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Tony Milton MRICS

BSc (Hons) Est Man
MRICS
APREA (CREIF)

HCM Hotels
Friday, 27 February 2009

HOTEL MARKET                                                                 

 

HCMC has 171 one to five star hotels with over 11,000 rooms of which nearly 60% or about 6,600 rooms are of 3-5 star standard. It is also home to 10,000 guesthouses, lodges and other accommodation providers. There are 21 three-star hotels and 7 four-star hotels and 10 five-star hotels. HCMC lacked more than 4,000 rooms in 2007 but the demand is estimated to increase by 50% in 2010, meaning that the city will need 14,500 more rooms by then, including 7,000 rooms of 3-5 star ratings. The city’s tourism department calculate the supply on the assumption that from now to 2010, 67 -75% of local visitors and 78 - 80% of international visitors to the city will stay in hotels. The average length of local tourists' stay in HCMC is about 1.5 days, and that for foreign­ers is 2.43 days. The city has approximately : -

 

·         3,599 five-star rooms

·         1,281 four-star rooms

·         1,671 three-star rooms

·         3,394 two-star rooms

·         2,027 one-star rooms, and

·         10,068 other rooms.

 

 

 

 

Althouth the number of international arrivals in the city increased 214% from 1.1 million in 2000 to 2.35 million in 2006, the average number of rooms available grew a mere 34% in the period. In 2007 the city welcomed 7.15 million for­eign and local visitors, and about 5.06 million of the num­ber needed to stay in hotels. In 2010, the city must provide rooms for about 7.3 million visitors out of the total num­ber of 9.55 million guests com­ing to the city. Although the city has approved over 2,348 more hotel room the shortage of high-rated hotel rooms will still be around 14,500 standard hotel rooms in 2010 using these projections.

 

 

 

 

The HCMC government has approved the 2007-2010 tourism develop­ment program, which projects the tourism industry will earn more than USD$2.15 billion in revenue by 2010. This is double the 2006 revenue from tourism services but the city’s tourism department belived the num­ber of international tourists will increase by more than 12.3% a year to more than 3.6 million in 2010. At the same time, the number of domestic tourists is increasing by about 15% a year to reach 6 million.

 

Star                  Business          Travel  Long Term Stay

Grand                           3                      40%                  20%                  40%

Bong Sen                      3                      60%                  40%     

Palace                          3                      55%                  45%     

Kim Do                         3                      70%                  15%                  15%

Oscar Thang Long          3                      50%                  50%     

Vien dong                      3                      20%                  75%                  5%

Riverside                       3                      15%                  60%                  25%

Chancery SG                 3                      40%                  40%                  20%

Sai Gon                        3                      40%                  60%     

Majestic                        4                      40%                  60%     

Amara                           4                      60%                  40%     

Rennaissance                5                      60%                  40%     

Legend                          5                      60%                  40%     

 

Average stay (days)

                                    5 star                            4 star                            3 star

Average                         2.1                                2                                  2.2

Foreign Guests              2.1                                2                                  2.3

Local Guests                 2.5                                2.6                               1.8

Source: HCMC Department of Tourism

The hospi­tality industry in the city earned a record revenue of about USD$1.5 billion in 2007, up 45% year-on-year and 23% higher than the year's target. The average room occupancy was 78% and room tariffs increased strongly. The average room rate for 3-5 star hotels in HCMC increased by 31% year on ­year, while the rate at 5 star hotels surged 32%. In the report, the department expects to receive three million international visitors in 2008, up 11 % on this year, and USD$1.8 billion in revenue – up 20%. The current rates at 5 star hotels in HCMC start from $140 per day.

 

 

 

 

3-STAR ACCOMMODATION                         

 

Most of the 3 star hotels were built before 1999 with capacities of less than 100 rooms and are self managed by the hotel. There are about 23 three star hotels with 1,970 rooms and the average occupancy is from 70-80%, even in the low season. Average rates range from USD$30-50 per night with standard facilities.

