Savills Hotels, the hospitality arm of the LSE-listed international property consultancy, last week announced a merger with Saigon-based hotel and resort advisory firm Alternaty, aimed at strengthening the company’s hotel platform across the region. Financial terms of the deal were not disclosed, and Alternaty co-founders Mauro Gasparotti and Rudolf Hever are said to be joining Savills’ Vietnam office following the deal.
“The merger between the Savills Vietnam office and Alternaty is of significant strategic importance to Savills Hotels, Asia Pacific,” commented Chris Mancini, CEO of Savills Asia Pacific. “Alternaty’s strong foothold in Indochina enables the Savills team to engage with the growing number of investors In Southeast Asia actively seeking hotel and resort assets and will consolidate Savills already well-established investment brokerage platform.”
According to Vietnamese government statistics, international visitor arrivals to Vietnam rose to 10 million in 2016, a 4.3-fold increase compared to 2001, giving the country the fastest growing tourism sector in southeast Asia. Building resorts and hotels to exploit the country’s growing economy and scenic beaches has become a major target with the international investors who typically drive fee income for consultancies such as Savills.
Savills on the Hunt and Vietnam on the Up
Savills expansion of its hotel division in Vietnam comes after the company sold $2.1 billion in hospitality properties in Asia Pacific over the past two years. The acquisition allows Savills to further tap into Indochina’s emerging hospitality market, where Vietnam saw a 26 percent increase in foreign arrivals in 2016.
“The Vietnamese hotel industry is becoming more dynamic as more players enter this growing market, with the number of five-star hotel rooms in 2015 soaring by 37 percent year-on-year to reach 24,000,” Aternaty’s Hever said at the merger ceremony. “This growing trend in hotel development can be seen across all hotel segments, with an estimated 15 to 20 percent growth in total hotel supply in the short term.” Indeed, Savills has been expecting a hospitality boom in Vietnam for quite some time.
In November last year, US private equity giant Warburg Pincus, which has invested heavily in China’s hotel sector, formed a $300 million joint venture with Vietnamese real estate asset management firm VinaCapital aimed at developing luxury resorts in Vietnam and the rest of southeast Asia. And just last week, Japan’s Okura Hotel group signed a deal to open its fourth hotel in Vietnam, a 269-room five star Nikko Hotel property in the northern port city of Haiphong.