Nha Trang Hotel & Resort Development Market Overview

Nha Trang Hotel & Resort Development Market Overview

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Rudolf Hever, Executive Director

Nha Trang Location Map

Nha Trang City was chosen as this edition’s feature location because the City’s hotel market is poised to enter into a new era as both the supply of and demand for accommodation is about to make a significant leap forward. In terms of demand, November marked the start of the high season for Russian tourists and with a major tour operator having tentatively entered the market last year, it is about to ramp up tourist arrivals this coming season via charter flights in a big way. On the other hand a wave of new supply is about to hit the market, so it will be interesting to see which side, demand or supply will tip the scales over the coming year.


Nha Trang City is located within the South Central Region of Vietnam, a strip of provinces that runs along the coast of Vietnam and includes other resort locations such as Da Nang and Mui Ne. The capital city of Khanh Hoa Province, Nha Trang is 448 km north of HCMC and 1,280 km south of Hanoi. The latest official population estimate of Nha Trang is 361,454 (2009) and its area is 251 km2 with a 17 km coastline. Nha Trang Bay has 19 islands including the largest island, Hon Tre, with 3,250 ha and home to Vinpearl Resort (Nha Trang’s largest resort with 485 rooms) and Vinpearl Luxury which opened in Q2 of 2011. The island is connect¬ed with the mainland by a cable car system that can conveniently ferry tourists between the island and the mainland.


Most arrivals to Nha Trang are by a short flight from HCMC or Hanoi. Cam Ranh International Airport was upgraded with a new terminal in 2007 and remains one of the newest and best airports in Vietnam with ample capacity to meet current and expected future demand. The airport is 28 km south of Nha Trang City which translates into a 40 minute taxi ride from the airport at a cost of approximately US$20 for the one way journey. Unfortunately, as is all too common at most airports in Vietnam, there is an army of unscrupulous taxi operators eagerly awaiting to scam vulnerable tourists.

In total, there are approximately 78 scheduled flights per week to Nha Trang which translates to a maximum capacity of 12,600 passengers per week or 655,200 per annum. This does not include charter flights, which over the last year has rapidly grown to become a significant source of international arrivals, especially from Russia with the arrival of the tour operator Pegas Touristik.

Nha Trang also welcomes tourist arriving from cruise ships. In 2011, Nha Trang welcomed 35 cruise ships with more than 35,000 tourist arrivals, including the Queen Mary II – one of the world’s largest cruise ships.


Of the 250 accommodation establishments in Nha Trang supplying approximately 5,000 rooms in total, 25 properties are rated 3 – 5 stars by the Vietnam National Administration of Tourism (VNAT) comprising of five properties that are rated 5-star, four properties that are rated 4-star and the remaining properties are rated 3-stars. As is usually the case in Vietnam, a number of properties exist which are officially unrated, yet they would certainly be of an international 4 or 5 star standard. These tend to be the new properties which are yet to reach full scale operational status or due to their boutique nature do not conform to the rigid star rating criteria.

Figure 1. Largest Hotels in Nha Trang

Hotesl in Nha Trang


What sets Nha Trang apart is the availability of a broad range of hotel management formats and brands with the ability to satisfy a diverse mix of travelers, catering for a wide range of budgets and accommodation needs. These include local guesthouses, modern city hotels, beachfront resorts, island destinations as well as remote hideaway properties. For this reason, Nha Trang is chosen by the local Vietnamese and expat market (e.g. Mia Resort, Novotel, Sheraton, Best Western Hon Tam Island, Sunrise Beach Hotel, Vinpearl Luxury), as well as Western backpackers (e.g. local guesthouses and family run hotels), Russians (e.g. Vinpearl Island Resort, Diamond Bay Resort), as well as Europeans, Koreans and Japanese seeking peaceful hideaways (e.g. An Lam Ninh Van Bay, Six Senses Ninh Van Bay, Ana Mandara).

