Vietnam hotel faces oversupply of low-end hotel rooms

From Vietnam hotel – Vietnam Department of Culture, Sports and Tourism has shown concern over an oversupply of hotel rooms of one and two-star standards, citing an excessive development of the segment in recent years. The country now has to about 3550 hotels, with 500 of them meeting one and two-star standards and the remainder in the three-to-five-star segment, according to the department.

The number of visitors travel in Vietnam has grown strongly over the years, and demand for hotels of three to five-star standards has picked up as well. Meanwhile, lower-end hotels, especially those of one and two-star standards, have seen low occupancy.

Tran Chi Cuong, deputy director of the department, said many small investors in recent years had been focusing on developing low-end hotels in the city. However, demand for guest rooms at these hotels has been sluggish.
“We should help investors understand the present situation to make good investment decisions,” Cuong told Vietnam hotel.

He said unlike the low-end hotels, the mid- and high-end facilities in the city still see growth prospects, buoyed by a steady rise of occupancy.
“Average occupancy at many high-end hotels ranges from 65% to 75% and even reaches 90% at some places. Investors still have room in the segment as the number of guests has kept surging year after year,” he said.
Local and foreign tourist arrivals in Danang have grown an average of 20% annually in recent years. This year the number is projected to amount to around 3.2 million, according to the department.

In 2013-2014 the number of new hotel rooms built a year in the city totaled 1,300, with average occupancy of all the hotels in the city reaching 51% last year.

An extra 1,700-2,000 new hotel rooms would be put into service in Danang this year. Deail at | Vietnam tour | Vietnam hotel | travel in Vietnam |