Hanoi Hotel Market Report Q1 2020
Performance jitters
Total stock was approximately 9,950 rooms, stable QoQ and YoY from 66 hotels, comprising 16 five-star, 19 four-star and 31 three-star projects. The sudden drop in visitors had 3- to 5- star average occupancy fall -30 ppts YoY, average room rates (ARR) down -13% YoY and revenue per available room falling -49% YoY.
In early Q1 decreasing Chinese and Korean inbounds saw 3- to 5-star occupancy ease to 55%. In March the increased effect of containment measures had 3-5-star occupancy at under 30 percent. Occupancy is expected to be further affected following the April 1st lockdown and with work and holiday visas temporarily on hold.
Five-star unbowed
In Q1/2020, five-star average occupancy decreased -32 ppts YoY. ARR was US$127/room/night, down -13% YoY leading to RevPAR down -46% YoY. Business travelers to 5-star hotels decreased, but remained the main guest source to maintain 5-star’s lead in the segment.
Three- and 4-star hotels had the worst performance as RevPAR fell -60%, mostly from a drop in leisure trips to Ha Noi. In March some mostly lower grade projects, temporarily closed and furloughed employees.
Three hotels have been established as quarantine zones: Thang Long Espana Hotel, the 3-star Hoa Binh Hotel and 4-star Muong Thanh Xa La Hotel.
CBD, Secondary suffers
The absence of leisure travelers and closure of city attractions reflected poor segment performance. Secondary area RevPAR was down -51% YoY; and in the CBD, down -49% YoY. The Ha Noi Department of Tourism reports, from February to 19th March, 151 hotels were closed in districts Hoan Kiem (78) & Dong Da (73).
The West RevPAR decreased -43% YoY, hit by a late March performance drop after postponement of the F1 Grand Prix resulted in cancelled bookings.
New Inbound Lows
The approximately 3.85 million Q1 visitors were down -47.2% YoY to the lowest in 5 years. International visitors down -43.9% YoY to 956,000; and domestic travelers were down -48.2% YoY to 2.89 million. International staying visitors fell -36.9% YoY to 756,000. Those from China slumped -78.1% YoY; South Korea by -52.1%; and Japan by -33.3 percent. In March, total visitors to Ha Noi were down -76% MoM and -87.4% YoY to 321,390. Total first quarter tourism revenue in Hanoi was VND15,687 billion, down -38.8% YoY.