Tour operators unite to fight Vietnam’s hotel crisis

THE critical hotel situation in Vietnam, where demand for upmarket hotels is running far ahead of capacity, is causing problems between hoteliers, foreign travel agents and local tour operators.

Ten international tour operators in Ho Chi Minh City have formed a united lobby group to fight the challenging situation in the tourism sector and to promote professionalism in the industry.

Lack of hotel investments in Vietnam’s major cities and surging hotel rates haveled to a chronic supply and demand situation in the hotel industry.

Thuy Tien, managing director of Asian Trails Vietnam, said the number of foreign tourists increased 18 percent in Vietnam in 2007 compared to the previous year.

“Coupled with a year-round high occupancy of between 80 to 90 percent in international hotels in 2007, travel agents and tour operators are put at a disadvantage as they are weaker and the hoteliers more powerful in the supply demand game,” he said.

Tour operators are complaining of difficulties in finding rooms for their clients. They claim many hotels tend to sellat higher rates to corporate accounts and walk-in guests.

There are only 25 five star hotels and74 four-star properties in a country where tourism is booming. InterContinental Hanoi opened its doors to guests in mid-December 2007.It is only the eighth hotel of this category in Hanoi, and the first hotel in the four- to five-star category to open in Hanoi since 2005.

One of the next to open in Hanoi will a five-star property of Marriott Hotels & Resorts, which is expected for completed by end 2009.Accor has flagged its hotel network will grow from its existing eight hotels to at least 20 hotels by the end of 2010.

Two Pullman hotels would be developed in the country’s northern Lao Cai region, while Mercure and Novotel properties will be developed in city and resort locations.

Mercure La Gare Hanoi (102 rooms)and Mercure Hado Hanoi (400 rooms)will be the first Mercure hotels in Vietnam and the start of a planned development of up to 20 Mercure hotels throughout the country.

The opening of Novotel Resort Phu Quoc will follow four other significant Novotel openings scheduled for the next two years. Novotel Halong Bay will openin June 2008, Novotel Nha Trang (late 2008), Novotel Imperial Hoi An Resort(late 2009) and Novotel Reunification Park Hanoi (2010).

Accor Asia Pacific chairman, Michael Issenberg, said that the development of the hotels would significantly upgrade the tourism infrastructure in the north of Vietnam and would complement Accor’s already strong presence in Hanoi.

Jones Lang LaSalle Hotels (JLL)said quickening pace of foreign direct investment would help to ease Vietnam’s chronic four and five star hotel shortage. Foreign investors pumped US$1.7billion into Vietnam last year, funding 47 projects.

JLL is also optimistic about Vietnam and is hopeful that issues of bureaucratic transparency will be less of a barrier to hotel investment.

“As more transactions get done, transparency will improve,” said Scott Hetherington, JLL Asia managing director.

Vietnam National Administration of Tourism said it has increased the number of hotel rooms from 57,000 in 1998 to 130,000 last year, but the authority conceded it will not be enough to meet the overall increasing demand, nor the expectations of international visitors seeking luxury accommodation.

The administration has a 2010 target of six million international tourists, up from a target of five million in 2008.