The condotel (condo hotel) market is forecast to remain attractive to investors in 2018, with increasing amounts of capital poured by both domestic and foreign investors into the segment.
Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association (VREA), said the occupancy rate of hotels in Hanoi and Ho Chi Minh City as well as luxury resorts exceeded 90 percent, describing room booking during holidays as a hard task.
“Hundreds of thousands of rooms need to be built to meet tourists’ demand,” he said.
Condotels and villa resorts have formed a new trend of investment in Vietnam in recent years, Nam said, citing more than 12,500 out of more than 22,800 available condotel apartments traded successfully in 2017 in major destinations like Da Nang, Khanh Hoa, Phu Quoc and Binh Thuan in the central region and the northern province of Quang Ninh.
Big domestic investors such as Vingroup, Sun Group and CEO Group have also invested in condotel projects.
According to VREA, Khanh Hoa province has the most condotels with upwards of 11,800 apartments, followed by Da Nang city with more than 7,000. Quang Ninh, a newcomer, put up to 1,300 condotel apartments on sale last year.
Stephen Wyatt, General Director of Joneslanglasalle Vietnam, a real estate services firm specialising in commercial property and investment management, explained that investors want to utilise the development of Vietnam’s tourism.
In 2017, Vietnam welcomed nearly 13 million international tourists, an increase of 30 percent against the previous year. Thanks to the number, Vietnam has been named in the list of the world’s top ten fastest growing travel destinations.
The demand for villa resorts and condotels will not cool down in the near future as Vietnam aims turn tourism into an economic spearhead.
The country is expected serve 15 million foreign arrivals in 2018 and up to 20 million in 2020. By 2020, the number of domestic holiday-makers is projected at 82 million and the sector’s contribution to national GDP at more than 10 percent.
However, Nam said, the condotel sector still faces challenges in terms of legality, adding that condotels have yet to be regulated, which has caused difficulties for State management agencies, and affected the interests of people and businesses.
Only the Tourism Law 2017 identifies condotel and villa resort as tourism accommodation establishments, he said.
Nam underlined the need to soon address issues regarding the land granting, condotel and villa resort property rights certificates, possession duration, transfer of contracts and construction standards, among others.-VNA