Since the Novotel opened in the fourth quarter of 2008, the number and diversity of rooms supplied has increased dramatically with the opening of the Sheraton (Q4/2010, 284 hotel keys), Michelia (Q1/2011, 201 hotel keys), Vinpearl Luxury (Q2/2011, 84 resort keys), An Lam (Q2/2011, 35 resort keys) and most recently Mia (Q3/2011, 50 resort keys). This pace of increase in supply is set to continue with several large scale properties due to come on line in the near future.

Table 1. Selected Future Hotel Supply

Future Hotel Supply Nha Trang



Total tourist arrivals to Khanh Hoa Province in 2011 was a record 2.18 million, up by a significant 18.5% compared to the 1.84 million visitors received in 2010. Domestic arrivals accounted for 80% (1.74 million arrivals) of the total and increased by 20% compared to 2010 while international arrivals accounted for 20% (440,000 arrivals) and increased by only 13.7% compared to the previous year.

In the first 9 months of 2012, total arrivals were 1.75 million, 5.7% higher compared to the same period in 2011 however the 27.4% growth of international arrivals comfortably outpaced the 0.9% growth in domestic arrivals. In terms of absolute numbers, in the first 9 months of 2012, domestic arrivals to Khanh Hoa Province increased by 11,500 to 1.36 million and international arrivals increased by 82,500 to 383,500 arrivals compared to the same period in 2011.

Figure 2. Tourist Arrivals in Khanh Hoa Province (,000)

Tourst Arrivals Khanh Hoa ProvinceNhat Minh International Travel Company in 2010 partnered with Russia’s Vladivostok International Airport, operating two flights per month from the Russian city of Khabarovsk to the Cam Ranh International Airport in late 2010. The truly game changing event was in late 2011 when the mammoth Pegas Touristik partnered with Anh Duong Company to offer 1 charter flight per day. The partnership has already sent well over 50,000 Russian tourists to Nha Trang from 9 cities in Eastern Europe and has recently boosted capacity to 3 charter flights per day as they expect to double arrivals this coming season. No doubt the unrest in the Middle East played a key role in channelling a new wave of Russian tourists towards Asia.

The average length of stay in Nha Trang is only several days because the usual package tour to Vietnam tends to include a visit to Hanoi and Ho Chi Minh City packaged with a short beach stay in between either in Nha Trang or Da Nang.

The average length of stay in the city hotels tends to be 3 days and 2 nights for Vietnamese guests, who tend to come for the weekend, while international guests, such as Russians tend to come in groups and stay up to a week in these properties.

russians tourist vietnam nha trang

The resorts have a longer average length of stay, in the range of 4 to 6 nights, however this varies significantly depending on the nationality of the guest. Vietnamese guests who stay in the resorts tend to book for 2 – 4 nights including the weekend. Europeans tend to stay 1 – 2 weeks with some up to 4 weeks, especially from Germany. The aver¬age length of stay of visitors from Australia and the US is 4 – 5 days. Meanwhile, resort guests from Russia stay 4 – 7 nights on aver¬age as the tours from Russia tend to be 12 days and include a resort stay plus short tours of other locations in Vietnam. Japanese visitors are a significant source of guests for Ana Mandara Nha Trang and Six Senses Ninh Van Bay as both of these resorts have a native Japanese guest relations officer and their average length of stay tends to be relatively short at just 2 – 3 nights.


Nha Trang weather Rainfall TemperatureNha Trang’s major strength as a resort destination is its ideal climate with 10 months of the year being conducive for tourists while only 2 months of the year are characterised by heavy rain, storms and flooding. These two months, October and November, alone account for almost 80% of the annual rainfall.

Nha Trang has a tropical climate with two seasons and an average annual temperature of 27 degrees celcius. The dry season lasts from January to August with only 27mm of rainfall per month. The average annual temperature during the local summer and high season months of May to August is 29 degrees. Meanwhile the monsoon season, which coincides with the local winter, is from September to December, with the wettest months being October and November with 250mm of rainfall per month on average.

