Vietnam's secondary cities on the radar for hotel development

Hotel companies are turning to Vietnam’s secondary destinations for development.

While hotel companies aren't completely giving up on top tourism destinations in Vietnam, these groups are eyeing development opportunities in Danang, Phu Quoc, Nha Trang and Sala. Le Hoang Vu, consultant, development, Vietnam, InterContinental Hotels Group, told TTG Asia that Danang and Nha Trang have emerged from the list as “key growing cities” to watch. Michael Ong, VP, development, Pan Pacific Hotel Group, told TTG Asia, “We have a hub each in Ho Chi Minh City and Hanoi, so now we’re ready to brand out to other areas, like Danang and Phu Quoc.” PPHG will begin marketing these destinations soon.

Danang’s growing appeal can be attributed to its emerging regional golfing scene, especially after hosting last year’s Asia Golf Tourism Convention, local tourism marketing initiatives, the annual Danang International Fireworks Festival from April to June and international sporting events, including the Manulife Danang International Marathon.

The upgraded Danang International Airport has also driven heightened tourism to the region. The city was expected to receive 6.3 million tourists in 2017, a double-digit growth from the 4 million seen in 2014. Meanwhile, 20 international airlines established direct connections from China, Macau, South Korea, Taiwan, Japan, Russia, Malaysia, Singapore, Cambodia and Hong Kong to capitalize on the city’s growing popularity.

Kho Trang, which now has the country’s first Club Med hotel, is also a growing market to watch out for along with Phu Quoc. The local and central governments of Phu Quoc have set plans to develop the island into an international center for eco- and resort tourism, entertainment and finance. To achieve this goal, the governments rolled out numerous development incentives, which have attracted big investments from local and international firms, including Vietnam’s CEO Group. Some of these incentives include low corporate and personal income taxes, waived land rental prices for the first four years and decreased land rental prices by 50 percent for the next nine. Phu Quoc is also currently looking to attract even more investment to offer investors 99-year land leases.

Hotel projects currently in the pipeline for these growing secondary cities included the Mövenpick Resort Phu Quoc opening in 2019, the Mövenpick Hotel and Residences Han River, Danang opening in 2020 and the Courtyard by Marriott Nha Trang Hon Tam Resort opening in 2020.