Report Overview Vietnam Hotel Survey 2012 This is an Executive Summary of the full 54 page Hotel Survey Report. Full copies can be obtained from Grant Thornton Vietnam
Grant Thornton Vietnam June 2012
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Vietnam Lodging Industry – Hotel Survey 2012
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Introduction
Grant Thornton Vietnam’s Hotel Survey 2012 presents financial, operational and marketing information for the 2011 financial year from a range of Vietnamese hotels and resorts.
For simplicity, “Hotel” refers to both hotels and resorts, with our survey covering 3 to 5-Star rated hotels. Statistics are presented by Star Category (hotel ratings), Hotel Size (number of rooms) and Hotel Region (hotel location). When presenting the statistics, hotel size is defined within three categories ranging from small to large hotels, described as less than 75 rooms, 75 to 150 rooms and more than 150 rooms. Lastly, hotel regions are separated into the three main areas of Vietnam; the North, the Central and Highlands and the South. In the North, the hotel participants are located in the capital Hanoi and Ha Long City. In the Central and Highlands region, the hotels are located in cities such as Da Nang, Hoi An, Hue, Nha Trang and Phan Thiet. Hotel participants from the South are mainly located in Ho Chi Minh City, Phu Quoc and Vung Tau. 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, financial data 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 along side key findings. In the Appendices, readers can also find tables showing the minimum, maximum and mean values of market data for the 2010 and 2011 financial years. 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 yearto-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.
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Vietnam Lodging Industry – Hotel Survey 2012
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Key trends
Average Occupancy Rates by Region (2003 – 2011)
Average Annual Room Rates by Star ranking (2003-2011) 200
3-Star
180 160 140 $
80%
4-Star
70%
5-Star
60%
120
50%
100
40%
80
30%
60
Central and Highlands North South
20%
40
10%
20
0%
0 2003
2004
2005
2006
2007
2008
2009
2010
2003
2011
9.1% increase in average room rates
2004
20.9%
25.5%
32.9%
26.0%
32.2%
23.1%
21.2%
28.4%
2006
2007
2008
2009
2010
2011
0.7% increase in overall occupancy rates with 3-Star hotels rising by an impressive 8.1% Source of Guests (2003 – 2011)
Expenses & Profit as Percentage of Revenue (2013 – 2011) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
2005
16.3%
20.5%
20.9%
16.7%
12.9%
19.7%
83.7%
79.5%
79.1%
83.3%
87.1%
80.3%
2003
2004
2005
2006
2007
2008
26.3%
28.5%
22.0%
73.7%
71.5%
78.0%
2009
2010
2011
28.2%
c
2003
2004
G&A expenses Energy expenses Other expenses
2005
2006
2007
Sales & Marketing expenses Total departmental expenses EBITDA
2008
2009
2010
2011
Repair & Maintenance expenses Fixed charge
International
Domestic
0.2% EBITDA decreased in 2011
6.5% increase in proportion of
compared with 2010
international guests
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Vietnam Lodging Industry – Hotel Survey 2012
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Hotel Survey 2012 Overview
Maintaining the success of the preceding year, Vietnam’s Hospitality and Tourism industry in 2011 again achieved a creditable result with more than 6 million foreign visitors. This is a 19.1% growth year on year.
This year's survey indicates a growth in occupancy in 3Star hotels; with the highest occupancy rate of 66.4%. The Revenue per available room, (RevPAR), the standard industry measure of room utilisation and return, showed an overall increase from USD49.73 to USD54.89. That was 10.4% higher compared with 2010; which was contributed by the growth in both occupancy rates and room rates of 0.7% and 9.1% respectively.
Grant Thornton’s Hotel Survey report 2012 will provide readers with a detailed evaluation of Vietnam’s tourism and hotel industry for the year 2011 in comparison with prior years. Moreover, the report also demonstrates an analytical study for the sustainable future growth within the industry.
