Why are Hanoi hotels expected to recover soon?

Hanoi’s hotel industry continued to improve in the first quarter of 2023 as domestic and international travel to Vietnam and the city increased, according to research and consulting firm Savills Vietnam.

International visitors at a relic site in Phu Xuyen District, Hanoi. Photo: Hoai Nam/ The Hanoi Times

The consulting firm said international visitors to Vietnam increased by 2,900% year-on-year to 2.7 million in January-March.

Meanwhile, Hanoi received 5.9 million visitors in the first quarter of this year, up 110% year-on-year. The number of domestic visitors reached 4.9 million, up 75% year-on-year, while international arrivals reached 979,000, an increase of 5,900% compared to the first quarter of 2022.

There were 10,260 hotel rooms available in Hanoi, including 17 hotels with five stars, 18 with four stars, and 31 with three stars.

Savills Vietnam experts said this supply increased by 1% quarterly and annually. The occupancy rate increased by 35 percentage points annually and nine percentage points quarterly to reach 58%.

As a result of rising demand, the average daily rate climbed. In the first three months of 2023, the typical room cost topped VND2.5 million (US$106.5) each room night.

The resumption of inbound tourism from China, according to Director of Savills Hanoi Matthew Powell, has improved the outlook for the hotel business.

“Vietnam’s most important source market is China, which resumed tours to Vietnam on March 15. Chinese tourists are expected to drive the hotel industry’s recovery,” he said.

Apart from leisure travelers, demand comes from business travelers, MICE (meetings, incentives, conferences, exhibitions) guests, and foreign investors. Given Vietnam’s healthy foreign direct investment inflows, demand from these guests is solid. Foreign investors stay in major cities such as Hanoi and travel to neighboring areas such as the northern province of Bac Ninh and Haiphong City.

The experts predict that two new projects totaling 471 rooms will be offered this year on the Hanoi market. International hotel chains such as Four Seasons, Lotte, Dusit, Wink, Accor, The Shilla, Hyatt, Marriott, and Hilton, among others, will debut 66 projects totaling 11,123 rooms in the city starting in 2024.

Out of 68 future projects, five-star hotels account for 61% or 32 accommodations. Typical projects include Lotte’s L7 West Lake Hanoi, Dusit International’s Dusit Hanoi – Tu Hoa Princess Palace in Tay Ho District, and Four Seasons Hanoi in Hoan Kiem District.

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