The condo-hotel is an alien concept for Vietnam but developers now believe the time is right to introduce this product to the market. Duc Hanh examines what the attractions are for investors and owners.
So, first of all, what is a condo-hotel or a condotel? It’s a condominium project, which is operated as a hotel with a registration desk, cleaning service and more. It’s a popular concept around the world, but brand new to Vietnam.
Second question – what’s the appeal? The units are individually owned giving owners the option to rent out their unit via the hotel’s rental programme. Holidaymakers can rent the room out like any other hotel room, except they can enjoy those homely extras – such as a fully-equipped kitchen – while availing of all the luxury amenities like a swimming pool, a fitness center or 24-hour service.
Typically condotels are high-rise buildings in either major cities or holiday destinations. Owners can enjoy the benefits of the hotel chain’s marketing campaigns to lure in renters and trust the management to ensure a comfortable stay.
Pros and cons
There are pros and cons to condotel ownership. Pros include rental income to offset ownership expenses, a great vacation home, a cared-for home and potential price appreciation.
On the down side, you might have to make a reservation for your own unit several days or weeks in advance. There are risks associated with all hotel ownership as well, such as occupancy rates that might be based on general economic conditions or the potential destruction of the property.
Currently in Vietnam property developers have shifted their investment to this promising new real-estate segment. With the advantages of a long coast with a string of beautiful beaches, there is plenty of potential for further condotel development.
Nha Trang Plaza the pioneer
Known as the first condotel project in Vietnam, Nha Trang Plaza Hotel is a 40-storey building providing 240 luxurious five-star apartments of 126-280sqm in size. Located on the coconut-tree-lined Tran Phu street in one of the world’s most beautiful bays, Nha Trang Plaza blends in naturally with the environment offering guests a welcome break from the worries of the world in a truly stunning setting.
After Nha Trang Plaza Hotel, a vast number of condotel projects have been deployed. Olalani Resort & Condotel on Bac My An beach in Danang features three large villas, 88 apartments and 197 hotel rooms with high-end services including a spa, a mini-golf course, a casino and a water sports centre.
Ocean Vista Condotel is a five star project in Phan Thiet in the central province of Binh Thuan owned by Rang Dong Construction Corporation, which also features hotel rooms, villas and “condotel units” with luxury services including use of a golf course.
Investors of these condotel projects nurture great ambitions to bring their clients attractive investment and lifestyle opportunities. Timeshare possibilities also mean guests can exchange units with other timeshare owners from associated resorts around the world.
A burgeoning sector
In the forthcoming period, Song Da Thang Long JSC will launch the condotel Dragon-Pia project in Nha Trang. The project covers an area of nearly 22,000sqm in An Vien sea-tourist complex by Nha Trang Bay with a cultural centre, public services, shopping outlets, sports centre and an international standard marina. The project, which is scheduled to be completed by 2013, includes 240 luxury apartments with four-star services and facilities.
Nguyen Tri Dung, general director of Thang Long Song Da Joint Stock Co, said Nha Trang was an ideal place for building condo-hotels. Therefore, after carefully researching the market, the company decided to develop their property as a four-star condotel which is expected to bring more profit to investors, he said.
The key factor
The difference and advantage of condotel projects, in fact, is that it’s an investment with double profit. Customers can own an apartment in a luxury hotel managed by branded hotel management group in a famous tourist destination as well as affirming their “high-end status” when staying at the apartment and enjoying preferential treatment and hotel services.
However, the development of condotel in fact depends on policies to attract tourists and MICE by local authorities and industries. The success of condotel projects in Bali, Indonesia or Phuket, Thailand has been down to a comprehensive support system, including access to an international airport, positive promotion of tourism by local authorities, prestigious branding and reputable services. These elements attract high-end tourists and make them return to invest in property projects.
In Vietnam the concern is that investors only care about an increase in property price and a quick flip. Investors may be less concerned about the other elements, which create the value of the product and help develop the sector on a sound and sustainable basis.
Source: Timeout