VietnamHotels + ResortsNewsletterSeptember 2012Table of ContentsPhu Quoc Hotel Market Overview                    1Vietnam...
2       Phu Quoc Hotel Market OverviewAccess – A traveler’s nightmareThe main point of access to Phu Quoc isDuong Dong Air...
September 2012                                                                                                            ...
4        Phu Quoc Hotel Market Overview                                                                                   ...
September 2012                                                                                                        Phu ...
6      Phu Quoc Hotel Market Overview                                                                                     ...
September 2012                                                                                                            ...
8     News Update                                                                                                         ...
September 2012                                                                                  Feature Article: Franchise...
10       Investment Opportunities                                                                                         ...
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Alternaty - Phu Quoc hotels and resorts market view - September 2012

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The island of Phu Quoc lies off the south- western coast of Vietnam 40 km west of Ha Tien on the Vietnam mainland and just 12 km from the coast of Cambodia. The Island’s population is only 85,000 while its size being 50 km north to south and 25 km east to west makes it the largest island in the Gulf of Thailand with an area of 574 km2.

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  • This is great. Do you have anything similar for 2016? We would like to update our guide http://www.phuquocislandguide.com to reflect the new outlook. Thanks
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Alternaty - Phu Quoc hotels and resorts market view - September 2012

  1. 1. VietnamHotels + ResortsNewsletterSeptember 2012Table of ContentsPhu Quoc Hotel Market Overview 1Vietnam Economics Update 7News Update 8Feature Article: Franchise Agreements 9Investment Opportunities 10About Us 10 Phu Quoc Hotel Market OverviewIn deciding on the location to feature for Together with numerous smaller islets itthis first newsletter edition, we could nothave picked a more underrated investment belongs to the District of Phu Quoc, of Kien Giang Province which forms part of P hu Quoc has an ideal geo- graphical location being a stone’s throw away from Cambo-destination in Vietnam – one with stunning the mainland. The Island is administratively dia, sailing distance to the islandsbeaches, a strategic location within SE Asia, divided into 2 towns and 8 communes. The of Thailand and a short flight fromvirgin landscapes, improving infrastructure largest town and district seat is Duong Dong major population centers suchand a limited number of hotels and resorts, Town which is located on the west coast. as Kuala Lumpur, Singapore andwhich incidentally are outperforming other Jakarta. It has the potential to bedestinations in Vietnam. More than half of the island is covered by a connection hub for travelers and forest. With up to 12 km of pristine beaches offers repeat visitors to Thailand aBut why has there been a dearth of con- and a variety of cultural and historic attrac- fresh alternative to Phuket.struction activity? What went wrong in the tions, it is one of the most visited touristpast and what may the future bring for the destinations in Vietnam. The island remainsisland of Phu Quoc? relatively undeveloped with the first modern — Alternaty Opinion hotel development, Tropicana Resort, only appearing in 1995.Location – An investor’s dreamThe island of Phu Quoc lies off the south-western coast of Vietnam 40 km west of HaTien on the Vietnam mainland and just 12km from the coast of Cambodia. The Island’spopulation is only 85,000 while its size being50 km north to south and 25 km east towest makes it the largest island in the Gulf ofThailand with an area of 574 km2.
