Hotel investors said to focus more on mid-scale segment

Hotel investors should shift their focus from the high-end hotel segment in Vietnam to the mid-scale segment to better meet the market demand, said participants in a conference in HCMC on Tuesday.
Tour operators, consultants, and hotel management developers suggested the above idea in a session discussing tourism investment as one of the topics at the two-day Jaccar investors conference. The conference was held by Jaccar, a company of Luxembourg.
Participants said while the mid-scale hotel segment is offering more opportunities, investors have not properly attended to such signals.
Tran Trong Kien, chairman of Thien Minh Travel JSC, which has popular travel brands such as Buffalo Tours and Ivivu, said Vietnam’s tourism market still lacked sizable three-star hotels in major cities and main destinations.
Similarly, Antoine Sirot, head consultant of Ethic Consultant, said opportunities in the mid-scale hotel investment were more ample and secured, as this category of hotel is less affected by such negative circumstances as epidemics like SARS, or economic downturn. Investors can develop the segment targeting the ever-growing domestic demand, he said.
According to him, such hotels need not be located in prime tourism locations, so the cost of land and construction can be lowered.
“These hotels can be located in busy business districts or in the suburbs of major cities where land is most affordable,” he said.
If such hotels are located in less favorable locations, hoteliers will still be able to market their products given the widespread use of the Internet.
“The high level of internet connectivity and penetration in Vietnam offer opportunities to market such hotel products,” Sirot said.
The Vietnam National Administration of Tourism said the country now had 32 five-star hotels, 92 four-star facilities, and 178 three-star hotels.