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Vietnam Hotel and Tourism Report | April 2015

Hotels & Hospitality Group

Hotel Intelligence
Vietnam

Contents 03 Market Summary Market Overview 04 06 Cities 06 Ho Chi Minh City 07 Hanoi 08 Nha Trang 09 Da Nang Hanoi Recent Key Transactions 10 Da Nang Nha Trang Ho Chi Minh City .

NEW HOTELS (Top 5 major hotels that have opened recently) OTHER NEW HOTELS The Reverie Hotel.4 million and 3.0% year-on-year. The Vietnamese tourism industry is set to continue to grow for the foreseeable future as Vietnam continues to establish itself as a leading destination in Southeast Asia.729 keys expected to enter these two markets in the near future.Revenue per available room 279 rooms InterContinental Nha Trang . however. Ho Chi Minh City and Hanoi remain the most popular cities for tourists to visit with 4. The country has seen a CAGR (Compounded Annual Growth Rate) of 15. while scheduled promotional campaigns by the tourism board should further enhance the country’s exposure. JLL ADR – Average daily rate. Planned government investment in infrastructure will improve overall connectivity.86 million) and Da Nang (0.9 million during 2014. Branded new room supply is primarily concentrated in Ho Chi Minh City and Hanoi with an additional 3. Internationally branded supply in Nha Trang and Da Nang is limited but growing. RevPAR . HCMC – 257 rooms Hilton Garden Inn Hanoi – 86 rooms UPCOMING HOTELS Dusit Thani Nha Trang – 439 rooms The InterContinental Hotel at Keangnam Hanoi – 359 rooms Le Méridien Saigon HCMC – 350 rooms Ibis Grand Place HCMC – 338 rooms Hilton Da Nang – 193 rooms 445 rooms JW Marriott Hotel Hanoi 323 rooms Novotel Da Nang Premier Han River 318 rooms 300 rooms Lotte Centre Hanoi* Starcity Airport Hotel. a growth of 4. Vietnam National Administration of Tourism (VNAT). growth has been eroding over the past three years.0 million foreign tourist arrivals in 2014 respectively.96 million) growing by 14.9% in international visitation between 2009 and 2014. Emerging resort markets have been gaining traction with foreign visitors to Nha Trang (0.6% % of total GDP in 2013 (forecast to rise by 8. with Dusit Thani and Hilton branded hotels expected to open shortly.399 International Visitor Arrivals in 2014 Number of New Rooms in 2014 Contribution of Tourism Industry to National GDP 4.9% and 13.9% in 2014) Source: WTTC.Hotel Intelligence Vietnam 3 Market Overview Tourism Demand Supply Outlook International tourist arrivals to Vietnam numbered approximately 7.9 million 1. Ho Chi Minh City *318 rooms hotel and 258 rooms SA QUICK FACTS (HCMC and Hanoi) 7.9% between 2005 and 2014 (CAGR) respectively.

