HCMC – The ailing hospitality industry triggered by the coronavirus pandemic has plunged a number of hotel owners into hardship but has led to an increasing number of groups and investment funds on the lookout to buy hotels and resorts facing huge debts at low prices, according to a report recently compiled by CBRE Hotels Vietnam.
However, the market has yet to see many transactions in the luxury hotel segment.
Some owners of hotels told The Saigon Times that many investors seem to be waiting for prices to drop and more time to assess the risks. Despite making requests over the purchase of hotels and resorts, they have not made any decisions yet.
“Some investment funds told us to help them find large-scale hotels being offered for sale, but they then canceled their request and said they needed time to re-evaluate the market. Currently, we are receiving other requests, mainly for small hotels,” said Tran Thi Thanh Tam, director of Chez Mimosa Hotel Management and Consulting Company.
The selling price of four- or five-star hotels in Vietnam, especially in HCMC, remains high, according to many investors. Meanwhile, mid-end hotels are being put up for sale at lower prices, Tam said.
Vietnam’s hotel industry is facing a recession, with the revenue of each hotel in Hanoi and HCMC in the first half of the year dipping by 56% and 64%, respectively, year-on-year, according to CBRE Hotels Vietnam.
In Khanh Hoa Province, hotel room occupancy rates have plummeted to 2% from the 20% seen last month, indicating an underperforming hospitality sector.
HCMC is seeing most hotels shut down while those operational are experiencing room occupancy rates at 1-5%. When the second wave of Covid-19, the disease caused by the coronavirus, began, the room occupancy rates of three- to five-star hotels in Hanoi City plunged to 8%.
“The hotel market in the 2020-2021 period is expected to play defense due to the complicated development of the disease in Vietnam and many other countries,” Nguyen Trong Thuc, deputy director of CBRE Hotels Vietnam, said in the report on the impact of Covid-19 on the local hotel market.
With the falling number of guests and the ongoing global pandemic, the hotel segment will take a few years to recover fully, many businessmen said.
By Dao Loan