 

3 Star Hotels

 

No.       Hotel name                    Address                                    Dist             Rooms

1          Bong Sen                      117-123 Dong Khoi                     Dist 1              131   

2          Chancery Saigon           196 Nguyen Thi Minh Khai           Dist 3                96

3          Continental                    132 Dong Khoi                           Dist 1                83   

4          De Nhat                        18 Hoang Viet                            Tan Binh           130 

5          Empress                       136 Bui Thi Xuan                         Dist 1                39  

6          Epoch                           120 Cach Mang Thang 8              Dist 3                70 

7          Grand                           8 Dong Khoi                                Dist 1               107  

8          Hai Van Nam                 132 Ham Nghi                             Dist 1                42   

9          Huong Sen                    66-68-70 Deng Khoi                     Dist 1                50 

10         Kim Do                         133 Nguyen Hue                         Dist I                135    

11         Metropole                      148 Tran Hung Dao                     Dist 1                74     

12         Mondial                         109 Dong Khoi                            Dist 1                40   

13         Oscar                           68A Nguyen Hue                         Dist I                 90   

14         Palace                          56-66 Nguyen Hue                      Dist 1               140     

15         Pastel Inn Saigon           99 Pasteur                                 Dist 1                97    

16         Riverside                       18-19-20 Ton Duc Thang              Dist 1                73    

17         Saigon                          41-47 Nguyen Du                        Dist 11             100   

18         Saigon Star                   204 Nguyen Thi Minh Khai           Dist 3                 72   

19         Vien Dong                     275a Pham Ngu Lao                   Dist 1                109 

20         Norfolk                          117 Le Thanh Ton                       Dist 1                104  

21         Caesar                          34 An Duong Vuong                    Dist 5                106 

22         Dong Khanh                  2 Tran Hung Dao                         Dist 5                 76    

23         Van Xuan                      193 Tran Hung Dao                      Dist 1                 69  

 

Unit size of selected 3 star hotels

 

Standard   Superior   Junior     Delux     Club       Suite  Double   Exec   Deluxe

Continental             -           25-38       50-55    33-43        -           59-80      -           81         -

Bong Sen              25         28               -        30            35             -        70           -           -

Kim Do                  -           26            34         32           31              -         -            60       50

Vien Dong             20         20             -            -             -                -         -            -          25

RiverSide              28         30             50         32            -             80         -            -           -

Chancery Saigon   32         42              -           -             -               -          -            -           -

Saigon Star           26         28              -          36            -              -        58            -           -

Saigon                  28         30              -           32           -              48       -             -           -

Pastel Inn Saigon     -         24              -            -            -               -         -             -           -

De Nhat                 20          -               -           -             -               -        20            -           -

 

 

4-STAR ACCOMMODATION                         

 

There are 6 four star hotels in Ho Chi Minh City with about 1,275 rooms, most of which were developed before 1999. The number fell in 2007 & 2008 as both SaigonTourist's Majestic & Rex were upgraded to 5 star status. Whilst average daily rates are falling, because there are so few 4 star rooms, they are now taking business from the 5 star properties.

 

4 Star Hotels

 

No.       Hotel name                    Address                      District           No.rooms

1          Duxton (ex Prince)         63 Nguyen Hue             Dist 1                203        

2          Ramana                        322 Le Van Sy              Dist 3                305        

3          Grand                           8 Dong Khoi                  Dist 1                107        

4          First-De Nhat                18 Hoang Viet                Tan Binh Dist      96        

5          Park Royal                   311 Nguyen Van Troi      Tan Binh Dist     193  

6          Saigon Palace              56-66 Nguyen Hue          Dist 1                144       

                                                                                              1,275    

* Majestic & Rex upgraded to 5-star status in early 2007&8 but partially replaced by upgrade of Palace in 2007 from 3 stars.

 

 

 

Standard     Superior  Junior  Delux  Club  Suite  Double Exec Deluxe

Majestic            25-29                30-35    46-67    37-42      -         -           -         -   126-150

Rex                   25                     44         -           32.41     -         -           -         43      98

Saigon Prince     -                       32         53         61         -         -           -          -          -

Ramana             28                     32         32         -            -         -           -         64        -

Park Royal         33         37         40         60         -           -          -           -          -         -

 

 

 

 

 

5-STAR ACCOMMODATION                         

 

There are now 13 five star hotels with the 2007 & 2008 upgrades of the Majestic & Rex and 2009 addition of the InterContinental, the majority of which were constructed before 1999, although several that did not open until later: Legend Hotel in 2001; Sheraton Hotel in 2003; and the Park Hyatt Saigon in July 2005. The Windsor was developed in 2003 and opened in 2004. 

 

Operators have had a great few years with occupancies and rentals flying high - much higher than in other regional countries - but that has all come crashing down in 2008/9 with the credit crunch putting a stop to unneceesary business travel and decimating tourists' discretionary spend (especially given the arguous task of getting a Visa). Rents and occupancies are collapsing.

 

Some 5 star hotels are obviously better than others, if for no other reason than their location, since one is by the airport and the other @China town.

 

.