  2. 2. 2 Phu Quoc Hotel Market OverviewAccess – A traveler’s nightmareThe main point of access to Phu Quoc isDuong Dong Airport which is only able tocater for small planes. Vietnam Airlines uses A nother major access constraint is that there is only a very limited window during the daythe 68 seat ATR Turboprop and provides when flights can land and depart Phu Quoc from the airport on the island. This Kien Giang Province68 flights per week from HCMC as well as 1flight per day from Rach Gia and Can Tho. means that the last flight to leave HCMC on a Friday is just after 1pmAir Mekong uses much newer Bombardier and the latest return flight on Sun-CRJ 900 jets with a capacity of 90 seats and day is 3pm. This makes it difficult toprovides 18 flights from HCMC and 9 flights justify a weekend trip to enjoy onlyfrom Hanoi per week as well as some flights 1 full day.from other provinces. Flights from HCMCstart from US$50 one way and it takes 1 — Alternaty Opinionhour to cover the 300 km distance. © 2012 GoogleTable 1Airlines Providing Services to Phu Quoc In total, there are approximately 115 flightsDeparture Airline Flights / Week Capacity per week to Phu Quoc which translates toHanoi Air Mekong 9 90 a maximum capacity of 8,500 passengersBuon Me Thuot Air Mekong 4 90 per week, or 625,000 per annum. The newQuy Nhon Air Mekong 4 90 airport is scheduled to be completed by theVinh Air Mekong 2 90 end of this year which is expected to boostHCMC Air Mekong 18 90 capacity dramatically by allowing muchHCMC Vietnam Airlines 63 68 bigger jets to land.Rach Gia Vietnam Airlines 7 68Can Tho Vietnam Airlines 7 68 Phu Quoc can also be reached by ferry with Source: Alternaty regular services from Rach Gia and Ha Tien.Supply – Limited & only small scale offeringsPhu Quoc has approximately 60 hotels or Figure 1 have been awarded 5 stars by VNAT, Saigon1,500 rooms with the majority being family Largest Hotels in Phu Quoc 120 Phu Quoc Resort is the only one with 4 stars,run mini hotels and guest houses. Most of La Veranda is the only 3 star resort whilethe current stock was developed by state 100 another 36 properties have been awardedowned enterprises, with some exceptions less than 3 stars. These star gradings do notbeing La Veranda, Chen La and Long Beach 80 necessarily reflect the operating perfor-which were developed under a JV structure mance nor the true quality of the hotels.with a foreign majority partner. The only 60 Number of Roomstwo properties managed by international A further constraint of the Phu Quoc markethotel operators are La Veranda managed by 40 is that there is a lack of properties with suffi-Accor under their MGallery brand and Chen cient scale and facilities to accommodate theSea managed by Centara as part of their 20 MICE sector. Saigon Phu Quoc resort offersBoutique Collection. the largest number of rooms at 100 rooms while most of the remaining hotels have 0The Vietnam National Administration of between 40 to 70 rooms.Tourism is the government body having the Source: Alternatyauthority to issue hotel star gradings. Thereare no properties on the island thatAlternaty® Vietnam Hotels + Resorts Newsletter alternaty.com
  3. 3. September 2012 Phu Quoc Hotel Market Overview 3 Table 2The La Veranda is undergoing an extension Hotel Brands Expected To Debut In Phu Quocadding 27 new rooms to increase the total Developer Operator Brand Location Scalenumber of rooms to 70. BIM Group IHG Crowne Plaza Duong Dong 400 keys Esaco/Long Beach IHG Holiday Inn Bai Sao 250 keysA number of large scale resorts are expect- Esaco/Long Beach Accor Novotel Duong Dong 210 keysed to come online over the next 3 years Tran Thai Fusion Maia Ganh Gio 300 keyswith international operators already in place. Ninh Van Bay Six Senses Latitude Cua Duong 136 keysThese include a Holiday Inn, Crowne Plaza Source: Alternatyand Novotel. Other brands that have beeninvolved in negotiations include Ritz Carltonand Hyatt Regency.However, to date there has been limited W here are the five star hotels? The extreme difficulty of real estate development in Phu Quoc is what has held it back and at the same time has been its salvation. The arduous and drawnconstruction activity and it is difficult to out land compensation and approval processes has meant that out of the 229anticipate oversupply of any kind. Looking planned projects submitted to the local authorities only 9 have been put intofurther ahead, there are several multi-resort operation. Phu Quoc may have missed out on the last development boom, how- ever this means that it is free of the oversupply headaches that currently plaguedevelopments that are in planning stages. other markets and sectors in Vietnam. — Alternaty OpinionDemand – Tourist arrivals dwarfed by regional peersTotal tourist arrivals to Kien Giang Province surpass the peak set in 2010 as well as the Figure 2peaked in 2010 with 4.4 million arrivals of government target for 2012 of 5.3 million Tourist Arrivals to Kien Giang 5which 4.2 million were domestic arrivals and arrivals in total including 160,000 foreign121,000 were foreign arrivals. arrivals. 