Sunny skies over Vientiane's Hotels

The forecast for Vientiane’s hotel looks sunny, but bring an umbrella,” Horwath HTL’s Shyn Yee Ho-Strangas told the 5th Lanith Quarterly Symposium at Vientiane’s Settha Palace last Friday.

Lanith (Lao National Institute of Tourism and Hospitality) chief technical advisor Peter Semone opened the event “Hotel and Tourism Development in Vientiane: Current Trends and Future Prospects” warning, “Vientiane is making a big mistake in its haphazard hotel development and assuming customers will come. They need a plan.”

Singapore-based, Horwath HTL assistant director, marketing and special projects for Asia Pacific Ho-Strangas, then presented, “ASEAN Hotel Sector: Key Market Trends”.

She noted Vientiane hotels’ average occupancy rate climbed 2% to 65% in 2010, placing the Lao capital in the middle of the ASEAN pack. She expects the rate to rise 3% in 2011.

Average daily rates for Vientiane’s upper-tier hotels remained a constant US$62 last year, but Mrs Ho-Strangas predicts this number will jump US$10 in 2011 as “new hotels enter the market with higher ADRs.” She said this places Vientiane’s ADR near Jakarta’s USD70.

She stressed ADR growth is being stifled by a market dominated by corporate clients, MICE, and leisure groups (87%), which sign multiple contracts with hotels, and do not fulfil them.

“You should charge them more next time. Do not let corporations and tour operators decide the price. Hotels must work together, agree on a way forward, and enforce it.”

International aid organizations with fixed per diems also keep rates low, but Mrs Ho-Strangas remained firm. “Make them pay the price you want…They’ll have to raise their per diems.”

Other issues affecting Vientiane’s hotels are their low-cost perception, and the lack of quality products. “There are no real high-end hotels in Vientiane,” she said.

Mrs Ho-Strangas emphasised due diligence in hotel development, as most Vientiane hotels are privately owned and operated, thus lacking management experience.

She said more supply is coming on line, and though occupancy rates may drop in 2015 to 2016, the situation looks bright.

During the panel discussion, “Hotels and Tourism in Vientiane – Where do we stand now and where are we heading?”, UNDP’s deputy representative of operations, Javier Barrantes, said he was unaware aid organisations affected hotel rates.

He said UNDP annually canvasses hotels for their rates to determine per diems, and the survey “didn’t trigger any change,” but he would review the exercise.

Hotel Khamvongsa’s Souriyo Arounsavath, which caters to aid organisations, said, “We need good, competent, committed staff,” adding that Lanith could be the answer. “Workers need to understand what they are doing.” He said they require both education and skills.

Exotissimo Travel’s Duangmala Phommavong said only a few Vientiane hotels appeal to her customers. “Sometimes, we can’t find rooms.” She said owner-managed hotels tend not to negotiate, but rates are a small factor. “We sell packages.”

Lao Tourism Marketing Board’s Kirsten Focken said the country needs a unique selling point and discover if it is competitive. “Laos has come a long way without promotional investments. This will not continue.” She said Lao tourism needed to rise to the next level.

Ms Focken stressed a “coordinated approach…such as package deals during low season.” Tour operators, hotels, and airlines need to work together and be more innovative, she said.

When asked what tourism products Laos lacked, Ms Phommavong said Exotissimo’s standard Vientiane, Luang Prabang, Champasak packages satisfy most of their needs, “But to do other activities, we must do them by ourselves as no one offers them.”

Ms Focken noted that several aid organisations have developed tourist attractions and community-based tourism projects, adding that development projects should work more with the private sector.

Mr Barrantes noted “ A noticeable lack of development agencies at the symposium.”

On the symposium sidelines, Ms Phommavong said she offers a few options that visit easily-accessed publicly-developed attractions such as Konglor Cave. “If they have other attractions and soft activities, they should better market them.”

Source - ttrweekly