Resort real estate: Overcoming hot fever, treating cold fever

Recently, among the 60 real estate properties VietinBank offered for sale, there were 2 4-star hotels in Hoi An offered at the same price of VND420 billion each.
 
Liquidation wave 
 
VietinBank also made it harder for a group of 4-5 star hotels, homestays, and villas in other tourist cities like Da Nang, Nha Trang, and others to pay their debts. Orient Bank (OCB) also said it was going to auction off assets that were attached to land for 84 villas in the FLC Ecotourism Urban Area (Thanh Hoa).
 
This is also something that many other banks do when they try to collect debts on valuable resort real estate across the country. 

According to the Vietnam Association of Real Estate Brokers (VARS), the unfavorable economic situation has negatively impacted customers' ability to repay debt, causing bad debt risks to increase.

Resort real estate properties face difficulties in liquidation despite attractive offers. Despite the recovery, the tourism market faces obstacles, particularly in Nha Trang, Cam Ranh, Da Nang, and Phu Quoc.

Vietnam's National Administration of Tourism says that the number of Asian tourists coming to the country in the first nine months of 2023 is still 33% less than it was before the pandemic.

There are also too many tourists at some destinations, and the main international tourist markets, like China and Russia, are still recovering slowly. This makes it harder for the holiday industry to get back to business.
 
In that context, the resort real estate market continues to face many challenges, leading to the "wave" of sell-off mentioned above. According to DKRA Group, the cumulative inventory of beach villa products in both the North and South will reach 15,000 units by the end of the second quarter of 2023.

Even more gloomy, according to DKRA, the whole country had only 1 resort real estate transaction in August, down 99% over the same period.
 
Savills Hotels Director Mauro Gasparotti explains that overdevelopment in some destinations and products not matching market requirements are contributing to oversupply and high price competition in the mid-range segment. This lack of consideration for market characteristics and industry trends poses risks when projects fail to meet tourists' experience needs, especially as Vietnamese tourists can now travel more conveniently abroad. 

Bright spot ahead
 
The recent 14th Meet The Experts conference had a lot of content centered on the resort real estate industry. Here, representatives from Accor Hotels Group, Sovico Hospitality Group, Vinpearl, Booking.com, and VinHMS... despite many competitive advantages, Vietnam's tourism has not yet fully developed its potential, resulting in difficulties.
 
“The resort industry needs to adapt to changes in tourist consumption behavior after the pandemic. A representative from Savills Vietnam said, "Vietnam needs to make a wide range of products to meet the needs of a wide range of customer profiles and customer segments in order to be more competitive on the international stage and to keep potential domestic customers."
 
The bright spot is that according to VARS, both the supply and demand of beach resort real estate in the last months of the year are forecast to grow, becoming the driving force for growth for the resort industry in 2024. These are signals coming from expectations.

In general, the real estate market will be better after laws like the Land Law and the Real Estate Business Law are passed. In addition, beach resort real estate projects also received many positive signals in terms of policies, such as Decree No. 10, which opened up opportunities to issue condotel books, allowing accommodation, rental, and transfer businesses. ...
 
At the same time that banks are "liquidating" a lot of resort real estate, a lot of other projects, like the Sun Cosmo Residence Da Nang and Imperial projects, are being sold at very low prices. Oasis Quy Nhon, The Ocean Resort Quy Nhon, Meliá Nha Trang...

In Long Hai, Ho Tram, Vung Tau, Phu Quoc, and Da Nang, some investors want to reopen or start new sales with big discounts of up to 40–50%... According to Mr. Dinh Minh Tuan, Director of the website Batdongsan.com.vn in the Southern region, the resort real estate market will not get better until at least the third quarter of 2024.