Danang resort real estate back on track

After over two years of depression, Danang’s hospitality sector will bounce back quickly as international flights resume, says Matthew Powell, Director of property consultant Savills Hanoi.

How would you describe the picture of Danang's real estate market in 2021?

In 2021, Danang continued to suffer from the Covid-19 outbreak. Hospitality was particularly hard hit. The obvious consequence was that many hotels and hospitality service providers suffered.

However, Danang's office segment has performed well. We have been working with a diverse set of customers, notably from technology, insurance or educational backgrounds, who are looking for offices in the city. This is not surprising given Danang’s offering of high-quality and affordable offices, qualified labor force, supportive policies, and the great quality of life it provides. It has been a popular destination for businesses to establish themselves or to expand. We expect this market to perform well and grow in the future.

In terms of the industrial sector, activity in central Vietnam is improving as prices are reasonable and the region has good access to ports and airports. The residential sector has some interesting projects in the pipeline that will provide residential properties like apartments and villas as well as resorts.

Vietnamese and international buyers are keen on branded residential developments, with a view that the Danang market will bounce back quickly. The resumption of international travel will also support market recovery.

How do you rate the resort real estate segment in Danang this year, with tourism fully reopening?

It's very encouraging and shows that people will still want to visit Danang. While there are some issues with maintenance in some of the hotels and issues with staffing, the overall performance is good. The turnout during the recent national holiday is certainly stimulating. We are confident that hospitality will bounce back now that the borders have reopened, and international tourists have started to come back.

There are many upcoming events in Danang, which will attract international arrivals. As we see international guests, tourists, and investors return, we look forward to the development of branded residences, which continues to be a promising sector.

After two years of "freezing" due to Covid-19, have investors "turned away" from the resort segment, in your opinion?

Before the pandemic, Vietnam’s hospitality market was growing extremely well and had well-established resort destinations all along the coast. The return of international tourists will be fantastic for all hotels, including those in the city, three- to five-star hotels and resorts. Coastal cities and hotel developers should take advantage of ‘whiplash’ demand to aid their recovery.

Already, we are seeing the return of many Korean travelers through Danang’s vaccine passport program. In terms of domestic tourism, we saw increased activity during Tet (lunar New Year holiday), and we expect huge growth in this space. We look forward to hospitality real estate bouncing back quickly in the upcoming period, fueled by domestic and international tourism.

Which segment in Danang will dominate soon, apart from resort real estate?

Danang and central of Vietnam have very good infrastructure and a skilled workforce, which will support economic recovery across sectors. The residential market has many avenues that can support its recovery. Retail in Danang is still relatively small; however, the long-term outlook is promising. In terms of offices, demand is high, and our team is collaborating with many clients now. Industrial trends we expect throughout Vietnam include the strengthening and expansion of logistics activities and data centers.

Danang’s appeal is undeniable. It has created a strong, beautiful base for itself with great transportation links and a skilled and well-educated workforce, many of whom attended some of Danang’s prestigious universities. The city also has established tech infrastructure like a stable internet connection. All of this and the unrivalled quality of life offer incredibly favorable conditions for the Danang market to thrive in the post-pandemic time.