4In 2011, even though foreign arrivals Of the limited data available specifically forincreased to 144,000, domestic arrivals Phu Quoc, released figures include 243,000 3 A rrivals (million)decreased by 23% causing total arrivals to total arrivals for the first half of 2012, up 39%fall by 22%. This could be attributable to the from the same period in 2011 while interna- 2highly unsteady local economy during 2011, tional arrivals increased by 20.4% to 69,000which would have caused vacation plans to during the same period. To add some per- 1be put on hold. The first 6 months of 2012 spective to these figures, during the samehas seen a significant rebound in tourist period, foreign arrivals were almost 3 million 0arrivals with 85,000 international (up 33% in Bali and just above 2 million in Phuket. Source: Kien Giang Department of Culture, Sports and Tourismcompared to the same period in 2010) and2.5 million domestic arrivals recorded thus Domestic Arrivalfar. If this pace of arrivals continues it looks International Arrivallikely that total tourist arrivals in 2012 willalternaty.com Alternaty® Vietnam Hotels + Resorts Newsletter
  4. 4. 4 Phu Quoc Hotel Market Overview September 2012Seasonality – Warm all year but wet and windy monsoon seasonThe island has a monsoonal sub-equatorial Figure 3climate enjoying a fairly steady average coincides with the best weather (driest Rainfall & Average Temperaturetemperature throughout the year with a months) as well as the holiday season forpeak of 33 °C in April and an annual average western tourists looking to escape the cold 500 29of 27.7 °C. winter. There is also a 2 week peak period during the lunar new year. During high 400Average rainfall is 190 mm per month with season it is essential to book stays well in ad- 28the driest months being November through vance as many properties are fully booked. Temperature (°C) Rainfall (mm) 300to March with just 43 mm of rainfall per 27month. The monsoon lasts from July to Low season is from May to October, with 200October when 360 mm of rainfall can be the slowest months being June and July.expected per month. Western travellers tend to choose destina- 100 26Humidity is also fairly steady ranging from tions such as Nha Trang and Da Nang on75% during the dry season and 85% during Vietnam’s central coast during these months 0 25the wet season. as the weather is much better there during Source: Kien Giang Department of Culture, Sports and Tourism these months, especially during June andHigh season in Phu Quoc is from November July when the monsoon begins in Phu Quoc. Rainfallto March, with December and the first half of Average TemperatureJanuary being the peak period. This periodHotel Performance – Among the best in VietnamDue to the limited supply of rooms and the Figure 4growing demand from local and interna- Average Room Rates of The mid and economy tier of the market,tional travellers, hotels and resorts in Phu Upscale Resorts in Phu Quoc which are typically smaller sized properties,Quoc have historically delivered a solid 120 achieve a more stable ADR of $20 - $40 perperformance compared to other locations in 110 night for the family run hotels and up to $65 Average Room Rate (US$/night)Vietnam. In the upscale market the average 100 per night for the larger and more sophis-room rates (ADR) in 2011/12 ranged from 90 ticated mid scale properties which offer a$85 per night for the more dated prod- wider selection of room types as well as 80 70ucts and up to $165 per night for the well restaurant, swimming pool and spa facilities. 60established boutique properties, which is a 2010/ 11 2011/ 12 Source: Alternatyconsiderable increase over the past 2 years Average occupancy in Phu Quoc is amongwhen the numbers of flights were more International Management the highest in Vietnam with propertieslimited. Local Management achieving an average of 75% - 85%, sup- ported by a mix of international and localThe seasonality of the island remains the Figure 5 demand, spread throughout the dry andmain dampener to average room rates. Seasonlity of Room Rates of monsoon season. Even properties that areFrom June to October, competition from Mid to Upscale Resorts favoured by international clients are ableother beach destinations such as Da Nang 50% to deliver a remarkable level of averageand Nha Trang, with better weather con- 40% annual occupancy ranging from 65% - 78%,ditions, force Phu Quoc resorts to reduce 30% depending on the size of the property andrates in order to attract the price sensitive their price strategy with local travel agents. Variation in Room Rate 20%local market. Rates can vary as much as 60% Overall, the Phu Quoc hotel market enjoys 10% 0%from the low to the high season, making Phu -10% relatively high occupancy compared toQuoc room rates among the most volatile in -20% other destinations as supply is constrainedVietnam. -30% and properties are small which makes them Source: Alternaty easier to fill.Alternaty® Vietnam Hotels + Resorts Newsletter alternaty.com
