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Foreign hotelliers flock to Vietnam market

Thứ Sáu, 07/06/2019 - 11:30

More high-end hotels have entered Vietnam market in anticipation of a tourism boom. Their owners are spending big money to hire foreign managers.

Recently, Kajima Corporation and Indochina Capital have kicked off construction of Wink Hotels in District 1, Ho Chi Minh City (HCMC). Another Wink Hotel will be developed by the joint venture in Da Nang in the time ahead.

Vietnam is considered among the world’s fastest growing tourism markets, and the country hopes to serve 103 million travelers in 2019, including 18 million foreign and strives for turnover of $30 billion by the end of 2020.

The most famous hotel management brands in the world, such as InterContinental, Marriott, Park Hyatt, Hilton, Wyndham, Mandarin Oriental, AccorHotels, and Best Western International, are present in Vietnam.

JW Marriott Hotel Hanoi. Many world's well-known hotel management brands are present in Vietnam.

JW Marriott Hotel Hanoi. Many world's well-known hotel management brands are present in Vietnam.

Local property giants like Vingroup, Bitexco, and Sun Group, which own luxury resorts and hotels across the country, are willing to spend money to hire international groups to manage their hotels.

The management fees hotel owners have to pay to foreign managers are sky high, but the profits they can expect are even higher, said an analysist who prefers to preserve his anonymity.

He explained: “When you hire an international hotel management group, you can not only expect higher profit thanks to its capability of attracting foreign travelers, but also you can improve your fame, because your hotel is managed with international standards.”

The operation cost is not high since hotels don’t have to pay a lot for communication and marketing campaigns, but they still can attract foreign travelers, the analysist added.

International management groups’ involvement in the first phase of project development, including advice in business models, management standards to be applied, building materials to be used and design, helps the hotels’ exploitation.

However, hiring foreign managers is not always a good choice, Le The Hung from CNC Counsel pointed out.For example, a Vietnamese-owned resort in Sam Son hired a well-known international management group, but had to terminate the contract after four months due to disagreements.In another case, a hotel owner hired a professional management firm and ‘said goodbye’ to the firm just after three years of operation, deciding to run the hotel himself. Legal framework on hotel management services remains incomplete, Hung noted.

Many important issues such as the right and responsibility of hotel managers and the accountancy regime remain open, which could be the reason behind disputes between the two parties.

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