OVERVIEW OF ACCOMMODATION INDUSTRY AT THE BEGINNING OF 2023 AND TRENDS FOR THE SECOND HALF OF THE YEAR

 

Overview of the accommodation industry in the first half of 2023

 

The accommodation service industry experienced strong growth after COVID

 

According to a consolidated report with comments from financial institutions and economic experts, the service and tourism industry can play a key role in promoting Vietnam’s economic growth in the third quarter and the whole year.

The aggregated first-quarter economic indicators show that the economy has been strongly impacted by the global economic recession. This is clearly shown when the data shows that the import-export turnover in the first quarter along with the processing and manufacturing industries have a downward trend.

In that context, in the first quarter of 2023, the service and consumption sectors were again the bright spots, contributing the most to economic growth. The service sector increased by about 6.8%, contributing 95.91% to the overall growth.

The growth of a number of service industries in the first quarter of 2023 has reached an outstanding high compared to the same period last year such as: tourism revenue increased by nearly 120%, revenue from accommodation and food services increased by more than 28%.

 

Source: VIRAC’s Report

 

Only in the first quarter of 2023, Vietnam’s tourism industry welcomed 2.7 million international visitors, equivalent to one-third of the whole target in 2023. Therefore, this is the time when tourism businesses are promoting many plans to attract as well as increase the spending level of foreign tourists.

 

Source: VIRAC’s Report

Thanks to the effectiveness of the policy to stimulate domestic consumption and open the economy after the COVID-19 epidemic is under control, activities to promote and promote Vietnam’s tourism to countries around the world have been promoted, boosting the driving the significant growth of the accommodation service industry. According to VIRAC, GDP of accommodation and catering services increased by 25.98% over the same period last year.

Source: VIRAC’s Report

In addition, the tourism stimulus policies of the localities have helped increase the number of domestic tourists staying overnight at accommodation establishments. According to VIRAC’s accommodation industry report, this number is estimated to reach x million arrivals in the first quarter of 2023. The above figure even surpasses the figure of the same period of 2019 (+11.9%), the time before Covid-19 pandemic. Revenue from accommodation and catering services in Q1/2023 is estimated at x billion VND, up 28.4% over the same period last year.

 

Source: VIRAC’s Report

 

With the international tourist market, the demand for information about tourist accommodation establishments increased sharply right after Vietnam officially reopened to international tourism. International search volume for Vietnam tourism remains high. According to VIRAC’s report, the search volume for accommodation facilities is 12 times higher; Aviation searches are four times higher than in early January 2023. The most sought-after international destinations in Vietnam are: Ho Chi Minh City, Hanoi, Da Nang, Phu Quoc, Nha Trang, Hoi An, Da Lat, Hue and Phan Thiet. The countries with the most search visitors include the US, Singapore, India, Australia, Japan, and more.

 

It can be seen that the accommodation and food service industry is the industry that contributes most positively to the growth of the service industry in the first quarter of 2023.

Some outstanding problems of the accommodation industry in Vietnam

• Environmental problems

 

The hot development of tourism and accommodation services has caused many negative impacts on the environment. At many tourist sites, solid waste, garbage, untreated wastewater, air, water, noise pollution, changes in the natural landscape and living environment of organisms have appeared. Untreated wastewater at some tourist accommodation service establishments is being discharged directly into the environment, increasing the organic level of coastal seawater. The intense conflict of economic interests between economic actors and the industry combined with short-term vision and technological limitations leads to the destruction of many tourism resources, leading to risks such as erosion. coastline, degrade forest and island ecosystems. The above problems have degraded the environment, adversely affecting the image and sustainable development of Vietnam’s tourism.

 

The cause of the above situation can be seen because the tourism industry has not yet developed and issued adequate guidelines on environmental impact assessment criteria and a system to control and manage environmental issues.

