STR: Positive Outlook For Hanoi Hotel Industry
Hanoi grew ADR by 10.1% and saw RevPAR increase 14% during the first two months of 2019, according to STR
SINGAPORE — Rapid growth in international tourist arrivals to Vietnam has contributed to a positive short- to mid-term outlook for the Hanoi hotel industry, according to data and analysis from STR.
"Vietnam has become a popular destination for tourists, as international arrivals have tripled from 5 million visitors in 2010 to 15.5 million in 2018," said Jesper Palmqvist, STR's area director for Asia Pacific. "Later during that time period, Hanoi saw an uptick in supply when the metric grew roughly 4.0% for 12 consecutive months ending with July 2018. However, the current slowdown in development has certainly helped ease the pressure off of overall performance."
There are 224 hotels accounting for 17,615 rooms in Hanoi. The market continues to remain full of smaller hotels, with almost 75% of all hotels at 100 rooms or fewer and 60% of all hotels with fewer than 50 rooms. There are roughly 3,000 rooms in the development pipeline, with fewer than 1,000 rooms expected to open in 2019.
Not only has the balanced supply helped Q1 performance, but events and holidays in Hanoi have set the market on track for solid performance levels in 2019. There was improved occupancy during Tết (5 February), and the North Korea-U.S. Hanoi Summit (27-28 February) resulted in one of the highest monthly ADR levels ever recorded in the market.
"The strong start to 2019 produced a positive outlook for the rest of the year," Palmqvist said. "RevPAR growth will certainly be heightened this year, ultimately driven by an increase in occupancy during the low season and continued ADR growth throughout a majority of the upcoming months."
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.
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