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Tony Milton MRICS

BSc (Hons) Est Man

Hanoi Hotels
Friday, 27 February 2009

 HOTEL MARKET                                         


 The Hanoi hotel has rapidly cooled down, hit by the effects of the Credit Crunch with 5 star hotel occupancies falling to 60-70% (compared to 84% in the 1st Quarter 2007), and with the opening of the InterContinental Hanoi Westlake. The effect of the global economic slowdown became more apparent in the 4th Quarter when occupancy rates fell to around 63% (a decline of 20% year on year). Occupancy and average daily rate (ADR) of the entire year 2008 were 65% and $154, while those of 2007 were 80% and $131. Movenpick Hanoi Hotel held a soft-opening in November 2008 and was upgraded to 5 star status in early 2009. VinaCapital, the owner of Movenpick Hanoi Hotel, also held a breaking ground ceremony for Times Square Hanoi, a commercial complex with a high-end hotel component. Two 4 star hotels are scheduled to come on stream in 2009: the Dan Chu Hotel and the Mercure la Gare. About 1,800 4 & 5 star hotel rooms are tentatively slated to come online during 2009-2011.



Hanoi presently has 428 hotels, 9 of which are 5 or 4 star hotels, and 21 of which are 3 star hotels. With a project annual growth in tourism of 20% the city has projected a shortage of about 10,000 rooms rated at 3 stars or higher. The Tourism Depart­ment anticipate that by 2010 two million foreign visitors a year will visit Hanoi and that an additional 2,000 ho­tel rooms in the 3-5 star range would be needed to accommodate them.








5No. 5 star hotels are set to take shape in Cau Giay and Tu Liem districts, on the outskirts of Hanoi : a hotel com­plex and twin towers backed by PetroVietnam at Me Tri commune's South-West Sport and Culture Park, Keang­nam's $500 million venture, another $500 million complex invested by Japan's Riviera, and the InterContinental within the National Sports Complex’s USD$65 million mixed use development by the domestic company Tran Hong Quan'. Apart from the 5 loca­tions above, Hanoi People's Committee has further plans to develop other new hotels in the city. Under this plan, a 3.5 hectare land lot in the diplo­matic area in Tay Ho district's Xuan La commune, a 5.5ha area in Linh Dam peninsular in Hoang Mai district and another section on the other side of the Red River, in the Xuan Non and Nam Hong communes of the Dong Anh district were planned for hotel developments. Some hotels are being extended, such as the Hoan Kiem hotel (four stars, 126 rooms), Dong Loi (three stars, 70 rooms) and Dan Chu (four stars, 160 rooms). According to the city's Department of Tourism, the majority of hotels in Hanoi are now operating at occupancy rates higher than 80%. The city now has 428 hotels in all levels with a total of 12,500 rooms. The city is home to 8No. 5 star hotels with 2,360 rooms and 4No. 4 star hotels with more than 1,000 rooms. With a predicted growth rate of 20% per year until 2010, the city will lack about 10,000 rooms of 3­ star standard. By 2010 Hanoi will receive about 2 million international visitors and it needs about 26,000 rooms to serve those tourists. Once the new 5 star hotels, totalling $1.18 billion in investment capital, are operational more than 2,200 extra 5 star rooms will be available. Therefore, over the next 4 years, from 2007 to 2010, Hanoi will have to build 3,300 more hotel rooms each year to meet the demand. Inves­tors will enjoy preferences in tax infrastructure, real estate rent and ground clearance.





Hotel                                              No of hotels                                  No of rooms

3 star                                                    21                                                     1,686

4 star                                                    5                                                          874

5 star                                                    8                                                       2.364

Total                                                     35                                                     4,924

                                                                                    (4&5 star hotels)        3,238




Hotels in the Pipeline


Name of investor                           Investment           Land                      Number

                                                    ($ million)            (hectares)              of rooms

Keangnam                                        500                         4.6                      500

Riviera                                              500                         4.2                      550

Charmvit                                            80                         1.98                     564

PetroVietnam's Petrowaco                  90                          3.7                      350   

InterContinental - now open                 65                          1.3                      363



Future projects


At least 8No. 5 star hotels are planned for the My Dinh area of Tu Liem dis­trict, with more than 3,000 rooms in the pipeline.



