Positive tourism growth lures hotel and resort investors to Đà Nẵng

September, 24/2018 - 09:00

The rapid and stable growth of tourism has become a magnet for tourism property projects in the central city of Đà Nẵng over the past decade, and revenue from the ‘green’ industry contributed nearly 30 per cent of the tourism hub’s Gross Regional Domestic Product (GRDP) in 2017.

A 22-storey five-star Grand Tourane hotel. — Photo courtesy Quảng Nam-Đà Nẵng Trade company
Viet Nam News

ĐÀ NẴNG — The rapid and stable growth of tourism has become a magnet for tourism property projects in the central city of Đà Nẵng over the past decade, and revenue from the ‘green’ industry contributed nearly 30 per cent of the tourism hub’s Gross Regional Domestic Product (GRDP) in 2017.

Booming hotel and resort projects now offer 28,000 rooms – 10 times as many as in 2007 – for the 15 million tourists expected to visit the city in 2030.

Chairman of the city’s tourism association, Huỳnh Tấn Vinh, said tourism also created 140,000 jobs for local and neighbouring employees – 25 per cent of the city’s labour force.

Vinh said the unique landscape of coast, rivers and mountains as well as the nature reserves in Sơn Trà and Bà Nà-Núi Chúa lured 6.7 million tourists, of which 2.3 million were foreigners, to the city in 2017. In the first half of 2018, 3.3 million visitors, including 1.6 foreigners, flocked to the city.

He said the tourism boom had attracted huge investment in tourism property for future growth, and most big property developers had invested along the 90km coastline.

The city has become a landing site for luxury hotel brands including Novotel, Fusion Suite and Sheraton, and local groups Vinpearl, Sovico, Furama, Đa Phước Urban and Mường Thanh commencing work on their projects in the city between 2013-15.

A landmark of the city’s tourism property boom was on the occasion of the Asia-Pacific Economic Co-operation (APEC) meetings, when the city hosted 15,000 participants, economic leaders, CEOs, journalists and top investors.

Two key projects – the Tourism Entertainment Complex CocoBay Đà Nẵng project belonging to Empire Group and the Soleil Đà Nẵng five-star hotel and luxury apartment complex project on Mỹ Khê Beach —had total investment of US$1.06 billion.

Soleil Đà Nẵng is the biggest apartment and hotel complex project in the city with a 58-storey five-star hotel and three 47-storey apartments, and will launch 1,000 luxury flats in 2020.

Citadines Blue Cove Đà Nẵng is the latest launched project of Singapore’s Ascott near Đà Nẵng Bay. It’s the largest serviced residence of the group in Việt Nam. — Photo courtesy Ascott

According to the city’s Investment Promotion Agency, the city is designed as a destination for foreign investment in Việt Nam, and has been in the top-five group on the Provincial Competitive Index (PCI) for the past six years.

Đà Nẵng is the most mature coastal market, catering to a range of visitors, including traditional and MICE guests. Apart from its beautiful beaches, it is also the economic hub of Việt Nam. Most of its upscale accommodation is found along the white sandy beaches of Ngũ Hành Sơn, Sơn Trà and Thanh Khê.

These hotels and resorts and recreational projects were built on the coastal road linking Đà Nẵng and Hội An with two golf courses – Montgomerie Links Việt Nam and Đà Nẵng Golf Club – making Đà Nẵng a favourite destination and ideal recreational habitat in central Việt Nam.

Huỳnh Thị Thanh Thảo, manager of the Thiên Kim Property Transaction Centre in the city, said coastal projects were priced at nearly $1,600 to $4,400 per square metre.

“The price of small real estate projects, including terraced houses, villas and apartments, along the coast from Đà Nẵng to Hội An, had increased by 8-10 per cent,” Thảo said.

She said the sale of coastal property projects covering an area of 17-20ha was booming before of APEC, and at least 20 hotel projects valued at $18 million had been sold in the first half of 2017.

According to Nguyễn Mạnh Tuấn from the city’s Real Estate Association, the Ariyana Convention Centre – the main meeting point for the APEC events, its condotel and villa projects had also offered beachfront apartments at an annual 10 per cent interest for investors over 10 years.

Đà Nẵng is a favourite site for giant property Vinacapital Group, which poured at least $200 million into tourism property projects from 2006-17.

