Vietnam Hotel Market, Q1 2020

SAILING UNCHARTED WATERS AS COVID-

19 WREAKS HAVOC AROUND THE WORLD

36.9% y-o-y 38.9% y-o-y 42.3% y-o-y 47.9% y-o-y

Figure 1: International Tourist Arrivals to Vietnam and RevPAR in HCMC/Hanoi, Jan 2019 – Mar 2020

2.5 125
International Arrivals (mil)

RevPAR (US$/room/night)
2.0 100

1.5 75

1.0 50

0.5 25

0.0 0
Jan-19

Apr-19

Jan-20
Dec-19
Mar-19

Jun-19

Aug-19

Mar-20
Feb-19

Oct-19

Nov-19

Feb-20
May-19

Jul-19

Sep-19

RevPAR-HCMC RevPAR-Hanoi International Arrivals

Source: STR, Vietnam National Administration on Tourism, CBRE Research, Q1 2020.

The COVID-19 pandemic has created many

disruptions in Vietnam’s economy, its tourism sector
and its hotel market.
• Vietnam suspended flights from China by end of •
January, and those from Korea by early March. By
end of March, all international flights were
temporarily suspended. •
• With travel restrictions, social distancing measures
and reluctance to travel due to the COVID-19
outbreak, Vietnam welcomed only 3.7 million
international tourist arrivals in Q1, down by 18.1%
y-o-y, while the number of domestic traveler-trips
also saw a decrease of 18.0% y-o-y. In addition,
many key tourism events such as the Hanoi Formula
1 Grand Prix were delayed or canceled.
• Vietnam National Administration on Tourism
(VNAT) estimated a loss of $5.9-$7.7 billion to
Vietnam’s tourism for the period February - April.
• Vietnam Airlines estimated that it would lose
US$2.1 billion in revenue in 2020.

Q1 2020 CBRE Research CBRE Vietnam | 1

 HANOI 4-5 STAR HOTEL

COVID-19 POSES UNCERTAINTY TO HANOI Figure 2: Total room count, 4- and 5-star Hotels, Hanoi
UPSCALE HOTEL PIPELINE 10,000

8,000

Number of rooms
6,000

4,000

2,000

0
2017 2018 2019 Q1 2020 2020F
5-star 4-star
Source: CBRE Research, Q1 2020.

Figure 3: International Tourist Arrivals to Hanoi

5 40%

International arrivals (Million)

4 20%

Y-o-Y Growth (%)

3
HANOI WITNESSED PLUNGE IN TOURIST 0%
2
ARRIVALS AND DELAYS OF MAJOR EVENTS -20%
1
0 -40%
2017 2018 2019 Q1 2020
International arrivals Growth
Source: Hanoi Statistics Office, CBRE Research, Q1 2020.

Figure 4: Market performance, 4- and 5-star Hotels, Hanoi

140 100%
Covid-19 impact
120
80%
100
US$/room/night

Occupancy (%)
80 60%
60 40%
40
20%
20
0 0%
Q1 Q2 Q3 Q4 Q1 Case 1 Case 2
2019 2020 2020F 2020F
ADR RevPAR Occupancy
Source: STR, CBRE Research, Q1 2020.
PERFORMANCE SEVERELY IMPACTED
Case 1: COVID-19 contained by Jun 2020
Case 2: COVID-19 contained by Sep 2020

Table 1: Performance Snapshot, 4- and 5-star Hotels, Hanoi

Q1 2020 Y-o-Y
ADR US$115.2 -6.6%
Occupancy 51.2% -28.9 ppts
RevPAR US$60.3 -38.9%
Source: STR, CBRE Research, Q1 2020.

Q1 2020 CBRE Research CBRE Vietnam | 2

 HCMC 4-5 STAR HOTEL

LIMITED SUPPLY PIPELINE FOR 2020 DUE TO Figure 5: Total room count, 4- and 5-star Hotels, HCMC
CONSTRUCTION HALTS
12,000

9,000

Number of rooms
6,000

3,000

0
2017 2018 2019 Q1 2020 FY2020
5-star 4-star
Source: CBRE Research, Q1 2020.

Figure 6: International Tourist Arrivals to HCMC

TOURISM STRUGGLING DUE TO WORLDWIDE
10 50%
TRAVEL SUSPENSION

International arrivals (Million)

8 30%

Y-o-Y Growth (%)

6 10%

4 -10%

2 -30%

0 -50%
2017 2018 2019 Q1 2020
International Arrivals Growth
Source: HCMC Department of Tourism, CBRE Research, Q1 2020.

Figure 7: Market performance, 4- and 5-star Hotels, HCMC

140 100%
Covid-19 impact
120
80%
100
US$/room/night

Occupancy (%)
80 60%
60 40%
HOTEL PERFORMANCE MARKEDLY WEAKENED
40
AMID CHALLENGING SITUATION 20%
20
0 0%
Q1 Q2 Q3 Q4 Q1 Case 1 Case 2
2019 2020 2020F 2020F

ADR RevPAR Occupancy

Source: STR, CBRE Research, Q1 2020.
Case 1: COVID-19 contained by Jun 2020
Case 2: COVID-19 contained by Sep 2020

Table 2: Performance Snapshot, 4- and 5-star Hotels, HCMC

Q1 2020 Y-o-Y
ADR US$110.3 -12.7%
Occupancy 42.0% -28.4 ppts
RevPAR US$46.3 -47.9%
Source: STR, CBRE Research, Q1 2020.

Q1 2020 CBRE Research CBRE Vietnam | 3

 HOTEL SECTOR

INVESTMENT MARKET CBRE VIETNAM’S OFFICES

CONTACTS

MARKET OUTLOOK

8-13% y-o-y 10-15% y-o-y

46-51 ppts y-o-y 40-45 ppts y-o-y

15-20% y-o-y 17-22% y-o-y

50-55 ppts y-o-y 44-49 ppts y-o-y

DEFINITIONS

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,
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