The diversity of tourist arrivals to Nha Trang means that despite the weather in Nha Trang, there are arrivals at all times of the year whatever the season whether that be Europeans, Americans, Russian, Asians or local Vietnamese. In Vietnam, the summer lasts from May to August, which coincides with the school holidays, hence it is the peak season for Vietnamese tourists. Europeans tend to come during their winter months from November to February, as do the Russians and Americans.

Hotel Performance

boutique hotels nha trangThe abundance of small sized family run mini hotels at the budget end of the spectrum means that Nha Trang has a fiercely competitive hotel market, making it a difficult task for hoteliers to bring profits. These hotels and guesthouses with zero to 3 stars offer value for money by providing a decent product at a very low price point and they make it extremely difficult for the upscale segment to justify their room rate premium. With room rates in the range of $20 – $40 per night, these hotels have been in business for a long time, so they know their customer needs and they know how to meet these needs at minimum cost.

The Novotel, having entered the market back in 2008 and being the only international 4 star product at this time, has so far succeeded in justifying its price premium over the local products and is favored by both local and international guests. However it is no easy task to cover the cost of services and amenities provided and to push rates much above/ towards $100 per night. At the top end of the range for city hotels which is currently dominated by Sheraton, the task of justifying room rates to cover the costs of providing full services and multiple F&B outlets is even more difficult. It will certainly be interesting to see how room rates and performances are affected with the opening of Crowne Plaza and Best Western Premier.

In terms of average room rates the internationally managed and high end boutique resorts are achieving ARR’s in the range of $250 – $300 while the ARR of the internationally managed upscale city hotels are in the range of $90 – $110.

Operating Cost

Nha Trang hoteliers enjoy a relatively long trading history compared to other resort destinations in Vietnam as Nha Trang was among the first to develop its tourism sector. This is a considerable advantage in terms of budgeting for and controlling hotel operating costs. Also, staff availability and level of skill as well as experience is above average compared to other locations however the steady increase in rooms supply means there is always fierce competition for trained and skilled labour which puts an upward pressure on labour costs. Labour costs also tend to have a strong correlation with the number of expatriates among the hotel staff.

That being said, the hideaway style resorts in remote locations, especially those that can only be accessed by boat, such as Six Senses, An Lam and Hon Tam have a much more challenging task of controlling costs, as they have a significant added cost in terms of fuel for the power generators and shuttle boats. This has encouraged the use of alternative energy solutions such as using solar power for the water heating. Another extra cost for these resorts is the on-site staff accommodation in some cases.

Land Price

Nha Trang land priceWhen it comes to development sites, Nha Trang again offers a wide range of options from large scale absolute beachfront sites suitable for mixed-use resorts with residential components to smaller sized city hotel development sites. The current master plan does not allow for further resort developments on the main strip of beachfront adjacent to the city centre and hotel development sites within the CBD are limited.

However, there is an ample supply of beachfront sites just north of and south of Nha Trang City. Cam Ranh Bay to the south has approximately 30 sites, all of them already controlled by investors and developers, but very few having received their construction license and most of them in need of investors and joint venture partners. There are still more sites available in remote hideaway locations, as well as on nearby islands.

The asking price of land can be as high as US$800 – US$1,500 psm for the smaller development sites along the area surrounding the main street Tran Phu (Red Zone) and as low as US$300 – US$500 psm for less central locations on the city fringe. Sites in Cam Ranh Bay (Green Zone) are suitable for mixed-use resorts with residential components and their asking price ranges from US$30 psm and up to US$60 psm depending on the location, approvals and tenure.

Final Thoughts

It is no wonder why Nha Trang remains one of the main tourist destinations in Vietnam. Above all, it is its diversity that sets it above its peers. It is the diversity of its landscapes, experiences and types of accommodation offered as well as the diversity of budgets, nationalities and tastes that it can cater for. This diversity is what gives the Nha Trang hotel market its depth and at the same time will ensure that it will continue to always remain at the forefront of the tourism market in Vietnam.


Download the Nha Trang Hotel Market Overview pdf.

Images: Rudolf Hever, Alternaty


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