Hotel business in Danang faces huge losses
Many
investors in the central city of Danang are seeking to sell their small
and medium hotels to cut losses as the city has ample accommodation.
Five years ago when Danang was named as the most worth-living city in Vietnam with beaches listed among the most beautiful in the world, the city saw a sharp increase in tourist numbers. Local hotels were also full, even at low season.
Le Xuan Tam, a local hotel owner, said that “The mushrooming construction of hotels has led to oversupply. The price of many newly-built two or three-star hotels along beaches are just between VND400,000 (USD18) and VND500,000 (USD22.7) per day, so small hotels like ours fail to compete.” He added that he and many others want to sell their hotels.
According to a real estate company in Danang, the company is seeking customers for dozens of small local hotels which are sold at between VND10-20 billion each. Despite being offered attractive commissions by these hotel owners, the company still finds it hard to find customers.
Many buyers have dropped out of deals after putting down deposits.
In 2016, Danang welcomed a total of over 5.5 million tourists; however, local hotel occupancy rates stood at around 50-55%, with most of the loss-making hotels being one or two-star.
According to a report from the Danang Department of Culture, Sports and Tourism, during the 2017 Tet Holiday, local five-star hotels saw an occupancy rate of 75%, while the level was 46% for three-star and 23-25% for one or two-star accommodation respectively.
Tran Thi Thanh Tam, Chairman of Son Tra District People’s Committee suggested that the city’s authorities should announce a general planning which stipulates clearly areas allowed for building hotels to restrict the massive amount of hotel construction.
Five years ago when Danang was named as the most worth-living city in Vietnam with beaches listed among the most beautiful in the world, the city saw a sharp increase in tourist numbers. Local hotels were also full, even at low season.
The mushrooming construction of hotels has led to oversupply in Danang
At that time, many people rushed to build small and medium-sized hotels with the hope of earning big money from the booming tourism industry. Lots of one and three star hotels have been built along Pham Van Dong, Hong Sa, Vo Van Kiet and Ngo Quyen streets.Le Xuan Tam, a local hotel owner, said that “The mushrooming construction of hotels has led to oversupply. The price of many newly-built two or three-star hotels along beaches are just between VND400,000 (USD18) and VND500,000 (USD22.7) per day, so small hotels like ours fail to compete.” He added that he and many others want to sell their hotels.
According to a real estate company in Danang, the company is seeking customers for dozens of small local hotels which are sold at between VND10-20 billion each. Despite being offered attractive commissions by these hotel owners, the company still finds it hard to find customers.
Many buyers have dropped out of deals after putting down deposits.
In 2016, Danang welcomed a total of over 5.5 million tourists; however, local hotel occupancy rates stood at around 50-55%, with most of the loss-making hotels being one or two-star.
According to a report from the Danang Department of Culture, Sports and Tourism, during the 2017 Tet Holiday, local five-star hotels saw an occupancy rate of 75%, while the level was 46% for three-star and 23-25% for one or two-star accommodation respectively.
Tran Thi Thanh Tam, Chairman of Son Tra District People’s Committee suggested that the city’s authorities should announce a general planning which stipulates clearly areas allowed for building hotels to restrict the massive amount of hotel construction.
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