Airbnb Growth Putting Pressure On Vietnam’s Hotels

The increase of travel traffic into Vietnam which has led to the growth of Airbnb in creating momentum for the country’s accommodation industry. This, in turn has lead to growth in the aforementioned industry, but has also put pressure to meet the increased demand for. In particular, three-star hotels are the most under strain, due to the fact that they share the same market that accommodation-sharing service industry.

The traditional trappings of most accommodation industry buildings such as hotels, or a classic boutique hotel in Saigon and the like are slowly losing their appeal to the younger visitors of Vietnam as accommodation-sharing services like Airbnb grow in popularity, resulting in competition, especially since most accommodation-sharing services offer lower prices.

According to a representative of Luxstay, another accommodation-sharing service like Airbnb, people are now looking to stay in local homes, with the increased travel traffic into the country creating the momentum for the accommodation-sharing industry/

Data on the country’s tourism shows that Vietnam is expected to receive approximately 12.8M foreign tourists, maybe more for 2017, which is a marked increase of 28% from 2016, which already managed to make it past the 10M benchmark even before the second half of December; with official data from Vietnam’s General Statistics Office saying that Vietnam had already welcome 11.6M foreign tourists into the country from January and November, a marked increase from last year’s figures by 28%.

In relation to that, Airbnb has experience explosive growth since its launch in Vietnam back in 2015. As of 2017, there are 6,700 active Airbnb listings in Vietnam, with the many boutique hotel in Saigon sitting alongside 4,000 of these listings.

According to the Grant Thornton consultancy, the driving force behind the embrace of accommodation-sharing services in Vietnam is due to how visitors now seek to experience something different, but affordable.

A research report from Nielsen Holding shows that 76% of their sample of people from Vietnam liked shared services, which is a 10% increase from the global mark of 66%.

Another key factor in the emergence of accommodation-sharing is the strong entrepreneurial spirit present in the Vietnamese people, with many taking advantage of the boom in order to acquire a secondary source of income.