Mauro Gasparotti, director of Savills Hotels APAC, speaks at a roundtable on discussing policies to support small and medium-sized hotels held on March 23 in HCM City. —  VNS Photo

HCM CITY — Small- and medium-sized hotels in HCM City are struggling with low occupancy rates and labour shortages, and are in need of support to recover from a COVID-19-induced slump, according to the municipal Department of Tourism.

The city’s hotel industry was hit hardest during the pandemic, leaving many small- and medium-sized hotels closed down or switching to other businesses to survive, said Bùi Thị Ngọc Hiếu, deputy director of the department.

One- to three-star hotels have been heavily affected by a sharp drop in overseas tourists and have yet to bounce back from the COVID-19 pandemic, Hiếu said at a roundtable on discussing policies to support small- and medium-sized hotels held late last week in HCM City.

The city’s Department of Tourism has implemented many marketing and promotion programmes to attract foreign tourists after the country reopened to international tourism.

The lack of tourist accommodations might affect the development of tourism in the long run, she said.

As of the end of 2022, the number of one- to three-star hotels had plummeted by more than 10 per cent.

Struggling hoteliers proposed the Government have policies in place to help them revive from the crisis, including providing low-interest loans and reductions in prices of electricity, water and internet services.

Four and five-star hotels in the city have experienced significant recovery. The occupancy of four and five-star hotels reached 75 per cent or above last year, according to the Department of Tourism.

Certain cities have experienced significant recovery, particularly HCM City, where occupancy is fast reaching 2019 levels, according to Savills Hotels statistics.

However, average daily rates are between 15 per cent and 20 per cent lower than pre-pandemic levels.

Mauro Gasparotti, director of Savills Hotels APAC, said there have been undesirable outcomes of the rapid growth in hotel and resort supply over recent years, most importantly the downward pressure on room rates.

In a highly competitive market, room rates struggle to increase even at the best upscale hotels in the locality, Mauro said.

With its diverse natural landscapes and cultural background, Việt Nam has great potential for destination experiences, he said.

However, achieving this reimagined tourism industry will require a coordinated effort from the Government, local authorities, developers, and industry professionals, all of whom will need to work together to develop sound initiatives, he added. — VNS