Multi-million dollar resorts in central region in doldrums

Published:  14:08 Friday - June 15, 2012

Multi-million dollar resorts in central region in doldrums

The representative of a high grade resort in the sea city of Da Nang said the occupancy rate of the resort has been low at 20-30 percent since the beginning of the year. The occupancy rate increased to 60 percent on the days when the Da Nang international firework festival took place, from April 28 to April 30.



The executive said that the low occupancy rate has put a hard pressure on high grade resorts, because it is very costly to maintain the operation of resorts.

Cao Tri Dung, Deputy General Director of Vitours Da Nang, said that the biggest challenge for high end resorts which hire managers is the high room rates and service fees which fit the high classes of the resorts. Meanwhile, in the current difficult circumstances, reasonable service fee is always the top priority for travelers.

Also according to Dung, medium class and self-managed resorts can be more flexible in setting up service fees in order to attract travelers. While high grade resorts cannot lower the service fees to lure guests, the medium class resorts would be ready to change their pricing policies to get adapted to the new circumstances.

Nguyen Thi Tuy Van, General Director of Hoang Tra Tourism and Trade Company, said that the economic downturn and the difficulties in the tourism sector have been anticipated. Travel firms once hoped that domestic travelers would be a main source of income for them for the time being. However, the number of domestic travelers has dropped dramatically. 

Meanwhile, the MICE (meeting, incentives, conference and exhibition) tourism sector has also seen a sharp downturn. Therefore, travel firms all have bogged down in difficulties.

Not only the resorts in Da Nang, but the service providers in neighboring localities; including the ancient capital city of Hue or Quang Nam provinces, which have the income from tourism accounting for a big proportion in the local GDP, have also been facing the same problem.

Truong Van Bay, Deputy Chair of Hoi An People’s Committee, said Hoi An, which has been recognized as one of the most attractive tourism destinations over the last few years, has also fallen into decay.

Bay said a lot of resort investors cannot make the profit high enough to cover the initial investment expenses. Especially, the income is not high enough to pay bank debts. Therefore, some of them have decided to transfer the resorts to other investors who have better financial capability.

However, despite the current big difficulties, the local authorities still believe that it’s now the right time to make investment in the tourism sector, which is always the key industry of the localities. 

That explains why the investment capital in the tourism sector always accounts for a big proportion in the investment structure. A lot of domestically and foreign invested resorts have been implemented along the beaches from Lang Co in Hue City to Chu Lai in Quang Nam province. These are believed to make a breakthrough in the development of local economies in the upcoming years.

Chair of the Da Nang Tourism Association Huynh Tan Vinh said the national economy has been brought to standstill, and that it is now believed at the bottom of the recession, which means that optimistic signals would appear in the time to come.

Therefore, Vinh said, it is now the right time to make investment and prepare for the tourism development in order to catch up with the pace of the national economy recovery.


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