  5. 5. September 2012 Phu Quoc Hotel Market Overview 5 S urprisingly, La Veranda (managed by Accor) and Chen Sea (managed by Centara), both boutique resorts featuring 43 and 36 keys respectively, are among the best performing properties in Vietnam in terms of RevPAR (Revenue per Available Room), outperforming some well known, larger resorts in Da Nang, Hoi An and Nha Trang. This is mainly due to the high level of average occupancy and limited direct competition. — Alternaty OpinionOperating Costs – Phu Quoc’s Achilles heelAlthough Phu Quoc hoteliers enjoy relatively Furthermore, the F&B profit margin is Figure 6strong revenue, this is considerably offset by eroded by the cost of shipping stock from Energy Costthe high operating costs, which are signifi- the mainland or abroad causing some of the 14%cantly higher compared to properties on the international properties to struggle to deliver 12% percentage of revenuemainland. an F&B profit margin that is higher than 20 - 10% Energy cost as a 8% 25%. Another major cost is electricity which 6%The difficulty of attracting skilled workers can amount to 12% - 14% of total revenue, 4%to the island and the competition between incentivising developers to search for alter- 2%the resorts for trained staff puts upward native energy solutions. 0%pressure on labour costs. Vietnam Phu Quoc Source: Alternaty Developers need to also factor in construc- tion costs which are 15% - 20% higher com- pared to developing an identical property on the mainland.alternaty.com Alternaty® Vietnam Hotels + Resorts Newsletter
  6. 6. 6 Phu Quoc Hotel Market Overview September 2012Land Price – Land is abundant but good deals are rareWhen it comes to absolute beach frontage, The asking price of beach-front land can bePhu Quoc offers both the cheapest and as high as US$150 – US$350 psm for smallermost expensive options in Vietnam, depend- development sites on Duong Dong Beach Would we at Alternatying on the location within the Island. Land (Red Zone) and as low as US$30 – US$50 invest our money inin Phu Quoc is abundant but the difficult psm for the more isolated locations such as Phu Quoc?process of securing land and obtaining Cua Can Beach and Truong Beach (Greenconstruction approvals make “ready to build” Zone) suited for destination resorts. How- The undersupply of hotel rooms,projects rare as well as costly. ever, in Vietnam, as is mostly the case in absence of second home villa prod- the region, the initial, or public, asking price ucts, increasing tourist arrivals and for land can be considerably higher than the new airport on the way make the actual transacted price. In the majority a convincing case to invest in Phu of cases, buyers can secure a reasonable Quoc. However, beneath the surface discount on the asking price by spending lurks a challenging approval process the time and effort during the negotiation and unpredictable master planning process. guidelines which have seen the demise of many projects. A JV partnership with a financially strong and well connected local company or indi- Assuming that the right local partner vidual is the surest method for foreign inves- is found to mitigate the development tors to minimise the development timeline. risks, we believe that opportunity Large multi-phase master planned develop- exists to bring to market formats that ments that are searching for investors are are yet to appear in Phu Quoc, such still to be found throughout the island. Some as: of these are private investors looking for JV © 2012 Google partners while others are available directly A mixed-use beachfront from local authorities. resort with residential villas for sale, managed by a brandedFinal Thoughts operator with a vacation club component.The jury is still out on whether Phu Quoc Providing some hope that Phu Quoc isis “the next big thing”. It has certainly been about enter its next development phase is An upscale destination resorttouted as the next Phuket or Bali for several the new airport, built on 800 ha in Duong To with a holistic eco-tourismyears, especially