Executive Summary

Hotel Survey 2018

Vietnam Upscale Lodging Industry

July 2018
Introduction
Grant Thornton Vietnam’s Hotel Survey 2018
presents financial, operational and marketing
information for the 2017 financial year from a
range of Vietnamese upscale hotels and resorts.
For simplicity, “Hotel” refers to both hotels and
resorts, with our survey covering 4 and 5-Star rated
hotels. Statistics are presented by Star Category
(hotel rankings) and hotel region (location).
Hotel are grouped into the three main regions: the
North, the Central and Highlands and the South. In
the North, the hotel participants are located in the
capital Hanoi, Sapa and Quang Ninh City. In the
Central and Highlands region, the hotels are located
in cities such as Danang, Hoi An, Hue, Khanh Hoa,
Quang Binh, Phan Thiet, Daklak and Da Lat. Hotel
participants from the South are mainly located in Ho
Chi Minh City, Phu Quoc, Vung Tau and Mekong
Delta.
This report is prepared to provide readers with a
general, as well as specific, view on hotel
operations, in Vietnam, by presenting data covering
different criteria for analysis, such as hotel facilities,
staffing, performance KPI’s such as average room
rate, occupancy rate and RevPAR, financial
statements and market data. For financial analysis,
the data is shown up to net profit before interest,
tax, depreciation and amortisation (“EBITDA”) for
Kenneth Atkinson
Executive Chairman
the purpose of relevant comparability. The unit of
currency is the United States Dollar.
As can be seen later in this report, most data is
presented in percentage terms or as averages. For
instance, with financial statements, numbers are
shown as a percentage of total revenues. In the
market data analysis and other sections, statistics
are in the form of averages of the respective items.
For ease of comparison, the report presents the
survey results of each specific category alongside
key findings. In the Appendices, readers can also
find tables showing the minimum, maximum and
mean values of market data for the financial year
2017. This report, however, does not attempt to set
operating results for the Vietnam hotel industry. The
figures and ratios in this report should not be
considered as standards for any type of property.
The report users also need to note that NOT all
changes from one year’s results to another are due
to actual year-to-year differences. Sometimes, they
may be a result of a different mix of survey
participants. Readers should note that due to limits
on analysing data based on specific sample sizes,
the results should be regarded as indicative only.
Vietnam Hotel Upscale Lodging – Hotel Survey 2018 2
Newborns
Newborns Vietnam
Newborns Vietnam (NBV) is a United Kingdom
registered charity licensed to operate as a non-
governmental organisation (NGO) in Vietnam
dedicated to reducing neonatal mortality in South
East Asia, with a specific focus on Vietnam.
chance of surviving to access a higher level of care
and without a long-term disability.
In the next five years Newborns Vietnam will deliver
a programme of activities to develop safe and
consistent care for all newborn infants. With your
help, we can give more parents the gift of life.

In Vietnam, the healthcare system and standards of

care for preterm and sick newborns trail those of
more developed markets resulting in limited
progress in reducing deaths in the newborn period
(first twenty eight days of life). 70% of all infant
deaths are newborns, more than 500 babies born
every day in Vietnam need some form of neonatal
care – many newborns die on their very first day of
life, many of these deaths are preventable.

Outside of high-income settings there are almost no

Contact detail:
specialist neonatal training programmes for doctors
UK Address:
and nurses. We work in close partnership with the
Newborns Vietnam,
Ministry of Health to address this deficit. In Vietnam
75 Maygrove Road,
only 10% of doctors are specialists and this is a
London NW6 2EG
major factor in why newborn deaths remain high.
T: 01392 770108
We are accelerating improvements in standards of
neonatal care and reducing mortality by sharing a
Vietnam Address:
century of British expertise.
Newborns Vietnam Project Offices
Vietnam National Children’s Hospital
We are training doctors and nurses at the Vietnam
18/879 La Thanh Road, Dong Da District, Hanoi
National Children’s Hospital, Hanoi Obstetrics and
Gynecology Hospital, St Paul Hospital, Da Nang
Da Nang Hospital for Women and Children
Hospital for Women and Children, general hospitals
402 Le Van Hien, Khue My Ward,
within Hanoi and provincial hospitals in the north of
Ngu Hanh Son District, Danang City, Vietnam
Vietnam.