 

5-Star Hotel Occupancy rates

 

No.          Hotel name                           Address                 District             No. rooms

1          Caravelle           19 Cong Truong Lam Son  Dist 1               335       

2          Legend              2a-4a Ton Duc Thang        Dist 1               282      

3          New World        76 Le Lai                          Dist 1               552     

4          Sofitel Plaza      17 Le Duan                      Dist 1                290       

5          Renaissance      8-15 Ton Duc Thang         Dist 1                349        

6          Equatorial          242 Tran Binh Trong         Dist 5                333         

7          Movenpick         251 Nguyen Van Troi        Phu Nhuan         248         

8          Sheraton            88 Dong Khoi                   Dist 1                382     

9          Windsor Plaza   18 An Duong Vuong          Dist 5                 402        

10         Park Hyatt         2 Lam Son Square           Dist 1                 259          

11         Majestic            1 Dong Khoi                     Dist 1                176

12         Rex                 141 Nguyen Hue                Dist 1                 227

13         InterContinental  Hai Ba Trung / Le Duan    Dist 1                 321

                                                                                                  4,165    

 

 

 

Standard   Superior   Junior   Delux  Club   Suite Double  Exec  Deluxe

Caravell             -           38         -               43     -          67         -   104            -           -

Legend              37        37         -               37    74         74         -     -              -           -

Sofitel Plaza      -           36         -               -       -            -           -    68            -           -

Renaissance     -            -           -               32     32         -           -      -            64         -

Equatorial          -           32        32             38     32         -           -    70           102      128

Sheraton           37         55         -               37     55         -          -     53             91      220

 

 

 

 Most are in the CBD

 

 

DEMAND & SUPPLY FORECAST                          

 

In June 2007 the city's depart­ments and agencies submit­ted a list of 11 locations for developing new hotels of 4 ­and 5 star ratings to 2020, most of them in the downtown area. The 11 chosen sites are among 30 locations proposed by the Department of Tourism and other departments. The 11 spots include : -

 

  1. No. 8-12 Le Duan: In early 2008, the government approved a proposal by the Saigon Pearl of The Far East Com­pany to develop a luxury hotel on this prime 4,953 sqm site at 8-12 Le Duan. Partners include HCM City Housing Management and Trading, Saigon Jewelry Company and Saigon Industry Corporation.

 

  1. 76 - 78 Hai Ba Trung: The Saigon Trading Group (SATRA) will develop the 3,216 sq m area for a 5 star hotel and a commercial center and will be operational by 2010.

 

  1. 2-4-6 Hai Ba Trung: In early 2008 the Saigon Alcohol Beer & Bever­ages Company (Sabeco) obtained permission to develop a 6 star hotel, office, commercial and con­vention center at the upper end of Hai Ba Trung.

 

  1. 164 Dong Khoi

 

  1. 11c-11-13 Lam Son Square: Saigontourist Holding Company will develop the 2,758 sqm site in the downtown area. The location is currently unoccupied ex­cept for the Hoang Long and Lion restaurants. Saigontourist will develop and oper­ate a high-class hotel on the premises by 2010.

 

  1. 27b Nguyen Dinh Chieu: In early 2008 the People’s Committee approved the development of 25 story 5 star hotel and of­fice building at 27b Nguyen Dinh Chieu in District 1 by the Aviation JSC on a 5,000 sqm site owned by Vietnam Airlines. This long-stalled hotel was originally planned to be 260 room Holiday Inn and was half built when the financial crisis delayed completion.

 

  1. 60 Vo Van Tan

 

  1. 79 Ly Thuong Kiet (Tan Binh District)

 

  1. 651 Tran Hung Dao (District 5)

 

  1. 39 Nguyen Van Ba (Thu Duc District): Saigontourist Holding Company will develop the 1,616 sqm stie.

 

Some other hot spots under consideration are : -

 

  1. Tan Hung Dao - Pham Ngu Lao-Nguyen Thai Hoc area

 

  1. Le Thanh Ton-Thi Sach -Cao Ba Quat- Hai Ba Trung area (opposite the Park Hyatt Hotel in District 1).

 

  1. 21 Ton Duc Thang in District 1 - In late 2008, the HCMC government approved a plan to move the city's Customs Department to Saigon South. The department's current premises at Ton Duc Thang in District 1 will be used to develop a high-rise luxury hotel.

 

Because these areas are densely populated, the site clearance, compensation and paperwork would be complicated, the People's Committee said. The city expects to have about 4 or 5 more qual­ity hotels by 2009. The supply is estimated to fall short by some 14,500 standard rooms by 2010 including 7,000 rooms of 3-5 star ratings. There are currently 8 projects to build and expand 4 and 5 star hotels in the city that should be completed prior to 2010 such as the Times Square, the Kim Do complex and the Majestic Hotel.

