The Hanoi Stock Exchange’s (HNX) report on the financial health of many businesses running resorts in Vietnam shows their tragic situation amid low demand and high financial costs.

Paradise Bay Resort Co Ltd (Alma) has reported a loss of VND832 billion for 2022, which was even higher than the VND701 billion in 2021, when tourism was seriously affected by Covid-19.

Alma’s situation is lackluster. By the end of 2022, its stockholder equity had fallen to minus (-) VND1.575 trillion.

Paradise Bay Resort is the developer of Alma Resort in Cam Ranh, Khanh Hoa province. Alma is a brand managed by Serenity Holdings. The US-based Warburg Pincus and VinaCapital (listed in the UK) hold 100 percent of Serenity Holding’s capital.

The owners of domestic resorts have also been in distress in the last few years.

According to HNX, the owner of Flamingo Dai Lai Resort – Flamingo Holding Group, reported a sharp fall of 82 percent in profit to VND25 billion in the first half of 2023, but an increase in accounts payable.

Its ratio of accounts payable to stockholder equity has increased from 1.91 to 1.99 by the end of the second quarter, which meant a liability of VND4.94 trillion.

Ninh Van Bay Travel Real Estate (NVT), the owner of the luxurious Six Senses Ninh Van Bay, has reported a modest profit of VND7 billion in the first half 2023, which was small compared with its huge capital of VND900 billion.

Its undistributed post-tax profit had remained minus (-) VND710 billion by the end of June, and a warning has been given to the company’s shares.

Meanwhile, Crystal Bay continued to report a loss of VND136 billion in the first six months (the figure was VND17 billion the same period last year).

Eurowindow Nha Trang Investment and Tourism JSC took a post-tax loss of VND124 billion, which was a slight decrease compared with the loss of VND290 billion in the first half 2022.

The list of unprofitable resort real estate developers includes Van Huong Investment and Tourism JSC and Sunbay Ninh Thuan. The former is the developer of Dragon Ocean Do Son in Hai Phong City, while the latter is the owner of Sunbay Park Hotel & Resort.

Tough times

Analysts say the resort tourism and resort real estate segments have become lackluster because of the heavy impact of the pandemic. 

Other Southeast Asian countries, including Singapore and Thailand, have seen a strong recovery of the hotel sector. Meanwhile, it is still gloomy in Vietnam with reports about poor patronage, low hotel room occupancy rates, and room rate decreases.

The absence of guests is seen in most resorts throughout the country, and the situation is very serious in Phu Quoc. On the internet, people find ads about tourism packages to Phu Quoc at surprisingly low fees.  Travelers pay less than VND3 million for a tour lasting four days and three nights, return ticket, and 3-star hotel.

In Sapa, hotels have reported many unoccupied rooms, including on the weekend and the 120th anniversary of Sa Pa tourism development with attractive activities.

Many resort real estate projects have been left idle for many years because of the lack of customers. Villas and shophouses within resort super-projects are deserted, which is attributed to low demand, people’s income decreases, and the reduced confidence in the resort real estate market and legal problems of many projects.

Mauro Gasparotti, CEO of Savills Hotels, commented that in short term, the absence of Chinese travelers, which made up 32 percent of total foreign travelers to Vietnam in 2019, has posed challenges to the resorts.

Also, the increased costs of long-distance flights have hindered the recovery of some markets, including Europe. The total number of travelers from the continent is still 38 percent lower than in the pre-pandemic period.

Analysts believe that in current conditions, domestic customers and travelers remain the major source of income for resort companies. However, the spending level of domestic travelers is low.

Manh Ha