Elite Hanoi hotels reduce rack rates

Rates advertised by high grade hotels in Hanoi in the second quarter of 2010 were twelve percent below their rates a year earlier. The biggest drop is at the five star level.
Demand is strong. The number of Vietnamese travelers to Hanoi in the April-June period reached 1.85 million, up 33 percent over 2Q09. Foreign visitors totaled nearly 300,000, up 32 percent. tourists came to Vietnam, increasing by 32 percent in comparison with the second quarter of 2009.
CBRE, a real estate service provider, reports that multi-star hotels in Hanoi have seen considerable improvement in room occupancy; 54.5 percent of their beds were filled, 10.3 percent better than a year earlier. Four star hotels gained a full 14 percent, to 53 percent occupancy.
Even though demand’s up, room rates are generally down. High grade hotels are now charging about $75 per night on average. In the 2nd quarter of 2009, they charged nearly $84.
At five star hotels, a guest will be pampered for a mere $120 per night, over twenty percent less than a year earlier.
At the three star level, rack rates are up a bit, however, and average $39 per night.
A CBRE executive says that the Hanoi hotel market still has great potential. “The Hanoi 1000 year anniversary festivities in October will increase the number of tourists,” he said. Many international hotel management groups are seeking investment opportunities in Vietnam, including Accor, InterContinental and Marriott.
A survey by the Grant Thornton firm has not surprisingly reported that 2009 was a difficult year for Vietnam’s hotels. Afflicted by the global financial crisis and an eleven percent drop in foreign visitors, most saw reductions in room occupancy and in profit. By Thornton’s estimate, the average charge per room at luxury hotels fell 32 percent in 2009.