InterContinental Westlake Hotel: Several groups joined forces to resuscitate the dormant West-lake hotel project, the Lien Westlake Resort, which Inter­Continental Hotels Group agreed to manage. InterContinental Hotels Group signed an agreement with TPC Nghi Tam Village Company to manage this 5 star hotel. The building construction was about 70% completed in 1998 before the Asian Financial crisis. TPC Nghi Tam Village Company was a joint venture between Thang Long Tourism and General Trading Company and Malaysia's Tradewinds Corporations Berhad, who borrowed USD$18 to USD$20 million to complete construction and furnish the hotel at the end of 2007. inlate 2007 the Malaysian company Berjaya Land announced it had bought out stake belonging to Tradewinds Corp in the 359 room InterContinental for USD$75 million.




Lotus Hotel: In early 2007 Japan’s Riviera announced plans to build the USD$500 million 15 floor star 769 room Lotus Hotel with 200 offices for rent in My Dinh on Pham Hung close to the National Conference Center. Of the amount, Riviera will contribute USD$200 million, China Commercial Credit Bank contributes USD$200 million, Japan’s CSK Financial Company USD$100 million, and CRD Singapore. The development will be just on part of a much larger 19 hectare complex including a residential area, trading centre, recreation and sport facilities.



Hoan Kiem Hotel is conveniently located in the heart of the City's business, tourist and culture district. A 150 room 4 star hotel is being built and expected to open in the first quarter 2006. Being developed by a joint-venture of Hanoi Tourism Company & Ngan Anh Commercial and Export Production Company, Hoan Kiem Hotel will provide numbers of 4-star hotel rooms to the market.



Ha Noi Plaza: South Korea's Charmvit is building an USD$80 million 27 floor twin tower 5 star hotel on 1.97 hectares in the Dong Nam New Residential Area of Tran Duy Hung Street in Cau Giay district. The company plans to start work on the 50-year project in July 2007 and finish it in late 2009. Charmvit is also the investor in the 54-hole USD$30 million Dragon Mountain Golf Course (one of the biggest in Southeast Asia), in Luong Son dis­trict in the northern province of Hoa Binh which opened in late 2006.



Tran Hong Quan Hotel: Vietnam's Tran Hong Quan Trading Company is investing $16.8 million in a five-star hotel on 1.3 hectares near the National Athletic Training Centre on Le Due Tho Street in Tu Liem district's My Dinh commune which will be completed in 2009.



Rafin Hotel: Polish group Rafin will develop this UISD$200 million project in Youth Park near Thanh Nhan lake with HanoiTourist including 3 towers of 60, 48 and 28 floors that will provide 600 hotel rooms, 97,000sqm of office for lease, 70,000sqm of luxurious apart­ments, 73,000sqm of shopping centres and a conference facility. Rafin will hold 80%. To acquire land, the developers were required to pay an up-front fee covering a 50-year rental term for 20,000sgm of land, with the city using the cash to improve the nearby Thanh Nhan lake. Cancelled in March 2009 due to slow progress.



Keangnam Hotel: In early 2007 Korea's Keangnam got approval to develop a $72 million 5 star 500 room hotel, apartment and office complex in the X2 zone in Pham Hung next to the newly built National Conference Centre (NCC) and north-west of Hanoi's proposed museum. The development will have 300 rooms, 7,000 square metres of office space, 60 high­ end apartments for lease, a restau­rant, banquet and spa and entertainment centre on a 4.6 hectare site.  To completed in 2010, the skyscraper will be the tallest in Viet­nam and the 17th tallest world­wide. The Hanoi Landmark Tower is a 72 story structure with 2 with another two 47 story apartment buildings, whose total cost is estimated at USD$1.05 billion.



PetroVietnam Complex: In early 2007 Vietnam Oil and Gas Corp. (PetroVietnam) received approval for a USD$75 million 5 star hotel with some 500 rooms near My Dinh National Stadium as part of a complex on 25 hect­ares, including a 108 floor commercial twin office and apartment tower, a park and an entertainment area.



Hanoi Plaza: In mid 2007 the Viet Nam Construction No 2 JSC (VC2) has signed a contract with the Ha Noi Plaza Hotel Co Ltd to build a USD$23.14 million hotel on Tran Duy Hung Street.



