Booming Demand Boosts Hotel Room Rates in HCMC by 20% in Second Quarter
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The average price of hotel rooms in Ho Chi Minh City (HCMC) experienced a 20% increase on a year-by-year basis in the second quarter, reaching VND2.4 million (US$92) per night as a result of robust demand. This surge in demand was largely fueled by international tourists, businesses, and attendees of Meetings, Incentives, Conferences, and Exhibitions.
Hotel Supply and Demand
The number of available rooms largely remained consistent at approximately 17,000, with minor increases due to the expansion of some three-star hotels. The market is predominantly seeing upgrades rather than new developments. Despite a 4% decrease in the number of flights to the city, driven by increased fuel costs and airfares, the number of international visitors soared by 50% to 6.4 million in the first six months of the year.
Luxurious accommodations have maintained a steady demand from international tourists and business customers. The lack of new supply has meant that existing hotels have not faced significant competitive pressure. Average rates for four-star hotels were approximately VND3.5 million with an occupancy rate of 72%-78%. Five-star hotels had an average rate of VND5 million per night and a consistently high occupancy of 75%-80%.
“Average rates for four-star hotels were approximately VND3.5 million with an occupancy rate of 72%-78%.”
Future Outlook of the Hotel Industry
The hotel industry’s future looks promising, supported by growing international visitor numbers and the revival of tourism across the Asia-Pacific. However, not all hotels may benefit from the limited supply as customers increasingly prioritize brands and service quality. Older establishments, self-operated hotels, and those lacking sufficient investment could face increased pressure. To remain competitive, these hotels may need to undergo renovation or repositioning.
Looking towards the future, the market is expected to attract more international brands. By 2029, nearly 900 new rooms within four- and five-star hotels are projected to be added, mostly in the former District 1. However, in the short term, the supply is expected to remain unchanged, allowing existing hotels to maintain occupancy and room rates.
In the years 2027-2028, upscale brands such as Nobu Hotel, Four Points by Sheraton, and JW Marriott are anticipated to establish a presence in HCMC. The city hopes to attract 61 million visitors and generate approximately VND330 trillion in tourism revenues in 2026.
Questions & Answers
Q.What led to the increase in average hotel room rates in HCMC?
What led to the increase in average hotel room rates in HCMC?
The hike in hotel room rates can be attributed to a surge in demand from international tourists, businesses, and Meetings, Incentives, Conferences, and Exhibitions attendees.
Q.What is the expected trend for hotel room supply in HCMC?
What is the expected trend for hotel room supply in HCMC?
The supply of hotel rooms is expected to remain steady in the short term. However, by 2029, nearly 900 new rooms within four- and five-star hotels are projected to be added.
Q.What challenges could hotels in HCMC potentially face in the future?
What challenges could hotels in HCMC potentially face in the future?
Older establishments, self-operated hotels, and those lacking sufficient investment could face increased competition as customers increasingly prioritize brands and service quality. These hotels may need to undergo renovation or repositioning to remain competitive.
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