Hotels in Ho Chi Minh City Reopen

According to the Deputy General Director of Savills Vietnam, the operational situation has improved as businesses booked hotels to meet the “three on-site” requirement and the need for centralized isolation. The recovery of domestic tourism will be the driving force behind the hotel industry in the fourth quarter of 2021.

Savills’ report indicates that the supply pressure will increase in the fourth quarter of 2021 when 30 hotels serving the frontline against the epidemic will return to normal operations after the Ministry of Health withdraws reinforcements from Ho Chi Minh City.

In the third quarter of 2021, the total remaining supply of 10,400 rooms came from 74 hotes, down 22% QoQ and 27% YoY. Supply decreased as Ho Chi Minh City mobilized 30 hotels with nearly 3,500 rooms in all three segments to support frontline medical staff and doctors in the fight against the epidemic.

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Nearly 1,000 rooms from 15 hotels have reopened to meet the accommodation needs of businesses according to epidemic prevention requirements. Most of the hotels that reopen are 3-star. The decrease in the number of arrivals and the regulation of medical isolation at home caused six isolation hotels to convert back into normal hotels.

According to experts, the capacity improved thanks to the “three places”, “two routes one destination”. The hotel benefited from strict epidemic prevention measures in the third quarter, when businesses rented hotel rooms for employees to stay to ensure business and production activities. Capacity reached 55%, up 38 ppts QoQ and 43 ppts YoY. However, this capacity is still lower than pre-pandemic levels. Quarantine hotels had an occupancy rate of 38%, down 26 percentage points QoQ due to a drop in demand for centralized isolation.

Favorable room rates for businesses for long-term rentals and reduced demand for fee-based isolation facilities resulted in a 29% decline in average room rates QoQ and 11% YoY at $49/room/night.

Regarding prospects, a representative of Savills said that the operation of hotels may be affected because businesses reduce the demand for hotel reservations. However, the recovery of domestic tourism in Q4 will be a driving force for sustainable development for the hospitality industry.

Ho Chi Minh City has entered the phase of “Living safely with Covid-19” and gradually loosening travel restrictions. The tourism recovery plan is divided into three phases, focusing on connecting the inter-regional safe tourist destination by the end of 2021 and aiming to welcome international visitors by June 2022.

Other Southeast Asian countries including Thailand, Singapore and Malaysia are also gearing up for the “new normal” and are starting to open their doors to fully vaccinated international visitors.

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