Vietnam home-sharing market grows dramatically

01-Aug-2019 Intellasia | InfoMoney | 6:02 AM Print This Post

While traditional hotels show signs of slowing down in the race for accommodation supply, in the past one year, the market for home-sharing business in Vietnam has been growing rapidly at a rate of 452 percent in the number of accommodation supply.

Tourism development leads to a strong growth in the demand for accommodation

According to the World Tourism Organisation, Vietnam is currently one of the three countries with the fastest growing tourism industry in the world. With many policies to encourage development, significantly reduce procedures and conditions for international visitors, Vietnam has become a hot spot to attract tourists.

Statistics from the Vietnam National Administration of Tourism said that in the first six months of 2019, the number of domestic tourists reached 45.5 million; International visitors reached nearly 8.5 million. Total revenue from tourists reached 338.2 billion dong, an increase of 8.4 percent compared to the same period in 2018. Expected in 2019, the tourism industry is expected to serve about 18 million international visitors, 85 million domestic tourists; The target of total revenue from tourists reaches 700 trillion dong.

The rapid growth of Vietnam’s tourism in recent years has led to a strong growth in the demand for accommodation. The government aims to 2020, tourism will become a key industry of Vietnam, making resort real estate more attractive than ever with business investors.

A booming home-sharing market

While traditional hotels show signs of slowing down in the race for accommodation supply, in the past one year, the market for home-sharing business in Vietnam has been growing rapidly at a rate of 452 percent in the number of accommodation supply. According to AirDNA research, this number was larger than the global average of 140 percent and much higher than the traditional hotel industry, which only grew by 40 percent in supply.

In Vietnam, real estate investors mainly focus on high-end resorts and houses. However, most of these properties are not used frequently, leading to excess supply, or “idle real estate.”

For an abundance of real estate in the hands of rich people, home-sharing becomes a strategic channel, bringing in huge profits taking advantage of idle real estate.

Home-sharing is not only a solution to the problem of taking advantage of surplus accommodation supply but also helps to meet the change in the demand for tourist accommodation. In the past, tourists only chose accommodation as a resting place, but today, they want to get more value.

According to a survey of 2018 global tourist trends conducted by Visa with the participation of more than 15,000 people from 27 countries, including Vietnam, tourists often wanted to achieve “discovery” and “enjoy” in their travels. It is the change in the need to find connectionenjoydiscover that homestay becomes an optimal choice not only in experience but also in the cost of current travel enthusiasts.

According to the latest report from the AirDNA market research company, the homestay business in Vietnam increased by five times in the number of accommodation supply in the past year, much higher than the traditional hotel industry with only 40 percent growth in supply. In HCM City in 2016, there were about 6,200 homestay accommodation, by mid-2018 it was above 20,000 with over 11,000 properties available.

In Hanoi, the number of accommodation also increased from approximately 3,200 accommodation in 2016, and to more than 11,200 in the first half of 2018 with over 6,400 properties available.

Vietnam quickly seized the opportunity to participate in the homestay business market, generating revenue of about $130 million in 2018 and continuing to grow at a high rate.

AirDNA reports indicated that city areas had the largest revenue for homestay such as HCM City ($41.6 million), Da Nang ($19 million), Hanoi ($13.3 million), Lam Dong ($2.2 million). The potential of emerging tourist areas such as Vung Tau, Phu Yen, Ha Long, etc. would also attract tourists, where the homestay model was not yet popular, the demand of tourists was always higher than supply.

In response to the needs of tourists and market trends, a number of popular hotel applications like Traveloka, TripAdvisor, Agoda and so on have developed a private homestay channel to connect travellers and homestay owners closer together.

Besides, a number of young domestic startups have entered this market, including Luxstay, a pioneering start-up to build a business platform for homeowners in Vietnam when participating in the market for rent home-sharing.

Before Airbnb officially operates in Southeast Asia or another Southeast Asian start-up attacks the Vietnamese market, the emergence of a Vietnamese start-up pioneering to build and dominate the market is a smart move ahead of young entrepreneurs. It is also a positive signal for the domestic tourism industry and also a potential bright spot for Vietnamese startup community.

 


Category: Business, Vietnam

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