by local stakeholders, but at a cost of US$970 million. It is committed concept for yoga fans and detoxduring this time there has been a lot more to open by the end of 2012 and will be able candidates, aimed at the healthhype than progress. Activity on the ground to handle medium sized planes such as the tourism sector.certainly gives plenty of voice for the critics. Airbus A320 or Boeing 767 with a capacity to process 7 million arrivals per annum. A multi-phase integrated resortMany issues stem from land compensation catering for the discerningand relocation, as well as the revised island It seems that Phu Quoc does have many of entertainment needs of a familymaster plan which caused many projects the ingredients required to become a major vacation, complete with adultsto be in conflict with the new zoning plans. tourist destination, however, until the day only and kids only zonesOther problems that need to be resolved that international tourists are able to arriveare the slow construction progress of the on direct flights from abroad, Phu Quoc willroad network and the chronic electricity only continue remain “the next big thing”.shortage.Alternaty® Vietnam Hotels + Resorts Newsletter alternaty.com
  7. 7. September 2012 Vietnam Economics Update 7 Vietnam Economics Update Inflation Trade Balance Figure 7 Figure 8 Consumer Price Index Imports and Exports 30 120 Y-o-Y Price Index (%) 100 20 Foreign Trade (US$ Billions) 80 60 10 40 20 0 0 2007 2008 2009 2010 2011 2012 -20 2007 2008 2009 2010 2011 2012 -40 Source: General Statistics Office of Vietnam Source: General Statistics Office of Vietnam Consumer Price Index Housing and Construction Materials Import Trade Balance Export August CPI came in at 5.04% y-o-y while electricity and medical services. The CPI is the m-o-m figure moved back into posi- expected to continue to escalate in Septem- The trade balance swung back into deficit tive territory at 0.63% after decreasing for ber as further upward adjustments of the YTD in August by US$62 million, although the previous two consecutive months. This gasoline price are expected and inflation it remains the lowest deficit for at least the increase was attributed to the three recent typically begins to escalate in the period past 5 years. The terms of trade have had a petrol price hikes which amounted to a 12% from August until the Lunar New Year. positive impact from the closure of the Dung increase, as well as due to price pressures in Quat oil refinery which temporarily crimped crude oil imports, but has recently resumed operations. Interest Rates Figure 9 Foreign Direct Investment State Bank of Vietnam Interest Rates Figure 10 20 Foreign Direct InvestmentInterest Rates (%) 15 80 70 10 60 FDI (US$ billion) 50 5 40 30 20 0 10 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 1H 2012 Source: Foreign Investment Agency Source: State Bank of Vietnam Committed Capital Base Discount Rate Refinancing Rate Implemented Capital Credit growth remains lacklustre at only The Vietnam banking system fell into a In the first 8 months of 2012, implemented 1.02% in July, a slight uptick from 0.76% in state of turmoil on 21st August, upon FDI was US$7.28 billion, only 0.3% short of June, even as the cost of funds for enterpris- the announcement of the arrest of ACB’s the figure achieved during the same period es continues to fall. Outstanding loans with founder Mr. Nguyen Duc Kien. Fear and in 2011. This has provided stable support interest rates above 15% decreased to 24.6% panic ensued in the following week with a for the Dong this year. On the other hand, in August, down from 29.1% at the end of widespread selloff in the stock market and newly registered capital was US$5.52 billion, July. Meanwhile, the latest estimate of bad mass withdrawals by bank customers. The equivalent to only 56.5% of the amount debts stand at 8.6% - 10% according to the risk of a bank run prompted the state bank registered in 2011. Real estate ranks second governor of the State Bank. to pledge its support for ACB. These events in terms of attracting FDI with 8 newly aptly demonstrated the fragile state of Viet- registered projects, with total registered and nam’s banking industry. additional capital of US$1.72 billion or 20.4% of total FDI. alternaty.com Alternaty® Vietnam Hotels + Resorts Newsletter