_____________________________________ Annual Room Rate, Occupancy Rate and RevPAR (20032011)
Operating Figures
______________________________________ Key Operating Figures 2011
Composition Average number of rooms per hotel Average occupancy rate per hotel (%) Average room rate per hotel (USD) Average RevPAR* per hotel (USD) Net profit margin (%)
3-Star
4-Star
5-Star $
55
101
243
66.4%
58.9%
57.4%
$45.54
$92.87
$123.04
140
70%
120
60%
100
50%
80
40%
60
30%
40
20%
20
10%
0
Annual AVR room rate ( $) RevPAR
Annual AVR occupancy rate (%)
0% 2003 2004 2005 2006 2007 2008 2009 2010 2011
$30.24
$54.67
$70.61
18.9%
37.8%
28.4%
*RevPAR: Revenue Per Available Room
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Vietnam Lodging Industry – Hotel Survey 2012
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Rooms Rate by selected Categories
Occupancy rates by selected Categories
This year, Phan Thiet achieved the highest increase in room rates of 11.5%. Room rates in other cities also increased in 2011, with Da Nang – Hoi An, and Hanoi showing a 5.7% increase year on year. Ho Chi Minh City, however, surprisingly had only a marginal increase of 0.7% in average room rate compared with the prior year.
Da Nang and Hoi An achieved an average increase of 6.2% in occupancy followed by Ho Chi Minh City with 2.3% increase. Other cities having a disappointing year were Phan Thiet and Hanoi that had a fall in 2011, of 6.6% and 1.8% respectively.
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_________________________________________ Average Occupancy Rates (%) by Selected Cities (2011 vs 2010)
Annual Average Room Rates for Selected Cities (2011 vs 2010) Location
2010
2011
Change
Da Nang Hoi An
$57.02
$60.27
5.7%
Hanoi
$80.78
$85.41
5.7%
Ho Chi Minh City
$85.16
$85.79
0.7%
Phan Thiet
$72.00
$80.30
11.5%
Location Da Nang Hoi An
2010
2011
Change
63.3%
69.4%
6.2%
Hanoi
63.5%
61.7%
(1.8%)
Ho Chi Minh City
64.7%
67.1%
2.3%
Phan Thiet
63.6%
57.0%
(6.6%)
_____________________________________________
________________________________________
Average Occupancy Rates (%) by Star-ranking (2003-2011)
Average Room Rates ($) by Star-ranking (2003-2011)
$
200.0
80% 70% 60% 50%
3-Star
150.0
5-Star
100.0
40% 30%
4-Star
20% 50.0
10% 0%
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 3-Star
4-Star
5-Star
4-Star hotels strengthened their room rates with an average of 18.2% increase, whereas the 3-Star and 5-Star hotels experienced a reduction in their room rates of 2.9% and 6.2% respectively.
A rising trend in occupancy rates was observed for 3Star category in 2011 while both 4 and 5-Star hotels experienced a slight decline in their average occupancy rate with 58.9% and 57.4% rooms being utilised, respectively.
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Vietnam Lodging Industry – Hotel Survey 2012
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______________________________________________________ Revenue Breakdown (2011 vs 2010)
Other sales 9.3%
F&B Sales 28.0%
In 2011, the Vietnamese hospitality sector experienced a less profitable year than 2010, with average EBITDA decreasing by 0.2% to 28.2% despite a reduction in a number of cost factors. F&B expenses and G&A expenses are the two main revenue expenses in 2011 which directly led to lower net performance of the hotels. F&B increased 1.8% and G&A increased 2.0% as a percentage of sales. ______________________________________________________ Expenses and Profit as Percentage of Revenue (2011 vs
Room Sales 62.7%
2010) 100% 90%
2011
28.4%
28.2%
5.9%
5.2% 5.1% 5.8% 3.6% 4.6%
80% 70%
Other sales 10.3%
60%
7.3%
50%
7.1% 2.9% 4.5%
40%
11.8%
13.8%
30% F&B Sales 28.2%
20% Room Sales 61.6%
2010
10%
17.6%
19.4%
14.6%
14.3%
0% 2010 Room expenses/ Total sales G&A expenses/ Total sales Repair and Maintenance expenses/ Total sales Fixed charge/ Total sales EBITDA
2011 F&B expenses/ Total sales Sales and Marketing expenses/ Total sales Energy Expenses/ Total sales Other expense/ Total sales
Revenue consists of room sales, F&B sales and other services’ sales (income from banquet, spa, conference and business centre). There was a relatively constant trend in revenue split into 3 main categories above between 2010 and 2011. .
