An Analysis of the Factors Affecting Residence Hotel's Revenue per Available Room (RevPAR) -Focused on Residence Hotels in HCMC, Vietnam-

Abstract

The increase of foreign tourists has encouraged the inflow of foreign capital in Vietnam. The investment in real estate market has grown relatively faster compared to other industries. Major investments in the real estate market are mostly residential properties and office buildings, but those markets have recently become saturated. As an alternative, the development of the recreational real estate has drawn public attention, but the business feasibility of the estate has not been tested yet. Thus, this study will examine the factors affecting the profitability of residence hotels in Vietnam by using Revenue per Available Room (RevPAR). The data used in this study was collected from 28 residence hotels located in Ho Chi Minh City, with their RevPAR. The time period ranges from 2007 to 2016 and dependent variable is the RevPAR, showing the operational results of the hotels. The independent variables affecting room income are residence traits, brand traits, and location and market traits. The results of the study are as follows. First, regarding the residence trait of hotels, RevPAR increases when the total number of hotel rooms is larger, and their operating period is longer. Second, as for brand trait, RevPAR goes up, when the hotel grades are higher and brand awareness is increased. The stylish designs of hotels enhance RevPAR as well. Third, with respect to location and market trait, when the hotels are located in a Central Business District(CBD), RevPAR is higher. In addition, the results also confirmed that the increase of tourists and consumer price index(CPI) is positively related to RevPAR.