According to the company, Nha Trang, Cam Ranh and Phu Quoc will receive huge investment in the sector. Investors should be prepared for an upcoming drop in demand, despite the growing number of tourists to the localities.Hotel mergers and acquisitions (M&A) activities were limited in 2016, with the transactions of InterContinental Asiana Saigon and Duxton Ho Chi Minh City among the highlights. Rudolf Hever, executive director at Alternaty, said more M&As will take place in the coming years when new projects join the market while investors will have to divest from ineffective projects.
A swimming in the InterContinental Danang Sun Peninsula Resort. (Source: danang.intercontinental.com)

Alternaty highlighted the growth of tourist arrivals to Vietnam, saying that Vietnam will become a popular destination thanks to many resort and hotel names at attractive prices. However, the company advised investors to use discretion to ensure sustainable development.According to Alternaty, the sector rebound after sluggishness in 2014 and 2015 thanks to a surge in international visitors.

In 2016, Vietnam saw a year-on-year increase of 26% in international visitors. The highest surge was seen from China, up 51%, the Republic of Korea (RoK) up 39%, Russia 28%, and Thailand 26%.

The number of tourists from Japan, the US, Taiwan (China), and Malaysia also increased over 10%.

However, Vietnam relied mostly on four key markets, namely China accounting for 27% of Vietnam’s foreign arrivals, followed by the RoK, 15%; Japan, 7% and the US, 6%, according to Alternaty.