Small coastal hotels in Danang City are concentrated in this area. Sales pressure and unethical business practices are among the main causes of poor business results among one-to-three-star hotels in the city. (Photo: Nhan Tam)
The number of hotels in the city has been rising constantly but the business performance of hotel segments is diverse and does not target a common goal, such as developing the local hospitality sector.
While internationally branded four-to-five-star hotels boast robust and sustainable growth, the one-to-three-star facilities are facing obstacles in operations, said Ho Nguyen Phuong Chi, chairwoman of the Danang Hotel Association, at a meeting on the tourist accommodation business on May 27 in the city.
Many small hotels have had their general managers and sales directors replaced with new ones regularly, even within two months, when sales figures or room occupancy rates failed to meet targets set by hotel investors.
According to Chi, this frequent change in personnel would give hotel managers very little time to study the market and adopt measures to improve service quality, resulting in lower-than-expected sales.
Aside from sales pressure from investors, unethical business practices, among many other causes, were blamed for the 10%-15% sales cuts recorded at one-to-three-star hotels, according to Truong Thi Hong Hanh, deputy director of the municipal Department of Tourism.
During recent holidays, many complaint letters were sent to the department, claiming that some tourists who had earlier booked hotel rooms through online travel agents could not get rooms when they arrived or had their bookings canceled without prior notice as the hotel owners had received other bookings with higher payments.
Hanh pointed out that this was an unethical business practice and would harm the hotels’ prestige as tourists would leave negative reviews on online travel booking websites and travel review platforms.
Negative reviews of a single poorly performing hotel would affect the city’s reputation among tourists, Hanh added.
Further, to avoid revenue losses, Chi advised investors in newly established small hotels to have a backup fund that would last at least six months after the launch, instead of putting extra sales pressure on hotel managers.
As of May this year, the city was home to 813 rental accommodations, up 100 units year-on-year, with 81 four-to-five-star hotels, over 600 one-to-three-star hotels and the remainder being hostels and tourist villas.
