Businesses cut down expenses, hotels have fewer customers

A lot of hotels in HCM City, including the bustling ones in the central area of the city, complain that they have few customers these days.

The revenues from room, meal, meeting services all have seen sharp decrease in comparison with the same period of the last year. Some hotels have reportedly slashed the hotel room rate by tens of dollars, while further decreases prove to be unavoidable.

A mini survey by Thoi bao Kinh te Saigon showed that in the first week of May 2012, the occupancy of many high grade hotels dropped sharply by tens of percent. A well-known hotel on Dong Khoi road in HCM City, which is considered the ideal area for hotel business, reported the low occupancy rate of 50-60 percent.

Meanwhile, the hotels located further from the central area of the city even have fewer clients. A five star hotel in district 5 in HCM City only had 36 percent of rooms booked in the first quarter of 2012.

It is now the low tourism season of the year. However, at that time of 2011, the hotel room occupancy was still higher than that of this year. Besides, hotels still could earn money from meal and meeting services. Meanwhile, the demand for all the services is very weak this year.

Nguyen Anh Vu, General Director of Majestic, a five star hotel, said that in April 2012, the hotel occupancy rate was 11 percent lower than that of the same period of the last year. In 2010-2011, the hotel rooms were full all year round, and it did not have “low season”. Meanwhile, things are worse this year: the number of foreign tourists to Vietnam has decreased, while domestic clients have cut down spending on meals and meetings.

“We have 178 rooms, but only 70-80 rooms were occupied on some days, even though we have been running a lot of sales promotion programs,” he said.

“Businesses and individuals now tend to spend less on meals and meetings,” he added.

An executive of a high grade hotel said 2-3 star hotels may make fatter profit than luxurious hotels these days, because clients tend to stay at medium class hotels instead of high grade hotels to save money.

However, the owners of the medium class hotels have denied the good business performance. Except some small hotels in Ben Thanh market area in district 1, other hotels in other areas now have few clients.

Do Dai Ba, Sales and Marketing Director of Lavender on Le Thanh Ton Street near the Ben Thanh Market, said his hotel’s occupancy rate is 70 percent, but it is still lower than the 80 percent of the same period of the last year.

Though the hotel room occupancy rate remains “satisfactory,” the director said that the conditions are not really optimistic.

Ba said that it’s difficult to compare the revenue of different hotels. Unlike big hotels in other areas, the hotels there mostly provide room and meal services and do not have meeting or outside party services.

Vien Dong 3-star hotel on Pham Ngu Lao Street has reported the low hotel room occupancy rate of 50 percent, which is lower than the 70 percent of the last year. The revenue from other services has also decreased.

In general, the hotel room occupancy rate in May is lower than that in other months. However, in 2012, the signs of decrease appeared right in the first months of the year.

“We have offered lower hotel room rates since mid April 2012, but we still do not have customers,” complained Nguyen Thi Xuan Hong, Vien Dong’s director.

Other hotels have also slashed their room rates. Majestic, for example, now quotes the room rate at 145 dollars a night instead of 170 dollars. Some high grade hotels on Dong Khoi road have slashed the room rates from 198 to 163 dollars.

Source: TBKTSG