  8. 8. 8 News Update September 2012 News UpdateVietnam News Regional NewsRitz-Carlton to debut in Vietnam Rex Hotel upgrades its premises Red Planet Hotels buys stake inRitz-Carlton is slated to open their first The Rex Hotel in HCMC is upgrading a franchisor Tune Hotelshotel in Vietnam with the signing of a deal section of its premises with total investment Red Planet Hotels secured a 16% ownershipto manage a 250 room hotel located in the funds of US$16 million. The newly-upgrad- of Tune Hotels becoming the third largestCBD of HCMC. The hotel forms part of the ed premises will provide 125 high-class shareholder and earning a board seat. Red48 storey twin tower integrated develop- rooms on high floors and when completed, Planet is based in Thailand operating its ownment named The One Ho Chi Minh City, the five-star hotel will have 284 rooms in hotels with 7 properties under a franchisewhich will also include prime office space, total along with a series of shops and restau- agreement from Tune Hotels. They have aretail outlets and 350 luxury apartments. rants at the ground floor. portfolio of 20 hotels across Thailand, Indo- nesia and the Phillippines. Tune Hotels is aAccor opens Novotel Saigon Novotel Phan Thiet Ocean Dunes budget operator with 24 hotels in operationCentre in HCMC & Golf Resort taken over by Vina with a further 38 properties in the pipeline.Accor opened Novotel Saigon Centre on Properties Development Groupthe corner of Nguyen Dinh Chieu and Hai Novotel Phan Thiet Ocean Dunes & Golf Outrigger to acquireBa Trung streets in District 1, HCMC. The Resort was taken over by Vina Properties Laguna Beach Resorthotel has 247 rooms and meeting space Development Group and renamed DuParc Hawaii-based Outrigger Hotels and Resortswith capacity of 350 people. The property Phan Thiet Ocean Dunes & Golf Resort. This entered into an agreement to purchaseis located approximately a 20-minute drive project comprises a four-star hotel with 123 the 254 key Laguna Beach Resort, with thefrom Tan Son Nhat International Airport. rooms and an 18-hole golf course. transaction expected to close in Q1, 2013. This will be Outrigger’s second managed re-Banyan Tree Laguna Lang Co Etihad To Fly To Vietnam sort inside Laguna Phuket, having managedHotel to open on 1st Etihad Airways will add Ho Chi Minh City to the Outrigger Laguna Phuket Resort andNovember 2012 its global flight network in October 2013. Villas since August 2009.The 5 star all-pool villa resort forms part of a The daily flights between Ho Chi Minh City288 ha complex which will comprise of an 18 and Abu Dhabi will be served by two A330- Hoteliers increasingly confident inhole golf course, Angsana Residences, Ban- 200 aircraft with 262 seats. Asia’s prospectsyan Tree Residences and Laguna Residences According to the latest TripAdvisor IndustryLang Co. The development is situated in HCMC metro line begins Index, most hoteliers are confident in theLang Co Bay, approximately 60 minutes construction works prospects of the hotel market in Asia, par-drive from Da Nang airport. Total investment The first 20 km metro line has broken ticularly in Thailand which had the highestcapital for the first phase is US$200 million. ground after a long period of delay. The percentage of respondents planning to line will pass through Districts 1, 2, 9, Binh increase the number of employees over theHanoi to welcome first Thanh, Thu Duc and Di An commune in Binh next few years.Hilton Garden Inn Duong Province. Approximately 2.6 kmsHoan Kiem Tourism & Trading Company will be underground consisting of 3 subway 1.76 million international arrivals tosigned a management agreement with Hil- stations and more than 17 km above ground Cambodia in the first half of 2012ton Worldwide for their 11 storey 86 room including 11 stations. According to the Ministry of Tourism ofproperty which is scheduled to open in the Cambodia, 1.76 million foreigners visitedsecond half this year. Cambodia in the first half of 2012, an in- crease of 27% compared to the same period last year. Of the total visitors, 48% arrived to Cambodia by air, 49% by land and the remaining by sea.Alternaty® Vietnam Hotels + Resorts Newsletter alternaty.com
  9. 9. September 2012 Feature Article: Franchise Agreements 9 Feature Article: Franchise AgreementsHotel franchise affiliationsFranchise agreements are one method anowner can use to operate a hotel whilebenefiting from the recognition, distributionand reach of a brand as well as retain controlover the operation of the hotel. Given therange of franchise options, the affiliationdecision requires a thorough understandingof the costs and benefits of the franchiseformat as well as of each of the brands.Ways to affiliate How to decide on a brand? Standard franchise agreement with a Analyze the business mix of the proper- brand. ty, and search for a brand that matches Combination of a management contract both the needs of the owner as well as Questions + Answers and a franchise agreement defined as a the project. "manchise". Assess the potential benefits of the Q Would a franchise agreement An independent manager