Nha Trang offers sure bet for building hotels

The feasibility of building hotels in Nha Trang resort city in central coastal Khanh Hoa Province is better than other cities because of its success as a tourism destination, according to real estate service and consultancy provider Savills Viet Nam.
The total number of tourists coming to Nha Trang has been stable despite the economic slowdown, which indicates a promising future for the hotel market there, Savills said.
In the next few years, Savills reckons that 14 hotel projects with about 2,300 rooms could be completed in Nha Trang.
Currently, there are 373 hotels in Nha Trang, providing 9,712 hotel rooms.
They include three 5-star hotels and resorts, five 4-star hotels, twelve 3-star hotels and approximately 51 two-star ones.
Most hotels, resorts and guesthouses are concentrated on and around Tran Phu, Nha Trang's beachfront boulevard. Others are located on the streets of Tran Hung Dao, Hung Vuong and Yersin, among several others.
Since October, many hotels of all grades have offered discounted room rates.
The majority of tourists travelling to Nha Trang during this period were foreigners. Hence, occupancy of 4-star and 5-star hotels was higher than in 3-star hotels due to foreigners' preferences for high quality rooms.
There was a big difference in room rates among hotel grades. Five-star hotel room rates, at around US$170 per night, were more than double of 4-star hotel rate and nearly six times of 3-star hotel rate.
Demand trends
Nha Trang has long been renowned as a popular tourist destination, but the MICE (meeting-incentive-conference-event) segment and demand from other business travellers remains limited.
The number of tourists in Khanh Hoa Province increased constantly in the period 2000-08.
In 2008, despite the global economic downturn, Khanh Hoa welcomed about 1.6 million visitors, an increase of nearly 17 per cent compared with 2007, in which domestic and foreign visitors accounted for 80 per cent and 20 per cent, respectively.
According to Savills, in November 2009, the total number of apartment projects in Nha Trang stood at 12 with more than 1,500 units.
The number of land plot projects remained at six, with 1,000 land plots. There are four villa/townhouse projects with a total of 250 villas and townhouses.
Most of the apartments are located in the city centre while the villa/ townhouse and land plot sectors are concentrated in Vinh Nguyen and Vinh Hoa wards with sea views.
The land sector is enjoying the highest primary price in Nha Trang residential market, at an average of $710 per square metre, while the primary price of apartments and villas/ townhouses is $595 and $620 per square metre, respectively.
All land plot projects in the primary market have a very good location, with excellent views to the sea.
There is a real demand for ready-built houses in Nha Trang. Due to the limited land area close to the seaside, many apartment buildings have been developed in the city centre in the last few years in order to meet this demand.
With Nha Trang increasingly considered as a destination for the holiday-home market, many foreigners living in Nha Trang consider this area as their second home.
Individual investors can buy land lots in a good location, build their own villas and the lease them to expatriates.
Savills said that a total of 31 residential projects may come on line in the next few years.
Large project areas are expected to be developed in Vinh Thai and Phuoc Hai wards to the west of Nha Trang, accounting for more than 60 per cent of Nha Trang's total future development area.