Recovery in FDI attraction, tourism helps Hanoi’s lodging service rebound

Hanoi has emerged as a bright spot as it was one of the leading localities in terms of tourism revenue during the early months of 2023, according to Savills Vietnam.
Recovery in FDI attraction, tourism helps Hanoi’s lodging service rebound
Foreign tourists in Hanoi (Photo:VNA)

In the first half of 2023, Hanoi served 10.3 million domestic visitors and 2.03 million international arrivals, 22.6% and seven times higher than those of the same period last year. Total revenue from tourism activities hit an estimated 44.88 trillion VND (1.89 billion USD, surging by 74.3% year-on-year.

Experts noted that the tourism sector’s recovery has positively impacted the hotel market. Although the accommodation segment in Hanoi has not fully returned to pre-pandemic levels, it is experiencing a fairly good resumption with high expectations for the future.

With support policies from the Government and a positive outlook for foreign direct investment (FDI) inflows, the hospitality and serviced apartment markets are predicted to fully recover after 2024.

According to a market report in the second quarter of 2023 by Savills Vietnam, the hotel supply in Hanoi increased by 7% quarter-on-quarter and 10% year-on-year, reaching a total of 10,962 rooms.

However, the room occupancy rate in the period reached only 62%, much lower than the 73% recorded during the same period in 2019.

Experts said the slow recovery pace is partly due to the fact that the number of international tourists coming to Vietnam has not met expectations.

To attract more foreign tourists to Vietnam, the Government and relevant agencies have introduced various special incentive policies, including visa exemptions.

Specifically, from August 15, people with Vietnamese e-visas can enter and exit the country any number of times within 90 days. The policy is expected to revive tourism and hospitality, creating opportunities for breakthroughs in the coming time.

Vietnam served 70 million tourists in the first two quarters of 2023, equivalent to 63% of the target set for the year, Savills Vietnam reported.

Of the figure, the number of domestic tourists increased by 5% annually, reaching 64 million, while the number of international visitors surged by 826% year-on-year, totaling 5.6 million. The highest proportion comes from the Republic of Korea, accounting for 29% of the total international arrivals, followed by China with 10%, and the US with 7%.

Data from the General Statistics Office shows that nearly 16.24 billion USD in FDI was poured into Vietnam in the first seven months of this year, up 4.5% compared to the same period last year.

Hanoi was ranked first among localities nationwide in foreign direct investment (FDI) in the period with a total investment of over 2.28 billion USD, accounting for nearly 14.1% of the total registered investment capital in the country, and up 2.76 times year-on-year.

Hanoi’s tourism sector will focus on diversifying tourism products to lure more holiday-makers to the capital city. The municipal Tourism Department also plans to organise a series of events, programmes, and festivals to promote the city’s tourism.

By late 2023, Hanoi will welcome new hospitality supplies from international brands, including L7 West Lake Hanoi in Tay Ho district operated by Lotte.

From 2024 to 2025, the market is projected to see an addition of over 2,600 rooms from various international hotel brands such as Dusit Hanoi – Tu Hua Palace, Fairmont Hotel, Shilla Hotel, Four Seasons, and Hyatt Regency, among others.

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(Source: VNA)