stimulating developments in infrastructure. While continuing territorial disputes between Vietnam and China is the likely reason affecting Chinese arrivals to the country. the city offers a French colonial architecture which adds to the cultural and historical significance and draws a number of tourists.0 6. real estate and industrial sectors. Investments in marketing campaigns to promote Vietnam’s tourism industry since 2010 has increased interest from international tourists. a number of internationally branded hotels positioned across all star categories. wharfs.0 8. enhancing domestic connectivity. Growth in tourism and visitation has spurred investment into the country especially in the hospitality.5% 1 20 According to recent information. international visitor arrivals to Vietnam have declined 14% during the first quarter of 2015 compared to Q1 2014. The government continues to be a key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas.0 0. many other coastal resort destinations such as Da Nang and Nha Trang have been developing due to improvement in tourism infrastructure and enhanced accessibility.0 1. entered the market over the past few years. International visitation grew by 15. It is located in the southern part of the country and houses a number of museums and war memorial sites.9 million visitors during 2014. Ho Chi Minh City is largest city in Vietnam and is the main commercial and cultural city of the country. As a result of growing lodging demand. Ho Chi Minh City Formally known as Saigon. the city plans to renovate and build 50 new docks. Vietnam appeals to a range of visitors. International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7.9% per annum (CAGR) between 2009 and 2014. the devaluation of Russian Ruble has limited travel of Russians overseas.0 4.0 2.9 million visitors during 2014.0 International tourist arrivals to Vietnam grew by 4% year-on-year to approximately 7. Not only are the main economic centres Hanoi and Ho Chi Minh City (HCMC). With the presence of diverse tourism attractions. waiting rooms by 2015 and plans to also redevelop more than 65 tourist sites within the city’s districts. Each of the major tourist destinations in the country provides unique offerings for the discerning tourist as follows: International Visitor Arrivals to Vietnam Number of Visitors (million) 9. 30 20 10 0 -10 Visitor Arrivals (million) -30 14 3 1 20 20 12 20 11 0 20 09 -20 20 08 20 07 20 06 20 05 20 Annual Growth (%) 40 CAGR (2005–2014) 9. As part of its initiative “River Tourism Development Strategy of Ho Chi Minh City in the period of 2013 to 2015 and towards 2020”. JLL The government is the key driver of the tourism industry providing incentives for investors and promoting Vietnam as a destination overseas. however. gradually developing. growth has been eroding over the past three years. Foreign direct investment into Vietnam continues to grow. . Among other tourist attractions.4 Vietnam Hotel and Tourism Report Market Summary Vietnam continues to emerge as a prominent destination for international travellers within Southeast Asia.0 5.0 3. Annual Growth (%) Source: Vietnam National Administration of Tourism (VNAT). This decline has been caused by a simultaneous drop in the number of arrivals from Russia and China.0 7.

The city benefits from long-standing historical and cultural traditions and a stable socio-political environment. Hanoi has become an increasingly attractive destination for international investors and visitors. Nha Trang is also a centre for training and scientific research in Southern Central Vietnam. airlines and lodging establishments (both local and foreign) will play a major role in promoting the country.9 million visitors in 2014. A continuing area of concern for the Vietnam tourism industry has been the inability to generate repeat business. With a number of academic institutions in the area. referred as the AEC 2015 (ASEAN Economic Community 2015) may prove to be a major contributor to Vietnam’s overall economic development. fishing and lobster farming. My Son Valley which features the remains of the ancient Cham civilization. Terminal 2 will see capacity increase to 25 million passengers by 2020 and 50 million passengers by 2030. The Da Nang tourism market extends from Da Nang to Hoi An in the adjoining Quang Nam province. The Nha Trang area is known for its natural beauty comprising of a largely unspoilt coastline. namely the 16th century silk route trading port of Hoi An.8 million visitors in 2009 to 7. Nha Trang is a coastal city and the capital of Khanh Hoa Province. In addition. as well as the ancient imperial city of Hue. ASEAN The implementation of the ASEAN Economic Community may prove to be a major contributor to Vietnam’s overall economic development. Khanh Hoa Province benefits from a coastline of approximately 200 kilometres. the capital of Vietnam. . However. some 30 km along China Beach south from Da Nang City. close to Mainland China. The coastline features some scenic beaches. highways and tourism promotional campaigns. with more than 200 islands offshore. and is a holiday destination for locals offering activities ranging from amusement parks. Da Nang Da Nang is one of the preferred resort destinations along the long coastline of the country. and also extends along the coastline north from Da Nang to Langco and on to Hue in the adjoining Thua Thien Hue province. Hanoi benefits from being a bureaucratic centre for foreign business and investment activity in Vietnam. three UNESCO World Heritage Sites located within 100 kilometres of Da Nang. mud baths and historic tracks such as the Po Ngar temple complex. Other industries contributing to the local economy are shipbuilding. Industry leaders have highlighted this as an issue that needs to be addressed in order to compete with regional rivals over the long term. various industry players such as tour agencies. including China Beach. it is mainly popular for its beaches. Nha Trang is regarded as one of Vietnam’s premier beach destinations. the unlocking of Vietnam's economic potential rests on reviving the reform drive. Nha Trang is located 1. airlines and lodging establishments (both local and foreign) will increasingly play a major role in promoting the country. the city’s tourism department also organises events and provides a platform for Hanoi to promote both its tourism and business opportunities. with the number of international tourist arrivals increasing from 3. The implementation of economic integration to create a single market across ASEAN states.Hotel Intelligence Vietnam 5 Hanoi Nha Trang Hanoi. Often called Vietnam’s Mediterranean area. In light of growing government investment in infrastructure across the nation in the form of construction (and expansion) of airports. golf. thanks primarily to a multi-fold expansion in external trade following entry into the World Trade Organization (WTO) in 2007. In addition. The city is located in the northern part of the country. An important infrastructural development in Hanoi is the completion of the second terminal and associated facilities at the Noi Bai International Airport. The tourism industry has considerably developed mostly in the last decade. where old sites are preserved in some areas while other areas are being developed. the Vietnamese tourism industry is set to continue to grow for the foreseeable future.278 kilometres south of Hanoi and 441 kilometres north of Ho Chi Minh City. which officially opened on 4th of January 2015. The coral seabed near the city is popular for diving and snorkelling. Outlook Vietnam has made considerable developmental strides over the past decade. Several industrial parks are located to the south of the city. Various industry players such as tour agencies. As Vietnam’s capital and the seat of government. is a city where old meets the new.

