VietNamNet Bridge – The increasingly high number of tourists visiting HCM City has raised the demand for accommodation services. That explains why mini hotels have been mushrooming in the city.

Mini hotels – the big money earners

According to the HCM City Department of Culture, Sports and Tourism, the number of 1-3 star hotel rooms has increased by 31.2 percent in comparison with the same period last year.

According to Tuoi tre, the percentage of unoccupied rooms at the hotels in District 1, the central area of the city (Le Thanh Ton, Ly Tu Trong and Bui Thi Xuan streets), is very low on weekends, just 10 percent. At many hotels, 100 percent of the rooms are occupied.

In District 1, the hotels on Suong Nguyet Anh street have become the choice of young Viet Kieu (overseas Vietnamese). Most domestic travelers, mostly from the north, choose the hotels near Ben Thanh Market, while businessmen stay at the hotels on Dong Du, Le Thanh Ton and Ly Tu Trong streets., The hotels on De Tham and Pham Ngu Lao streets are the ones reserved for “Tay ba lo” as Vietnamese call backpacking western tourists.

Nguyen Quang Huy, the owner of A&Em eight-hotel chain (including four 3-star and four 2-star hotels), said that the hotels in the central area (District 1) are always full with the occupancy rate of up to 80-90 percent. The majority of travelers (30-40 percent) come from Singapore, China and Taiwan, another 30-40 percent are Viet Kieu and domestic travelers, while the remaining 20-40 percent are from Europe.

As the business has been doing well, Huy plans to build another three star hotel in 2011.

Analysts say many domestic investors, who come from Hanoi and northern provinces, have come to HCM City looking for opportunities to invest in hotel rooms. They purchase already existing hotels or their shares, or buy land to build new hotels,
According to HCM City’s authorities, there were 545 1-star hotels in the city by early September 2010, and 155 2-star hotels, while there were only 364 1-star and 133 2-star hotels in the past.

The price war

As more and more hotels have been established, the price war has become fierce.

P, the owner of S 2-star hotel on Le Thanh Ton street in District 1, said she sometimes had to change the hotel room rates several times a day in order to retain clients.

The hotels on Thai Van Lung street once offered a discount of 30 percent to attract clients. Many hotel owners pay “commissions” to the taxi drivers who bring clients to their hotels.

According to Phan Dinh Hue, Director of Vong Tron Viet travel firm, there have been some changes in the habit of travelers. About 60 percent of foreign travelers choose to stay at 2-3 star hotels, and 70 percent of domestic travelers choose medium class hotels.

The owner of a two star hotel on Le Thanh Ton complained that since there are too many hotels, she has to lower her rates. The quoted rate for a room here is $30-60 per night, but she said the actual retail price is much lower.

VietNamNet, Tuoi tre