VipTour Hotels: At the end of 2007 the Vietnam Investment Promotion and Tourism Company (VipTour) received permission from the Hanoi city gov­ernment to build 2No. 5 star hotels located on the two of the busiest streets, Doi Can and Tran Vu, on sites of 10,000 sqm and 3,000sqm respectively. The company will invest some USD$250 million in the complexes, which will include hotels, offices and apartment buildings. The complex on Tran Vu Street will be developed on the site of the existing Van Hoa restaurant, located at one end of the road. Due to its proximity to Truc Bach lake, the complex is limited to a maximum of 9 storeys and has a construction density of 60%. The project is required to have at least 2No. underground levels for parking and the design must be in harmony with the sur­rounding environment. At 27 storeys high, the complex planned for Doi Can Street is required to have at least 3No. underground levels. Hanoi authorities have agreed to let the investor resettle 50 households in the area but asked for their accommodation to be provided in a sepa­rate area. Both complexes are expected to be put into operation in 2010. A Russian investor is likely to be a funding partner. VipTour also signed on with Malaysia's Sunway to manage and operate the com­plex at Doi Can.



Ngoc Khanh Hotel: A foreign ­invested JV has filed an applica­tion with the Hanoi authorities to build a USD$65 million hotel complex on Ngoc Khanh.



Ana Mandara Villas at Hanoi: At the end of 2007 the Thailand ­based resort manager Six Senses Resorts & Spas along with its local partner Khanh Hoa Trading & Investment Company said they would invest US$40 million to build a 5 star resort in Dong Anh District in Hanoi named "Ana Mandara Vil­las at Hanoi". The 20 hectare resort in up­town Van Tri Commune will be designed according to the typical northern village architecture style. Beside the Ana Mandara Villas at Hanoi, Six Senses and its Vietnamese partner also aim to build another resort called "Health Spa Resort" in Ba Vi District in Ha Tay Prov­ince nearby in the future, and several others elsewhere. "In the next five years, we plan to build 3-4 luxu­rious resorts in Hue, Phu Quoc, Quang Ninh and HCMC." The 2 companies now jointly own and manage 3 resorts in Vietnam, namely Evason Ana Mandara and Evason Hideway in Nha Trang City, and Evason Ana Mandafa Villas in Dalat. The occupancy rate of Evason Ana Mandara was up to 92% in 2006. The target markets of the resort are Germany, En­gland, Australia and Japan.



In early 2008, Accor announced plans to open the following hotels : -


Mercure Ha Noi La Gare Hotel: To be opend in early 2009 with 102 rooms.


Mercure Ha Noi Hado Hotel: To be opend in early 2010 with 380 rooms.


Novotel Ha Noi On The Park: In mid-2008, construction began on the Novotel Ha Noi by the Ha Noi Tourism Corporation and SIH Investment Group from Singapore. The USD$40 million, 5 storey hotel will house 376 rooms, a restaurant, a 500sqm conference room and entertainment facilities.



Holiday Inn Hanoi Dong Da Hotel: In late-2008, the InterContinental Hotels Group (IHG) announced an agreement with Vietnam's MB Land JSC to manage a 300 room hotel bearing the Holiday Inn brand in Hanoi. The Holiday Inn Hanoi Dong Da Hotel at 6-8 Chua Boc in Dong Da District will become the first hotel in Vietnam to bear this brand when it opens to business. MB Land is owned by Military Commercial Joint Stock Bank and the Service Flight Corporation. The 4 star hotel would be located in a complex of hotels, office buildings and shopping centers.



Hattoco Hotel: At the end of 2008, Ha Tay Tourism JSC has started on the Hattoco building in Ha Dong to be constructed by Ba Dinh Con­struction and Investment Consultation Compa­ny. With capital of $5.9 million, the 101,000 sqm site will boast 39 floors, 6 of which will be a 4 star hotel and 550 high­ quality apartments. Construction is slated to be completed by the end of 2011.  



Times Square: In late 2008 the Thang Long Property started on the USD$50m Times Square Hanoi project in Me Dinh. The 65/35% JV between VinaCapital and Vietnam's Thang Long GTC will develop 4 hectare into a mixed-use office, hotel and retail complex. The Times Square Hanoi is close to Big C shopping center and within a walking distance from the National Convention Centre (NCC) and Na­tional Sports Stadium. The office tower has a pro­posed gross floor area of 20,000 sqm.



SAS Hanoi Royal Hotel: In early 2009 the Hanoi Tourism Corporation and its Singaporean partner, SIH Invest­ment Ltd, obtained approval to build the USD$40 million 5 story 4 star SAS Hanoi Royal Hotel with 400 rooms on one hectare at Thong Nhat Park, 295 Le Duan.




Last Updated ( Wednesday, 06 May 2009 )
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