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Vietnam Hotel Survey 2019

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Executive summary
Hotel Survey 2019
Vietnam Upscale Lodging Industry
Introduction
“Grant Thornton Vietnam’s Hotel Survey 2019 presents financial,
operational and marketing information for the 2018 financial year from a
range of Vietnamese upscale hotels and resorts.”
Kenneth Atkinson
Founder & Senior Board Adviser
Grant Thornton Vietnam
For simplicity, “Hotel” refers to both hotels and
resorts, with our survey covering 4 and 5-Star
rated hotels. Statistics are presented by Star
Category (hotel rankings) and Hotel Region
(location).
Hotel regions are separated into the three main
areas of Vietnam; the North, the Centre and
Highlands and the South. In the North, the hotel
participants are located in the capital Hanoi,
Sapa and Quang Ninh City. In the Centre and
Highlands region, the hotels are located in
cities such as Danang, Hoi An, Hue, Nha
Trang, Quang Binh, Phan Thiet, Daklak and Da
Lat. Hotel participants from the South are
mainly located in Ho Chi Minh City, Phu Quoc,
Vung Tau and Mekong Delta.
This report is prepared to provide readers with
a general, as well as specific, view on hotel
operations in Vietnam by presenting data
covering different criteria for analysis such as
hotel facilities, staffing, performance KPI’s such
as average room rate, occupancy rate and
RevPAR, financial statements and market data.
For financial analysis, the data is shown up to
net profit before interest, tax, depreciation and
amortisation (“EBITDA”) for the purpose of
relevant comparability. The unit of currency is
the United States Dollar.
As can be seen later in this report, most data is
presented in percentage terms or as averages.
For instance, with financial statements, Dollar
figures are shown as a percentage of total
revenues. In the market data analysis and other
sections, statistics are in the form of averages
of the respective items.
For ease of comparison, the report presents the
survey results of each specific category
alongside key findings. In the Appendices,
readers can also find tables showing the
minimum, maximum and mean values of
market data for the financial year 2018. This
report, however, does not attempt to set
operating results for the Vietnam hotel industry.
The figures and ratios in this report should not
be considered as standards for any type of
property.
The report users also need to note that not all
changes from one year’s results to another are
due to actual year-to-year differences.
Sometimes, they may be a result of a different
mix of survey participants. Readers should note
that due to limits on analysing data based on
specific sample sizes, the results should be
regarded as indicative only.
Grant Thornton Vietnam - Hotel Survey 2019
2
Newborns Vietnam
Newborns Vietnam (NBV) is a United Kingdom
(UK) registered charity licensed to operate as a
non-governmental organisation (NGO) in
Vietnam dedicated to reducing neonatal
mortality in South East Asia, with a specific
focus on Vietnam.
Infant mortality in Vietnam has declined very
significantly, but newborn deaths in the first
month of life now account for 70% of all infant
deaths. In Vietnam, the healthcare system and
standards of care for preterm and sick babies
trail those of more developed markets resulting
in limited progress in reducing neonatal deaths.
In four years our work with Da Nang Hospital
for Women and Children achieved a 50%
reduction in deaths in the first month of life
This year, Newborns signed a five year
agreement with the Ministry of Health, Hanoi
Department of Health to develop the capacity of
public hospitals in Hanoi and the northern
provinces to improve the survival of newborn
infants and their long-term health outcomes.
Central to this is the continuation of our UK
specialist post graduate training for doctors and
nurses, and the development of a managed
network system, a safe transport system and
the establishment of a Vietnam National
Resuscitation Council.
Our vision is a world where there are no
preventable deaths of newborn infants, where
every birth is celebrated, and mothers and
babies survive and realise their full potential.
We are determined to do more to stop babies
from dying the day they are born, or in days
after their birth.
