A new Savills Vietnam report says that four-star hotels saw average occupancy falling 27 percent year-on-year, while the corresponding figure for five-star hotels was 31 percent.

The report by the global property services provider says the occupancy rate is unlikely to pick up in the second quarter because travel remains limited amid the nationwide social distancing campaign, which lasted from April 1 to 15 and was extended to at least April 22 for 12 localities with a high risk of spreading Covid-19 infections, including Hanoi and HCMC.

All restaurants and tourist destinations in HCMC have been shut since the end of last month.

The average room rate in the first quarter was $77 per night, down 14 percent year-on-year, the report says.

To offset reduced revenues, some hotels have cut more than 50 percent of their staff and others have used their premises as temporary hospitals or quarantine facilities.

The report says 90 percent of tourism firms in HCMC suspended operations in the quarter and the city lost around VND10 trillion ($425 million) in tourism revenues, with its foreign visitor numbers plummeting 42 percent year-on-year to 1.3 million.

Mauro Gasparotti, director of Savills Hotels in Asia Pacific, noted that the impacts of the Covid-19 pandemic on Vietnam's tourism industry will last until the end of the year.

Troy Griffiths, deputy managing director of Savills Vietnam, said, "Hospitality was the first and most heavily impacted asset class, however it will also be one of the first out of the trough. Domestic demand in the turnaround will be solid, Vietnam is fortunate to be able to turn hospitality assets back on, quickly." 

HCMC has a solid supply base, dominated by international hotels with approximately 16,200 rooms.