VIETNAM HOTEL MARKET 2026: FROM RECOVERY TO A NEW ERA OF GROWTH COMPETITION

This report shows that the Vietnamese hotel market is at a very notable stage: recovery has turned into substantive growth, but ahead lies significant pressure from new supply. In short: the market is getting stronger, but competition in the 2027–2029 period will be much more intense.

Overview: The market has moved beyond mere recovery

According to CoStar, the Vietnam hotel market currently has approximately 196,682 rooms in the tracking sample. In the last 12 months, occupancy reached 61.2%, ADR reached 118 USD, RevPAR reached 72 USD, with a total supply of about 70.5 million available rooms and a total demand of about 43.1 million rooms sold.

Specifically for YTD 2026, the picture is even more positive: occupancy reached 63.4%, ADR reached 122.88 USD, RevPAR reached 77.94 USD. Compared to the same period, occupancy increased by 9.7%, ADR increased by 12.4%, and RevPAR increased by 23.3%.

Notably, all three indicators increased: occupancy, room rates, and RevPAR. This shows that the market is not just recovering by lowering prices to attract guests, but has begun to regain the ability to raise prices.

Compared to 2019, the market has shown clear signs of recovery. In 2019, occupancy reached 61.1%, ADR was 109.89 USD, and RevPAR was 67.19 USD. YTD 2026 is currently higher in terms of occupancy, room rates, and RevPAR. However, it should be noted that this is a YTD comparison with a full year, so seasonal factors in the second half of the year still need to be monitored.

Demand is growing faster than supply – the most positive signal for the market

YTD 2026, total available room supply reached 35.23 million room nights, up 2.9%; while total demand for rooms sold reached 22.35 million room nights, up 12.9%.

This is the key point of the report.

When demand grows faster than supply, the market has the conditions to improve occupancy and rates. This is precisely why RevPAR increased by up to 23.3% in YTD 2026.

But the strategic question is: will this demand growth rate be sustained long enough to absorb the new supply?

The answer is uncertain, as Vietnam’s hotel pipeline remains very large.

Luxury and Upper Upscale segments are leading the growth

The Vietnamese hotel market is currently heavily weighted toward segments from upper-midscale and above.

* Luxury & Upper Upscale: 73,767 rooms, 12-month occupancy 63.8%, ADR 154 USD, RevPAR 98 USD.

* Upscale & Upper Midscale: 88,191 rooms, 12-month occupancy 60.8%, ADR 79 USD, RevPAR 48 USD.

* Midscale & Economy: 34,724 rooms, 12-month occupancy 43.2%, ADR 41 USD, RevPAR 18 USD.

YTD 2026, the Luxury & Upper Upscale group reached 66.0% occupancy, ADR 160.44 USD, and RevPAR 105.85 USD, up 24.5%. This group is recovering very well, reflecting the strength of luxury leisure guests, MICE, international visitors, golf, wellness, and resort destinations.

The Upscale & Upper Midscale group even saw a higher RevPAR increase, reaching 52.51 USD, up 27.0%. This group is benefiting from the recovery of business travelers, upper-midscale leisure guests, group tours, and international visitors with moderate budgets.

Conversely, Midscale & Economy is a weak point. YTD 2026, occupancy only reached 43.3%, down 9.5%; ADR reached 40.76 USD, up 11.6%, but RevPAR only increased by 1.0%. Notably, room demand for this segment in the YTD decreased by 8.2%.

This shows that the growth of Vietnamese hotels is currently uneven. The luxury and upper-midscale segments are leading, while the budget segment is under pressure from small hotels, serviced apartments, homestays, non-traditional accommodation, and price competition.

New supply is the biggest pressure

The report notes that Vietnam has 128 projects under construction, with a total of 38,208 rooms, equivalent to about 19.4% of existing supply. This is a very large pipeline.

In the last 12 months, 5,551 rooms have been put into operation. Specifically for YTD 2026, 2,918 rooms were delivered.

The structure of the supply under construction is also noteworthy. According to CoStar’s chart, the pipeline is mainly concentrated in the Upscale, Upper Upscale, and Luxury segments. In other words, the new supply is not primarily budget hotels, but upper-midscale and luxury products.

