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Resorts have only appeared on the local market in recent years,
but supply is rapidly increasing. Following a slowdown last year, the situation
looks difficult for the sector in 2012.
The region offers stunning resort options, but now holiday-makers are spoilt for
choice
According to VietRees, the resort market in Ba Ria-Vung Tau province remains in
its embryonic stage. Investment during 2010-2011 levelled out and investors
attributed the situation to the economic difficulties. Moreover, inefficient
business performance at resorts and tourist sites in Phan Thiet city has
contributed to the above phenomenon.
Some investors say it could take five more years for the resort market to fully
recover and flourish in the region. Consequently, most projects have yet to be
carried out and are limited to the registration phase with disbursed capital
representing a low ratio to pledged capital.
However, VietRees believes the potential of the resort property market in Ba
Ria-Vung Tau has yet to be fully realised and it has every necessary condition
to further develop as Ba Ria-Vung Tau is among the provinces with the highest
potential for development in Vietnam and is the leader in the southern key
economic zone, especially in the tourism and resort segment for the following
reasons.
The province is endowed with favourable natural conditions and rich and diverse
tourism resources and is unrivalled in the south-eastern and south-western
region. The infrastructure and connecting transport system have been developed
quickly and improved constantly, creating favourable conditions for rapid
growth.
Favourable incentives and investment promotion policies have attracted a lot of
investment projects and social resources from all sectors, particularly into the
tourism and property industry, including the tourism property sector. Human
resources for the tourism industry will have increased robustly by 2015 in terms
of quality and quantity.
Ba Ria-Vung Tau is very close to Ho Chi Minh City. The province is also close to
the proposed Long Thanh international airport. This creates conditions for the
sustainable development and recovery of the real estate market.
Over the past five years, it can be easily noticed that the scale of tourism
property segment in the province has developed strongly. As of July 2011 the
province was home to 148 tourism projects covering a total area of more than
3,900 hectares with a total registered capital of about VND35 trillion ($1.2
billion). Additionally, there are 39 tourism projects developed on forested land
spanning over 3,200ha and with registered capital of more than VND10,600 billion
($500 million).
Tourism industry infrastructure is being expanded and its quality being
improved. Local tourism businesses have strived to build and upgrade facilities
to meet ever increasing demand. The entire province has 162 hotel establishments
with 6,722 rooms and an estimated revenue of VND1,780 billion ($85 million). The
province has attracted some 8.4 million visitors, 320,000 of which are
international tourists.
It is inevitable that the growth of tourism property will fuel the development
of resort property. Although resort property has not yet been developed, the
market will really flourish in the next few years. Our research has also pointed
out that those investors who have a high expectation of the local resort
property market will see robust growth over the next three years.
The resort property market promises robust growth, especially in Xuyen Moc and
Dat Do districts. Xuyen Moc district has a coastline stretching dozens of
kilometres from Song Ray Bridge to Binh Chau commune. Besides the tourism
development potential, Xuyen Moc district also holds the edge in developing
eco-tourism with hot spas and pristine forests among the attractions.
Furthermore, Binh Chau site is currently the number one choice of tourism
property investors since it is blessed with stunning landscapes and a natural
reserve and hot springs. Then there is Tam Po Mountain, Ho Coc beach and cold
spring. In addition, travellers have easy and fast access to Binh Thuan province
from Binh Chau tourist site via the coastal road.
Many developers have realised the strategic location of Ba Ria-Vung Tau near Ho
Chi Minh City and are exploring opportunities to set up resort projects. They
have selected Xuyen Moc district as an ideal venue to launch potential projects.
The market’s bright spot is the Ho Tram Strip mega-project where construction is
on schedule at a time when the real estate market remains stagnant with many
projects stalled. In September 2011, Coteccons won the bid to build this
project. The package, whose total bidding value for the first phase stands at
$155 million, is expected to be come on stream by early 2013.
We rate the time-share resort property type as being in the early stage of
development. These projects are mainly located in Vung Tau city, Xuyen Moc and
Long Hai districts, as well as other sites specialised in resort property and on
the beautiful beaches in Ba Ria-Vung Tau province.
Given time-share is a high-end tourism property type with high prices and given
the current slump of the real estate market and macro-economic instability, the
business progress of these projects is very slow for the time being.
With poor business results and an inactive property market as well as tightened
monetary policy and the instability of domestic and global economy, the resort
property market in Ba Ria-Vung Tau in the 2012-2013 period is predicted to
continue facing multiple difficulties.
With similar supply from different kinds of property, time-share tends to go up
nationwide. We realise that the consumption and sale of this kind of property
will encounter difficulties at least over the next couple of years.
The market will only be able to pick up after 2013 when the domestic and global
economies enter a new and more stable stage of development. This is because
time-share property targets high-income earners and foreigners. It is forecast
that the resort property market will only be able to grow to its full capacity
over the next five years.
The development of infrastructure connecting Ho Chi Minh City with the province
and the pick-up of Vietnam’s property market are necessary conditions for Ba
Ria-Vung Tau’s tourism property development.
Ba Ria-Vung Tau and Phu Quoc island can be said to be the areas with the most
potential for development in the south of Vietnam. Along with economic recovery
will surely come the resurgence of tourism property.
All in all, the resort property market in Ba Ria-Vung Tau province is forecast
to face a difficult 2012-2013 period. If there is any growth, this will be less
than 5 per cent. In the 2014-2015 period, however, a growth rate of 7 to 8 per
cent per annum is achievable.
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