VIETNAM: TIDE TURNING FOR SAIGON LUXURY FLOATING HOTEL

(4 Nov 1996) Eng/Viet/Nat

Luxury hotels in Saigon are facing a crisis as they face a battle to fill up their rooms.

The Saigon Floating Hotel made quite a splash when it moored in the heart of the capital, Saigon, in 1989.

As the city's first true luxury hotel, its arrival marked the beginning of a boom in big, high-priced hotels in Vietnam's largest city.

But seven years on the tide has turned -- not only for "the Floater," but for Saigon's luxury hotel business in general as managers struggle to entice guests to their reception desks.

Hotels in Saigon, the capital of Vietnam, were a booming business during the country's shift towards a market economy in the eighties.

And a symbol of this was the Saigon Floating Hotel.

Having floated in on a flood-tide of rising expectations it has recently closed its doors -- a victim of a glut of luxury hotels in the capital.

When it was towed up the Saigon River from Australia in 1989, "the Floater" attracted business clients because it guaranteed reliable plumbing, luxurious suites and did not suffer power cuts.

As investors flocked to Asia's newest frontier, other luxury hotels sprang up, while Saigon's older hotels upgraded to meet international standards.

In the climate of the time, the hotel market looked a safe bet to invest in.

For several boom years in the early nineties, the few top Saigon hotels stayed nearly full while charging prices over 200 U-S dollars a night.

But new hotels kept coming on-line, causing a glut in the market, leaving many hotels now struggling to survive.

SOUNDBITE: (English)
"Right now demand is slower than the actual supply; right now we have too many hotels and not enough customers."
SUPERCAPTION: Thomas Linke, General Manager, EPCO Hotel

Increasing numbers of tourists and business people visit the capital, each year, but the number of new hotel-rooms is fast outpacing visitor growth.

New hotels such as the Equatorial, who have yet to establish a regular clientele are among those who have been hardest hit.

SOUNDBITE: (English)
"My occupancy, when I arrived in April, was running at 22 per cent. Yet today, we're running now about 28, because I said earlier that I could not improve occupancy during the time there was visa restrictions. I do hope that by the end of the year we should be about 32, 34 percent."
SUPERCAPTION: Robert Wild, General Manager, Equatorial Hotel

Hotels faced further difficulties earlier this summer when during the Eighth Communist Party Conference, visitor numbers plummeted, and few visas were issued for tourists.

The venerable Continental Hotel, which is now state-run, was made famous by Graham Greene's "The Quiet American".

A favorite watering-hole for correspondents, spies and society matrons during Vietnam's wars with France and America, it is now also feeling the pinch.

SOUNDBITE: (Vietnamese)
"On some days, we were a hundred per cent full. But after '94 many other hotels came up, and our occupancy rates dropped accordingly."
SUPERCAPTION: Nguyen Thanh Lan, Sales and Marketing Manager, Continental Hotel

But not every top class hotel has been suffering.

The Saigon Omni hotel, one of the city's most expensive, appears to have found its niche in the market and has an occupancy rate of 85 percent this month.

SOUNDBITE: (English)
"It's a bit like your dentist or your hairdresser -- you found one you're happy with and you always seem to be going back to that. I think it's similar in the hotel business."
SUPERCAPTION: Udo Doring, General Manager, Saigon Omni Hotel




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