2014 stats compared to 2013 RevPAR declined 5. up 7. 257 keys.1% y-o-y to USD 77 compared to the same period in 2014.4 million foreign visitors during 2014.770 keys from seven hotels expected to enter the market in the near future.1% over the previous year. the largest city in Vietnam. • Territorial disputes between Vietnam and China may continue to affect Chinese visitor arrivals to Ho Chi Minh City (currently the top source market to Vietnam) in the short term.0 3. Occupancy fell from 67.8% to 67. RevPAR (USD) 5 b2 b2 D Fe ADR (USD) Source: VNAT / Press Release /JLL YT YT D Annual Growth (%) Fe 01 4 14 20 13 0 01 50 20 10 20 11 20 12 20 13 20 14 09 International Visitor Arrivals 20 08 20 07 20 06 20 05 –20 100 12 0 150 20 20 Occupancy (%) 100 90 80 70 60 50 40 30 20 10 0 11 40 ADR/RevPAR (USD) 200 20 60 Trading Performance – Ho Chi Minh City 10 80 20 04 Annual Growth (%) 100 20 03 20 02 20 20 20 01 Visitor Arrivals (million) 5. Occupancy Source: STR Global / JLL Supply Outlook • Existing branded supply in Ho Chi Minh City comprises of 4. with RevPAR declining 5. ADR declined from USD 120 to USD 116.6% to 66. • With the development of new international routes from regional airports. Australia and Japan are the top source markets to Ho Chi Minh City.5 3. • Trading performance in 2014 was down over the previous year.2% relative to 2013 to USD 77 driven by a simultaneous decline in occupancy from 67. more foreign tourists have been flying direct to resort destinations such as Da Nang instead of transiting through Ho Chi Minh City.0 0.442 rooms across different segments. 09 • Mainland China.5 4. Malaysia.5 0.5 1. The News Key Recent Additions • Starcity Airport Hotel. • Future supply includes 2.4%.6% to 66.0 2.5 2.4% and average room rates from USD 120 in 2013 to USD 116 in 2014. • The Reverie Hotel.0 4. it welcomed 4. and a marginal decline in occupancy from 67.0 1. is the country’s commercial.0 20 International Visitor Arrivals to Ho Chi Minh City • Figures for YTD February 2015 indicate a decline in RevPAR performance of 3. Select Future Openings Hotel Rooms Opening Le Méridien Saigon 350 2015 Ibis Grand Place 338 2015 Ritz-Carlton Hotel 250 2017 Total 938 Source: JLL Research • With a continued growth in the number of international arrivals. which is driven by both a fall in ADR from USD 118 to USD 114. fresh supply slated to enter the market should continue to put pressure on ADR in the near term. Russia. 300 keys. • However. 20 • Being an international gateway to the rest of the country. tourist and cultural hub.6 Vietnam Hotel and Tourism Report Ho Chi Minh City Demand Trading Performance • Ho Chi Minh City (HCMC). we expect lodging demand levels to strengthen further over the short to medium term.2% y-o-y to USD 77. • Recent new supply in HCMC include the 300 key Starcity Airport Hotel in 2014 and the 257 room Reverie Hotel in February 2015. .7%.