Babies die every day because there is no safe

transport system to a higher-level hospital, it is E: info@newbornsvietnam.org
unacceptable that babies are irreversible damaged. T: +84 90 506 2500
We are developing a pilot transport system within
Hanoi that provides the care during transfer and www.newbornsvietnam.org - www.cycle-a-
equipment to give our precious newborns a realistic difference.com

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 3

 Key Trends
Average room rate (USD) by Star Ranking Average Occupancy Rate and RevPAR by
Star Ranking

100 80%
120 79.1
103.2107.6
80 71.8 75%
100 89.3 91.8 66.0
80 74.6 75.2 60 50.2 54.0 70%

USD
46.8
USD

60 40 65%
40
20 60%
20

0 0 55%
4-Star 5-Star Overall 2015 2016 2017
RevPAR 4-Star
RevPAR 5-Star
2016 2017 Occupancy Rate 4-Star
Occupancy Rate 5-Star

2.8% increase in average room rates 5.3% increase in occupancy rate

9.7% increase in RevPAR

Expenses and Profit as Percentage of Revenue Source of Guests (2017)

100% Other
Oceania 7.8%
34.1% 35.8%
80% 5.5%
% of Revenue

2.0% 1.8% North

60% 1.2% 1.2% America
28.4% 26.6% 5.8% Vietnam
40% 19.2%

20% 35.7% 35.7%

Europe
0% 20.2%
2016 2017 Asia
(excluding
EBITDA Vietnam)
Fixed Charges 41.6%
Financial expenses
Non - operating Income
FF&E Reserves
Undistributed Operating Expenses
Departmental Expenses Asia is the primary source of
guests, increased 2.3% in
comparison with 2016
EBITDA 35.8% of revenue for
upscale hotels in 2017, up 1.7%
compared to 2016

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 4

Executive Summary
Tourism overview for Vietnam
th
Vietnam is the 6 fastest growing country in the Countries of Origin for International
world, as a tourist destination, and the fastest in Arrivals to Vietnam (Source: GSO/VNAT) –
Asia, according to a report by UNWTO. In 2017, Year 2017
Vietnam tourism continued the growth momentum
from 2016 and surpassed the expectation of the China
government for a second year. Total arrivals rose Korea
by 19%, from 72 million in 2016 to 86 million in 16.9% Japan
2.1%
2017, of which international arrivals increased 29%, Taiwan (China)
2.2% 31.0%
attributed mostly to an increase of 1.3 million USA
2.3%
Chinese visitors. Domestic travellers increased Russia
2.9%
18%. Malaysia
3.7%
Australia
International Arrival growth rate for some 4.4% 18.7%
Thailand
selected countries 4.8% England
4.8% 6.2% Singapore
Vietnam 26.0%
29.0% Other
Indonesia 15.5%
21.3%
Asia is still the primary market for inbound Vietnam
Thailand 8.9%
8.8% tourism, accounting for 76% of total international
Singapore 7.7% arrivals, among which China, South Korea and
6.2%
Japan have been the top 3 inbound markets for the
Cambodia 5.0%
12.0% last 3 years, together accounting for more than 50%
Philippines 11.3% of total international visitors to Vietnam.
11.0%
4.2% On average, arrivals from Western countries rose
Malaysia -3.0% 14% in 2017, with the notable case of Russia,
-10% 0% 10% 20% 30% 40% where the number of visitors rose over 32% thanks
to the tour operators’ effort to expand their tour
2016 2017
packages for Russian tourists to travel to Vietnam in
winter, and increase knowledge of both tourists and
Source: Countries’ Tourism Authorities
travel agents about Vietnam. In the future, with the
As for overall economic contribution, the tourism 3-year extension to the visa scheme starting from
industry in 2017 earned the revenue of VND510.9 July 2018 for visitors from 5 Western countries, the
thousand billion, an increase of 27.78% from 2016. growth rate can be expected to increase
In 2017, direct contribution from the Travel & significantly.
Tourism Industry to GDP was USD12.97 billion,
In 2018, the Prime Minister of Vietnam and the
accounting for 5.9% of total GDP; while total
Minister of Culture, Sports and Tourism set a target
contribution of the industry to GDP was USD20.61
of 15 to 17 million international arrivals. This target
billion, accounting for 9.4% of total GDP (Source:
is within reach, with the first 5 months of the year,
World Travel and Tourism Council, 2018). The
the country received c.6.7 million tourists, an
Government set out the objective in Resolution No.
increase of 27.6% over last year’s figure.
08-NQ/TW to achieve the target of total contribution
from the Travel & Tourism Industry contributing over
10% of total GDP by 2020.

