Media Contact

Ha Dinh

Senior Manager, Head of Marcom, Marketing & Communications, Vietnam

 Phone

 Email
Da Nang tourism has witnessed a strong bounce back of both international and
domestic travel. For the first half of 2022, the city received a total of 1.33 million tourist
arrivals served by established accommodations, up by 26% y-o-y; in which, 1.27 million
domestic travelers were recorded, up by 39.5% y-o-y while there were 57,800 foreign
visitors, down by 34.3% y-o-y. International tourists has significantly picked up since
Q1/2022 as Da Nang fully reopened aviation and tourism. MICE guest number recorded
within 21/02 – 21/05 jumping eight-fold compared to the same previous last year.

Such vibrant tourism promoted service businesses. In the first half of 2022, revenue
from accommodation, food services, travel and tourism support activities hit about VND
8,329 billion, increased by 13.2% y-o-y. Thanks to high-spending travelers such as
MICE guests, family groups staying at 3-star hotel and above, together with foreign
tourists, the city tourism revenue has made great breakthrough.

Da Nang 4-5 Star Hotel Market

In the first half of 2022, there were two new properties, Radisson Hotel Da Nang (182
keys) and Mikazuki Da Nang (294 keys). As accumulated, Da Nang 4 – 5 star hotel
market has total of 81 projects with 15,343 keys. In which, the number of 5-star and 4-
star room count accounted for 38% and 62%, respectively.

Due to the outbreak of Covid-19, lodging business has been adversely affected. ADR
and occupancy significantly declined by 40% and 53 ppts in the period of 2020 – 2021,
respectively. Moving to 2022, as Vietnam fully reopened its borders, market
performance of upscale hotel gradually got improved. For the first six months of 2022, in
Da Nang, ADR averaged at US$70/room/night, up 11% y-o-y and occupancy rate was
reported at 26.3%, up by 15 ppts y-o-y. ADR has quickly regained its growth
momentum, reaching over two-thirds of the pre-pandemic level while occupancy
registered 42% of what has been seen in 2019.

For the rest of 2022, Da Nang expects to welcome 10 new properties with 2,442 keys,
lifting the total supply to 91 properties with nearly 18,000 keys. New launches gives a
stimulus to the market; however, the overall performance could not fully recovered as
being under pressure of unpredictable Covid-19 outbreak on global scale. For 2022,
ADR is forecast to rise by 30% y-o-y, standing at US$79/room/night and occupancy
would be reported at 53,2%, up by 43,5 ppts y-o-y.
Da Nang remains to be one of the most appealing holiday destination in Vietnam. In the
period of 2022F – 2024F, many prestigious hoteliers continue to increase their visibility
in Da Nang, with more brand names to be introduced such as Mandarin Oriental, JW
Marriott, M Gallery, Le Méridien, Wink Hotels, lyf by The Ascott Limited, etc. In 2024, Da
Nang 4 – 5 star hotel market is projected to have 99 properties with over 21,000 keys in
total. The greater number of branded projects enhance the upscale hotel market
performance. Following that, ADR is expected to increase at CAGR 2021 – 2024F of
25%/year, possibly reaching US%119/room/night in 2024. Occupancy will rebound to
pre-pandemic level of 63%.

Da Nang Vacation Property Market

New supply in Da Nang vacation property market remains limited. In the first half of
2022, there was only one newly-launched condotel project which is Felicia Da Nang (70
units launched in the first phase). As of now, the city has total of 7,384 condotel units
(from 16 projects) and 2,522 vacation villas (from 13 projects).

For the past three years, Da Nang condotel market had few projects opened for sales.
Hence, the primary price hovered at CAGR 2019 – 2021 of 4%/year and currently stood
at US$2,431 psm NSA. The accumulated sold rate was reported at nearly 85%. In the
same review period, vacation villa segment recorded no new supply. Primary price
remained unchanged and averaged at US$2,724 psm GFA. The accumulated supply
reached about 91%. Limited new launches, together with cautious approach by majority
investors, are main reasons why sales activities are still quiet even when tourism has
bounced back.

Since August 2021, Da Nang has stopped licensing new condotel projects to address
the mismatch of supply and demand after booming for quite a long time. A majority of
new supply only came from previously-approved projects or the remaining parts of
previously-launched ones. From 2022F – 2024F, Da Nang is expected to have an extra
of 1,800 condotel units and the primary price would increase at CAGR 2021 – 2024F of
3%/year. Condotel has long been developed and is entering stabilized phase. The lack
of proper legal framework remains a major barrier for the vacation property market to
regain momentum. This explains why given such slowdown in the new supply, market-
wide primary price would hardly experience any fluctuations and keep stable instead.
The accumulated sold rate could register 91% within the next 3 years.

New launches for vacation villa segment is also getting scarce. Well-branded projects
are key contributors to future supply and will be sold at quite high price level. In the next
3 years, primary sales is forecast to rise at CAGR 2022F – 2024F of 5%/year.

Da Nang Condominium Market

For the first half of 2022, no newly-launched projects are recorded. As of now, Da Nang
has the total of 7,378 condominium units from 20 projects.