On the business side, because the short-term business goal is to reduce costs and increase revenue. Many travel companies instead do surveys to build tour programs, assess supply – demand, customer psychology… to build tourism products in line with upcoming trends. green tourism, then proceed to “copy” tourism products of other companies. It can be seen that such businesses have not really paid attention and are properly aware of the issue of environmental protection and long-term and sustainable development.

 

On the tourist side, the awareness of green consumption of a part of tourists is still not good. Tourists are the main force developing the tourism industry, consumer behavior also has an important impact on the entire tourism process. However, because the concept of green consumption and green tourism is still vague and not very convincing, some tourists are still not aware, they still have behaviors that seriously affect them. to the development of green tourism.

• Lack of electricity is a hindrance to the accommodation service industry this summer

 

Summer is considered to be the peak season for tourism and the accommodation service industry has grown strongly, but recently, the power shortage has been prolonged for many reasons. Many provinces across the country are facing the most intense power shortage in recent years. The rotation of power cuts caused the operation of the accommodation service business systems to be halted. This can also be a huge obstacle this summer for the accommodation industry. Accommodation business establishments are also extremely worried and eager to follow instructions from the State and the Electricity Corporation. Revenue from local tourism is also affected significantly.

• HR issues

Shortage of human resources, especially high-quality workers operating in the accommodation service industry, is a difficult problem to solve for businesses. According to VIRAC, in terms of supply, the current human resource is assessed as decreasing in both quantity and quality compared to 2019.

• The direct labor force in the tourist accommodation sector is facing a huge shortage when it has not reached x people, meeting more than 70% of the demand with an average capacity of less than 50%, the norm is less than 0.6 employees. /room. At qualified tourist accommodation establishments, the current average is only about 0.4 workers per room, especially when there is a shortage of personnel at peak times such as holidays, Tet and weekends. Such an imbalance of human resources by region/region has caused many areas to grow hot in terms of tourists, but the quality of service is much lower than in other regions and has not achieved stability.
• Besides, the personnel structure at many accommodation businesses has not been synchronously arranged, and there is a serious shortage of highly qualified human resources, especially senior management personnel. Through a survey by Navigos Search – a unit specializing in providing human resource recruitment services, businesses in the field of tourism and hotels are returning to recruit senior management positions such as: General Director. , General Manager, Heads of Departments in hotels and resorts with the requirement of foreign candidates. Especially now that hotel and resort projects are gradually recovering, so the demand for senior personnel in  areas such as construction and operation will also thrive. Regarding human demand after the pandemic, according to VIRAC’s report, currently the tourism industry needs about x workers in tourist accommodation establishments with a capacity of over 70%, of which management personnel need about x people.

 

How will the 2023 tourism trend affect the accommodation service industry?

 

Looking back at 2022 as the year that saw the “spectacular return of tourism”, here 2023 is predicted to be the year “creatively re-imagine tourism amid chaos”. The following are predictions about tourism trends in 2023, which will show what experiences Vietnamese and foreign tourists are looking for, from which businesses in the industry will have the right direction for their travel plans. investment and development direction this year.

• Trends of travel to explore culture, seek new and unique experiences

Places such as the Northwest highlands, the Northeast are favorite places for this travel experience. Most of the tourists who love and tend to want to try this type of experience come from the Americas or Europe. They are excited about the experience of going to places with completely different and unique cultures and languages, and want to visit obscure cities.

 

 

Many accommodation service establishments have now updated and provided accommodation services right at homestays such as homestays, huts, dining experiences and living with local people. This form of service business is especially popular in the northern and central highlands such as Ha Giang, Cao Bang, Yen Bai, Ninh Binh, Pu Luong Thanh Hoa, … and has a large number of tourists. increased in the first months of this year, so far there is no sign of cooling down. These accommodation businesses are mostly indigenous people in the highlands, this is also an opportunity to bring a stable source of income from the tourism service business for the ethnic minorities. . This is a tourism trend that is on the rise in 2023. However, accommodation rental establishments are mostly households on a small scale. So this could be a great opportunity for businesses to notice and invest in.

