The hotel industry is expected to attract US$125 million in investments this year, supported by strong growth in international arrivals amid favorable visa policies.
The forecast, made by property developer JLL, has been increased from the earlier $100 million, reflecting confidence in the sector's sustainable growth.
Karan Khanijou, vice president of Asia Hotel and Hospitality Investment at JLL, said Vietnam's hospitality sector is attracting strong interest, delivering returns of 6-7.5% annually.
Hotel performance has continued to improve, with occupancy and revenue per available room rising by an average of 21% annually since 2020. HCMC and Hanoi lead in occupancy thanks to a diverse mix of corporate and leisure travelers.
Since the beginning of the year Vietnam has seen a series of major deals in the hotel and luxury resort segments, involving both domestic and international investors.
Projects under construction or being planned for until 2028 are mostly in Hanoi, Da Nang City and Hoi An, with 33% of new supply in the mid-priced segment.
As of August supply was 185,000 rooms across over 1,500 establishments, with the upscale to luxury segment accounting for 57%, JLL data shows.
The positive trajectory is reinforcing investor confidence, helping major deals continue to gain momentum, Khanijou said.
A recent report by property consultancy Avison Young said the hotel market is maintaining supply growth and attracting strong investment. In Hanoi, supply stands at around 12,000 rooms across nearly 70 projects.
By 2026 an additional 2,800 rooms are expected at 10 new projects, 74% in the five-star segment managed by international brands such as Waldorf Astoria, Mövenpick, Fairmont, and Dusit.
In central Vietnam, besides Saigontourist Group's newly launched five-star hotel in Da Nang, other high-end developments such as Fivitel Nam Hoi An are also under construction.
The region is expected to add six new hotel and resort projects next year, raising supply to more than 30,000 rooms.
In HCMC, the supply of four- and five-star hotel rooms is expected to reach 23,000 by 2026, with an occupancy rate of 78-83% driven by demand from international visitors and business travelers and supported by flexible visa policies. High-end domestic tourists are also anticipated to drive up demand.
Research firms said the hotel sector is benefiting from comprehensive real-estate legal reforms.
The 2024 Land Law allows more flexible land pricing, reduces construction permits for approved projects, shortens development timelines, and lowers costs.
The tourism sector's recovery is also a positive sign. Vietnam received 17.2 million foreign tourists in the first 10 months of this year, up 22% from last year.
The government is taking a slew of initiatives to position Vietnam as a leading tourism destination, including improving international air connectivity and infrastructure.
Major airlines are expanding their route networks, while the newly launched Sun Phu Quoc Airlines is connecting domestic and international destinations with Phu Quoc Island.