More than 70 per cent of international visitors to Vietnam over the last decade spent their holidays on the coast, according to the latest report from Savills on Vietnam’s hospitality industry in the first half of 2016.

With a tropical climate and long beautiful beaches, coastal regions are the primary destination for Vietnam’s international visitors, the report revealed, as most hail from the colder climates of the US, Europe, Russia and China.

Coastal cities in the south and central region, with year-round warm weather, were therefore more favored by these groups.

From 2010 to 2015 Da Nang, Khanh Hoa and Phu Quoc Island recorded significant tourism growth of around 23 per cent and catered to 30 per cent of international arrivals nationwide.

Increased tourist numbers from prosperous markets has led to an increase in demand for rated accommodation, especially upscale hotels.

There has been a construction boom in recent years, most noticeably in 2015 when the number of five-star rooms increased 37 per cent year-on-year to more than 24,000, 30 per cent of which were in Da Nang, Khanh Hoa and Phu Quoc Island.

Regarding investment activity, international hoteliers have continued to show interest in Vietnam’s coastal tourism destinations, with many projects coming on to the market over the next couple of years, especially in Khanh Hoa and Phu Quoc Island.

The Cam Ranh peninsula is an emerging destination and by the end of 2015 more than 30 projects had been approved for construction, with 13 underway and slated for launch in the next few years.

Most are four- or five-star and are located along Bai Dai Beach.

The popularity of the area has drawn in international operators such as Accor, Carlson Residor and Mövenpick.

Phu Quoc Island was late to the upscale market but is expected to expand quickly.

Though five-star supply is limited it has garnered large-scale investment into its tourism industry.

Five-star supply has grown rapidly with several new projects in 2016 - 2017, such as Crowne Plaza Hotel, Novotel Resort, Sonasea Villas and Resort, and Sunset Sanato Premium Complex.

These projects will provide international standard rooms, services and amenities from the reputable brands of InterContinental, JWMarriott, Accor, and Starwood.

Most hotel resorts are offering villas for sale that generally offer luxury quality with beach views, an international operator, and a management rental pool.

A recent marketing tool is guaranteed returns from the developer ranging from three to ten years at returns of 6 to 10 per cent per annum.

Sales of resort villas are strong, with robust interest from the local market through to offshore purchasers looking to hedge a relatively stable currency, combined with potential capital growth.

Prices of coastal villas generally range from $400,000 through to above $5 million.