By Hoàng Hà
HÀ NỘI — The domestic hospitality market is expected to recover strongly with the gradual resumption of domestic and international tourism, though the Ministry of Construction (MoC) warns that it might not all be plain sailing.
In the third quarter of 2021, 26 projects were completed in Bình Thuận and Lâm Đồng, consisting of more than 1,300 tourism villas. Meanwhile, 54 other projects on 14,500 tourism apartments and 4,000 tourist villas were built in Khánh Hòa, Quảng Nam and Phú Yên, said Hà Quang Hưng, the deputy head of MoC’s Department of Housing Development and Real Estate Market.
According to the ministry, the COVID-19 pandemic seriously affected the real estate market, including resort real estate.
In 2020, about 3.8 million foreigners visited Việt Nam. This number declined by 78.7 per cent year on year due to the COVID-19 pandemic, according to the General Statistics Office. In the first 10 months of 2021, the country received about 125,000 foreign arrivals, down 96.7 per cent on the same period last year.
Meanwhile, multiple pandemic waves have forced many hotels and resorts to stop the operations entirely, though domestic guests have provided some revenue. A few resorts have maintained operations at an average capacity of 20-30 per cent. The number of hotel and resort projects up for sale is very high.
The Real Estate Brokers Association reported that the number of condo-hotels offered on the market in 2020 was more than 18,000 units. Only 120 condo-hotels were sold in the whole year. The supply of villas and shophouses in 2020 reached about 15,000 units.
The absorption rate of these products was only about 8 per cent in the first months of 2021, as market demand remained at a low level.
However, since September, when the social distancing measures were eased, the market has shown more positive signs. The market has had 7,206 listings; 2,280 have sold, an absorption rate of 31.6 per cent. Localities that have listed hospitality for sale include Đà Nẵng, Phú Quốc, Quảng Nam, Quảng Ninh, Phú Yên, Khánh Hòa, Bình Thuận and Thanh Hóa.
Nguyễn Anh Tuấn, Director of the Institute for Tourism Development, said if the pandemic was controlled, the tourism and hospitality market would recover quickly.
“When tourism develops, hospitality real estate will develop too. If tourism still has difficulties, this market will face challenges.”
“In the context of COVID-19, a trend of wellness resorts is emerging in the world, because this virus has made good health more important. This kind of resort will promote the development of the hospitality market,” Tuấn said.
The Vietnamese resort real estate market has attracted globally famous brands, especially in coastal areas. This will create favourable conditions for further development in the future, according to Tuấn.
“Việt Nam always needs more quality products that deliver unique experiences for guests and create a true ‘destination’. We need more truly luxury resorts, boutique resorts, hi-tech hotels, senior living products, wellness products, more entertainment facilities… which helps to enhance the chain of tourism and attract more potential guests, not only international but also local demand,” Mauro Gasparotti, Director SEA Savills Hotels APAC, told Việt Nam News.
Hospitality is an industry that has been heavily impacted by COVID-19. Both business and leisure demand collapsed worldwide, causing a fall in revenue across all related sectors, such as restaurants.
Specifically in Việt Nam, international tourism ceased entirely, which was the primary source of revenue for most destinations, from the sea to the city.
In the coming months, there will continue to be a high level of uncertainty in the hospitality market, according to Gasparotti.
“First, there are uncertainties in future demand. We are all waiting for the borders to reopen but even then, we don’t expect a big rebound in short term for several reasons. It will take time to get back to the level we were at before,” he said.
“The second problem is demand. The fact is that people are still hesitant to travel, mainly due to complications of travelling, such as testing or additional insurances and limited flight options. There is also the risk of travelling to other destinations, the risk of being stuck there or perhaps coming into contact with a positive case and having to stay in quarantine at the destination.”
“The third factor impacting demand is a change in consumer behaviours, especially among business travellers. We are all very familiar now with video calls and the need for actual face-to-face meetings has decreased, which is having a larger impact on the office market and is expected to also impact MICE business, especially for city hotels.”
“We expect the demand to take a few years to recover back to 2019 levels. Delayed recovery is a problem for the Vietnamese market as a low demand is not sufficient to support the current supply growth. We expect, on average, the supply to grow by 20 per cent per annum in the next three years. If the demand is not there, this will largely impact the occupancy of hotels,” he said.
To ensure sustainable development in the hospitality market, according to Hưng, Việt Nam needs to complete specific regulations relating to land set aside for hospitality projects, trading activities for the projects, and conditions and procedures to sell these projects, including condo-hotels.
“Those regulations will create a solid legal basis for the development of the hospitality market in the future,” Hưng said.
“To create favourable conditions for enterprises and for the hospitality real estate market to have some sustainable development, the ministry has issued design standards for various types of tourism apartments and villas at resorts,” Hưng said.
At present, the development, management and use of apartments, villas and resorts for the tourism industry have been specifically regulated according to the 2017 Tourism Law and Decree 168/2017/NĐ-CP. —
Upgrading the market for the sake of all participants
HÀ NỘI — An upgrade to emerging status will not only help the stock market develop quickly, transparently and sustainably, but also attract huge foreign capital inflows, said experts.
Recently, the Government has directed to purge the market and improve the trading system’s capacity, showing its determination to enhance the quality of the stock market.
The refinement is to protect investors and open a door for the Vietnamese stock market to be upgraded from a frontier to an emerging market.
Prime Minister Phạm Minh Chính has taken an interest in the development of the capital market and the stock market, including the matter of upgrading the market.
During a trip to attend the ASEAN-US Special Summit, on May 16, the PM visited the New York Stock Exchange (NYSE) – the largest stock exchange in the world – hoping it supports and shares experience to develop an effective and sustainable stock market in Việt Nam, and successfully build a regional financial centre.
