Hotel Occupancies Down the Drain

Everyone knows tourism is down and the hotels are hurting.

But do you know just how much they are hurting?

This article cites a recent survey that things are pretty bad.

Actually they are even worse that that and getting bleaker by the minute. This summer's low season could be a killer for many.

A friend in the industry tells me that the top international hotels in HCMC (Saigon) are at best doing 20-25% occupancies these days. AT BEST!

That is not even enough to pay staff and keep the lights on...

Hotel room occupancy keeps falling in difficult times

Occupancy has fallen significantly at hotels, Ken Atkinson, managing partner of Grant Thornton Vietnam, told reporters in HCMC on Tuesday when this accounting and consulting firm released its annual Hotel Survey 2009.
“Some are running around at 40% and lower because of low season,” Atkinson said and added that he knew this result after talking with hoteliers in Hanoi and HCMC.

Vo Ta Ngoc, general manager of Allezboo Beach Resort and Spa, backed Atkinson’s observation, saying international bookings at properties in Mui Ne this summer could tumble by as much as 30% from the same period last year.

Ngoc told the Daily on the phone on Tuesday that the fall mainly resulted from the decline in Russian arrivals in the seaside resort town of Phan Thiet in the central coast province of Binh Thuan.

Reliable sources close to the Daily said guests currently occupied just a little higher than 40% of the rooms at certain four to five-star hotels here.

Experts said that the existing low occupancy could pull the hotel room occupancy for all of 2009 even lower than last year, when the average occupancy rate for five-star properties in 2008 was only 56.9%, as against 65.7% in 2007.

The overall occupancy rate for high-end hotels across all categories was 59.8%, down 9.6 percentage points compared to 2007 as indicated in the sixth edition of the Hotel Survey that Grant Thornton conducted at 50 three- to five-star hotels and resorts with a total of 7,911 rooms throughout the country.

The average occupancy rates across high-end hotels in Vietnam dipped 14.2% in 2008 to their lowest in the past four years of the survey.

Despite the fall in room occupancy as the impact of global economic downturn on Vietnam’s hospitality and tourism industry, the survey shows average hotel room rates across all categories last year picked up by 9.6% from 2007, or to US$114 from US$104. The room rate at five-star hotels averaged US$195 per night last year...

Part of the problem is beyond anyone's control: the global meltdown, H1N1 swine flu etc.

But I believe part of these wounds are self-inflicted.

The hoteliers got GREEDY. Plain and simple. When times were good the hotels jacked up their rates to 200 and even $300 a night in many cases.

On many occasions now I have heard visiting business people and tourists complain about the hotel rates and say Vietnam no longer offers good value compared to Thailand and other regional destinations....