Cashing in on the tourism property boom

A Tourism property is currently one of the real estate market’s most prominent sectors with developments mushrooming across the country. Vu Ngoc Tu, CEO of Ninh Van Bay Travel Real Estate Company, shares his views on the trend.
Is there any room for the company to capitalise on the current tourism property boom?
Tourism property is still a relatively new development in Vietnam’s real estate market. As the economy stabilises from the economic downturn and with continued growth, demand for real estate, including tourism properties, will increase. Currently, the tourism property market has great potential and that’s why dynamic Vietnamese developers, and foreign developers, are building larger projects.
Our company will not miss out on this particular trend. We have established a track record of building luxury tourism properties with our first project, Six Senses Hideaway, which opened six years ago in Nha Trang.
We are moving forward with a number of new developments such as Ana Mandara Resort in Ninh Binh province, Six Senses Saigon River in Dong Nai province and the second phase of Six Senses Hideaway in Nha Trang. Our aim is to become the leading tourism property developer in Vietnam by 2012 with eight tourism complexes, providing some 700 luxury villas for sale and lease.
When will these properties go on sale?
We expect to launch sales of Six Senses Saigon River Resort in the next few months. The project will have 51 villas for sale and another 112 villas and apartments for lease. The first phase will begin operation in 2011 with the management of Six Senses Hotels, Resorts, and Spas, and we are working with Savills on the sale of the villas.
Tourism property buyers often expect income from sub-leasing their properties. How will you meet this expectation of buyers at Six Senses Saigon River as it is located in Dong Nai province, an industrial hub, not a beach or tourist destination?
Although this project is located in Dong Nai province, it is actually very close to Ho Chi Minh City. It’s just 45 minutes from Tan Son Nhat International Airport and 25 minutes from downtown Ho Chi Minh City by waterway on the Saigon River. Therefore, from this resort guests can visit Ho Chi Minh City easily while enjoying tranquillity and privacy that cannot be found in the downtown areas.
Our target market is tourists who stay in Ho Chi Minh City before going to other resorts in Dalat, Nha Trang or Phan Thiet. The resort will also become a weekend destination for local people.
Most of the resorts the company is developing focus on luxury tourism. How challenging is it to develop this sector in Vietnam compared with other countries such as Thailand and Indonesia?
The biggest challenge and difficulty for luxury tourism in Vietnam lies with infrastructure. In order to attract more affluent tourists to Vietnam, we need better infrastructure such as international airports and seaports at tourist destinations.
In other areas of high-level tourism development such as Thailand, Indonesia and Singapore, investment was made in infrastructure a long time ago. For example, the international airport in Phuket, Thailand was built in the 1990s, turning it into a tourism hub.
In Vietnam, the international airports in Hanoi, Ho Chi Minh City and Danang have low capacities and there are not many international flights. If tourists want to go to destinations such as Halong, Phu Quoc and Nha Trang, they have to travel from Ho Chi Minh City or Hanoi, then continue their trips by road or by air.
This makes tourists tired. Phu Quoc, for instance, is a very beautiful place, which is ideal for luxury tourism, but we know that tourists are still hesitant to go there as they have to book connecting flights and the planes are small and uncomfortable.
How is the company addressing these challenges?
With years of experience in the tourism business, we research the market carefully and we only build when we see a demand for our product. We select locations that most other developers would not think of. But if these locations are properly studied, you will realise they are unique.
We have developed a synchronous investment process in which we are responsible for investment, design and construction, and our foreign partners contribute consultancy, design and management. For example, our Six Senses Ninh Van Bay and Six Senses Saigon River all had Six Senses Hotels, Resorts and Spas on board right from the beginning to ensure that they meet international standards while bringing Vietnam’s cultural identity into full play.
We can control our projects in a number of ways such as feasibility study, design, construction and management, and that brings us success. In addition, innovative and unique design, in combination with the perfect, seamless service at our resorts, is one of our strong points.