International Hotels Rising In Ho Chi Minh City

<B> International Hotels Rising In Ho Chi Minh City</B>

By Judy Jacobs

While a host of international hotel companies have their sights set on Saigon, two--Renaissance and Starwood--will open properties in Vietnam's major commercial city in the coming months. The additional hotel rooms they bring to the market are expected to foster even better room rate bargains in Saigon--now known as Ho Chi Minh City.

"The number of international hotels is steadily increasing," said Tak Uchikawa, director of sales for the Renaissance Riverside Hotel, whose opening has been delayed from late 1998 until early next year. "The room inventory for four- and five-star hotels reached 1,776 rooms in 1997 and is expected to increase to 2,751 rooms this year. An additional 3,686 rooms are projected for 1999." As the number of hotel rooms increase, the average occupancy and average room rate is decreasing. "The average occupancy in 1997 was 40 percent among deluxe hotels and is projected at 38 percent in 1998. The daily average room rate was $95 in 1997 and is projected to be $75 in 1998," he said.

Although Vietnam is suffering the same fate as its Southeast Asian neighbors--the dong has been devalued five times in the past year and a half, for example--the government has been gradually loosening restrictions to encourage foreign investment in the country. "The government has relaxed laws to allow foreigners to buy shares, and privatized government-owned companies. In addition, the easing of land laws so that foreigners can now have land use rights also is a positive sign. In the past, foreigners could not directly be lessees, but had to go through local partners, "said Nelli Yong, spokesperson for Starwood Hotels.

The liberalization of foreign investment is expected to bring more business travelers to Ho Chi Minh City to fill the new Renaissance Riverside and Westin Saigon, both of which are being built to cater to that market. "We expect between 65 and 80 percent of the business at the Renaissance Riverside Hotel to be transient business travelers," Uchikawa said. With that market in mind, each of the 349 rooms in the hotel will have large writing desks and data ports for Internet access. There also will be four Renaissance Club floors and meeting facilities that include a ballroom accommodating up to 200 attendees.

The Westin Saigon is expected to open in mid-1999 with 96 serviced apartments and 383 rooms, including Guest Office rooms--Westin's signature business accommodation that combines an office with a guest room. Meeting facilities will include 11 function rooms and a ballroom, which will accommodate up to 600.