Da Nang has natural hospitality and tourism advantages like a long coastline, an accessible location, beautiful scenery, and a sound infrastructure system. It is home to many international brands, which enhances its appeal, however, investors still must overcome several challenges in this promising market.
Tourism Opportunities
Da Nang has a comprehensive infrastructure network with an international airport, a deep-sea port, the North-South Railway and an extensive road network. Da Nang International Airport is the third largest airport in Viet Nam after Tan Son Nhat International Airport (Ho Chi Minh City) and Noi Bai International Airport (Ha Noi). Da Nang is planning to expand Terminal 1 and upgrade the airport's capacity to 25 million by 2023 and 30 million by 2050. Many infrastructure projects are in planning or under construction, which will boost domestic and international connectivity.
Transport infrastructure will boost economic development. Do Thu Hang, Senior Director of Advisory Services, Savills Ha Noi, shared: “The transport and infrastructure systems are being expanded and upgraded. This will contribute to development in Da Nang and neighbouring provinces. As these mechanisms improve, we expect increased demand for hospitality real estate products.”
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Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi
The return of Chinese tourists in 2023 will drive tourism recovery greatly.
Spotlight: Da Nang noted that in H2/2022, hotels with international operators like Pullman, Novotel or Grand Mercure had 40% higher average room rates and 8 ppts higher occupancy compared to domestic and self-managed projects.
Brands such as Furama, Accor, InterContinental Hotels Group (IHG), Hyatt and Fusion deliver the greatest hotel villa stock.
Capital and Legal Challenges
Increased capital shortages and a global economic downturn mean some property owners are adjusting their portfolios. Therefore, some hotel owners are looking to divest their hospitality assets.
Matthew Powel, Director of Savills Ha Noi shared: “Given the significant competition, small hotels are struggling given the sheer volume of high-quality products from domestic and international developers. However, savvy buyers can capitalise on these opportunities and those building new assets must consider how their assets meet sustainability demands.”
A new decree issued in April 2023 will help solve issues related to ownership and will grant ownership rights to condotels, officetels, resort villas and other properties built on commercial and service land for accommodation and tourism purposes. If hospitality projects constructed on commercial or service land have been built according to the law, they will receive ownership certificates.
Do Thu Hang noted: “Legal restrictions and the pandemic have meant the hospitality real estate market has been quiet for some time. Decree 10 will create a solid legal foundation which will support sales and performance as developers and owners can access greater security and there is transparency in all legal processes.”
Find out more: Advisory Services
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