market brief ho tram, vietnam 2016 - alternaty
TRANSCRIPT
Domestic International
2011 2012 2013 2014 2015
Visitor Arrivals to Ba Ria - Vung Tau Province(million)
Ha Noi
Da Nang
Nha TrangHCM City
Phu Quoc
Ho Tram
Ho Tram is a small beach town located in Xuy-en Moc District, Ba Ria – Vung Tau Province, Viet-nam. With a full service casino and kilometers of unspoiled beaches, it has the potential to eclipse Vung Tau City and Mui Ne as the preferred week-end playground. Ba Ria – Vung Tau always maintains one of the top destinations in Vietnam in term of total visitors, thanks to its close proximity to HCMC. However, the location also turns Ba Ria – Vung Tau into a weekend and daytrip destination and leads to shorter length of stay compared to its peers.
96.3%
12.5%
Of all total tourist arrivals (2015) are domestic guests
Tourist arrivals compounded annual growth rate in 2011-2015
Demand
Overview
HO TRAM. VIETNAM | 2016
Market Brief www.alternaty.com
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9.6 11.1 12.5 13.9 15.2
Upper Midscale Upscale Upper Upscale
201120100
200
400
600
800
1,000
2012 2013 2014 2015 2015
Ho Tram, Upper Midscale to Upper Upscale Hotel & Resort Existing Supply (Rooms)
www.alternaty.comExisting Supply
Future Supply
Notable Future Projects :
The Grand Ho Tram Strip -Phase 2559 keysExpected opening in 2018
Sanctuary - Phase 244 VillasExpected handover in 2017
Melia Ho Tram At The Hampton144 Condotels, 58 VillasExpected handover in 2018
Gallery Villas6 villas out of 60Expected handover in 2018
960 Keys in Ho Tram
Supply increases by 2018
Future supply will be second home products
The market in Ho Tram is at a very early stage of development. Since the opening of The Grand Ho Tram Strip Resort in 2013, the supply in the last four years has been stable. Current properties in Ho Tram include mostly upper midscale to upper upscale branded residences, condotels and sec-ond home villas, leaving a lot of opportunity for the market to grow in other types of products such as midscale, theme parks and destination resorts.
The current development pipeline includes five properties ranging from upper midscale to luxury segment. This supply is anticipated to enter the market over the next two to three years.
58%
120%
25%
Upper Midscale
Luxury
Upscale
Upper Upscale
25%
26%
49%
1%
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Existing supply bElongs to a singlE rEsort (thE grand)58%
Which segment to invest ?
Which risk to consider ?
Average Daily Rate(Upscale Segment)
Properties in Ho Tram achieve lower rates compared to peer properties in more mature destinations such as Da-nang or Nha Trang. Main impact is the high seasonality.
Weekday occupancy is weak, reaching a low levels (25%-35%) but weekend rooms are in high demand (85%-95%), with some properties running at full occupancies.
Operating costs typically reach higher levels compared to other destinations due to the higher seasonality leading to difficulties in managing fixed costs.
Average Annual Occupancy,depending on property positioning
Gross Operating Profit Margin
Performance
Temperature of Opportunity
Temperature of Risk
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Ho Tram has a similar dynamic to Vung Tau, with stronger variance between weekday and weekend stays as the ma-jority of visitors are leisure guests from HCMC. The MICE and corporate market have not been developed and inter-national leisure guest segment are not yet a significant source of business. The market is expected to change as more properties will open and lift of the destination.
$110 - $140 55% - 60% 35% - 48%
Shortage of products in Vietnam but high demand from mid income people
Early stage of development, still a risky market for upscale products
It is all about young families and young couples
High demand for landed properties throughout the whole country
Few years away from being an opportunity
Low to Mid volume compared to other destinations in Vietnam
Large amount of available workforce in the area
Currently weak but positive prospect for a growth in demand as more propertieswill escalate more demand
Currently high competition from more mature destinationsbut large potential for the future development due to HCMC proximity
Midscale Hotel/Resort
Upper Upscale Hotel/Resort
Destination Resort
Condotel
Beachfront Villa
Retail/Office/Commercial
Over-SupplyWeak Demand
Operation Cost Escalation
Gallery Villas6 villas out of 60Expected handover in 2018
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What Will Boost The Demand ?
What Can I Buy For US$200,000 ? What Can I Buy For US$500,000 ?
Takeaways
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More international brand-ed resorts and variety of products will create healthy demand in the Mid-term.
Blue Sapphire Condo
2.6* units 1* unit 4* units320* m2
Land Plot Non Beach Frontage Sanctuary Beach Front Villa The Hamptons Studio Codotel
Casino component and expansion of Ho Tram Grand as inte-grated destination.
More F&B facilities and enter-tainments together with the completion of the new airport.
(*) The approximate estimation
Proximity to HCMC, beautiful beaches, and the rapidly improving infrastructure are key demand generators for Ho Tram hotel & resort market. The large number of local travelers visiting offer fertile ground for successful hospitality developments, second home and entertainment projects.
With Vietnam’s economy expanding, domestic tourists are seek-ing out less well known destinations, and these locations, includ-ing Ho Tram, have a high potential for growth but still risk of “first mover”.
Threats include the seasonality hotel performance, which makes developers skittish if they are focused on short term cash flow. Even if these risks can be reduced over the medium to long term, more conservative developers have been, for now, reluctant.
These materials prepared by Alternaty’s team
Disclaimer: This document has been prepared in good faith and for general informational purposes only. Nothing herein contains investment, legal, tax and/or other advice and investors should seek independent professional advice before making any investment decision. While reasonable care has been taken to ensure that the sources of information herein are reliable, no guarantee is provided to the accuracy or completeness of such information (and the same may not be independently verified or audited) and no liability is accepted for any inaccuracy or omission.
Alternaty is a boutique real es-tate consulting firm providing a suite of consulting services throughout the development lifecycle. Headquartered in Ho Chi Minh City, Vietnam, with as-sociates in Thailand, Myanmar, Indonesia and the Maldives. Our team has extensive track record in commercial property, hotel and resort advisory throughout
the Indochina Region.
Unit 38, 26 Ly Tu Trong StreetDistrict 1, Ho Chi Minh City, Vietnam
Tel: +84 836 028 591www.alternaty.com
Trang VoSenior Analyst
Nhung PhamBusiness Development ManagerE: [email protected]
Uyen NguyenInvestment Analyst
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