This is both a good signal and a warning.

Good because investors still believe in Vietnam’s tourism.

But a warning because if demand does not grow fast enough, the 4–5 star segment and luxury resorts could fall into price competition in the coming years.

Therefore, Vietnam’s strategy cannot just be about “building more rooms.” It must be about creating more demand: flight routes, MICE, events, wellness, golf, wedding tourism, the night economy, cuisine, shopping, and products that extend the length of stay.

The South has better operational efficiency, but Central & North Vietnam account for the majority of the supply

According to the report, the Vietnam Central & North region accounts for 69.2% of the total rooms in the tracking sample, with 136,077 rooms; while Vietnam South accounts for 30.8%, with 60,605 rooms.

However, in terms of operational efficiency, the South is currently better:

* Vietnam South: 12-month occupancy 64.2%, ADR 124.80 USD, RevPAR 80.10 USD, RevPAR growth 23.3%.

* Vietnam Central & North: 12-month occupancy 59.2%, ADR 112.68 USD, RevPAR 66.71 USD, RevPAR growth 18.8%.

This may reflect the role of Ho Chi Minh City and Southern markets with business, commercial, MICE, international guests, and more stable urban demand.

Meanwhile, Central and Northern Vietnam have a very large room scale, many resort destinations, and clearer seasonality. This is a region that needs special attention to creating year-round demand, especially during off-peak seasons.

Profits are recovering, but operating costs are rising sharply

The P&L report for the full-service hotels group in 2024 shows total revenue reached 65,920 USD/room, up 22.9%; GOP reached 25,824 USD/room, up 34.9%; EBITDA reached 22,822 USD/room, up 35.5%. GOP margin reached 39.2%, EBITDA reached 34.6%.

This is a very positive signal. Increased revenue has translated into better profits.

However, costs also increased sharply. Notably:

* Personnel costs account for 24.3% of total revenue.

* Sales & Marketing accounts for 6.7%, up 16.7%.

* Utilities account for 5.2%, up by 38.2%.

This point is very important for hotel owners. The coming period is not just about increasing revenue, but also about operational productivity.

If ADR increases but energy costs, personnel, OTA commissions, maintenance, and marketing increase faster, profits will be eroded.

Therefore, hotels need to focus on:

* energy saving;

* optimizing personnel staffing;

* increasing direct bookings;

* reducing OTA dependence;

* better revenue management;

* improving F&B efficiency;

* automating some operational stages;

* using data to optimize sales.

Hotel revenue does not only come from rooms

The revenue structure of full-service hotels in 2024 shows that room revenue accounts for 65.6%, but F&B also plays a very large role: food accounts for 23.5%, beverage 2.8%, and other F&B 2.8%. Total F&B contributes nearly 29.1% of revenue.

This is a very important point.

It reinforces the view that hotels should not just sell rooms. Especially for resorts, convention hotels, and luxury hotels, great value lies in:

* restaurants;

* banquets;

* MICE;

* wellness;

* spa;

* experiential activities;

* shopping;

* events;

* family services;

* community services.

This fits very well with the Travel – Shopping – Lifestyle model. When a hotel connects well with F&B, retail, wellness, events, and local products, the total value per guest will be much higher than just selling rooms.

The hotel M&A market still has low liquidity (many deals may go unannounced)

The report notes that YTD 2026 has only 1 transaction, with a total value of 35.7 million USD, averaging 302,894 USD/room. 2025 also had only 1 transaction, worth 3.5 million USD, averaging 18,080 USD/room.

This shows that the hotel M&A market in Vietnam still has quite low liquidity and individual transactions are not enough to represent the entire market.

Reasons may include:

* expectation gap between buyers and sellers;

* complex land legalities;

* assets needing restructuring;

* cost of capital;

* difficulty in valuing cash flows post-Covid;

* the difference between real estate value and hotel operational efficiency.

For investors, this indicates a need for caution. Hotels should not be valued solely by the number of rooms or location. One must look at EBITDA, cash flow, target market, repositioning potential, and additional investment costs.

