City hotels hit by rising competition

City hotels hit by rising competition

Both occupancy rate and revenue per available room (RevPAR) of hotels in HCM City fell slightly in the third quarter due to increase in room numbers and lower demand.

According to a survey by property services provider Savills Vietnam, the average occupancy was 60 per cent, down 2 per cent from the previous quarter and 5 per cent year-on-year.

The average room rate (ARR) was at VND1.75 million (US$83)/room/ night, a slide of 1 per cent and 6 per cent and the lowest rate in the last four years.

RevPAR for all three grades decreased, with the three-star segment seeing the sharpest drop of 8 per cent quarter-on-quarter, followed by 6 per cent for the four-star segment, and 2 per cent for five-star.

One new four-star hotel and 95 additional rooms in an existing three-star hotel in District 1 entered the market.

As of the third quarter there were more than 12,100 rooms in 90 hotels, a 2 per cent increase quarter-on-quarter and 5 per cent year-on-year.

International visitor numbers to the city also reduced, falling 1 per cent year-on-year in the third quarter to 892,540.

In the next two quarters the market is expected to add more than 1,300 new rooms in four hotels, all five-star and located in District 1.

A report released by Grant Thornton on October 16 said the hotel industry in the country as a whole achieved a year-on-year growth of 4.2 per cent in RevPAR in the first half to $56.6.

The increase was attributed to an average occupancy growth rate of 4.1 per cent and a small increase in average room rate of 0.1 per cent, the report said.

The five-star segment achieved a better performance in the period than a year earlier with a significant RevPAR surge of 15.6 per cent, mainly due to a rise in occupancy rate of 5.5 per cent.

A 0.4 per cent decrease in RevPAR for three-Star hotels was attributed to a reduction of 4.1 per cent in the occupancy rate.

The four-star segment increased its average rate by 4.7 per cent.

Overall, average room rates rose marginally to $88.35.

But they were down by 2.3 per cent compared with the full-year average room rate in 2012.

When classifying average room rates by region, the Central and Highlands saw the highest rise of 5.8 per cent to $92.20.

The north and south saw declines of 5.3 and 3.4 per cent.

Room rates were down 5.9 and 1.8 per cent in Ha Noi and HCM City.

But Phan Thiet saw a jump of 8.3 per cent to $106.95.

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