plus a affiliation in terms of cash flow. be a good option for my hotel franchise agreement with a brand, also Determine the costs of affiliation. project? known as an owner-operator-brand Compare the cost to the benefits. A It is certainly worth considering, model. however each project is unique Master franchise agreement, whereby a in terms of product, market- large branded operator signs a master ing strategy and competitive franchise agreement for an entire landscape, so while it may be country. In this case, the franchisor is suitable for some projects, it prohibited from competing with the may not be for others. master franchisee. Q Can I sign a franchise agree- ment for my mixed-use resi-Hotel franchising in Vietnam dential resort? A This is possible in some cases,There is a very limited presence of hotel reluctant to allow use of their brand name. but there are many issues thatfranchise chains in Vietnam with only 6 However, because of the short term nature must be considered.properties, which are mainly city hotels and of the contracts and low level of brand com-affiliated with Best Western. The main diffi- pliance required compared to management Q Will the franchisor manage myculties for franchisors seem to be the limited agreements, the franchise model offers property?experience of local developers to cope with an attractive management option for local A No, typically the franchisormanagement and ability to uphold brand developer seeking flexibility. will only offer marketing andstandards. For these reasons franchisors are distribution support and high level supervision of the brand standards.alternaty.com Alternaty® Vietnam Hotels + Resorts Newsletter
  10. 10. 10 Investment Opportunities September 2012 Investment Opportunities About UsHot Properties – See our website for more Hot Properties & EnquiriesLocation Da Nang Location HCMCStatus Development site Status Development siteScale 3 – 5 ha Scale 100 – 150 keysDescription Cleared beachfront develop- Description Midscale hotel developmentment site with freehold approval and in close with frontage to a main boulevard in HCMCproximity to golf courses. CBD looking for developer and investorInvestment Options 100% equity stake or Investment Options Lease of building Alternaty is a boutique real estateJV partner upon completion or JV partner firm providing specialist advice for hotel, resort and second home proj-Location Ha Long Bay Location HCMC ects in Vietnam and the IndochinaStatus Under construction Status Construction complete region.Scale 150 – 200 ha Scale 50 – 100 keysDescription Integrated resort, marina and Description Mixed-use D3 development Our servicesentertainment complex looking for develop- comprising of retail, office and residential Investment Consultingers for the subplots. components Investor RepresentationInvestment Options 100% equity stake in Investment Options Serviced apartment Hotel Operator Selectionone of the 7 sub-plots or JV partner lease or management contract Market Research Feasibility StudyLocation Hanoi Development ConsultingStatus Operating hotel Location Phu QuocScale >300 keys Status Operating resort We specialise inDescription Operating 5 star hotel for sale. Scale 50 – 100 keys Alternative OwnershipInvestment Options 70% equity stake Description Established upscale resort with Rental Pool Structuring beachfron. Fractional Ownership Investment Options 100% equity stake Membership Clubs Branded ResidencesPlease don’t hesitate to contact us to discuss any of the contents in this newsletter or for moreinformation on any of the opportunities above. We welcome your comments and suggestionsfor the next edition. In the meantime, don’t forget to follow us on Twitter, LinkedIn or Face-book to receive the latest updates and opportunities as they become available. Unit 23, 26 Ly Tu Trong Street,Rudolf Hever Mauro Gasparotti My NguyenExecutive Director Executive Director Research Executive District 1, Ho Chi Minh City, VietnamT +84 933 902 530 T +84 908 556 492 T +84 836 028 591E rudolf.hever@alternaty.com E mauro.gasparotti@alternaty.com E my.nguyen@alternaty.com T +84 836 028 591 W alternaty.comDisclaimer Find UsAlternaty Vietnam Hotels + Resorts Newsletter, published by Alternative Real Estate Service Co., Ltd. (hereafter “Alternaty”), is anewsletter containing information about the hotel and resort market in Vietnam and Indochina region. It is provided for gener-al information purposes only. Whilst making all reasonable effort to provide correct information, no legal responsibility can beaccepted by Alternaty for any loss or damage arising out of the use of or reliance on the contents of this newsletter.

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