Hotel Investment in Vietnam: A Growing Landscape
According to a recent report released on November 21 by global real estate services company JLL and corporate law firm DN Legal, Vietnam’s hotel investment scene is flourishing. The report highlights that annual returns ranging from 6% to 7.5% are creating a robust environment for hotel investment, projecting total inflows to reach approximately $125 million by the end of 2025. These figures underscore Vietnam’s consolidation as Southeast Asia’s fastest-growing tourism market, having welcomed 13.9 million international visitors in the first eight months of the year—a staggering increase of 21.7% compared to the previous year.
Positive Market Dynamics
Karan Khanijou, Senior Vice President of Asia Hotel & Hospitality Investment at JLL, emphasizes that major deals are likely to continue focusing on centrally located hotels and upscale resort projects, fueled by both domestic and international investors. Reflecting the strong market fundamentals and an active transaction pipeline, JLL has revised its 2025 transaction volume projection upward—from $100 million to $125 million. This revision incorporates pending deals and improved investor confidence across the market.
Legal Reforms and Visitor Influx
The momentum in Vietnam’s hotel sector can largely be attributed to pivotal new legal reforms. Notably, a policy extending visa-free stays for selected nationalities from one month to three months, effective since August 2023, is allowing for unlimited entries. This change has played a crucial role in attracting tourists, with China remaining the largest source market, contributing over 3.5 million visitors, marking a 44.3% increase on the previous year. South Korea followed with 2.9 million arrivals, while Taiwan and India saw significant growth, particularly with India posting over 42% growth as well.
Increasing Hotel Supply
Vietnam’s hotel supply is steadily increasing, achieving a compound annual growth rate of 7% through 2024. As of July, the market had recorded over 185,000 rooms across more than 1,500 accommodation facilities, with the upscale-to-luxury segment making up a substantial 57% of overall supply. The key markets—Ho Chi Minh City, Hanoi, and Da Nang—are driving this growth, together accounting for 39% of national hotel supply. Future pipelines point to strategic developments in Hanoi, Da Nang, and Hoi An, with the mid-scale segment projected to supply 33% of upcoming offerings through 2028.
Performance Metrics
According to recent data, Vietnam’s hotels have shown remarkable performance, posting a 20% year-on-year growth due to rising occupancy rates. The revenue per available room (RevPAR) has experienced average annual growth of 21% from 2020 to 2024, indicating a promising trajectory. Ho Chi Minh City, in particular, has not only surpassed its 2019 performance levels but has also maintained strong momentum into 2025. Alongside Hanoi, these cities significantly outperform the national average by attracting a diverse mix of business, leisure, and event travelers.
Competitive Yields and Investment Opportunities
Investment in Vietnam’s hotel sector is becoming increasingly attractive, with recent transactions yielding returns between 6% to 7.5%, approaching the desired target range of 8% to 9%. Comprehensive legal reforms are vital to creating a favorable investment environment. The 2024 Land Law, for example, has enhanced flexibility in land price adjustments, improving transparency and efficiency in land valuation processes.
Additionally, since July, the government has simplified construction permit requirements for projects with approved plans, significantly reducing procedural barriers and project timelines. This administrative streamlining is further supported by major governmental restructuring, which aims to improve transport networks, service standards, and accommodation infrastructure.
Embracing Data Protection and Secure Tourism
Starting January 2026, the Personal Data Protection Law will implement stringent compliance measures in line with international standards for customer and employee information. This development is expected to enhance credibility within the industry while providing Vietnamese hotels with a competitive edge.
Expanding Air Connectivity
The Vietnamese government is actively promoting initiatives to position the country as a premier tourism destination in Southeast Asia. This includes boosting international air connectivity and improving infrastructure. Major airlines are expanding their networks to additional Vietnamese destinations, with Emirates enhancing accessibility for international travelers. New entrants like Sun Phu Quoc Airlines are now operational, aiming to connect domestic and international routes through Phu Quoc.
Sustained Growth Cycle
Through a blend of flexible visa policies, extensive legal reforms, and effective administrative restructuring, Vietnam’s hotel sector is entering a sustainable growth cycle. Khanijou expresses optimism for 2026, predicting ongoing deal activity contingent on high-quality hotel inventory entering the market. However, he notes that the challenge remains in identifying assets that meet institutional investment criteria, as the availability of such properties is still relatively limited.
By understanding these dynamics, investors and stakeholders can navigate Vietnam’s vibrant hotel investment landscape with greater confidence and insight.