• Green – sustainable tourism trend

 

Being aware of the impact of tourism and accommodation business on the environment and nature, more and more businesses and tourism businesses are gradually changing and adapting to tourism trends. Green, sustainable tourism towards the environment.

Because of the environmental benefits that green tourism brings, more and more such tourist areas are being invested and developed. Real estate is also hot than ever, investors are racing to build resorts, homestays and hotels to meet the current green tourism needs.

Recently, a number of travel companies and accommodation service establishments have made new notes in the development of green tourism, such as in the Northwest provinces where community tourism is now available. ; Nha Trang focuses on sea and island tourism; The Southwest region focuses on garden tourism to provide tourism services. Besides, many tour operators build green tours; The hotel is certified green…

Especially nowadays, young people are tourists who are interested and tend to consume and use the most environmentally friendly services. Green tourism activities towards the environment are therefore easy to win the hearts of customers in general and young people in particular. Businesses should pay special attention to and build a sustainable tourism development orientation for their accommodation service right now to catch up with the trend of the times.

 

 

The approach of Six Senses Ninh Van Bay (Khanh Hoa) – a high-class resort resort is now also being highly appreciated for its green activities, which both help diversify the customer experience and protect the environment and the environment. towards sustainable trends. Six Senses Ninh Van Bay offers more than 11 experiences, ranging from food, wellness, walking tours, mountain climbing, beach activities, environmental education for children, and local culture. The most notable are the activities of joining hands to protect the environment such as learning how to make recycled candles, recycled paper, recycled soap, coral transplants, learning about black-shanted douc langurs, exploring recycled products from glass, experiencing being a farmer, harvesting chicken eggs or loofah in the garden.

• Tourism trend finds balance in “body – mind – mind”

 

A large number of visitors in 2023 are tending to experience trips that focus on nurturing “body – mind – mind” health. According to the aggregate report, a survey has shown that the trend of searching for accommodations that help customers balance their mind, meditation and mindfulness is becoming ever more popular with Vietnamese guests (54%), while three-quarters (73%) of travelers seek peace in a tranquil destination and 75% want to go to a place that focuses on mental health, body transformation or helps with important moments. important in life.

 

 

Many resorts today have been focusing on building and developing services to help customers have space to nurture their souls, focus on healing with activities such as meditation, yoga, emotional therapy, etc. immersed in nature, …

Currently in Vietnam, resorts such as Avana Retreat Mai Chau, Legacy Yen Tu all provide services to help customers nourish their souls and relax “body – mind – mind” in high mountain locations with high atmosphere. mild climate and mild weather. In addition, Avana Retreat also builds facilities at the resort on the basis of preserving the environment, limiting the destruction of nature as much as possible, contributing to creating sustainable tourism that meets the requirements of green tourism.

 

• Travel trend “out of coverage”

Surprisingly, a large part of Gen Z and Millennials want to try this type of travel experience. This is an opportunity for young people to have the opportunity to try the wild life, the journey of “trekking” the dangerous mountain road, without the support of modern equipment and tools, to enjoy the holidays. in the style of “out of coverage” – completely disconnected, immersed in nature and temporarily escaped from the chaos of reality.

 

Through this holiday, young people have the opportunity to learn survival skills, such as setting up tents, cabins, self-sufficient food and water, and still being environmentally friendly to protect themselves in the event of a sudden disaster. go out. Especially, when young people are used to living in an era of always connected phone and internet, this will be a new experience that those who are passionate about adventure and adventure will find it. Currently, mountainous areas or valleys in Vietnam are ideal destinations for these activities.

Many businesses have updated this trend, providing rental services for tents, camps, vans and survival equipment in the mountains, and providing relief when needed. It can be seen that the safety issue is very concerning in this form of experiential tourism, but currently, not many businesses provide travel insurance services.

 

Information on Vietnam’s accommodation industry is compiled from the “Vietnam Accommodation Industry Report in Q1/2023” conducted by VIRAC. The report provides full information on the macroeconomics, trade supply and demand of the accommodation service, relevant information and forecasts from the latest updated data. 

 

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