 

In mid 2007 Saigontourist set out a target to have around 2,000 more high-end hotel rooms in the next 5 years, bringing to at least 6,000 five­ star rooms by 2012. The aim is to increase the number of high-standard rooms by 50% within the next 5 years. Work started on the 4 star Grand Hotel upgrade into a 5 star facility. "We are focusing (resources) on projects to ex­pand and build hotels, office buildings and trade centers, with an aim to have at least 6,000 five star rooms in the next 5 years, including rooms at joint-venture projects," he said. The Grand Hotel on Dong Khoi Street is being upgraded at a cost of more than US$20 million, and upon completion in 2009, the facility will have 173 new rooms plus 63 upgraded rooms. Several 4 and 5 star hotels in the list to get facelift in the immediate future include the Majestic, Kim Do, and Conti­nental hotels, which will also be turned into 5 star ho­tels. Saigontourist plans to spend around USD$50 million to upgrade the Majestic Ho­tel into a 5 star hotel plus a 27 story office building, while the Kim Do Hotel will also be made a 5 star hotel of over 300 rooms. It is currently also expand­ing the Rex Hotel adjacent to the City Hall, and building the HCMC Exhibition and Convention Center in Saigon South. SaigonTourist owns many big hotels such as the Majestic, Rex, Grand, and Bong Sen, the company also acts as the lo­cal partner in many other big hotel projects such as the Caravelle, the Sheraton Saigon Hotel & Towers, and the New World Saigon. In 2009 the company welcomed around 1.5 million tourists - up 1.6% - and obtained total revenue of nearly USD$325 million – up 13%.

 

 

  1. Asian Plaza: Licensed in 1996 and was to start in October 1997 and to complete in three years. However, the Korean partner asked for permission to delay due to financial difficulties. The project restarted in 2006 when it became 100% foreign owned and construction started in 2007 to include an InterContinenal hotel, apartments and retail.

 

  1. Nikko Saigon ex-Saigon Happiness Square: US$428 million mixed use development projects located on 53,033 square meter land at 235 Nguyen Van Cu, District 5 overlooking to Cong Hoa Square, adjacent to Cho Lon. It was planned to include tow 20 storey five star hotels with a combined total of 800 rooms, 79,388 square meter of office space, 47,773 square meter of retail space and 680 luxury apartments with a total floor area of 73,875 square meters but was delayed for 11 years. Fei-Yueh Vietnam, the de­veloper of the Saigon Happiness Square project's phase one will comprie two 14-story office buildings and two commercial centers. The finished Saigon Happiness Square will span 2.4 hectares and include two 14-story office buildings, two commercial centers, one hotel, one 18-20 story apartment building, four 22-24 story apartment buildings and an underground parking lot. Fei-Yueh Vietnam, a subsidiary of Taiwan's Fu Tsu Construction, is investing US$150 million in the project. The project owner hired CYL, the designer of the tallest building in Taiwan, as a consult­ant for the project and applied Top Down construction technology to develop the Saigon Happiness Square into an architec­tural landmark in HCMC.

 

  1. Saigon Cultural and Commercial Centre: Located at the west of the commercial center of District 1, adjacent to the New World Hotel.   It is currently a city park.   It was originally planned as one of the largest real estate projects in Vietnam, including an amusement park, four floors of retail space and a 38 storey office building, and 523 five star hotel rooms. The foreign partner is Jin Wen Enterprises of Taiwan. Three local partners are Urban Development Service Company, Parks and Greenery Services Company and Ben Thanh Tourist Services Company.  The original investment license was US$ 524 million project, which was known as the “Black Hole of Saigon”, the tallest building in Ho Chi Minh City. A member of the Jin Wen Group had proposed convening local partners to negotiate the transfer of its legal capital. The Jin Wen Group was facing bankruptcy, reportedly due to losses incurred by its overseas subsidiaries. In April 2003, local partners and Taiwanese partners discuss capital transfer but have not finished due to the problem whether to include the joint venture’s $1.5 million debt owed to construction contractors and building-material and equipment suppliers, as transferred capital. The two sides, the source added, have not yet reached consensus regarding the $23 million Taiwan’s Jin Wen Group put into some half-finished areas of construction, which had been borrowed from Taiwan’s First Commercial Bank. It has since emerged that Jin Wen had submitted a document to the Ministry of Planning and Investment asking for the project to be delayed until 2003. All three local partners expressed a keen interest in taking over this giant project. If developed this project would likely represent competition with the subject site due to its similar products.

