Savills Hotels hosted the fifth event of their “Meet the Experts” series, where hospitality experts are invited to share their valuable insights with Vietnamese Developers, which features the trendy topic “The new concept of Luxury, creating and embracing additional value
Savills Hotels hosted the fifth event of their “Meet the Experts” series, where hospitality experts are invited to share their valuable insights with Vietnamese Developers, which features the trendy topic “The new concept of Luxury, creating and embracing additional value”.
The “Meet the Experts” event is organized for hotel and real estate developers, owners and industry experts. The Savills Hotels team proposes new interesting and inspiring topics related to new trends or new products that will affect hospitality market. The aim is to inspire real estate developers about what opportunities are coming and what elements that their next projects should focus on.
The event in April was divided into different sections, presented by four speakers. Mr Mauro Gasparotti, Director of Savills Hotels Asia Pacific presented the overview of global and Vietnam hospitality market as well as the future trends and how to capture those opportunities. Savills Hotels invited three hospitality experts, including Mr Andrew Pang from Yoo Asia Limited to present about branded resorts and the importance of design for the guest experience, Mr Chavatik Wanakasemsan (Winn) from Lub d Company Limited to discuss about Millennial clients and the future of social integration into hotels and Mr Kevin Wallace from Nikki Beach Hotels and Resorts Asia to explain how the entertainment industry can bring additional value for hospitality projects.
Mr Mauro Gasparotti highlighted that “Vietnam has experienced an unprecedented growth in the hospitality sector. Most of hotels and resorts have been very busy and there are lots of construction activities going on. Hospitality could become a very important part of the Vietnam economy. This is a perfect market for the development of pioneering products, thus we are expecting that innovations and new trends are integrated in upcoming projects”.
According to Mr Mauro, the developers seem to focus on short-term market opportunities through capturing the strong growth in room demand. Overall, there is a lack of product diversification and developers tend to replicate what already exists, instead of making an effort to embrace new concepts. The hospitality industry is changing fast and many opportunities are opening for developers not only to plan for today’s room demand but also for future new categories of guests. Building a large room or lobby no longer delivers a sustainable competitive advantage and guest satisfaction.
Mr Mauro has added “The Vietnam market is enormously promising for development of more sophisticated hospitality projects, following all the global megatrends that are happening around us. We see changes every day. Technology will completely transform the way we travel. And with the coming of big data, artificial intelligence, automated systems and building sensors, developers need to start to take all those elements into serious consideration at the planning stage of their next projects. The design, human resources and functions of the hotels will completely change in the coming years. In addition, if you also consider all the demographic shifts, such as ageing populations or the rise of the Asian middle class, the opportunities are incredible”. Mauro stressed out the importance of focusing on creating guest experience rather than simply providing rooms “Developers tend to see hospitality as a simple need for temporary accommodation, but there is an enormous opportunity for developers to focus on planning what I call buildings with soul”.
Condotel is a current popular trend in Vietnam. Savills Vietnam has forecasted that 18,000 condotel units will be added to the market in the next 2 years (in key tourism destinations). Most of the condotels are managed by the developers but Savills observes that many projects have begun to integrate a brand within their projects. The branded residence is yet to be popular in Vietnam but is considered to be a good investment product in the region. According to Mr Andrew Pang from Yoo, “Firstly, we need to distinguish what is Branded Residences and Condotels: Branded residences are proper apartments/homes being associated, designed or managed by a well-known international brand, often these residences are part of a mixed use development that includes a hotel managed by the same brand, while condotels are mostly purpose built hotels or small units for sale, managed by the developers themselves, sometimes with unrealistic guarantee rentals. To be a good investment, from a design company point of view, it is important that the product should be designed closer towards proper residences with a small kitchen and decent bathrooms regardless of whether they are managed by a reputable hotel brand or independently. All the furniture within these units should also be designed to fit properly in order to maximise the space and should also be of good quality and fit into the overall look and feel of the brand.”
Karan Kaul from Onyx Hospitality added ”We agree with Yoo, our design partner for the Yoo hotels brand, proper third party management under an established brand can give residences a premium in sales prices and offer buyers the value add of international standard services. Pure condotel projects need to be analysed careful by both investors and buyers as often the focus is on generating unit sales, rather than the long term viability and operating forecasts of the property once built and opened. At the upscale and higher segments of the market a hotel with additional and separated branded residences often makes more sense to develop than a condotel".
During the course of the event, a new category of travellers was discussed, the Millennials, accounting for 24% of the global population. Vietnam has a young population as this population segment accounts for 38% of the total population (2016). Therefore, Millennial travellers will become a very important tourism and hospitality revenue source. Mr Chavatik Wanakasemsan (Winn) from Lub d stated that “Social travellers tend to avoid the traditional hotels and look for a gateway to authentic local experiences and an experience with new friends both foreigners and local. Most of them require super-fast Wi-Fi speed for streaming their videos or watching Youtube or Netflix. Sharing accommodation platforms like Airbnb, Couch Surfing, Hostels and Poshtels would serve their need or lifestyle. The guest room is just part of their travel experience. They love to take photos in every moment and seek for local food and local cultural for sharing their travel stories via social media. A nomad is a traveller who travels from one place to another place and works while they are travelling. Co-working space will be part of their office when the need to work or conference call with their clients arises while staying in the hotel.”
The potential of the poshtel model is evaluated to be high, as Mr Winn added: “Based on our guest profile in all locations, Vietnamese millennials are among the top three nationalities to stay at Lub d. By 2020, the millennial traveler market will see at least two-fold growth from 2018, which will be a challenge for hotels to adapt with their existing products to capture this segment. We see the gap in hotel development like Lub d, which will be positioned between a 3 star and 4 star hotel. Hybrid hotels like Lub d combines the private room with an en-suite bathroom and dormitory based on guests’ preference and designed lobby area to be the meeting point for travellers and welcome local or walk-in guests to using the facilities.”
Another important part of hospitality is entertainment. Vietnam historically has lacked quality F&B and entertainment options, compared to neighbouring destinations such as Phuket, Bali, Bangkok and Singapore. According to Mr. Mauro, there is a general lack of understanding about how entertainment and F&B can be an incredible additional source of revenue for resorts and hotels. It also can deliver a strong identity for the properties. Mr Kevin Wallace, from Nikki Beach illustrated the potential of beach clubs or urban clubs in Vietnam. He explained how an entertainment complex can be beneficial not only for the single establishments but also for the whole area and neighbouring hotels or resorts. He believes that the Vietnam market is highly potential for new entertainment options: “With Vietnam's youthful population of young millennials and rising middle class incomes, demand for food experiences, entertainment, film, art, music and fashion, at beach side locations in Long Hai/Ho Tram, Danang, Hoi An, Nha Trang, Cam Ranh and Phu Quoc will fit best over the next decade with Hanoi and HCMC being the best urban locations.”