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A series of large-scale resort ventures unveiled in the first three months of this year has illustrated the positive signs of recovery from more than two years of pandemic impact on the resort and hospitality sector in Vietnam.
The Hai Giang MerryLand tourist area project developed by Hung Thinh Group
In early March, the Hai Giang MerryLand tourist area project developed by Hung Thinh Group in the central province of Binh Dinh was announced with the total investment for phase 1 of over $2.4 billion. The MerryLand Quy Nhon venture, meanwhile, is designed with 15 subdivisions, including a 5-star luxury hotel, villas, a square, and utilities.
Notably, in the central province of Binh Thuan’s Phan Thiet city, NovaLand Group is to announce the second project under the NovaWorld brand with a scale of 700 hectares in the second quarter of 2022, after having succeeded with the first NovaWorld Phan Thiet scheme.
In June, the group will also launch another venture under the NovaWorld brand in the central province of Khanh Hoa’s Nha Trang city with a scale of more than 600ha.
In the southern province of Ba Ria-Vung Tau, NovaWorld Ho Tram launched Long Island, while it also continues to study the land fund for planning Safari and some other locations over about 3,000ha.
In the Central Highlands province of Lam Dong, NovaLand will launch Lien Khuong-Prenn with the brand of NovaWorld Dalat.
“We consider many factors when choosing a project, such as infrastructure connectivity and the expectation to turn that place into a new tourist destination. They contribute to the local economy, like what we are doing in Binh Thuan with NovaWorld Phan Thiet, Centara Mirage Mui Ne Resort, and in Ba Ria-Vung Tau with NovaWorld Ho Tram,” a NovaLand representative said.
Regardless of famous tourist destinations, in many other places that have been quiet recently, such as the northern province of Quang Ninh, resort real estate ventures are also on the way back.
In February, the prime minister approved the investment policy for a high-class resort-entertainment complex, a golf course, and Monbay Van Don residential area. The project has an estimated total investment of $1 billion in the Halong commune of Quang Ninh. Meanwhile, the 5-star Sonasea Van Don Harbor City tourist and resort complex funded by CEO Group in Bai Dai has now completed many sections after long pandemic-induced delays. The project is currently preparing to put Sonasea Long Beach into operation and introduce new products in the two subdivisions of Wyndham Garden Sonasea Van Don and Sonasea Silk Path.
After more than two years of a sector freeze, movements are demonstrating that a new beginning is just around the corner. The success of resort real estate projects at the end of 2021 and buyers’ returns has helped developers have more capital and confidence to expand their business in 2022.
Vo Huynh Tuan Kiet, director of Residential Marketing from CBRE Vietnam, said that the resort real estate segment is on the radar of many investors. “Although this segment is heavily dependent on the development of tourism, that recovery will mean this segment will receive a lot of attention from interested investors,” Kiet said.
Kiet added that the market is recording movement from hotspot destinations such as Phu Quoc, Nha Trang, Danang, and Halong to second-tier cities and provinces such as Ho Tram in Ba Ria-Vung Tau, and Binh Thuan. The advantage of these markets is that the selling price is still low compared to the previously developed markets, so the future profitability is still there.
Mauro Gasparotti - Director Savills Hotels Asia-Pacific
With the recent positive signals, I realise that many hotel owners, as well as hotel operation teams, are restarting their business operations and implementing recruitment, training, and promotional plans to catch the recovery wave of the international market. Many hotel projects are also actively accelerating the construction, completion and implementation of pre-opening activities to welcome visitors in the near future.
I hope that hotels and resorts with a global distribution system and media network can take advantage of accompanying Vietnam’s tourism industry in promoting and attracting international guests back.
Phan Cong Chanh - Real estate expert
Over the past two years, the room rental rate sometimes reached zero, causing many owners to find ways to sell after a long time of struggling to pay bank interest in the context of having no revenues. This downturn wiped out the previously accumulated profits from the whole 5-10 years of operation, pushing the rental market into serious challenges.
The boom in resort projects is reasonable. The pandemic has had a powerful impact on many real estate investors and buyers. They are more interested in ecological, wellness, and health-oriented real estate.
During the fever period from the end of 2021 until now, localities with mountains, seas, and real estate products for second and third homes have attracted many investors, especially those from big cities.
Xander Nijnens - Managing director; head of Hotel Advisory, JLL Asia Pacific
We are extremely excited to see that the Asia-Pacific hotel market is recovering faster than anticipated. But more interestingly, we are witnessing the transformation of the industry to meet travel needs. Consumer behaviour and expectations are gradually changing.
Hoteliers will increasingly need to align strategies to adapt and create a work environment that supports the health and wellbeing of the workforce, in addition to prioritising efforts to reduce carbon emissions and climate risk reduction.
According to JLL’s annual Hotel Investment Outlook, transaction volume in Asia-Pacific totalled $8.5 billion, accounting for 13 per cent of total global hotel volume. This level of activity represented an increase of 39 per cent over 2020 volumes. Capital allocation in 2021 was impacted by ongoing pandemic restrictions and border controls in several key economies coupled with a wide bid-ask spread on properties.
Encouragingly, new market entrants were eager to capitalise on burgeoning opportunities, with activity supported by factors including five higher-end hotels situated in urban markets with strong domestic or leisure demand transacting at over $1.0 million per key and stable single-asset transaction activity, which accounted for 85 per cent of total volume in the region.
By Bich Ngoc
