HCMC hotel tariffs soar by 20% in Q2

Hotel tariffs in Ho Chi Minh City (HCMC) surged by 20% in the second quarter of 2023, according to a report by property consultancy Savills. The increase was driven by a high average occupancy rate of over 70%, fueled by international visitors, businesses, and those attending Meetings, Incentives, Conferences, and Exhibitions. The number of available rooms remained relatively stable at approximately 17,000, with minor expansions mainly in three-star hotels.

Despite a 4% decline in flights to the city due to higher fuel costs and airfares, room rates still rose. Foreign visitors surged by 50% year-on-year to 6.4 million in the first six months, boosting demand for upscale accommodations. Five-star hotels charged around VND5 million per night, with occupancy rates consistently between 75%-80%. Four-star hotels had average rates of around VND3.5 million, with occupancy rates between 72%-78%.

The limited new supply of hotels meant existing establishments did not face intense competition. Hotel revenue per available room increased by 19.3% year-on-year in the first quarter, attributed to both higher tariffs and occupancy rates. However, analysts warned that the limited supply might not benefit all hotels, particularly older and self-operated properties lacking recent investment. To remain competitive, such hotels may need to renovate or reposition themselves.

JLL forecasted around 900 new four- and five-star rooms to be added by 2029, mostly in HCMC's former District 1. Meanwhile, international brands such as Hyatt, Nobu Hotel, Four Points by Sheraton, and JW Marriott in Can Gio are expected to enter the upscale segment between 2027-2028. The hotel industry outlook remains positive, supported by increasing international visitor numbers and the recovery of tourism across the Asia-Pacific region.

HCMC aims to attract 61 million visitors and generate about VND330 trillion in tourism revenues in 2026.