 

  1. Heritage Saigon: Ben Thanh Tourist Services Company decided to buy 60% stake of its foreign partner, the Singapore backed Orient Vacation Company and will go it alone.

 

  1. Ben Thanh Windhorst: Despite his callow appearance, Germany's teen tycoon was remarkably composed and confident last week in Bonn at the signing of a joint-venture agreement for his latest project: the 55-story Windhorst Tower, to be built on a prime patch of real estate in Vietnam's Ho Chi Minh City starting in March. The almond-shaped complex will not only be the city's tallest building, but the first office high-rise funded by a German investor in Asia. The German based Windhorst Land Development Ltd (70%) recently said it will return to Vietnam to resume 45 million Ben Thanh Windhorst project with its local partner.

 

  1. Saigon International Exhibition & Conference Centre: As part of the new $200 ­million plus Saigon Exhibition and Con­vention Centre (SECC) project in Phu My Hung town in HCMC's District 7 a 4 star hotel with 600 rooms and a 5 star hotel with 400 rooms will be constructed.

 

  1. Savico Plaza: At the end of 2007 Savico and New City Properties signed an agreement to develop and operate a property complex named Savico Plaza in Tan Binh. The project includes a trade centre, offices for lease, a hotel and high class apartments. The JV is capitalised at USD$30 million.

 

  1. Vietnam Financial Centre: In early 2008 Berjaya Leisure (Cayman) Ltd., a subsidiary of the Ma­laysian group Berjaya Land Bhd (B-Land) obtained a license for a mammoth project to build the Vietnam Finan­cial Center on Ba Thang Hai Street in District 10. The 6.8 hectare center, which has total investment capital of USD$930 million, will comprise 6 high rise buildings. Two buildings will be for 5 star hotels, 2 buildings for offices for rent and 2 buildings for financial services. The tallest building will be 48 stories and the lowest building 28 stories and the project will also in­clude underground facilities for communication among the 6 build­ings, a shopping center and a park­ing lot for 3,000 cars.

 

  1. SATO: In early 2008 this USD$1 billion 50:50 JV between Construction Joint Stock Company No.5 (SC5) and SATO Corporation, announced plans to develop a huge 9.9 hect­are project on Binh Thanh District's Nguyen Huu Canh Street, which is next to the luxury Saigon Pearl condo buildings under construction. The multi-functional complex will comprise of more than 3,300 apart­ment units in 5No 35 story blocks, a 35 story office building, and a 5 ­star hotel with a conference hall able to seat some 1,000 people. There are also a shopping and rec­reational center, a world-class hos­pital and an international-standard school. Total investment capital required for the 3.2 hectare first phase of the project will range from USD$300 million to USD$400 million. The second phase is expected to need USD$600 million, British architecture firm Aedas has won the consultancy deal.

 

  1. Ben Thanh Hotel: The People’s Committee awarded the site at Ho Tung Mau-Huynh Thuc Khang-Ton That Dam-Ton That Thiep quadrangle to Ben Thanh Group to develop a hotel, commercial and service complex in early 2008.

 

  1. IBIS Saigon: In mid 2007 the BB Dai Minh company announced plans to set up a JV with the French hotel management company Accor to open a 3 star IBIS Saigon Hotel in Saigon South.

 

Suspended projects

 

  1. Mandarin Oriental Hotel: is planned Phase II of the mixed use development project located at the intersection of Le Loi and Nam Ky Khoi Nghia Street, in the heart of District 1.  This phase was scheduled to start the construction in 1996, but delayed at economic crisis.  As planned, it will provide 250 five star hotel rooms to the hotel market. If this project restarted , it will become strong competition to the subject site if proposed development is five star hotel.

 

  1. Holiday Inn Hotel: was three star hotel of 148 rooms developed by a joint venture between Vietnam National Airlines and S.M.I Travel Co. Ltd (Thailand) under the investment license No. 933/GP dated 30 July 1994 with total investment capital of US$ 27,334,640. The construction was stopped at the time of Asian economic crisis.

 

  1. Hilton International Hotel: developed by French Feal International S.A., a company specializing in hotel construction. As original plan, it is US$ 81.5 million project with 390 rooms and 30 serviced apartments, located on the west bank of Saigon River. The project has been redesigned as an office, retail and apartment complex and is due to start construction in 2007.

 

 

 

 

Last Updated ( Monday, 04 May 2009 )
 
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