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 5

Executive Summary
Room rates by Selected Category Movement in hotel room RevPAR by Star
Ranking (2016 – 2017)
Average Room Rate by Star Ranking (2015-
2017)
90 79.1
80 71.8
70
107.6
2017 60 54.0
75.2 50.2
50

USD
103.2
2016 40
74.6
30
106.8 20
2015
72.3 10
0 20 40 60 80 100 120 0
2016 2017
USD
5-Star 4-Star
4-Star RevPAR 5-Star RevPAR
Average room rate in 2017 increased by 2.8% from
USD89.3 in 2016 to USD91.8.
Central region continued to achieve the highest
After a drop in 2016, 5-Star hotels made a recovery growth by 19.7% as a result of the rise in both
with average room rate increased by 4.2% in 2017. occupancy rate and average room rate.
4-Star hotels also observed a rise in their room
rates but at a rate of less than 1%. Northern region followed with a 12.9% increase,
from USD68.8 in 2016 to USD77.7 in 2017.
All regions saw an improvement in room rate with Southern region ranked the last with a slight rise of
the Central region achieved the highest of 5.7%, 4.7%.
followed by the Northern region with 4.4%.
Occupancy rates by Selected
RevPAR by Selected Category Category
RevPAR showed significant increases for both star
Average hotel room occupancy rate by Star
categories at 7.6% for 4-Star hotels and 10.2% for Ranking (2015 – 2017)
5-Star hotels.
75.2%
2017
72.2%
69.2%
2016
67.4%
62.7%
2015
61.5%
0% 20% 40% 60% 80%

5-Star Occupancy Rate 4-Star Occupancy rate

Overall, occupancy rate improved by c.5% for both

star rankings (4.8% for 4-Star and 5% for 5-Star).

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 6

Executive Summary
Revenue and Expenses

Annual Revenue Breakdown (2016 - 2017) Departmental Expenses and Gross Profit as
Percentage of Departmental Revenue (2017)

1.7% 1.1%
100%
5.5% 5.6% 100%

% of departmental revenue
80% 33.1% 31.7%
80% 36.3% 37.4%
60%
60% 78.5% 8.7%
40% 11.6%
59.8% 61.5%
40% 32.1% 21.7%
20%

0% 20%
11.8% 29.2%
2016 2017 22.9%
9.7%
Miscellaneous Income 0%
Other Operating Sales Room F&B Other
F&B Sales Operating
Department
Room sales accounted for the highest portion of Gross departmental profit
Other expenses
total revenue at c.60% and showed a slight Cost of sales
increase of 1.8% from 2016 to 2017. F&B sales, on
the contrary, saw a decrease of 1.3% compared to The cost structure remained similar for the two
last year. Other operating sales, including spa, years. Even though gross profit margin of each
parking lot, Souvenir shop, banquet, conference department did not show any major changes,
and business centre, etc., remained roughly the payroll expenses were increasing for F&B and other
same in the two years. operating departments. Such trend was also
observed in the rise of average payroll per
employee in 2017.

