Vietnam is the third fastest-growing tourism across the globe based on the announcement by the United Nations World Tourism Organization after Vietnam observed a 29% increase in visitors. Over 15 million tourists came to country in the last seven years.
The Southeast Asian state is located on the southern and eastern part of the Indochinese peninsula. It shares the landing borders with Cambodia, China and Laos. Vietnam is famous for its cultural heritage and pleasing natural landscape. And it is the reason why tourists love to explore destinations like Vietnam.
In Vietnam, the home-sharing concept is booming, as visitors opt the home rental over staying in a hotel. And to this fact, for the last two years, the number of entire homes listed on HomeAway & Airbnb has increased by 425%.
Here is a graph which shows the rise in the number of entire home rentals.
It is safe to say that Vietnam is having immense growth in the rental industry in the form of home rentals.
From where the entire homestay rental revenue comes from?
Vietnam is a mix of everything, starting from its cultural heritage to floating markets on the Mekong, Delta. Most of the revenue from tourism comes during the seasons like summer (July & August), Winter (December & January) and Spring (March & April). It is the time when Vietnam gets double the number of travellers than in the regular months.
During this interval, most of the home rentals remain full. The highest jump was observed in March 2019, wherein 170,000 nights were booked ( a record for Vietnam). So, from where do these travellers come from?
About 66% of the Vietnam visitors are international tourists who choose homestay over the hotel. Airbnb and HomeAway are the biggest platforms through which the home rentals are booked. 42% of the total revenue in the industry is generated from the entire homestay rental. However, the market for home rental platforms hasn’t got huge competition yet. This makes it a good time to enter the market or invest in the growing industry.
How does homestay rental work in Vietnam?
Every country has its own rules and styles for the homestays. Here is a sneak peek on how things are managed at Vietnam homestay.
Some families in Vietnam start their own homestay rather than joining any platform. This is especially observed in rural areas. They will get support from the organisers in the form of a loan, training and marketing. A host needs to apply for a licence from the organizations to be able to host foreign guests at their homestays.
Furthermore, in rural settings, there will be a head for a cluster of homestay to avoid any issue regarding the language or cultural nuances. This middleman will be used to confirm the bookings and even provide administrative support and some customer service.
Another popular way that is common in the homestay industry in Vietnam is the use of online platforms such as booking.com, Airbnb, HomeAway, and more. The local hosts register on these platforms and list out their property with the appropriate details and expected rent. For every booking generated, the online platforms take a few percentage points for commission and the rest will be given to the hosts.
If you look at the distribution of the types of homestay rental available in Vietnam then the majority of it is covered by the entire home rental. Basically it has three types of segmentation here that is entire homes, private rooms, and shared homes. The below-given chart shows the percentage distribution of each type.
It’s right time to build one..!
So, agreed that Vietnam is healing the loophole of the rental industry and emerging a lot of new opportunities for the rentals?
As I already said that the best thing is the competition for the homestay rentals is quite low. So, you can easily start with your online vacation rental platform in Vietnam and expect success in a short span of time. It is a huge opportunity for all those who are planning to start a vacation rental business in Vietnam.
This article was contributed by Ciara Carron
This article has been edited for clarity by the Tech Collective editors.
Ciara is a writer and journalist. She loves to deep dive into the ins and outs of the technologies. Her aim is to share the knowledge by writing on the technical aspects of business, eCommerce, startups, enterprise IoT, AR, VR, and other Smart Technologies. To describe her in one word, she is a writer focused on Tomorrow’s World.