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Ho Chi Minh City
Tuesday, October 26, 2021

HCMC hotels suffer despite big discounts

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HCMC – Despite the modest number of domestic guests and discounts of 30%-40% or higher on offer, hotels in HCMC are still unable to recoup from the Covid-19-induced losses and the subsequent travel restrictions around the world, as they mainly rely on international travelers.

Although Vietnam has contained the coronavirus pandemic, multiple hotels are yet to reopen, while some chains have scaled down their businesses or are lowering prices to attract customers.

A sales director of a five-star hotel in the city said the room rate is currently at US$90 per night, compared to the previous rate of over US$120.

The regular room rate at four-star hotels is US$100 per night. Many hotels are offering services at lower prices to attract domestic guests, who mainly come to the city for business purposes. There could be further cuts on room rates but the number of guests is not expected to improve, he added.

Tran Thi Thanh Tam, owner of the Chez Mimosa small hotel chain, said that of the five Chez Mimosa-branded hotels, she had to give up the site of one hotel, while only one of the other four is operational as there are no international arrivals and only a handful of local guests.

Current revenues are just enough to pay rentals, salaries, electricity and water bills. The chain cannot afford to cover other fees, Tam noted.

Similarly, a seven-property hotel chain is operating only two facilities in District 1, with a major focus on the domestic segment but it rarely reaches the breakeven point. The chain has furloughed most of its staff and can only resume regular operations once travel restrictions are lifted, said its marketing director.

Data from CBRE Vietnam indicated that the revenue per available room (RevPAR) earned by four- to five-star hotels in the first quarter of the year was a mere US$46.3, down a sharp 48% over the same period last year. The RevPAR could be severely affected this quarter due to travel restrictions and low travel demand from local people.

By Dao Loan

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