Major strategic implications

Vietnam should not choose between “quantity” and “quality”

This report shows that supply is very large and continues to grow. With 38,208 rooms under construction, Vietnam still needs a large enough volume of guests to absorb the capacity.

But if only chasing quantity, hotels will easily fall into price competition.

Therefore, the right direction is:

Increase the volume of guests to absorb new supply, but increase the quality of guests to raise ADR, RevPAR, and profit.

This is what Thailand, Singapore, and many major destinations are doing: not abandoning quantity, but focusing on increasing the value per tourist.

MICE, wellness, golf, F&B, and events will be the key

An increase in high-end supply means a need for more high-spending guests.

Priority products should include:

* MICE;

* corporate retreats;

* incentives;

* golf;

* wellness;

* medical wellness;

* destination weddings;

* festivals;

* culinary tourism;

* sports tourism;

* cruises;

* family resorts;

* long-stays;

* luxury FIT.

These products not only fill rooms but also generate revenue from F&B, events, transportation, spa, shopping, and ancillary services.

The Midscale & Economy segment needs to be repositioned

This segment is currently the weakest. Low occupancy, decreasing demand, and RevPAR almost stagnant. Without repositioning, this group will be caught between two pressures:

* high-end guests moving up to the 4–5 star segment;

* price-sensitive guests switching to apartments, homestays, and short-term villa rentals.

Midscale hotels need to focus on:

* domestic business travelers;

* family groups;

* sports groups;

* students;

* long-stay guests;

* clean, safe, and reasonably priced products;

* simple but clear local experiences.

Investors need to be cautious with new projects

With a pipeline of nearly 20% of existing supply, new hotel projects must answer very clear questions:

* Where do guests come from?

* Which flight routes do they use?

* How many nights do they stay?

* How much do they spend?

* What is the differentiating product?

* Is there MICE?

* Is the F&B strong enough?

* Is there a surrounding ecosystem?

* Can it operate efficiently during the off-peak season?

The era of just having beautiful land, building a beautiful hotel, and waiting for guests to arrive is over.

The biggest challenge is creating demand outside the peak season

The monthly occupancy chart shows clear seasonality in the market. Some months in early 2026 were very positive, but to absorb the large supply, Vietnam must create stable year-round demand.

This requires event schedules, flight routes, MICE, festivals, sports, cuisine, wellness, and nightlife activities to be organized according to a long-term strategy.

Implications for hotel businesses

For hotels and resorts, this report provides some very clear messages.

First, do not just chase occupancy. With RevPAR growing well, it is necessary to protect ADR and focus on segments with the ability to pay.

Second, F&B and experiences must become the center of growth, as room revenue is no longer the only source of income.

Third, energy and personnel costs must be managed very tightly, as utilities and labor are items that can erode profits.

Fourth, direct booking and CRM need to be invested in more heavily to reduce dependence on OTAs and increase cross-selling capabilities.

Fifth, hotels need to participate in the destination ecosystem; they cannot stand alone. Guests stay at hotels but spend at restaurants, shopping centers, spas, tours, events, shopping, and local experiences. Whoever can connect that ecosystem will retain higher value.

Conclusion

The CoStar report dated July 25, 2026, shows that the Vietnamese hotel market is having a very positive year: occupancy, ADR, and RevPAR are all increasing; room demand is growing faster than supply; the luxury and upper-midscale segments are recovering strongly; and full-service hotel profits have improved significantly.

But at the same time, the report also issues an important warning: new supply remains very large, with more than 38,000 rooms under construction. If the market is not further expanded by increasing international visitors and developing MICE, events, wellness, golf, F&B, and experience ecosystems, the market could face price competition pressure in the coming years.

Therefore, the right strategy for Vietnamese hotels is not just to increase the number of rooms or the number of guests.

The right strategy is:

Create more reasons for guests to come, stay longer, spend more, and return more often.

This is also the time when the Vietnamese hotel industry needs to shift strongly from a room-selling mindset to an experience-ecosystem creation mindset, where accommodation is just the starting point of a larger value chain.