Hospitality real estate bounces back
After being hit by Covid-19 outbreaks, the hospitality real estate market is on the mend, especially in prominent tourist destinations like Quy Nhon.
Adjusting to the new normal, along with the last bottleneck’s removal to welcome international visitors to Vietnam since May 15, the tourism industry has returned to the race.
According to the Ministry of Construction, there were 52 ongoing hospitality property projects in the first quarter 2022, about 98 percent of the fourth quarter of 2021, providing 20,118 condotels and 7,887 resort villas. There were five newly-licensed projects, 83 percent of the fourth quarter of 2021, adding 67 resort villas and 220 offices pairing accommodation.
A report from DKRA Vietnam also indicates growth in supply and occupancy of hospitality properties in the first quarter. Specifically, 12 resort villa projects of 1,020 units were launched for sale, up 4 percent over the same period in 2021. The new consumption-to-supply ratio reached 57 percent (about 579 units), increasing 2.3 times over the same period in 2021.
In the first quarter, the hospitality market welcomed 2,768 townhouses and shophouses from 13 new projects, up 4 percent from the previous quarter and 12.4 times higher than the same period last year. The occupancy rate reached approximately 87 percent (2,408 units), 14.7 times over the same period in 2021. The condotel segment recorded 613 newly-launched units; consumption reached 199 units or 32 percent of new supply and 3.3 times higher than the fourth quarter 2021.
Several reasons, according to analysts, are fueling this development. First, rebound of the tourist industry supports the vacation property market substantially. Second, supply and demand are reasonable due to few projects being deployed in the past two years. The Vietnam Association of Realtors (VARS) sees 2022 as a critical year for the hospitality real estate sector to reclaim its vibrancy. It is forecasted that investment will mainly flow into vacation properties in prominent tourist destinations, namely Quy Nhon in Binh Dinh – a new focus thanks to an infrastructure and transportation makeover and its coastal tourism potential.
Aerial view of Quy Nhon Beach. Photo by Cental Group
Besides, investors primarily focus on products with high business efficiency and long-term benefits in investment and exploitation. The pandemic has also changed customer tastes. Buyers are more interested in real estate with coastal advantages, aligned amenities and existing facilities.
During the holiday season of April 30 and May 1 alone, Quy Nhon (Binh Dinh) became one of the hottest destinations with 192,000 visitors. Binh Dinh Department of Tourism noted that most three-five star hotels were fully booked. Quy Nhon is now one of the top 10 most searched for destinations among foreign tourists too, according to Google Destination Insights.
Well-connected infrastructure is also necessary to entice hospitality investors to Quy Nhon-Binh Dinh.
In 2021, Binh Dinh started many large-scale transport projects, including Cat Tien – Go Boi coastal road (VND1,084 billion) connecting Cat Tien, Cat Chanh, Phuoc Thang and Phuoc Hoa; Thi Nai 2 Bridge (VND1,888 billion); My Thanh coastal road leading to Lai Giang Bridge (VND1,496 billion); and the Dien Bien Phu route extending to Diem Van urban area (VND1,126 billion).
Quy Nhon-Binh Dinh is drawing many big brands to invest in and develop hospitality real estate projects, of particularly large-scale and high-class, due to its vast tourist potential and well-developed transportation infrastructure.
Notably, Ngo May Complex, offering commercial, coastal hotel and condotel services, is located in the unique diamond position, a bustling intersection at the heart of Quy Nhon.
The investor elaborated that the project involved leading domestic and foreign companies like GSA (Australia), Meinhardt (Singapore), ACONS (Vietnam) and Red Design (Australia).
Ngo May Complex. Photo by Cental Group
In particular, the condotel tower will be operated by Centara Hotels & Resorts – a professional hotel operator under Cental Group. Centara Hotels & Resorts’s portfolio currently includes various famous projects across Asia.
Once finished, Ngo May Complex will breathe new life into the luxury hospitality real estate segment, contributing to the resurgence of Quy Nhon’s real estate market.