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 7

Executive Summary
Undistributed Operating Expenses Breakdown Expenses and Profit as Percentage of Revenue
(2016 – 2017) (2016 – 2017)

100% 100%

37.1% 36.2% 34.1% 35.8%

80% 80%
2.0%

% of Revenue
1.8%
60% 1.2% 1.2%
60%
21.0% 20.3%
28.4% 26.6%
40% 6.6% 7.5% 40%
9.8% 10.7%
2.1% 2.9% 20%
20% 35.7% 35.7%
23.4% 22.3%
0% 0%
2016 2017 2016 2017
Payroll Expenses EBITDA
Utilities Fixed Charges
Property Operation and Maintenance Financial expenses
Sales and Marketing Non - operating Income
Information and Telecommunication Systems FF&E Reserves
Administrative and General Undistributed Operating Expenses
Departmental Expenses

GOP and EBITDA as Percentage of Revenue

Payroll, administrative and general expense and (2017)
utilities, the three biggest cost components of total
undistributed costs, together account for 81.5% in
100%
2016 and 78.9% in 2017. In 2017 the participating
Hotels spent more on maintenance and sales and 80% 35.7%

marketing, with both expense items increasing by 60%

nearly 1% each. 100.0% 26.6%
40% 1.2% 0.3% 2.0%
1.4%
20% 37.7% 35.8%

0%
GOP
Revenue

Non - operating
FF&E Reserves

EBITDA
Fixed Charges
Financial expenses
Departmental

Operating Expenses
Expenses

Income
Undistributed

The upscale hotel sector continued to see a better

year with EBITDA in 2017 increased by 1.7%
compared to that of 2016. Such improvement was
mainly contributed by the drop of 1.8% in
undistributed operating expenses while other
expenses remained roughly the same.

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 8

Executive Summary
Employees by Selected Category
Average Revenue and average payroll
expenses per employee (2016 - 2017)
Source of Guests by Selected
Category
Source of guests (2015 - 2017)

2017 80.8% 19.2%

35,000
28,702
30,000 26,889 2016 79.2% 20.8%
25,000
2015 81.1% 18.9%
20,000
USD

15,000 0% 20% 40% 60% 80% 100%

10,000 6,249 6,605 International guests Domestic guests

5,000
- Over the last 3 consecutive years we observed an
2016 2017 increasing trend of Domestic guests staying at
upscale hotels, however the trend was adjusted in
Average Revenue per employee 2017 when the growth in International guests
surpassed the growth of domestic guests (yoy 29%
Average payroll expenses per employee
vs 18%). As the result, the percentage of
International travellers staying at 4-5-Star hotel
increased to almost 81% in 2017 and domestic
Statistics of the participating hotels showed that
guests dropping slightly.
average revenue and payroll expenses per
employee increased for the second year in a row.
The average revenue per employee, in 2017,
increased by 6.7% and average payroll expenses
increased by 5.7%.

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 9

Executive Summary
Purpose of Stay by Selected Channel of Reservation by Selected
Category Category
Purpose of Stay (2015 – 2016) Channels of Reservation (2017)

2017
Other 6.2%
guests FiT/ 17.5%
14.4% Leisure 16.1%
traveller
35.8%

Tour 21.4%
groups
27.2%
Corporate 32.7%
6.0%
& MICE
Business 7.6%
Travellers
15.0% Direct booking with hotel
Online Travel Agencies (OTA)
Wholesalers/ GDS
Tour operator/ Travel Agency
Corporate
Sales via other channels
2016
Other
guests,
15.1% FiT/
Leisure The Structure of room reservations in 2017 follows
traveller,
35.3%
the same pattern as in 2016 where tour
operators/travel agencies were the major channel of
Tour reservations for 4-Star and 5-Star hotels at c.33%.
groups,
27.3% A drop of 1.6% was noticed with Direct Bookings.
Corporate
On the other hand, OTAs increased by 1.0% and
MICE
& Business 7.8% corporate increased by 1.1%.
Travellers
14.5% The corporate channel’s portion increased from
15.0% in 2016 to 16.1% in 2017. This trend was
consistent in both star rankings.

