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Foreign companies expand the hotel industry's reach in Vietnam

Seven Vinpearl hotels and resorts will be taken over and managed by Marriott International, a major global player in hotel management, starting in mid-April. Three already exist in Nha Trang, Hoi An, and Da Nang, and four more will be developed with more than 1,200 rooms, with completion anticipated for 2028.
Also read: ​Five resorts in Vietnam listed among Asia s top 30 resorts​​​
According to Mr. Rajeev Menon, President of Marriott International Asia Pacific (excluding mainland China), the move is intended to put the company in a better position to service the variety of hotel demand in several locations across Vietnam. In Vietnam, Marriott International runs 16 hotels and resorts. The company plans to bring several new hotel brands, such as The Ritz-Carlton, Westin, Element and Courtyard by Marriott.
The presence of other international titans is also growing. Previously, Lodgis Hospitality Holdings and the Hanwha Group (Korea) worked together in February to invest in and oversee hotel projects around Asia, including Vietnam.
As the owner of the Sofitel Legend Metropole in Hanoi and a significant stakeholder of The Grand Ho Tram Strip in Vung Tau, Lodgis, founded in 2016 by Warburg Pincus, VinaCapital, and Mr. Don Lam, manages more than 1,950 rooms under the Maia Resort, Ixora, and Hiive brands. In Vietnam and Cambodia, they own and operate 11 hotels and resorts. By 2025, the business projects that there will be 10,000 operating rooms in use worldwide.
The head of JLL's Asia-Pacific Hotel Investment Business spoke on the Asian real estate information website Mingtiandi, saying that the industry is still recovering. "Investors' interest despite geopolitical and macroeconomic risks," he declared.
Commenting exclusively on the Vietnamese market, Mr. Morgan Ulaganathan, Head of Property Services & Tourism Consulting - Hospitality of Colliers Vietnam, said that market participants have made "bold moves" immediately from translation until now.
Read more: ​Many Vietnamese resorts and hotels win international awards​​​
For example, KKR raised $4.3 billion amid the Covid-19 rush. Additionally, Bain has bought hotels alone or collectively, with or without the name. According to a citation from Blackstone, the company's share in the hotel market is at a historic low of about 12%. Blackstone stated in a report that "we wish our portfolios were bigger."
According to experts, the efforts of foreign enterprises in Vietnam's hotel business come from good property valuation opportunities and preparing a springboard for tourism recovery and development in the long term.
Before hotel income completely recovers, funds have been raising money to invest in hotel assets at a period of good value, according to Mr. Morgan Ulaganathan.
For example, in Da Nang, Savills noted that in recent times, there had been a situation of hotels for sale, concentrated on the coastal roads of Son Tra and Ngu Hanh Son districts and the city center. The reason is that after more than two years of being affected by the pandemic, many owners have difficulty in cash flow.
Matthew Powell, Director of Savills Hanoi, said that most of the hotels for sale are for personal investment, the first to fall into crisis because of the epidemic and have products that are difficult to compete with quality products from professional developers and operators nationally and internationally.
However, this is an opportunity for buyers to consider specific plans for planning and developing these projects to meet the trend of higher-quality tourists and more sustainable," this expert said.
Additionally, foreign businesses are better able to generate income, which enables them to enter into management partnership agreements or make audacious investments in Vietnam. Savills report showed that in the last 6 months of 2022, hotels managed by Pullman, Novotel, and Grand Mercure had 40% higher average room rates and 8% higher occupancy rates than domestic brand projects and self-management.
The supply of resort villas is dominated by hotel brands, including Furama, Accor, InterContinental Hotels Group (IHG), Hyatt, and Fusion. Or, with Marriott, they got improvements and enhancements for 8 Vinpearl hotels last year and announced "strong growth" before continuing to shake hands this month.
Meanwhile, Vietnam's tourism industry's long-term recovery and growth potential are hard to ignore. Vietnam recorded domestic tourism last year exceeding pre-epidemic levels, with more than 101 million visitors. The government hopes to welcome 110 million tourists this year, including 102 million domestic and 8 million foreign visitors.
Despite global economic uncertainty, foreign tourists are still planning to visit Vietnam, according to the travel booking platform Klook. Vietnam welcomed 2.7 million international visitors in the first quarter, and Klook is seeing the demand for international tourists coming to Vietnam "growing exponentially". As an illustration, the number of Korean and Singaporean tourists reserving travel services in Vietnam jumped by 70% and 300%, respectively, compared to the first quarter of 2019 – before the pandemic.
Also read: ​Vietnam to attract high spending visitors​​​
Mr. Nguyen Huy Hoang, the newly appointed Managing Director for the Vietnam market of Klook, forecasted 2023 to be a good boom year for inbound (international visitors to Vietnam). Attractions include Da Nang, Ho Chi Minh City, Ha Long, Nha Trang, Sa Pa, Hanoi, Phu Quoc, Hoi An, Ninh Binh, Da Lat and Hue.
According to Colliers, the key markets for Asia's recovery will be Ho Chi Minh City, Singapore, Bangkok, and Bali. The need for capital deployment is quite strong, and the foundations for growing resort tourism in Vietnam are highly active. The clock is ticking. It's time to start preparing for an exciting season of deals this year," said Mr. Morgan.

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