A local commercial real estate broker, who declined to be named, said: “We are seeing a significant increase in the number of hotels being put up for sale over the past two months.”

Hotels in the Tan Binh District have been put up for sale for around VND25 billion (US$1.06 million) each, while a hotel located on Bui Thi Xuan Street was put up for sale at VND175 billion ($7.42 million).

In May, a three-star 10-storey hotel located on a main road in District 1 was put up for sale at VND270 billion with negotiable discounts for serious buyers.

Recently, a small hotel near the iconic Ben Thanh Market in the downtown area was put up for sale at VND150 billion.

Nguyen Van Dinh, deputy chairman of the Vietnam Real Estate Association, said many hotel owners in the city, especially small and medium-sized ones, are selling their hotels at significantly lower rates to maintain their cash flow, while others are trying to liquidate their assets to survive.

Many hotels have closed or suspended operation, including Norfolk Hotel in District 1, which has closed after 30 years of operation.

The over 100-room four-star hotel located near iconic Ben Thanh Market used to attract many foreign tourists.

Some hotel owners are even unable to keep up with operational and maintenance costs.

Nguyen Hoang Nhu Thao, a representative of Wink Hotel in HCM City, said: “Hotels are struggling to cover expenses, from electricity and water bills to wages for employees and property taxes.”

“Many hotels with low occupancy rates have to cut down on operations or find a way to recover their capital,” she said.

Nguyen Huu Thien, director of Sabay Home Investment Corporation, said owners of small and medium-sized hotels in particularly are selling their hotels at much lower rates to maintain their cash flow.

Since last month, many owners have lowered their selling price by up to 30 per cent compared to the same period last year, he said.

An owner of a hotel on Cong Hoa Street in Tan Binh District has gradually lowered the sales price from VND120 billion to VND100 billion, VND95 billion, VND90 billion, and currently VND85 billion, but still cannot find any buyer, he added.

A hotel situated on Bui Vien Street in District 1, a bustlling area popular with backpackers, has closed. — VNS Photo Bo Xuan Hiep

Sluggish tourism market

Trang Minh Ha, chairman of North Stars Asia Company, said the city finds it more challenging to attract foreign tourists while local tourists are spending more carefully due to economic constraints.

Local tourists are increasingly opting for coastal destinations instead of big urban areas like HCM City, he said.

Adding to the sector’s hurdle, unfriendly visa policies continue to make it a hassle for the tourism market to attract international visitors.

The visa policy remains complicated and restrictive compared to regional neighbouring nations such as Thailand and Singapore, which have extended visa exemptions for up to 60 or 90 days to stimulate tourism.

A restrictive visa policy and the poor quality of tourism services are major problems preventing foreign visitors from returning to the country, experts noted.

Experts proposed Viet Nam improve the policies, including expanding the list of visa-exempt countries, extend duration of stay.

According to a report by Savills Vietnam, the hotel M&A market has been strongly activated since 2020-2021.

The hotel industry in the city is expected to face continued challenges until 2024, it said.

According to a report from the HCM City Tourism Department, as of the end of last year, the city has 3,227 types of accommodation with over 65,000 rooms, including 325 hotels (from one to five stars) compared to 1,342 before 2019.

Around 20 hotels, mostly in District 1, have closed, suspended operations, changed owners, or changed business models.

The city attracted 11.9 million visitors in the first four months, including more than 1.3 million international tourists.

It has set a target of welcoming five million international tourists this year and 35 million domestic tourists, with total revenue of VND160 trillion. — VNS