FIT/Leisure travellers and Tour groups accounted

for the highest proportions of guests staying at
upscale hotels, together they accounted for more
than 60% of total guests. The third biggest portion –
the Corporate/Business travellers was observed
with a slight increase of 0.5% in 2017.

MICE (Meetings, Incentives, Conference and

Exhibits) guests decreased slightly by 0.2%. The
decrease though minor, is the second year in a row
which implies that Vietnam has not done much in
the last few years to attract MICE tourists.

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 10

Executive Summary
Importance of Digital Technologies

Hotels that consider the Integration of Which area of operation have you applied digital
digital technologies into the Hotels technology?
services is a factor that will change
Vietnam hotel market Have not applied yet 0%
0%
Data mining and analysis 81%
71%
95.7%
100% 84.6% Guests Personalization via 54%
Mobile application 39%
80%
Online check in/ check out 50%
60% 30%
40% Digital marketing (via social 100%
15.4% media such as Facebook,… 100%
20% 4.3%
0% 20% 40% 60% 80% 100%
0%
No Yes
4-Star 5-Star 5-Star 4-Star

Responses from 4 and 5 star hotels proved that
the importance of incorporating digital technology
in their business is vital. 89.8% of hotels consider
the integration of digital technologies into the
hotels’ services is a factor that will change the
Vietnam hotel market.
While digital marketing and using of data mining
and analysis have become basic, being used at
almost all the 4-5 Star hotels, the trend of
applying mobile application for guests
personalisation and online check in/check out is
becoming more and more popular, with more
than 50% of participated 5 Star hotels, and 30-
40% of the 4 Stars. It is predicted that these
digital technologies will soon take over the
industry.

For full report, please contact Ms. Ngo Hai Hanh at hanh.ngo@vn.gt.com

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 11

Further Information
Grant Thornton provides a wide range of services to the
Hospitality sector, including:
 Audit and Assurance  Negotiation of management contracts  Valuations

 Tax advice  Diagnostic and performance reviews  Internal audits and control reviews

 Transaction advice (buying and  Feasibility studies  Outsourcing services

selling properties)

Kenneth Atkinson Ho Chi Minh City Tourism and Hospitality

Executive Chairman
T +84 28 3910 9100
E ken.atkinson@vn.gt.com
Nguyen Chi Trung
Managing Partner
T +84 24 3850 1686
E chitrung.nguyen@vn.gt.com
th
14 Floor Industry Leader
Pearl Plaza Kenneth Atkinson
561A Dien Bien Phu Street T +84 28 3910 9100
Binh Thanh District, Ho Chi Minh City E ken.atkinson@vn.gt.com
Vietnam
Audit and Assurance Services
T +84 28 3910 9100 Nguy Quoc Tuan
F +84 28 3910 9101 Partner
T +84 28 3910 9100
E tuan.nguy@vn.gt.com
Hanoi
th
18 Floor Tax Services
Hoa Binh International Office Building Hoang Khoi
106 Hoang Quoc Viet Street Partner
Cau Giay District, Hanoi T +84 28 3850 1686
Vietnam E hoang.khoi@vn.gt.com

T +84 24 3850 1686 Advisory Services

F +84 24 3850 1688 Nguyen Thi Vinh Ha
Nguyen Thi Vinh Ha Partner
Partner T +84 24 3850 1686
T +84 24 3850 1686 E vinhha.nguyen@vn.gt.com
E vinhha.nguyen@vn.gt.com
Outsourcing Services
Le Minh Thang
Partner
T +84 28 3910 9100
E minhthang.le@vn.gt.com

Vietnam Hotel Upscale Lodging – Hotel Survey 2018 12

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