VietNamNet Bridge – The online hotel booking service is becoming a lucrative business for investors in the hospitality industry in Viet Nam.

A Thoi Bao Kinh Te Sai Gon (Saigon Economic Times) report says that Viet Nam now has 13,700 tourist accommodation facilities with about 290,000 rooms, including 61 five-star hotels with 14,600 rooms, 154 four-star hotels with 19,300 rooms, and 365 three-star hotels with 25,520 rooms.

With the number of domestic and overseas tourists visiting different locations in the country increasing every year, many of those looking to reserve accommodation find it convenient to do so online.

According to the General Statistics Office (GSO), the number of international arrivals in Viet Nam in June 2013 was 567,291, up 1.5 per cent over the previous month and 29.9 per cent year-on-year.

In the first six months of this year, in spite of the global economic recession which has strongly impacted Viet Nam's source markets, the tourism sector has managed to take advantage of its strengths and gain positive growth, the report says.

Total international arrivals during the first six months reached 3,540,403, a 2.6 per cent growth over the same period of 2012. The number of domestic tourists was 24 million, up 12 per cent, and total tourism revenues rose 23.5 per cent year-on-year to reach VND105 trillion (US$5 billion).

Given such attractive conditions, Viet Nam is a potential market for websites providing online booking services.

The report says that at present there are dozens of websites abroad and some at home that providing online booking services for hotels in Viet Nam.

But a few overseas companies like Agoda.com, Booking.com and Expedia.com dominate the market now, charging between 15 and 20 per cent for a confirmed booking.

Some domestic websites offering the service at lower prices are not able to compete with the big players.

In the past, the overseas websites provided the service for three to five star hotels and resorts, but now they are ready to help smaller tourist accommodations like mini hotels and guesthouses.

"These websites are very quick on the uptake. Although their head offices are located abroad, they carry out surveys of the country's regions every year to discover new hotels and introduce their booking service to these establishments," said Phan Van Toan, general director of the Phan Thiet Allezboon Resort.

Three to five star hotels and resorts are those that have the highest online sales turnover. At some high-end hotels, online bookings account for nearly 40 per cent of their total sales.

At the Majestic Hotel in HCM City for instance, online bookings account for 37 per cent of its occupancy, most of them sold by overseas websites, according to general manager Nguyen Anh Vu.

Doing business with these overseas websites is simple and flexible and highly effective, so the hotel is ready to pay up to 15 per cent of the value of a sold room to the websites, Vu said.

Tao Van Nghe, general manager of the Rex Hotel in HCM City, also said that global websites dominated the domestic hotel room booking market. This is a global trend and set to rise because of the increasing use of mobile devices, he said.

Global websites were more attractive than domestic ones in selling hotel rooms online since they not only have their networks covering the entire world, their payment was very quick and flexible, Toan said.

"If we sell rooms on overseas websites we can get the money right after customers check out while we have to wait for at least one or two weeks to get money if we sell rooms on domestic websites," he said.

Despite the market domination of global firms, domestic counterparts like Ivivu.com and Chudu.com have been very active in seeking new ways to better exploit the market.

Recently, the Viet Nam My Tour Company entered the market with its Mytour.vn website.

The leader of a major tourism company, who declined to be named, said that his company had already invested US$1 million to open a website specialising in selling hotel rooms online. He said the website is set to begin operations next year

"The domestic market still has much potential, but because we lag behind the global websites, we have to make some changes to attract customers. We will provide other relevant services in addition to the hotel room bookings to create more convenience for customers," he said, adding that the problem of "slow payment" would be settled.

Source: VNS