Hanoi hotels, Sheraton builds third hotel in Vietnam

Sheraton Hotels Group is building an international hotel & spa in the coastal city of Nha Trang, central Khanh Hoa province, which will be put into operation in mid-2009.

This is Sheraton’s third luxury hotel in Vietnam , after two facilities in Hanoi and Ho Chi Minh City .

According to Scott Hodgetts, Sheraton Hotel & Spa Nha Trang General Director, the booming business at the Hanoi and Ho Chi Minh City hotels is the reason for Sheraton to build one more hotel in Nha Trang city, helping expand its operation and reaffirm its brand name in Vietnam .

The 30-storey hotel comprises a chain of modern facilities, including 280 rooms and meeting halls, a spa area, restaurants and sports centres, he said, adding that tourists will also enjoy convenient IT services.

Sheraton Hotels, which is managed by Starwood Hotels & Resorts Worldwide Inc., one of the world’s largest tourism service providers, plans to build 54 more hotels throughout the world in 2009.

Hotel dealings: Quiet but hot!

Many big hotels in Vietnam recently have been the subjects of big deals – big, quiet deals.

On July 26, 2008, the four-star Amara Saigon on Le Van Sy road, District 3, HCM City, was renamed Ramana Hotel Saigon after a local company, Vina Properties Co., Ltd., bought this hotel from Amara Saigon Co., Ltd., a wholly foreign-owned company.

Comparing building a new hotel and buying an operational hotel, Pham Trinh Phuong, Chairman of Vina Properties Board of Directors, said the latter is better because it helps investors to save time (building a hotel may take 3-4 years) while the hotel is operating and is already located in a good position.

Since Vietnam joined the World Trade Organization (WTO), the number of foreign visitors and investors coming to Vietnam has been rising. In addition, Vietnam hosts many international events so the need for hotel rooms has grown strongly.

According to CB Richard Ellis Company, since 2007 there have been 5 five-star hotel projects in Hanoi and 11 others in HCM City, with a total number of 3,611 rooms. Yet, none of these projects will be completed in 2008.

The shortage of hotel rooms in Vietnam is due to a shortage of suitable places to build hotels. Hanoi and HCM City don’t have large plots of land for hotels in their inner areas and if they have, it is very costly and time-consuming for investors to make site clearance for the construction. Purchase of hotels, thus, becomes very attractive.

To date, hotel deals are mainly conducted between foreign investors. For example, the five-star hotel Omni Saigon in HCM City and Guoman in Hanoi were renamed Movenpick Hotel Saigon and Movenpick Hotel Hanoi. The new owner of these hotels is the Swiss Movenpic Hotel and Resort Hotel Group. The Novotel Hotel in HCM City was bought by ParkRoyal Group.

It is worrying that local companies are selling lands in good positions to foreign investors. The case that Vina Properties bought a wholly foreign-owned hotel, Amara, is a rare phenomenon. In December 2007, Vinpearl stopped hiring the brand name Sofitel of the Accord Group for its Sofitel Vinpearl Resort and Spa to change the name to Vinpeal Resort.

The real estate market in Vietnam, especially tourism and hotel real estate, will be very hot in the future, experts say.

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