However, this trend is likely to change. As indicated earlier, there are approximately 28 new hotel projects planned or under construction in Hanoi and the surrounding suburban market areas. This growth in available hotel supply is likely to result in declines in occupancies and average room rates for the hotels. As a result of potential overbuilding in Ho Chi Minh City and Hanoi, savvy investors have begun to seek development opportunities in other, less-developed locations. There are two major projects underway in central Vietnam that are taking advantage of this opportunity.
China Beach is a pristine sandy beach once used by the U.S. military forces.
The first international standard hotel to be located in Da Nang is being developed by a joint venture between Australian Leda Holdings, Ltd. and local authorities on a site that was once the location of the U.S. consulate. While growing pains are evident, Vietnam is clearly committed to economic reform and expansion. Political and regulatory uncertainties, combined with the urgent need to modernize infrastructure are hurdles to overcome for any organization contemplating investing in Vietnam, especially outside of Ho Chi Minh City and Hanoi. Potential opportunities are considerable however, for well capitalized and knowledgeable hotel companies with strong Vietnamese partners as the country moves forward with long-term economic development. Online with your comments and suggestions.