Luxury hotels in HCMC make high profits in 2018
Some high-end hotels in HCM City had occupancy rates of 90 percent last week. The 5-star Rex Hotel, for example, announced it would not receive more guests on November 7 because the bookings had exceeded the number of rooms available.
The hotels farther from the central area of the city, such as Windsor Plaza also reported high occupancy rate recently, over 80 percent.
November is one of the busiest month for hoteliers in the winter tourism. However, the number of guests is even higher than the same period last year.
Explaining this, an analyst said while the number of travelers has increased, the hotel room supply has decreased. The two 5-star hotels in the central area – Caravelle Saigon and New World Saigon Hotel — are under maintenance, which is a reason behind the supply decrease.
Hoteliers in HCM City all said the business performance this year was better than last year. A Vietnamese owned hotel reported profit to revenue ratio of 52 percent. The ratio is lower for high-end hotels managed by foreign groups, 20-30 percent — not because of fewer guests, but because of higher operation costs.
The analyst said the head of divisions at an international hotel can receive up to VND80 million a month, while Vietnamese hotels pay VND20 million to the senior executives in the same positions. CEOs of international hotels can receive $12,000-15,000 a month after tax, while a Vietnamese hotel CEO gets tens of million of dong.
While reporting satisfactory figures about revenue and occupancy rate, hoteliers said the business is going to be more challenging. A hotel CEO said it is more difficult to persuade MICE (Meetings, incentives, conferencing, exhibition) travelers to spend big money since businesses are cutting down spending on meetings and events.
Therefore, hoteliers have to attract more guests to offset the spending decreases and keep the revenue as high as last year’s.
“The situation is really more challenging than last year,” said Phan Thanh Long, CEO of Rex Hotel, estimating that the hotel would have revenue of VND520 billion this year, an an increase of VND20 billion over 2017.
According to the HCM City Tourism Department, the city received 6.1 million foreign travelers in the first 10 months of the year, up 20.2 percent over the same period last year.
Source: VietNamNet Bridge