• Figures for YTD February 2015 show a similar trend. while ADR declined from USD 113 to USD 107.8% y-o-y to USD 74.4% increase in RevPAR to USD 77 compared to USD 75 in 2014. . Occupancy grew from 66. Malaysia. 20 Demand • With a recent decline in the number of Chinese visitors to Hanoi. Select Future Openings Hotel 150 11 Annual Growth (%) 100 80 60 40 20 0 -20 -40 20 03 20 02 20 20 20 01 Visitor Arrivals (million) 3.9%. a 3.4% to 68. 445 keys Trading Performance • Lotte Centre Hanoi.8% year-on-year during 2014 to USD 74. • Some of the existing hotels are being upgraded. • The completion of the second terminal at the Noi Bai International Airport will help facilitate international arrivals to Hanoi as it will see capacity increase to 25 million passengers by 2020 and 50 million passengers by 2030. Trading Performance – Hanoi 20 • International arrivals to Hanoi reached an all-time high of 3 million during 2014. expanded and rebranded to remain competitive as new supply continues to enter the market. 09 • Hanoi is emerging as an increasingly attractive destination for international investors and visitors supported by long-standing historical and cultural traditions. Re-brandings • Hanoi Horison Hotel rebranded as Pullman Hanoi. 86 keys Source: JLL Research • JW Marriott Hotel Hanoi. Source: VNAT / Press Release / JLL Supply • Existing supply in Hanoi comprises of 44. 318-key hotel and 258-key Serviced Apartment • RevPAR increased by 0. South Korea.0 2.0 1.0%. Russia and other East European countries in the near future. • The political friction between Vietnam and China may continue to affect Chinese visitor arrivals to Hanoi (currently the top source market to Vietnam) in the short run.0 Occupancy (%) 100 90 80 70 60 50 40 30 20 10 0 20 International Visitor Arrivals to Hanoi ADR/RevPAR (USD) 200 10 • Top source markets to Hanoi include Mainland China.5 0.0 0.278 keys.1% to 71.5 1.0%. Singapore. 250 keys 2014 stats compared to 2013 RevPAR increased by 0.Hotel Intelligence Vietnam 7 Hanoi 10 20 11 20 12 20 13 20 14 09 International Visitor Arrivals 20 08 20 07 20 06 20 05 20 04 Annual Growth 14 14 ADR (USD) RevPAR (USD) Fe b YT D YT D Fe b 20 20 13 20 20 12 0 15 50 20 100 Occupancy Source: STR Global / JLL Outlook • Growing number of domestic flights from Hanoi is benefiting the overall tourism industry as visitors are encouraged to travel to multiple destinations throughout Vietnam.3% from 2013. which is driven by an increase in occupancy from 66.5 3. an increase of 16. the tourism authorities are planning focused promotion campaigns in other markets including Japan. South Korea and Singapore. Rooms Opening The InterContinental Hotel at Keangnam 359 2015 The News Novotel Ciputra Hanoi 300 2017 Total 659 Key Recent Additions • Hilton Garden Inn Hanoi. while ADR declined marginally to USD 109. ADR declined marginally to USD 109. Japan.5 2. • Future supply includes three hotels with a total inventory of 959 rooms expected to enter the market in the near future. with more than half being unrated. driven by an increase in occupancy to 68.

• International visitor arrivals reached approximately 856. These independent and family run hotels are largely located on Biet Thu and Nguyen Thien Thuat Streets.2%. International Visitor Arrivals to Nha Trang Annual Growth (%) 100% Hotel Rooms Opening 60% Dusit Thani 439 2016 40% Eastin Duyen Ha Resort 450 2017 20% Total 889 14 20 13 20 12 20 11 20 10 09 20 20 20 08 -20% No. South Korea.2%. Source: JLL Research Outlook • With an improvement in tourism infrastructure. while independent midscale hotels are located along Tran Phu Boulevard and its sub-streets. improving domestic as well as international connectivity and the launch of focused tourism promotion campaigns bode well for the outlook of the Nha Trang tourism market. Key players in the market include InterContinental. which represents a year-on-year increase of 18.9% (CAGR). Russia and USA. The News Key Recent Additions • InterContinental Nha Trang. . Novotel and Evason (a brand of Six Senses Hotels Resorts Spas). Best Western.000 in 2014. representing a year-on-year increase of 18. • The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travellers. 279 keys • Best Western Premier Havana Nha Trang. This has helped bring the destination under international spotlight.000 in 2014. JLL • K ey source markets to Nha Trang include Japan. • Factors such as the addition of internationally branded resorts. the Nha Trang tourism market has seen substantial growth over the past few years with increasing number of domestic as well as international tourist arrivals. 680 keys International visitor arrivals reached approximately 856. Sheraton. of Visitors ('000) Select Future Openings 80% 0% 07 20 06 20 20 05 Visitor Arrivals ('000) 900 800 700 600 500 400 300 200 100 • Internationally branded supply in Nha Trang is limited but growing. Annual Growth (%) Source: Tourism Department of Khanh Hoa. The existing supply in Nha Trang is largely dominated by independent and family-run hotels targeting domestic and cost-conscious travelers.8 Vietnam Hotel and Tourism Report Nha Trang Demand Supply • The total number of visitors to Nha Trang via Khanh Hoa Province has increased significantly over the period from 2005 to 2014 at an annual rate of 14. • Nha Trang Bay has been voted as one of the top 29 most beautiful bays in the world by Travel + Leisure magazine for two years in a row.