Contact detail:
UK Address:
Newborns Vietnam,
75 Maygrove Road,
London NW6 2EG
T: 01392 770108
Vietnam Address:
Newborns Vietnam Project Offices
C/o 402 Le Van Hien, Khue My Ward,
Ngu Hanh Son District, Da Nang,
Vietnam
Vietnam National Children’s Hospital
18/879 La Thanh Road, Dong Da
District, Hanoi, Vietnam
E info@newbornsvietnam.org
T +84 90 506 2500
www.newbornsvietnam.org www.cycle-a-difference.com
Grant Thornton Vietnam - Hotel Survey 2019
3
Key Trends
Average room rate (USD) by Star Ranking
80.0%
83.4
79.1
91.8 93.3
100
80
75.2 73.4
USD
USD
100
107.6 112.0
120
80
Average Occupancy Rate and RevPAR
by Star Ranking
60
60
75.0%
71.8
54.0
50.2
52.0
70.0%
40
65.0%
20
60.0%
40
20
0
0
4-Star
5-Star
2017
1.6%
in average
room rates
% of total sales
35.7%
2017
RevPAR 4-Star
Occupancy Rate 4-Star
2018
34.8%
GOP
37.7%
GOP
37.2%
26.6%
28.0%
1.9%
2.1%
35.8%
35.2%
2017
2018
RevPAR 5-Star
Occupancy Rate 5-Star
0.1%
in occupancy rate
1.5%
in RevPAR
2018 International Guests vs. Domestic Guests
Expenses and Profit as Percentage of Revenue
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
55.0%
2016
Overall
G
O
P
3
7
.
2
%
Oceania
6.2%
Vietnam
17.5%
North
America
7.7%
Europe
20.4%
2018
Other
7.3%
Asia
(excluding
Vietnam)
41.0%
Departmental Expenses
Undistributed Expenses
Other income and expenses
EBITDA
37.2% GOP of revenue for upscale
hotels in 2018
0.5%
compared to 2017
Asia
is still the primary source of
guests, with the dominant of Korean
and Chinese guests
Grant Thornton Vietnam - Hotel Survey 2019
4
Executive Summary
Occupancy rate of 5-Star slightly increased by
0.5% while 4-Star’s dropped by 1.0%. From the
regional view, while the Northern and Central
region observed a drop in occupancy rate of
2.6% and 1.4% respectively, the Southern
region’s occupancy rate, in contrast, continued to
increase even though at a lower rate of 1.7%.
Room Rates by Selected Category
Average Room Rate by Star Ranking
(2016- 2018)
112.0
2018
73.4
107.6
2017
75.2
103.2
RevPAR by Selected Category
74.6
0
50
100
USD
5-Star
150
Movement in hotel room RevPAR by Star
Ranking (2017 – 2018)
4-Star
In 2018, average room rate saw an increase of
1.6%, from USD91.8 in 2017 to USD93.3.
While 5-Star ranking continued to see their room
rates increased 4.1%, 4-Star’s room rates
dropped by 2.3%.
By region, both Northern and Southern regions
saw an improvement in room rates, though at a
slower growth than last year, with the Southern
region achieving the highest growth of 2.7% and
Northern at 1.7%. Central region, in contrast,
observed a marginal drop of 1.0%.
Occupancy rates by Selected Category
Average hotel room occupancy rate by Star
Ranking (2016 – 2018)
71.2%
75.2%
2017
72.2%
69.2%
67.4%
2016
60%
65%
5-Star Occupancy Rate
70%
75%
90
80
70
60
50
40
30
20
10
0
83.4
79.1
54.0
2017
4-Star RevPAR
52.0
2018
5-Star RevPAR
RevPAR of 5-Star increased more significantly
as the result of the rise in average room rate. 4Star’s RevPAR, in contrast, showed a decrease
of 3.6% compared to the previous year.
Southern region, this year, achieved the highest
growth of 5.5%, mostly thanks to the rise in
average room rate. Northern region dropped
slightly, from USD77.7 in 2017 to USD77.3 in
2018. Central region came last with a fall of
2.7%.
75.6%
2018
USD
2016
80%
4-Star Occupancy rate
Overall, KPIs of revenue
generation slightly improved
from last year.
Grant Thornton Vietnam - Hotel Survey 2019
5
Executive Summary
Revenue and Expenses
Annual revenue breakdown (2017 - 2018)
2017
2018
Room
Sales
F&B
Sales
Other
Operating
Sales
Miscellaneous
Income
61.5%
31.7%
5.6%
1.1%
59.3%
31.7%
6.1%
2.9%
Similar to the previous year, room sales continued to account for the highest portion of total revenue
at 59.3% and showed a slight drop of 2.3% from 2017 to 2018. While F&B Sales showed roughly no
change between the two years, Other Sales started to increase in proportion of Total sales, showing
the shift in customers’ demand to other services rather than just only room service.
% of departmental revenue
Departmental Expenses and Gross Profit as Percentage of Departmental Revenue (2018)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
33.2%
78.2%
9.7%
37.1%
13.6%
31.7%
21.3%
12.1%
9.7%
25.4%
28.0%
Room
F&B
Other
Operating
Department
Gross departmental profit
Other expenses
Cost of sales
Payroll expenses
Year 2018 continued to show minor change
in the cost structure compared to the
previous year. While gross profit margin of
room and other operating department did
not show any major changes, F&B
department’s dropped, mostly due to an
increase in payroll expenses.
