Popular travel community website Tripadvisor has just released the results of its annual hotel visitor survey, and for us at the Duxton the results make heartening reading!

When asked what makes a hotel great, the most important factor (chosen by 30% of respondents) was location. Our guests often comment that they stay with us because we have the best location in Saigon, and it’s also good for our banqueting business. There are other international standard 4* hotels in Saigon, but none of them are in district 1!

24% of respondents cited hotel staff/great service as the most important factor in a great hotel. This is an area we take very seriously. We know we may not be able to compete with our 5* neighbours in terms of number of rooms, extensive facilities or brand awareness, but we CAN and DO match them for service, as our guest feedback will confirm.

The Duxton also scores well in terms of rate, with 54% of respondents saying they prefer to pay between $100 and $200 per night for their hotel stays. Our internet rate of $150 sits right in the middle of this band.

All in all, the survey bears out what we at the Duxton see as our strengths – the best location in the city, fantastic service, and competitive, realistic pricing. Thanks Tripadvisor!

Today’s Saigon Times reports of hard times for the city’s luxury hotel market, with occupancy as much as 10% down on the same period in 2007 (to tell the truth it’s closer to 15%!). Citing factors such as global recession, increasing air ticket prices and the 2007 hotel rate hikes, the city’s upscale hoteliers are wringing their hands and pining for the boom years.

With one exception. One hotel is still achieving high occupancy, hitting 95-100% in midweek and holding a steady 80% over the summer low season period, without cutting its rates or offering promotions in order to do so, and thus holding the highest occupancy in Saigon and probably in Vietnam as a whole. That hotel is, of course, the Duxton!

How are we doing it? Well, we have a few yield management tricks up our sleeve which I’m not prepared to divulge in public, and our consistent marketing and busy networking schedule have helped, but another reason is the very factors cited in the opening paragraph. In a time of recession & rising prices, travellers, be they business or leisure, look for ways to cut their travel costs, and those who usually stay in 5* hotels often choose to stay in a 4* instead. As the only international standard 4* hotel in the centre of Saigon, we are in a great position to benefit. And when those guests try us and see that our service and location are as good as, if not better than, many of the city’s 5* properties, they become regular customers.

This highlights probably the biggest reason for the decrease in visitors, particularly tourists, to Saigon and Hanoi – the lack of 3* & 4* hotels. Both cities have plenty of 5* properties – too many in low season, as the Saigon Times report bears out. What they lack are mid-range hotels to cater for tour groups, affluent tourists who prefer to save their money for shopping & eating rather than blowing it on a room they will only use for sleeping & showering, and business travellers who have been told to cut their travel budgets!

Looking at hotel development plans for the next few years it doesn’t look as if the situation is going to improve, with most planned openings being in the 5* bracket. Why is this? Well, one obvious answer is simply that, all things being equal, 5* hotels make more money. But another answer is that, in Asia, the concepts of prestige and ‘face’ are more important than in the west, and Asian hotel owners value the prestige of owning a 5* property. And so the trend for 5* hotels continues, leaving a big gap in the market for good 3/4* hotels.

We’re not complaining – we like being unique, as it’s good for business, and our customers enjoy getting a 5* location and 5* service at a 4* price, and our occupancy figures reflect this. But in the long run, if Saigon and Hanoi are to cement their status as popular business, tourism and MICE destinations, hotel developers need to swallow their pride and be a little more pragmatic – far better to be the owner of a full 4* hotel than a half-empty 5*!

At the moment it seems like I can’t open a newspaper without reading gloomy predictions about the tourism industry, both in Vietnam and globally. Monday’s Saigon Times predicted that, despite a good first half of 2008, visitor numbers for the rest of the year would decline, due mainly to increasing airline ticket prices.

 

And yet if I wander outside the front door of the hotel, I can see that HCMC itself is full of tourists and business travellers, and our hotel has been 100% full for the last two nights – and this is supposed to be low season! Is HCMC bucking the global downturn in tourism? If it is, here are 10 reasons why:

 

1.                Cost

 

OK, so it  might cost you a bit more to get here than it did last year, but once you’re on the ground HCMC remains a very cheap place to visit. Taxis, drinks, food, entrance tickets and other daily expenses are all way cheaper than in the countries most tourists come from. And the recent fall in the value of the Vietnamese Dong means visitors get a lot more for their dollar, pound or euro.

 

2.                Accommodation

 

At the last count, HCMC had 175 star-rated hotels, and many, many more mini-hotels, guest houses and dormitories. So whilst I am duty bound to praise the city’s luxury hotel scene, there are rooms available for all pockets – the $5-a-night dorm bed can still be found in the backpacker district!

 

3.                Food & Drink

 

HCMC has thousands of restaurants, bars and cafes, from cheap street food outside the markets to fine dining restaurants. There aren’t too many places in the world where you can get a 3-course Asian lunch for $2, a French bistro meal for two with wine for under $20, or a buffet including 10 main courses as well as freshly-grilled lobster, shrimp, lamb and beef for $20, but you can in Saigon! (The last one of these is available in our Grill restaurant every evening from 18:00 – hey, this is my blog so I’ll plug my hotel if I want to…)

 

The city’s nightlife, whilst a lot more sedate than Bangkok, still has plenty to offer with a wide range of pubs, cafes, lounge bars and nightclubs, and despite HCMC’s curfew reputation many are open until 02:00 and beyond.