Vinpearl Đà Nẵng Resort&Spa is the second resort of Vinpearl Group in Đà Nẵng. — VNS Photo Công Thành

New investors

Singapore’s Ascott Limited officially launched Việt Nam’s largest serviced residence, the 548-unit Citadines Blue Cove Đà Nẵng by the Hàn River on the Sơn Trà Peninsula and overlooking Đà Nẵng Bay, making it as Ascott’s first property in Đà Nẵng and its largest property globally.

Lew Yen Ping, Ascott’s Country General Manager for Việt Nam, said: “Việt Nam is Ascott’s largest market in Southeast Asia, where demand for serviced residences remains high. We currently have 21 properties offering close to 4,700 units across seven cities in the country.”

“More than 2,000 units across nine properties are slated to open in HCM City, Hà Nội, Đà Nẵng, Hạ Long City and Bình Dương Province. We look forward to providing more accommodation choices in the fast-expanding Việt Nam market and are committed to achieving our target of 7,000 units in the country by 2020,” she said.

She continued: “Citadines Blue Cove Đà Nẵng would widen Ascott’s brand offerings in Việt Nam where it has a well-established reputation built over 20-years with the Somerset brand.”

In 2017, Route Inn Group from Japan launched its first ever four-star hotel project – the Grandvrio Đà Nẵng City – in the central city, marking its first appearance in Việt Nam’s hospitality market, and the start of a plan to develop a chain of 50 hotels in the country.

The group also said it’s the first step on the way to entering the country’s tourism and accommodation market.

Route Inn Group also debuted its five-star Grand Ocean Resort in Quảng Nam Province in 2018.

In 2015, Route Inn Group signed a Memorandum of Understanding with Đà Nẵng-based Đông Á College on tourism service training.

As scheduled, Route Inn will recruit 200 graduates from the college starting in 2018 to serve a chain of 320 hotels in Japan and Việt Nam.

The InterContinental Đà Nẵng Sun Peninsula Resort is built on the Sơn Trà Mountain, near the nature reserve. — VNS Photo Thanh Hải

New trend

In July of 2018, more than 100 owners, developers and industrial experts in the field of hotel and resorts real estate attended a meeting themed Đà Nẵng Hotel Solutions 2018.

Director of Savills Hotels Asia Pacific, Mauro Gasparotti, said Việt Nam had witnessed rapid growth of international hotel brands and foreign management companies over the past few years.

“There are four types of megatrends that have strong impacts on global travel, including technology, change in consumer behaviours, demographic shift and transportation infrastructure,” he said.

“Vietnamese developers are encouraged to study these megatrends to identify and apply to future products and developments instead of duplicating what has already been built. Guests are now seeking an experience, not just a place to sleep. With technology development, they can easily check and select the best offer on the internet.”

Bryan Chan, a representative of IHG Group, said: “As one of the largest populations in Southeast Asia enjoying double-digit arrivals growth and sustained economic growth, we are very upbeat about the Việt Nam market and see opportunities to expand in numerous segments.”

“Location-wise it includes not only large cities including HCM City, Hà Nội, Đà Nẵng and Hải Phòng, but also smaller satellite towns that serve as strong business and industrial feeders of Bình Dương and Vũng Tàu.”

Daniel Steinke from Akaryn Hotel Group, said: “Millennials are looking for a more active vacation and more fun. It is not good enough anymore to have a nice resort where you lie on the beach and have nice cocktails. They want to explore, they want an authentic experience of the country and the surroundings they are in.”

Naman Retreat resort in Đà Nẵng,invested by Empire Group, offers an entertainment site on beach. — VNS Photo Như Hoa

Property market

In a report on Đà Nẵng’s real estate market in the first half of 2018, Savills said the city had continued to establish itself as a leading destination for domestic and international tourists with 29 per cent growth. International visitors were up 47 per cent to a total of 1.6 million.

It said at least 1,400 three-to-five-star rooms will come online from the second half of 2018, while three new apartment projects will provide 830 units to the market later in the year.

Tourism real estate remains a popular investment magnet in the central city, attracting 25 foreign direct investment (FDI) projects worth $1.8 billion – 54 per cent of total FDI capital in the city.

To date, the city has attracted 609 FDI projects, worth $3.1 billion, of which 174, worth $2.19 billion, are in the service sector.

More than 2,200 businesses were established in the first half of 2018 with registered investment capital of $495 million. — VNS