PM Chính also expected the NYSE and its Vietnamese partners to foster a sustainable, mutually beneficial partnership, contributing to making the Việt Nam-US comprehensive partnership more substantive and effective.
On the occasion, PM Chính witnessed the awarding ceremony of two cooperation documents in the fields of finance, banking and investment funds between Vietnamese and US partners, including a cooperation document between the Vietnamese State Securities Commission (SSC) and the NYSE regarding support to upgrade the country’s stock market and build a mechanism for investors to participate in both stock markets.
Previously, the PM chaired a conference on developing a safe, transparent, efficient and sustainable capital market to stabilise the macro-economy and ensure major balances of the economy.
At the conference, PM Chính also asked the Ministry of Finance to immediately solve the order congestion situation and invest in technological innovation and digital technology application, while urgently implementing measures to upgrade the market from frontier to emerging status to attract investment capital, especially foreign investment.
Dominic Scriven, head of the Việt Nam Business Forum’s (VBF) Capital Markets Working Group, said that the move to purify the market is a great effort and determination from the Government.
As the goal is to build and develop a safe, transparent and sustainable securities market, cleansing the market will ensure the interests of businesses and genuine investors, increase the stock market’s appeal, and attract more investment capital flows both at home and abroad.
Meanwhile, Phạm Lưu Hưng, chief economist of SSI Securities Company (SSI), said that the move to purge the market in recent years raised expectations that the upgrade process will be easier. Hưng hoped that in the next assessment, the Market Rating Organization (MSCI) will note some positive comments about what Việt Nam has done.
According to Minister of Finance Hồ Đức Phớc, the ministry is currently working with international organisations to deploy solutions to upgrade the stock market by 2025 as per the set roadmap.
Huge foreign capital inflows
Analysts believe that the upgrade from frontier to emerging status will be an important driving force for the market.
Zafer Mustafaoglu, World Bank (WB) Practice Manager for Finance, Competitiveness and Innovation (FCI) for East Asia and Pacific, said that the capital market development is a long-term effort, and there is still much work to be done in Việt Nam.
Upgrading to emerging market status is not only an improvement in position, but also signals strong enhancement in quality with a solid market foundation.
Upgrading to an emerging market also attracts the attention of high-ranking international investors to Việt Nam. In the stock market, upgrading to an emerging market could result in an additional US$10 billion in new investment for the country. The first year alone can receive an additional $2-5 billion.
According to Nguyễn Minh Tuần, General Director of AFA Capital Investment JSC, the criteria for upgrading from frontier to emerging status focus on two main factors – size and liquidity of the market (quantitative) and market access (qualitative).
In terms of size and liquidity, there are four criteria which are the number of companies included in the Standard Index, total market capitalisation, floating capitalisation and market liquidity. Việt Nam has almost met three standards, he said.
The main issue is qualitative standards. In the latest ranking in June 2021, there are nine criteria that the country has not yet met, including the ownership rate, ownership restrictions and equal rights of foreign investors.
EVN accelerating projects to gear up for hot season
HÀ NỘI — Vietnam Electricity (EVN) said it is accelerating power generation and grid projects, especially urgent infrastructure, to ensure supplies in the hot season.
The State-owned group said in the first four months of 2022, the firm and its subsidiaries had started work on 30 projects and put into use 31 grid facilities between 110kV – 500kV.
It cited meteorological forecasting centres as saying that heatwaves this year are likely to appear in the northern and central regions later than usual, but won’t be too severe.
Power demand in the north is unlikely to rise sharply in May, and daily consumption will be around 805 million kWh.
EVN noted that this month, it is working to guarantee supply for production and business activities as well as daily life, especially the 31st Southeast Asian Games (SEA Games 31) and the 15th National Assembly’s third session.
It is maintaining high water levels at multi-purpose hydropower plants in the north, operating thermal power plants in the region, and importing about 540MW of electricity in May.
Its subsidiaries were also requested to ensure power supply in the dry season, ready manpower and equipment for any possible incidents due to natural disasters, and recommend people, agencies and factories use electricity in a safe and economical manner.
In April, the entire EVN system produced 22.62 billion kWh of electricity, up 1.9 per cent year-on-year. That added up to a four-month figure of 85.65 billion kWh, increasing 6.2 per cent. —
Deputy Finance Minister Nguyễn Đức Chi takes charge of the State Securities Commission
HÀ NỘI — Minister of Finance Hồ Đức Phớc had assigned Deputy Finance Minister Nguyễn Đức Chi to take charge of the State Securities Commission (SSC) from May 19.
In a dispatch to the SSC, Minister Phớc stated that Deputy Minister Chi will manage the commission during the consideration and completion of personnel for the commission.
Earlier on May 18, the Party Central Committee’s Inspection Commission announced the inspection conclusions and Party disciplinary measures on the SSC Party Committee in the 2015-20 tenure and relevant individuals. Right after that, the Ministry of Finance directed the SSC, stock exchanges, the Việt Nam Securities Depository and relevant agencies to review and implement measures to remedy the violations and shortcomings.
Specifically, the ministry dismissed Trần Văn Dũng from the position of the Chairman of the SSC, while giving a warning to Vũ Bằng, former secretary of the SSC Party Committee in the 2015-20 tenure and former SSC Chairman.
Warnings were given to Nguyễn Thành Long, secretary of the Hà Nội Stock Exchange Party Committee; and Nguyễn Sơn, chairman of the management board of the Việt Nam Securities Depository for their wrongdoings during their tenures. —
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