%Payroll expenses/Total
sales increased from 23.7%
to 25.2%
Grant Thornton Vietnam - Hotel Survey 2019
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Executive Summary
Undistributed Operating Expenses
Breakdown (2017 – 2018)
GOP and EBITDA as Percentage of Revenue
(2018)
100%
2017
2018
Payroll Expenses
Utilities
Property Operation and Maintenance
Sales and Marketing
Information and Telecommunication Systems
Administrative and General
The three biggest components of undistributed
expenses (Payroll, administrative and general
expenses and Utilities) together accounted for
78.9% in 2017 and 79.3% in 2018. Payroll
expenses saw the greatest increase in proportion
of c.4%. This trend was in line with the increase
in average expenses per employee.
Expenses and Profit as Percentage of
Revenue (2017 – 2018)
100%
% of Revenue
80%
60%
35.8%
35.2%
1.8%
1.2%
1.9%
1.2%
26.6%
28.0%
35.7%
34.8%
2017
2018
40%
20%
0%
37.2%
35.2%
0%
EBITDA
0%
20%
1.4% 0.3%
2.0%
Fixed Charges
20.8%
1.2%
Financial expenses
22.3%
28.0%
100.0%
Non - operating Income
7.1%
11.0%
2.6%
40%
FF&E Reserves
20%
7.5%
10.7%
2.9%
GOP
40%
60%
18.6%
34.8%
80%
Undistributed Operating
Expenses
20.3%
100%
Departmental Expenses
60%
39.9%
Revenue
36.2%
80%
GOP and EBITDA of the upscale hotel sector in
2018 showed a slight drop, of 0.5% and 0.6%
respectively. This was mainly caused by higher
undistributed expenses, which rose by 1.4% in
2018.
By Star rankings, while 4-Star continued to show
an increase in GOP of 1.1% to 37.8%, 5-Star, in
contrast, dropped by 1.8% to 36.9%. Changes for
both Star rankings were because of higher
undistributed expenses. However, 4-Star
reduced Departmental expenses which led to a
small increase in GOP.
Profitability expressed in terms of
GOP and EBITDA drop slightly.
By Star ranking, 4-Star’s GOP
slightly increased while 5-Star’s
dropped.
EBITDA
Fixed Charges
Financial expenses
Non - operating Income
FF&E Reserves
Undistributed Operating Expenses
Departmental Expenses
Grant Thornton Vietnam - Hotel Survey 2019
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Executive Summary
Employees by Selected Category
Average Revenue and Average payroll expenses per employee (2017 - 2018)
35,000
30,000
Both average revenue and payroll
expenses per employee continued to
increase in 2018, but payroll expense
per employee saw a higher growth, at
6.4% compared to 5.7% growth in 2017,
while revenue per employee only grew
at 3.3% compared to 6.7% in 2017.
29,648
28,702
USD
25,000
20,000
15,000
10,000
7,029
6,605
5,000
2017
2018
Payroll expense per employee
saw a higher growth.
The proportion of Domestic guest
started shrinking again and it
continued in 2018.
Average Revenue per employee
Average payroll expenses per employee
Source of Guests by Selected Category
Source of guests (2016 - 2018)
After an increase of Domestic guests staying at upscale hotels for 3 years from 2014 – 2016, the proportion
of Domestic guest started shrinking again and it continued in 2018.
By star ranking, 4-Star hotels observed a higher contribution in International arrivals of 4.9% while 5-Star’s
remained roughly the same as last year.
2018
2017
2016
19.2%
17.5%
20.8%
79.2%
80.8%
82.5%
International guests
Domestic guests
Grant Thornton Vietnam - Hotel Survey 2019
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Executive Summary
Purpose of Stay by Selected Category
Purpose of Stay (2018)
Other
guests
17.3%
Channel of Reservation by Selected
Category
Channels of Reservation (2018)
7.3%
FiT/
Leisure
traveller
37.1%
18.2%
16.4%
Tour
groups
23.5%
23.4%
Corporate
&
Business
Travellers
15.3%
27.6%
MICE
6.8%
7.1%
Direct booking with hotel
Online Travel Agencies (OTA)
Wholesalers/ GDS
Tour operator/ Travel Agency
Corporate
Sales via other channels
Purpose of Stay by Star rankings (2018)
5-Star
40.2%
4-Star
34.2%
0%
20%
6.6%16.2%
7.1%14.5%
40%
18.3%
18.7%
28.3%
60%
80%
15.9%
100%
FiT/ Leisure traveller
MICE
Corporate, Business Travellers
Tour groups
Other guests
FIT/leisure travelers, tour groups and
corporate/business travelers continued to be the
three biggest components, together accounting
for 78% in 2017 and 76% in 2018 of total guests.
