Demand for serviced apartments remains strong

Question. From a new player’s point of view, could you please share some comment on Vietnam’s real estate market?

Response. The real-estate market is indeed highly vibrant. At the high-end level the opportunities appear to be favorable, whilst competition in the mid-tier segment is stiff.

Q. Vietnam is amongst the fastest-growing tourist destinations in the world which have given a push to the hospitality market. Do you think that the development of this market has matched its potential?

R. The tourism market is slowly moving out of its ‘early stages’ in Vietnam. Nevertheless, there are still lots of development opportunities in this segment throughout the country. On the contrary, oversupply of accommodation in certain destinations is gaining significant momentum and in some has already reached levels of concerns.

The focus for Vietnam is to ensure that it is not being seen as a ‘one-time’ destination but instead needs to show that it is able to capture the all-important ‘return-visitor’ pro-actively.

Q. Now we are seeing the serviced apartment segment rising in the hospitality industry. So, could you please share the reasons why serviced apartments are able to position themselves as a top choice for short and long stays alike?

R. Serviced apartments are diverse in their offerings as they cater to both short- as well as long-term residency. Whereby the segment has been often marked as ‘hybrid’, it has been able to establish itself as a recognizable segment in the industry. Globally, travelers are now better in understanding the benefits and opportunities the segment can avail. It is the benefit of more space (for a better price), a secure environment with family-attributes combined with all the comforts of home and especially that one thing every family loves, a private and fully-equipped kitchen.

A private and fully-equipped kitchen in Oakwood Residence Saigon’s apartment.

Q. Oakwood Residence Saigon is the second Oakwood-branded property in Asia after Mapletree acquired Oakwood Worldwide. Why HCMC? What is your next destination in Vietnam?

R. Ho Chi Minh City is a business hub that is growing in importance, set to be one of the fastest developing cities in Southeast Asia. With Oakwood Asia’s vision to expand its portfolio in key gateway cities across Asia Pacific, having its brand presence in such an important destination as Ho Chi Minh City will only add to the strength of its footprint.

Apart from Oakwood Residence Saigon and Oakwood Apartments Ho Chi Minh City we have at the moment, we are looking forward to the opening of Oakwood Residence Hanoi which has 265 apartment units, later this year.

Q. Besides thousands of traditional apartments built and sold every year, a huge number of them are listed on Airbnb which are being considered as a direct competitor to serviced apartments. Do you worry about this?

R. Competition is always good as businesses can never be complacent. Airbnb might be a competitor but can at the same time also be seen as a compadre. Through Airbnb, more and more people are becoming aware that apartment rental is an attractive alternative to the more traditional known offerings in the hospitality market. In the near future, I see Airbnb as another channel where hospitality operators can avail their products to their clientele.

Q. The occupancy rate of serviced apartments was reportedly over 90% a couple of years ago. Is this high rate still maintained today?

R. Thanks to its segmentation of long- and short-stay, the playing field for serviced apartments is more diverse and less prone to fluctuations. With the ongoing growth in Vietnam, it is expected that business predictions remain strong.

Q. Reports from local real estate consultancies reveal that only grade A serviced apartments in the downtown area saw high occupancy rates thanks to their superior location and inherent differences in brand and utility. What makes Oakwood Residence Saigon stand out in this market?

R. Oakwood Residence Saigon participates pro-actively in this segment of the market. With a well-designed product-offering and a superb location in District 7, we are able to target this market segment effectively.

Oakwood Residence Saigon located in the fast-growing Phu My Hung urban area in District 7, Ho Chi Minh City.

Q. Should you be a guest, what do you expect from serviced apartments in general and Oakwood Residence Saigon in particular?

R. Serviced apartments provide greater ease of doing business than, for instance, a hotel-environment. Serviced apartments are ‘homes’ for our residents, whilst the more transient hotel industry is less able to create such a distinction.

Oakwood Residence Saigon is a full-service apartment property, focused on providing a safe, spacious and homely environment to our residents who seek a comfortable and family-centric accommodation.

The Three-Bedroom Apartment’s living room.

Q. Technology is changing the way we run business and also has had a tremendous impact on the tourism industry. Do you think that it’s time for developers to catch this trend to attract more travelers?

R. Certainly, if one does not play along in the technology field, one will fall behind quickly. For instance, Oakwood owns and operates the most agile end-to-end accommodations management solution available, through its ‘Epic’ housing-solution website.

Q. You have been working in the accommodation industry for 30 years. So what is your plan to expand the property’s presence in the region and maintain smooth operation to offer memorable stay experiences for your residents?

R. ‘Consistency in delivery’ is an underrated strategy which requires day-to-day commitment and excellence by all in the team. By delivering ongoing excellence to our residents, we will be able to weather any challenge that may come ahead of us.

Thank you for your sharing.