most of which are of international standard.6 20 0. • The opening of the Crowne International Club in 2009. continue to be key international source markets in the Central Vietnam region. 111 keys • Novotel Da Nang Premier Han River. JLL Select Future Openings Hotel Rooms Opening Hilton 193 Q1 2016 Four Points by Sheraton 390 2017 Total 583 Source: JLL Research Outlook • In the short to medium term.3%). • International operators with a presence in the market include Accor. with an improved airport infrastructure. which represented a y-o-y increase of 28.000 in 2014.0 60 0.7% of hotels are categorised as three-star to five-star. • The availability of a variety of accommodation options ranging from locally managed resorts and villas to internationally branded hotels as well as the increase in direct international flight routes have led to an increase in inbound visitation.96 million. supply comprises a total of 426 hotels with 15. launch of additional direct international flights and with the entry of additional international branded hotels in Da Nang. • The regional markets including Thailand and Mainland China. Japan and Australia. particularly from Mainland China. not considered as being of international standard. International Visitor Arrivals to Da Nang Number of Visitors (million) 1. territorial dispute with China and a sluggish Thailand economy is likely to continue to negatively affect tourism arrivals in the short term. The Majority of existing hotels are one-star to twostar properties (83. we anticipate visitor arrivals to continue to grow at a healthy pace in line with growth observed over the past few years. USA. the only casino today with a licence to operate live gaming tables in Da Nang.8 40 0. . • Top source markets to Da Nang include Thailand. 323 keys International visitor arrivals reached approximately 960.6%.2 Annual Growth (%) Source: Da Nang Tourism Board. Da Nang’s second largest source market.3%).Hotel Intelligence Vietnam 9 Da Nang Demand Supply • International visitation to Da Nang has shown a steady increase since 2009 growing at a rate of 25% per annum (CAGR) between 2009 and 2014 to 0. The News Key Recent Additions • Hotel Premier Village Da Nang Resort (Managed by Accor).0 06 -20 05 0.2 Annual Growth (%) 100 80 1.7% of hotels are categorised as three-star to five-star. and only 16. Hyatt and IHG. However. • According to the Da Nang Tourism Department. has also contributed to the increase in visitor arrivals since 2010.4 0 Visitor Arrivals (million) 14 20 13 20 11 12 20 20 10 20 09 20 20 20 20 20 08 -40 07 0.465 rooms as of September 2014 (latest available statistics). Mainland China. and only 16. • The Majority of existing hotels are one-star to two-star properties (83.

000* Hoi An 2013 96 9.587 The Nam Hai Resort & Spa Movenpick Saigon (50% stake) Sheraton Nha Trang (50% stake) Life Heritage Resort (rebranded as Anantara) Life Wellness Resort (rebranded as Avani) Source: JLL *Price reflects 100% interest Hanoi Vietnam Key Destinations Da Nang Nha Trang Ho Chi Minh City .000 Quy Nhon 2013 63 6.4 million 101.440* Nha Trang 2013 280 42 million* 150.6 million 100.10 Vietnam Hotel and Tourism Report Recent Key Transactions Property Name Location Year Rooms Price (USD) Price per room (USD) Six Senses Con Dao 2014 50 Confidential Confidential Hoi An 2014 100 Confidential Confidential Ho Chi Minh City 2014 268 32 million* 119.

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