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Vietnam Lodging Industry – Hotel Survey 2012
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Employees ______________________________________________
___________________________________________
Sources of Guests
Average Number of employees’ revenue and payroll in
Source of Guests – International vs Domestic
2011 2011
North Average number of employees/ hotel Average number of employees/ available room Average salary and related expenses/ Employee/ month Average growth in staff number Average sales per employee/ month
263
Central and Highlands 161
South 218
78.0% 71.5%
28.5%
2009
73.7%
26.3%
2008
80.3%
2007
2.0
1.6
$331.32
(4.9%)
(2.8%)
1,803
1,354
1,810
The table shows the effectiveness of average revenue per employee across all regions in Vietnam. The South had a better performance with a lower average number of employees per room (1.6 staff) but the highest average revenue per employee per month (USD1,810). In relation to employees’ salary and other related expenses, the South had the highest staff cost with a record of USD379.85 per employee per month. The North came next with USD365.83 per month, whereas Central and Highlands’ employees average cost was USD331.32 per employee per month.
16.7%
2005
79.1%
20.9%
2004
79.5%
20.5%
83.7%
$379.85
26.3%
12.9%
83.3%
2003
$365.83
19.7%
87.1%
2006
1.9
22.0%
2010
International
16.3% Domestic
The graph above shows that, of Vietnam's hotel guests, 78.0% were international tourists; representing a 6.5% increase year on year. Among 78.0% international tourists, European visitors accounted for 34.0%, the largest proportion of foreign visitors. Moreover, tourists from Oceania and North America reached 9.5% and 8.6% respectively. _____________________________________________ Source of Guests – Region
Oceania 9.5%
Others 7.0%
Vietnamese 22.0%
North America 8.6%
Asia (Non Vietnamese) 19.2% Europe 34.0% 2011
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Vietnam Lodging Industry – Hotel Survey 2012
__________________________________________ Purpose of Stay ______________________________________________ Purpose of Stay (2010 vs 2011)
Government Officials
Conference Participants Other Guests
Business Travellers
2.6% 3.1% 7.6% 2011
5.4%
2010 14.0% 8.3% 14.5% 16.6%
Tour groups
29.1% 26.6% 32.2%
Individual Tourists
The graph shows a major drop of 7.9% in individual tourists from 40.1% to 32.2% in 2011.The number of visitors joining tour groups and attending conferences increased to 29.1% and 7.6% respectively in 2011.
40.1%
Channels of Reservations
The most popular method used to reserve hotel rooms was through travel agents and directly to the hotel operators in both year 2010 and 2011. Although internet bookings only grew 4.7% in 2011, it represented the highest growth. This is in line with the internet service in Vietnam becoming more secure and trusted by its customers. Furthermore, direct reservations with the hotels achieved only 0.8% growth and stood at 29.8% in 2011. ___________________________________________ Source of Reservations (2011 vs 2010) 40% 35% 30% 25% 20% 15%
2010
10%
2011
5% 0% Direct bo o king Internet Sales with ho tel (including Ho tel GDS)
Sales via Travel agents and To ur o perato rs
Sales via o ther channels
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Vietnam Lodging Industry – Hotel Survey 2012
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Further Information
Ho Chi Minh City
Audit
Grant Thornton provides a wide range of services to the Hospitality sector, including: • Audit and Assurance • Taxation advice • Transaction advice (buying and selling properties) • Negotiation of management contracts • Diagnostic and performance reviews • Feasibility studies • Valuations • Internal audits and control reviews
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T +84 8 3910 9100 F +84 8 3914 3748
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Hanoi
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