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In Vietnam, hotels are being sold as owners take losses amid Covid-19

14:40 | 17/05/2020

Many owners cannot maintain operation of their hotels during the epidemic and want to sell them.

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Many owners cannot maintain operation of their hotels during the epidemic and want to sell them.

Tran Hoa, the owner of Hanoi Passion Suite on Tran Nhat Duat street in Hanoi, has sold her hotel for VND350 million.

Hoa had been doing business well until the outbreak, but could not arrange capital to continue her business.

Hoa had been running the hotel for more than one year after she signed a lease contract with rent of $2,700 a month.

Saigon Palace Hotel on Tran Quoc Hoan street in Cau Giay district with 27 rooms has also been transferred to a new owner at VND800 million, of which VND420 million is the deposit for the 10-year lease.

A series of guest houses with 10-15 rooms in Hanoi have been offered at prices of VND80-100 million.

Hai, the owner of a small hotel on Quan Hoa street, said he has to pay VND50 million in monthly rent and pay once every three months. Because of Covid-19, the landlord has agreed to cut the rent by 50 percent. However, despite the support, he still cannot retain the hotel and has to sell it.

In HCM City, small hotels and homestays in central districts 1, 3 and Phu Nhuan have also been put up for sale as they cannot receive guests for a long time.

The owner of a large 120-room hotel on Ly Tu Trong street, which had always been full of travelers before the epidemic, is seeking buyers for the hotel at the price of VND950 billion.

Meanwhile, smaller hotels on Phan Dang Luu street, HCMC, are offered at VND10-20 billion. Analysts noted that the hotels in the area could make a profit of VND200-300 million a month before the epidemic outbreak.

Other hotels still operate, but they have been downsized. At some hotels, 50 percent of workers have been laid off and the others are working in shifts.

Nguyen Van Vinh, a worker at a hotel on Bui Thi Xuan street, has been staying off work since mid-March and receives VND2 million in allowance a month.

“I am living on the allowance and the job of taxi motorbike driver. The current income is low, but I am still happier than my colleagues from other hotels who have no salary and no allowance,” he said.

Phan Cong Chanh, a real estate expert, commented that more hotel owners would leave the market in the next 3-4 months. He believes that hotel prices will decrease even more sharply in 3-6 months.

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