Vietnam waking up to bright new days
You don't have to be old enough to remember the Vietnam war to be familiar with China Beach. Robin Williams' classic film, Good Morning Vietnam, etched that particular stretch of South China Sea coastline indelibly in the minds of generations born long after the 1970s.
In the decades since those times, when United States troops landed on that long stretch of white sandy beach near Da Nang, China Beach has morphed into a popular holiday destination. Visitors from around the world visit to swim in its clear, warm waters, and surf and walk along kilometres of soft white sand. Only now, they can stay in style, being preened and pampered in a plethora of luxury resorts and spas.
The new-found fame of China Beach is welcomed by everyone, especially the local residents. It is one of the many pristine beaches for which the new Vietnam is now renowned. Its coastline runs along the Pacific Ocean from Hue, Da Nang and the old port city of Hoi An to Nha Trang, past Mui Ne - playground of Ho Chi Minh City's nouveau riche and holidaying expatriates - to the emerging area of Ke Ga. In the north, scenic Ha Long Bay beckons.
Yet, despite the attractions of its unspoiled coastline, resort development has not occurred en masse in Vietnam like it has in Thailand or Bali. Mauro Gasparotti, senior manager, hospitality consultancy, CB Richard Ellis (CBRE) Vietnam, believes a lack of confidence is at play. Local developers have invested gradually in recent years, but sales have been slow.
CBRE estimates that only 5 to 10 per cent of resort real estate projects in Vietnam have been sold to foreigners. At the luxury end, more than US$1.5 million, there have been limited transactions in recent times.
Last year, a number of new projects were launched, especially in south and central Vietnam. 'In some cases, sales have been moderate to slow, while in other cases extremely limited,' Gasparotti says.
He feels Vietnam's resort market has an image problem: the dearth of well-known hotel brands is telling, and buyers seem reluctant to put their trust - and their cash - in the hands of local developers with limited experience in resort/villa projects.
An unrealistic price point is another hurdle. As in Chinese culture, there is face at stake in Vietnam. If a resort is built to boost the developer's ego, he is unlikely to meet the market price. 'They believe sooner or later someone will buy, and they are prepared to wait,' he says.
Lack of clarity in regard to land ownership means that of the deals that are closed, very few are with foreigners. 'Overseas buyers don't yet see Vietnam as a secure investment destination. They still prefer Thailand or Bali,' Gasparotti says.
All that could change now that the big names are looking at the numbers. Tourist arrivals have doubled since 2000, and are continuing to grow by 10 per cent a year. CBRE research shows Vietnam, with an estimated 4.2 million arrivals in 2008, is still a young market compared with Thailand, which gets 14 million tourists, and Malaysia's 22 million.
In 2000, only three international hotel brands - Accor, Starwood and Marriot - managed operations in Vietnam. But the list of names now considering projects is impressive, Gasparotti says, citing Carlson, Hilton, Wyndham, Best Western, Pan Pacific and Langham, among others.
'Banyan Tree is already here - they have a stunning site in central north Vietnam,' he says. 'Hyatt Regency is in under construction, while I am sure Ritz Carlton, Four Seasons and Mandarin Oriental are discussing good opportunities.'
The next couple of years will be interesting, he says, for if any of those negotiations result in resort developments, the goal will be to increase overseas buyers. Developers may be of a mind that raising the bar on quality and luxury will be key. Marc Townsend, managing director, CBRE, cites a case study from his research on the second home market in Vietnam. The 40 villas in luxury resort the Nam Hai, Quang Nam, started at US$1.5 million - a price 'never before seen in the market'.
It was launched in the fourth quarter of 2006 and, by the same quarter of last year, was 95 per cent sold. Given that 50 per cent of the condominium units in projects launched between 2004 and 2009 are still available, it seems that patience has paid off.
CBRE has a range of beach resort units for sale in Vietnam, many along China Beach. David Scribner, branch manager, Da Nang City, says developers from all over the world are building internationally designed, quality resorts that are 'absolutely stunning'.
'China Beach stretches through Da Nang and Quang Nam provinces for over 30 kilometres and is delineated by the Son Tra Peninsula in the north and the World Heritage cultural centre of Hoi An ancient town in the south,' he says. 'Development activity includes over 30 prominent coastal resorts. The pioneer projects include a Colin Montgomerie designed 18-hole golf course, and the five-plus star Nam Hai Resort, both developed by Indochina Capital.
'The Da Nang Beach Resort, developed by VinaCapital, includes villas and condominiums and an 18-hole Greg Norman-designed golf course. The most prominent new developments include the Fusion Mia, Fusion Hoi An, Da Nang Beach Resort and the Hyatt Regency Resort and Spa. China Beach is developing into a world renowned resort destination,' he says.
