Hospitality real estate embraces new structural trends

Prime locations and guaranteed returns are no longer sufficient to convince investors when it comes to Vietnam's hospitality real estate.

- Phuong Thu

Vu Dinh Luan, deputy CEO of Virex, which is a member of Alphanam Group, explained to VIR’s Phuong Thu that integrated, multi-brand resort complexes are emerging as the industry's most effective model for creating sustainable revenue streams.

What is the most notable market shift, and what will determine a project’s long-term appeal?

The most significant change we are witnessing today is the shift from investment based on financial guarantees to investment based on actual operational performance.

The period when a hospitality property could be sold solely on the strength of a prime location or projected returns on paper has passed. Today’s investors are far more rational and data-driven. When evaluating a project, they increasingly reverse-engineer the financial model and ask questions about expected occupancy rates, average daily room rates, and the target customer segments that the project is designed to serve.

As a result, the long-term attractiveness of a project will no longer be determined by pricing tactics or financial commitments. Instead, it will depend on its ability to generate visitor demand and the quality of its operational management.