With policies to support Vietnam’s tourism market and with growing FDI capital flows, the hotel and serviced apartment segment in Hanoi is assessed to have positive prospects and will attract more international brands in the near future, according to Savills Vietnam.

Notable international projects in the hotel segment include Dusit Hanoi - Tu Hoa Palace, Fairmont Hotel, Shilla Hotel, Four Seasons, Hilton West Hanoi, and Skyline West Lake. In the serviced apartment segment, The Ascott will soon manage 59 per cent of future supply at the Tay Ho View Complex and Somerset Metropolitan West Hanoi projects, while the Lotte Group will have an 8 per cent market share in The Heaven in Starlake new urban area. Experts believe that the increasing flow of FDI will create a solid source of demand for the accommodation segment, thereby contributing to its continued growth.

According to Savills, efforts to remove entry and exit bottlenecks with new visa exemption and e-visa policies effective from August 15 and attractive tourism products for international visitors as well as policies to attract investment have created a push for positive changes not only for the hotel market but also for other accommodation products such as serviced apartments.

In particular, in September 2023, Vietnam and the US announced the establishment of their Comprehensive Strategic Partnership. Mr. Matthew Powell, Director of Savills Hanoi, noted that this could be an important attraction factor for major international technology corporations to invest in Vietnam, providing additional opportunities for important FDI projects, thereby creating a positive outlook for the serviced apartment market.

According to Mr. Powell, the increasing flow of FDI will bring a large number of international experts, creating a solid source of demand for the serviced apartment segment, thereby contributing to this segment’s continued growth.

According to Savills, hotel supply in Hanoi in the third quarter of 2023 was 10,962 rooms, stable quarter-on-quarter and increasing 8 per cent year-on-year. The launch of L7 West Lake Hanoi by Lotte in July brought an additional 264 rooms in Tay Ho district. It is expected that when it is officially ranked, the hotel will reach 5-star standard.

Hotel occupancy in the third quarter reached 61 per cent, down 2 percentage points quarter-on-quarter but up 19 percentage points year-on-year. However, occupancy is still below 73 per cent, the level recorded in the third quarter of 2019, before Covid-19. Room tariffs in the quarter recorded an increase of 7 per cent quarter-on-quarter and 22 per cent year-on-year, reaching VND2.7 million ($110) per room per night.

Regarding future hotel supply, according to Savills, Hanoi will receive four more projects in 2024, with 1,355 rooms. From 2025 onwards, 64 projects with about 10,300 rooms will be launched. Among them, Nam Tu Liem district has the largest share, with nearly 3,000 rooms, equivalent to 26 per cent of future supply, followed by Ba Dinh district with 18 per cent and Tay Ho district with 15 per cent.

Savills has also said that 17 international hotel projects with 3,720 new rooms will be opened in the future, including 12 5-star projects, 2 4-star projects, 1 3-star project, and 2 undetermined projects. Mariott will have the largest market share, with 29 per cent, followed by Hilton with 26 per cent.