In the period of 2020 – 2021, even during the pandemic time, several projects were
introduced. Market-wide primary price averaged at US$1,475 psm and grew at CAGR
2019 – 2021 of 8%/year. Primary price currently stood at US$2,100, US$1,300 and
US650 psm for high-end, mid-end and affordable segment, respectively. High-end
products rose at the highest, with CAGR 2019 – 2021 of 6%/year, mainly thanks to two
projects, The 6Nature and The Sang Residence sold at relatively higher than the price
range of similar-grading ones in Da Nang. Affordable segment witnessed almost no
fluctuations. Meanwhile, primary price of mid-end segment slightly went down as FPT
Plaza 2 offered 700 units for sales at quite lower than the same-grading peers. The sold
rate accumulated at 92%. For the past three years, thanks to such steadily increasing
number of newly-launched projects and units, there was no oversupply situation, which
in turn supported healthy absorption rate.

In upcoming time, Da Nang condominium market is expected to get more thriving, with
10 new projects to be launched, providing an extra of 5,600 units. This marks the CAGR
2021 – 2024F of 22%/year. Luxury apartments will take the lead, promoting the market-
wide primary price growing at CAGR 2021 – 2024 at 12%/year. The condominium
sector would be soon reshaped as riverside apartment projects have gained in
popularity. Those iconic buildings play vital role in delivering high-class living standards.

Da Nang Landed Property Market

In the first six months of 2022, the city had Sunneva Island firstly launched in Q2 2022,
with 106 units including villas and townhouses. The remaining phase from Regal
Pavillion contributed 34 shophouses to the whole supply. As of now, Da Nang landed
property market has total of 1,624 units (villas, townhouses, shophouses).

In the period of 2019 – 2021, there were no new supply of villas and townhouses;
hence, market-wide primary price kept nearly unchanged, reported at US$3,300 and
3,450 psm land. New launches from Sunneva Island in the first half of this year pushed
up price range to US$3,780 for villas and US$3,900 psm land for townhouses. Regal
Pavillion was firstly introduced last year, sold at over US$6,500 psm land, thus leading
to two-fold increase in market-wide primary price for shophouse segment during the
period of 2019 – 2021.

On the back of steady supply by years, the accumulated sold rate stood at 92%. New
launches in the early stage of this year also attracted a huge number of investors,
thanks to high-quality products and the developers’ reputation.

In upcoming time, few projects are expected to be opened but there will be a diversity of
product types, providing the public with more options and thereby promoting sales
activities. Da Nang has focused on building up riverside urban areas with extensive
facilities. Majority future supply of landed property lie in prime location and are well-
planned; hence, those are projected to be sold at quite high price. Following that,
market-wide price significantly gets improved and rise at CAGR 2021 – 2024F of
9%/year.

Da Nang Property Market Outlook

The decentralized trend has emerged in Da Nang, similar to what has been observed in
Hanoi and Ho Chi Minh City. Currently, a majority of existing projects concentrated in
CBD areas or scattered along My Khe beach. In the next phase, the city will expand
development space towards Northwest and Southeast areas, especially promoting the
establishment of satellite urban areas. Northwest region is home to many
industrial/high-tech parks, and is also the intersection of key traffic projects, thus owning
convenient linkage to the nearby locations and the city center. Many developers have
flocked there with the intention to build up township developments and hospitality
complexes to catch the upcoming wave of high-quality residents, especially the
expats/foreign professionals working in IPs. Southeast region is well-connected to the
neighboring province, Quang Nam, which could easily form an urban - coastal strip.
Therefore, this region is oriented to develop eco-tourism urban areas, especially the
location along the Co Co River where having great advantage of the landscape. The
existing limitation of Northwest and Southeast regions is the lack of supporting facilities
as well as the need for more infrastructure improvements (Co Co River dredging
project) to optimize the development potential.

Da Nang will soon witness the blooming of riverside apartments and urban areas
developments. These are iconic projects, well-invested in terms of design and product
quality. This trend indicates that Da Nang has been gradually shifting its development
direction towards a more sustainable direction, focusing on luxury apartments and high-
class urban areas to enhance the positioning of Da Nang property market. In reality,
riverside properties have been gaining traction; hence, the launching of these new
projects will boost up sales activities and at the same time help Da Nang quicky regain
its growth momentum after a after a relatively quiet period.

“Staycation” or “workstation” holiday continue to be on the rise, even during the post-
Covid-19 time. Da Nang market is forecast to welcome multiple new projects to stay
tuned with this new trend. Such diversification regarding vacation product types helps
this city to lure more guests to come and stay. A number of new hotel brands, with a
youthful and modern style, will soon enter Da Nang, targeting Millennials and Gen Z,
who are keen on mobility cultures and flexibility. These new projects will pay more
attention to creating private space for guests to stay, while still ensuring such well-
designed common living spaces and co-working spaces for them for efficient
workstation mode.

According to Ms. Duong Thuy Dung, Executive Director, CBRE Vietnam: "After the
pandemic, Da Nang property market has made speedy progress, gradually
strengthening investment attraction to this city. Given the smarter and more sustainable
development orientation, in the next phase, Da Nang will pay more attention to
promoting high-class residential products, which goes in parallel with great efforts to
fostering the tourism and vacation property sector. This helps improve the provincial
competitiveness while boosting market resilience in the longer run.”

Notes on CBRE condominium ranking criteria:

1. Luxury: projects that have primary prices over US$3,500 psm
2. High-end: projects that have primary prices from US$1,500 psm to US$3,500 psm
3. Mid-end: projects that have primary prices from US$800 psm to US$1,500 psm
4. Affordable: projects that have primary prices under US$800 psm
(Selling price excludes VAT)