VietNamNet Bridge – The current economic difficulties and the sharp fall in
the number of guests have forced a lot of big bosses to sell hotels to gather
strength on their important projects.
After seven years of developing Holiday View Hotel, in April, Vinaconex ITC
offered to sell the hotel at the starting price of 70 billion dong only. This is
the only 3-star hotel in the well-known Cat Ba tourist site with the total area
of 8500 square meters, 120 bedrooms and convention rooms.
The documents provided by the hotel developer to potential investors show that
Holiday View has been operating well with the average occupancy rate of over 75
General Director of Vinaconex ITC Tran Ngoc Quang declined to say about the
reason behind the decision to sell Holiday View. However, investors seemed to be
keep indifferent to the investment opportunity.
Until June, Vinaconex ITC still had not wrapped up the deal because of the lack
of interest of investors. Meanwhile, Quang said Vinaconex ITC would change the
hotel sale plan.
Opinions from well informed circle said that Vinaconex ITC sells Holiday View in
order to get money for the Cat Ba Amatina project in its ambitious plan to turn
Cat Ba Amatina into a trade and ecotourism of international stature.
To date, the plan remains unimplemented because primary and secondary investors
both have not made promises to inject money in Cat Ba Amatina.
In 2011, Dai Duong Hotel and Service Joint Stock Company OCH made a series of
big transactions, including the one on buying 68.75 percent of stakes of THT
(which runs Rose Garden Ngoc Khanh Hotel), Starcity Suoi Mo Quang Ninh and 49.5
percent of stakes of Phuong Dong tourism (which is the owner of Starcity Phuong
Dong in Nghe An province), 51.42 percent of stakes of Tan Viet (Sunrise Hotel in
Nha Trang City).
The hotels targeted by OCH all are located on advantageous positions and they
have been operating well. OCH’s board of directors has affirmed that it would
continue to join into merger and acquisition deals in the hotel sector in 2012.
The biggest merger and acquisition deals wrapped up recently are the ones in the
high end hotel market segment. A lot of Vietnamese businessmen have become the
owners of five star hotels.
Sovico, for example, has become the owner of Furama Resort Da Nang after it
bought all the stakes held by the Bac My An Tourism Company, a joint venture of
the Da Nang Tourism and Hong Kong’s Lai Sun Group.
BRG has bought all the stakes from German and Austrian owners to become the
owner of Hilton Hanoi. Most recently, Hanel has become the only owner of Daewoo
Hotel after it bought 70 percent of the capital contribution from Daewoo.
However, it’s very difficult now to find the buyers for the hotels with high
The reports by market survey firms all showed that the majority of hotel buyers
were domestic investors. According to Gregory Crovo, a lawyer from Kelvin Chia
Partnership, involved parties in the deals always have to follow complicated and
sometimes unclear procedures.
Any transactions with the presence of foreign companies or individuals must be
approved by state management agencies. As such, the success of the deals still
much depends on whether the deals are approved.
Domestic analysts have also said that hotel transfer deals always relate to the
regulations on land use right. Therefore, it is always a very hard work to
follow all necessary procedures to terminate business deals.