New hotels have been built and pout into operation in Khanh Hoa, leading to an oversupply and pressure of room rate cut on hotel investors.
Data from the provincial Department of Tourism show that the number of tourists visiting the province surged during the first four months of the year, recording a total of 2.16 million local and international tourists, up over 20% year-on-year. The number of Chinese accounted for the majority, at 1.2 million tourist arrivals.
However, room occupancy rates dropped sharply in the given period, ranging between 42% and 54%, while those recorded in the year-ago period ranged from 63% to 76%.
Some hotel operators in the province told the Saigon Times that their businesses were facing hardships as both the room occupancy rate and hotel tariffs had plummeted, mainly triggered by the oversupply of hotels. The newly launched hotels, condotels and homestays offered by local residents had resulted in an abundance of rental accommodations.
Nguyen Anh Vu, general manager of the four-star Rosaka Nha Trang Hotel, said that the hotel’s room occupancy rate had been some 50% over the past two months, much lower than the year-ago figure of 85%.
Confirming the oversupply, Nguyen Van Thanh, vice chairman of Nha Trang-Khanh Hoa Tourism Association, said that Chinese travel firms now tend to book hotel rooms at the last minute, instead of making reservations months or even a year in advance as they had done previously. Moreover, they required low room rates, small deposits and short-term contracts.
Only a few hotel operators managed to sign deals with deposits with their Chinese partners, and these contracts were usually only valid for a few months.
Many hotels could not offer room rental services to some Chinese partners as they had agreed to pay only VND600,000-VND650,000 per night per room, far lower than normal. Other four-star hotel’s room rates were some VND700,000 per night, 30% lower than those offered at other coastal destinations.
A local hotel owner, who wished to remain anonymous, said that the Chinese firms had demanded hotel room tariff cuts since they knew local hotel operators had an abundant supply of rooms and were in dire need of clients.
The source added that many condotel owners had offered a room for six people at a rate of VND900,000 per night, so each one was charged only VND150,000, placing significant pressure on traditional hotel operators.
Also, statistics revealed at a conference on hospitality indicated that the number of hotel rooms rises by 10,000 annually and is forecast to reach 50,000 by the end of the year. As of the first quarter of this year, over 41,000 rooms were available for rent in the province.
