Vietnam is promising market for foreign hotel management groups Hoteliers had a difficult year in 2014 but the demand for hotel managers remains very high in Vietnam. The president of a HCM City-based large real estate group, for example, said she was looking for a hotel manager for her hotel in Ba Ria – Vung Tau province. “We are considering some famous foreign management groups,” she said. “We will sign contracts with those who offer the most reasonable service fees.” The hotel developer said that travel firms and hoteliers have had difficulties in recent years due to the economic downturn, but hotel and resort management fees have been increasing steadily. She noted that about 10 years ago, foreign hotel management groups only eyed luxury 4-5-star hotels, but now they seek 3-star hotels as well. “Hotel managers usually have the upper hand when negotiating with us,” she said. “As soon as we sign contracts, we will have to pay a deposit of $200,000. Therefore, we will have to think carefully before making decision.” An analyst, who said he once read 37 important agreements on hotel management in South East Asia signed in 2009-2014 by Jones Lang LaSalle, a big international real estate service provider, noted that the provisions were of great advantage to hotel managers. The hotel management contracts are usually valid for 15-19 years on average. Meanwhile, hotel owners have to pay many kinds of fees, from basic fees to royalty and technique service fees. If hotel developers transfer their hotels to new owners, hotel managers still can continue their work as agreed in the contracts. If the new owners want to terminate the contracts, they will have to compensate for the contract break. However, an analyst noted though hotel managers still hold great advantages, they = no longer would be able to impose their rules on the market, because many rivals have appeared. The analyst said that more and more websites allowing travelers to book hotel rooms online have been set up, which scramble with hotel management groups for clients. Vietnam’s fertile land Vietnam, with 16,000 accommodation establishments and many hotel projects under construction, is a fertile land for foreign hotel management groups. However, while there are more and more Vietnamese-owned hotels, the number of Vietnamese hotel management brands remains modest. Most high-end hotels, both foreign-owned and Vietnamese owned, are managed by foreign groups. Tao Van Nghe, chair of the HCM City Hotel Association, confirmed that the hotel management market is controlled by foreign groups. However, Nghe thinks the situation will change in several years. A new Vietnamese face has appeared in the market - Odyssea Hospitality JSC, owned by Que Huong Liberty JSC. TBKTSG