MICE (Meetings, Incentives, Conference and
Exhibits) decreased from 7.6% last year to 6.8%
this year. This is the third consecutive year that
this section dropped, indicating either lack of
efforts or inefficiency in the country’s attempt to
attract MICE tourists.
Reservations through Travel agencies and Tour
operators (TA/TO), though they continued to be
the biggest channel, fell a sharp 5.1% in 2018 (4Star had a heavy fall of 7.1% while 5-Star fell by
2.8%) and were replaced by the increase in
Online Travel Agencies (OTA’s) and other
channels.
By Star rankings, the highest change in
reservation channels was 2.3% in wholesalers/
GDS for 5-Star and 2.8% in OTA’s for 4-Stars.
The corporate channel’s portion slightly increased
from 16.1% in 2017 to 16.4% in 2018, mostly
contributed by the rise in this channel of 4-Star
hotels.
Third consecutive year that MICE
section dropped.
Increase in Online Travel Agencies
(OTA’s) booking channel.
Grant Thornton Vietnam - Hotel Survey 2019
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Executive Summary
Application of Digital Technologies
Data mining and analysis
Guests Personalization Mobile application
95.5%
77.8%
54.5%
34.6%
Online checkin/ checkout
Digital marketing (via social media such
as Facebook, Instagram, Twitter..)
49.2%
100.0%
28.6%
96.3%
5 -Star
4-Star
Technology is no longer a stranger to Vietnamese
hotels, as internet access and smart devices
become more widespread. Managing their digital
image is now a crucial part of hotels’ operation.
Overall, 5-Star hotels are shown to be embracing
more digital advances than 4-Star did in all 4
questions asked.
Digital marketing via social channels such as
Facebook, Twitter and the like continues to be the
priority, which results from the increase in guests’
usage of numerous social networks.
Nearly 100% of participants shared that they used
this effective channel to gain more awareness
from social network users.
Online check in/check out and guest
personalisation via mobile application, however,
received less attention, with less than 50% of
hotels using them.
Analysis using data obtained from operation is
widely used by both Star rankings to assist their
marketing strategies and decision making process.
Overall, 5-Star hotels
embraced more digital
advances than 4-Star did in all
4 questions asked.
Grant Thornton Vietnam - Hotel Survey 2019
10
Further Information
Grant Thornton provides a wide range of services to the Hospitality sector, including:
•
•
•
•
Audit and Assurance
Tax advice
Transaction advice (buying and selling
properties)
Diagnostic and performance reviews
Nguyen Chi Trung
CEO & Managing Partner
T +84 24 3850 1686
E chitrung.nguyen@vn.gt.com
•
•
•
•
Feasibility studies
Valuations
Internal audits and control reviews
Business Process Solutions
Head Office in Hanoi
18th Floor
Hoa Binh International Office
Building
106 Hoang Quoc Viet Street
Cau Giay District, Hanoi
Vietnam
Audit and Assurance Services
Nguy Quoc Tuan
National Head of Audit
T +84 28 3910 9100
E tuan.nguy@vn.gt.com
T +84 24 3850 1686
F +84 24 3850 1688
Nguy Quoc Tuan
Managing Partner of
Ho Chi Minh Office
T +84 28 3910 9180
E tuan.nguy@vn.gt.com
Ho Chi Minh City Office
14th Floor
Pearl Plaza
561A Dien Bien Phu Street
Binh Thanh District
T +84 28 3910 9100
F +84 28 3910 9101
Nguyen Thi Vinh Ha
National Head of
Advisory Services
T +84 24 3850 1686
E vinhha.nguyen@vn.gt.com
Travel, Tourism and Hospitality
Industry Leader
Kenneth Atkinson
T +84 28 3910 9100
E ken.atkinson@vn.gt.com
Tax Services
Hoang Khoi
National Head of Tax
T +84 28 3850 1686
E hoang.khoi@vn.gt.com
Advisory Services
Nguyen Thi Vinh Ha
National Head of Advisory
T +84 24 3850 1686
E vinhha.nguyen@vn.gt.com
Business Process Solutions
Le Minh Thang
National Head of BPS
T +84 28 3910 9100
E minhthang.le@vn.gt.com
Grant Thornton Vietnam - Hotel Survey 2019
11
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