Savills: A hospitality boom in Vietnam

In recent years, Vietnam has become one of the fastest growing tourism destinations in Southeast Asia. The growth has been driven by the entrance of international hoteliers, a rapid increase in direct flights, an improved visa policy and investment into key infrastructure. Following a historical high of 7.9 million international arrivals in 2015, the number of international tourists visiting Vietnam in the first quarter of 2016 recorded at approximately 2.5 million, up 20% from the same period in 2015. Similarly, the number of domestic tourists is also growing at a phenomenal rate of 48% in 2015 and approximately 14% per annum over the last 10 years.

As demand increases, investors have demonstrated growing interest in the hotel market. Hospitality development throughout the country kicked off with fervour in 2015 and will deliver world-class product, supported by great coastal locations, quality golf courses, world heritage sites and international architecture. Vietnam’s outstanding destinations are set for continued rapid growth in 2016 and beyond.

The improving hospitality market has resulted in a number of successful transactions, among which the latest sale was the Duxton Hotel Saigon with the transaction value of approximately US$49 million. The property is a premium 4-star hotel located on Nguyen Hue Boulevard, one of the most prestigious addresses in Ho Chi Minh City. The hotel offers 191 luxurious guest rooms and suites, 16 meeting rooms and a wide range of amenities. Savills acted as the exclusive agent for the vendor - Low Keng Huat, a Singapore-based group.

Savills expect the recent interest from investors to continue, with a number of further hospitality transactions due to complete in 2016.