Falling visitor numbers to Vietnam felt in average room rates while stock continues to increase.
Despite a strong increase in stock, a year-on-year decline in international visitor numbers and reduced spending by Russian tourists had a negative effect on hotel performance in Nha Trang, according to a Savills report on its real estate market in the first quarter released yesterday.
Nha Trang’s hotel market had approximately 8,000 rooms from 71 three- to five-star hotels in the first quarter, an increase of 8 per cent against the same period last year. Three-star hotels led the market, with a 46 per cent market share, followed by four-star with 29 per cent and five-star 25 per cent.
Hotel supply Q1/2013-Q1/2015
Although supply is on the rise a decline in the number of Russian tourists and international visitors in general saw occupancy rates plummet. Average occupancy in the first quarter was just 68 per cent, a fall of 12 percentage points compared with the same period last year.
The continual increase in stock also forced three- to five-star hotels to lower their average room rate (ARR) to VND1.5 million ($69) per room per night, 15 per cent less year-on-year. The three-star segment saw the best performance, albeit with just 70 per cent occupancy.
Regardless, hotels are still expected to be the most vibrant segment this year. For Nha Trang’s hotel segment, the Savills report said that the first quarter 23 projects were in the pipeline in the three to five-star hotel segments, with nine on the way in both the four-star and the five-star segment.
In the next three quarters of the year the market is expected to accept 3,730 rooms from nine future projects.