 

4.                Shopping

 

The regular visitor will notice an increase in the number of high-end luxury stores but that’s not really what Saigon shopping is all about. It’s more about hunting down local crafts such as lacquerware and silk, haggling over original artworks in the city’s countless galleries, finding discount designer goods, and exploring the city’s lively markets, such as the legendary Ben Thanh, Chinatown’s Binh Tay market, and fascinating local markets such as Tan Dinh or Nguyen Van Troi.

 

5.                Cholon

 

Cholon is HCMC’s Chinatown, located around 5km west of the city centre. Not too many tourists bother to make the trip, which is a shame as Cholon gives you a taste of the old colonial Saigon, before the developers moved in. A fascinating architectural mix of old pagodas, French colonial and 1960s brutalism, as well as some fantastic Chinese restaurants and the huge Binh Tay market, where everything you can imagine is on sale, in bulk.

 

6.                Getting Out

 

There are also some great places to visit within a couple of hours’ drive of the city. The Mekong Delta, the nation’s ricebowl, is worth a couple of days at least, with its scenic waterways and sleepy villages. A tip – avoid the tourist traps of My Tho and Vinh Long and try the comparatively unexplored province of Ben Tre. There’s also the splendid beach at Long Hai, and Can Gio biosphere with its peaceful mangrove forests.

 

7.                Hub

 

These days HCMC is a regional transport hub making it easy to travel to anywhere in Vietnam and SE Asia. Buses to the likes of Mui Ne and Phnom Penh can be had for as little as $10, while domestic flights to the beautiful island of Phu Quoc or the friendly highland city of Dalat cost around $80 return. And the arrival of budget airlines such as Tiger Airways and Air Asia means it’s cheaper to get to Bangkok and Singapore than ever before.

 

8.                Relaxation

 

Sure, HCMC is a noisy, bustling city where relaxation can often seem impossible. But it also has more spas than anywhere else I’ve ever been, all of which offer relaxing massage and other treatments. Many hotels have rooftop pools, high above the heat and traffic. And there are hundreds of coffee shops with gardens, sofas or balconies where you can escape the hustle with a cold drink. And of course, all at extremely affordable prices.

 

9.                History

 

Mention Vietnamese history and people immediately think of the American War. HCMC has two key attractions for history buffs. First there’s the War Remnants Museum, a disturbing, fascinating look at the conflict through armaments, documents and rarely seen photographs. Secondly there’s the Cu Chi Tunnels, a 90-minute drive out of the city, where you can explore the Viet Cong tunnel networks that mystified the US troops for so long. Combined with a visit to the Cao Dai Temple at Tay Ninh, it’s a memorable day out.

 

10.             The People

 

One memory visitors to HCMC always take back with them is that of the local people. Lively, smiling, joking, always on the move, they make Saigon the fascinating place it is. You may get annoyed by street traders, motorbike taxis and shoeshine boys constantly offering their services, but give them a smile and you’ll always get one back, whether you’re buying or not.

 

 

So there are just 10 reasons to pay us a visit – I’m sure you can think of more!

A story in today’s Saigon Times reports that several Ho Chi Minh City hotels, suffering from low occupancy, are cutting their rates by as much as 40% in order to sell more rooms. It seems like an obvious tactic – cut your prices, and you sell more product. But does it work?

 

We’ve found in the past that it doesn’t. Previously we’ve cut rates for certain low periods such as public holidays or weekends, but the effect on our occupancy has been negligible, and we’ve noticed that rate cuts have the following negative side-effects:

 

  • Lower revenue, as customers who would have booked with you anyway end up paying less for their rooms, while few new customers are attracted
  • Negative value perception – whilst budget travellers are sensitive to price variance, luxury hotel guests are largely impervious to both discounting and increasing, and indeed they will often see discounts as a reflection of a decrease in a hotel’s quality, standard and brand value
  • Customers get used to the new low rates, making it difficult to increase them again
  • Gossip! When competitors and customers see a hotel reduce its rates, it isn’t long before tongues start wagging – “They must be struggling”, “Business must be bad” etc.

 

Many hospitality experts feel the same – have a look at this article by Neil Salerno, in which he concludes that the small occupancy gains that may accrue from rate discounting aren’t worth the decrease in revenue. As he says: Hoteliers who myopically focus on cutting expenses to produce profit, without a substantial effort to improve top line revenue, are doomed to failure”.

Welcome to Heart of Saigon, the Duxton Hotel Saigon’s new blog. It’s basically a new channel for us to talk about developments at the hotel in a more informal way, to give advice to visitors to Ho Chi Minh City, to talk about the local hotel and tourism scene, and hopefully to facilitate dialogue with our customers.

 

Traditionally, businesses communicate with their customers via brochures, ads, sales letters, newsletters, and emails. These are all well & good, but they have two drawbacks: they’re formal and ‘rigid’, and they’re one-way. Blogs allow businesses to chat with their customers in a more relaxed, open and less sales-orientated way, and allow those customers to respond, give feedback and even contribute themselves. In the new collaborative economy, web-savvy customers don’t just like the opportunity to converse with businesses, they expect and demand it, and hotels should be no different – we’ve all been quick to use the internet as a distribution channel, but a lot slower to embrace web 2.0 concepts such as social networking or blogging.

 

So please enjoy our blog and feel free to leave comments, suggestions and even contributions. All are welcome, and as you’ll read in future blog entries, we do listen to and act on customer feedback.