Many three-star hotels in HCMC have joined the list of higher-grade hotels which are feeling the pinch of the economic slowdown. 

They have reported a decline in business performance with the average room occupancy in the year to date lower than in the same period last year.

Five-star hotels have also reckoned that corporate and leisure travelers were trimming their budgets for trips, reducing the frequency of their trips and shifting to cheaper hotels like three or four-star rather than five-star hotels to cut down on spending in times of economic woes.

La Thanh, vice president sales and marketing of Que Huong Liberty Joint Stock Company, which has six three-star hotels in HCMC, said the economic difficulties could prompt business travelers to shorten their stays or even shelf their unnecessary business trips.

This trend can cause a fall in room occupancy, he added.

Pham Lan Anh, general manager of Bong Sen Saigon Hotel, said guests were shifting from five-star hotels to three-star ones and that luxury hotels were offering attractive room rates to maintain their guests.

Anh, however, said her three-star hotel had witnessed occupancy so far this year dropping 10 to 12 percentage points from the same period last year, at 78%.

The hotel chain of Que Huong is enjoying higher occupancy, at around 89%.

Despite the occupancy fall, the hotels' growth remains strong, buoyed by the rising room rates. Que Huong has attained revenue growth of some 30% and Bong Sen 24% so far this year, but the two hoteliers did not give exact figures.

The hotels said the imbalance between supply and demand had triggered a 38% jump in room rates.

The higher room rates have had a negative impact on tourism. Travel agents are shunning the promotion of HCMC as a destination for tourists but shifting their guests to other destinations in Vietnam or even in neighboring countries.

Source : SGT