Mauro Gasparotti, Director of Savills Hotels Asia Pacific highlighted, “Vietnam has experienced unprecedented growth in the hospitality sector. This is a perfect market for the development of pioneering products. Thus, we are expecting that innovations and new trends are included in future projects”.
According to Mauro, the developers seemed to focus on short-term market opportunities through capturing the strong growth in the room demand. Overall, there is a lack of diversification, and developers do not often make an effort to embrace new concepts. The hospitality industry is changing fast. Building a large room or lobby no longer delivers a sustainable competitive advantage and guest satisfaction.
Mauro also emphasised the importance of focusing on creating the experience for guests rather than merely providing rooms.
“Developers tend to see hospitality as a simple need for temporary accommodation, but there is an enormous opportunity for developers to focus on planning, called buildings with soul,” he said.
Condotel is a current popular trend in Vietnam. Savills Vietnam has forecasted that 18,000 condotel units will be added to the market in the next two years in key tourism destinations.
Most of the condotels are managed by the developers, but Savills observes that many projects have begun to integrate a brand within their projects. The branded residence is yet to be popular in Vietnam but is considered to be a good investment product in the region.
Andrew Pang from Yoo Asia Limited said, “Firstly, we need to distinguish between branded residences and condotels. Branded residences are proper apartments/homes being associated, designed or managed by a well-known international brand. Often, these residences are part of a mixed-use development that includes a hotel managed by the same brand, while condotels are mostly purpose-built hotels or small units for sale, managed by the developers themselves, sometimes with unrealistic guarantee rentals."
Karan Kaul from Onyx Hospitality added, ”Condotel projects need to be analysed carefully by both investors and buyers, as the purpose is often to generate sales rather than the long-term viability. At the upscale and higher segments of the market, a hotel with additional and separated branded residences often makes more sense to develop than a condotel."
Chavatik Wanakasemsan (Winn) from Lub d stated, “Social travellers tend to look for a gateway to authentic local experiences and new friends. Most of them require super-fast Wi-Fi speed. Sharing accommodation platforms like Airbnb, Couch Surfing, Hostels and Poshtels would serve their need. The guest room is just part of their travel experience. They love to take photos in every moment and seek for local food and local culture for their travel stories on social media. Also, a nomad is a traveller who travels from one place to another place and works while they are travelling. Co-working space will be part of their office when the need to work appears while staying in the hotel.”
The potential of the Poshtel model is evaluated to be high, as Winn added, “Based on our guest profile in all locations, Vietnamese millennials are among the top three nationalities to stay at Lub d. By 2020, the millennial traveller market will see at least two-fold growth from 2018, which will be a challenge for hotels to adapt their existing products to capture this segment.”
Another important part of hospitality is entertainment. Vietnam has historically lacked high-quality food and beverages (F&B) as well as entertainment options, compared to nearby destinations such as Phuket, Bali, Bangkok and Singapore. According to Mauro, generally, people do not understand how entertainment and F&B can be an incredible source of revenue for resorts and hotels. It also can deliver a strong identity for the properties.
Kevin Wallace, from Nikki Beach, illustrated the potential of beach clubs or urban clubs in Vietnam. He believed that the Vietnam market had the high potential for new entertainment options. “With Vietnam's young millennials and rising middle class, the demand for experiences of food, entertainment, film, art, music and fashion at beachside locations will fit best over the next decade with Hanoi and Ho Chi Minh city being the best urban locations.”