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Do you think I should open a hotel in such place?

Posted by dha6892 on 10/8/2010 at 03:28

Posted from within Vietnam.

I’m a Vietnamese student and I am going to study in Canada soon. My family has a house in the old quarter. Since I’m going and there will be just the two of my parents, they are going to move to an apartment. We may rent the house but some friends advised us to use the house to open a small hotel. I think it’s a great opportunity because…well… I just love the place I live.
It’s in the old quarter. Now there is a temporary outdoor fruit market in front of the house. It can be a little bit noisy in the morning but sometimes I find it quite fun watching the activities in the market. It reminds me of a more traditional Hanoi and I think I will not have the chance to see that kind of market in Hanoi for long. They are building shopping malls and those shopping malls will take the places of all the outdoor markets. I think it’s close to almost everything, shopping, restaurants, park, museum, all sorts of things. When I was a kid, I used to walk around the old quarter with my sister. Most of the time, we spent the afternoons walking to Hoan Kiem lake or West lake, eating street food or just enjoying the familiar sceneries of this place.
To tell the truth, my family has no experiences of business related stuffs so we are feeling very uncertain. But I have a lot of memories there and I think it’s a good place. Maybe it would be nice if someone can understand and experience the same feelings and come to love this place and Hanoi.
I’m not sure whether this is a spam or not but I do not own any business. Since everyone here is so experienced about traveling, if anyone is interested, could anyone please give me some advice about whether we should open a hotel or not?
Thank you. I would appreciate your help very much.

#1 dha6892 has been a member since 10/8/2010. Posts: 3

Posted by dha6892 on 10/8/2010 at 03:37

Posted from within Vietnam.

sorry I forgot, my house is in Hanoi!

#2 dha6892 has been a member since 10/8/2010. Posts: 3

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Posted by daawgon on 10/8/2010 at 05:33

This sounds like a big risk to me, because you have no experience at such a business. You might make a large investment in that hotel and then lose everything because you lack the skill of running this type of business. If you are serious, then I suggest you learn the hotel business by working for a hotel before you even consider owning one. It also seems to me that there is a great deal of competition in the Hanoi small hotel market - making the whole situation even more difficult. Why don't you just rent this house while you are away, and then when you return, you could reconsider your options.

#3 daawgon has been a member since 17/4/2007. Posts: 1,152
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Posted by eastwest on 10/8/2010 at 11:08

hi, I have over 12 years of experience in the hospitality industry (also in Vietnam) and you might want to reconsider this as daawgon points out rightly it is not as easy as you might think.

Ok, it's not rocket science but you do need a lot of hard work and time. If you leave and your parents will have to do this by themselves it might turn out that they won't enjoy (or can't handle) it and then you've taken a big risk with any investments you've made. Even turning the best of houses into a guesthouse hotel requires changes and investment.

Normally a lot of hospitality businesses are out of business after 1 year. First year is always the most difficult (you'll make losses most likely) because people discover they don't actually like hospitality after they had romantic ideas about a little hotel or competition proves to be too hard. Dealing with guests day in day out is completely different from being a guest in a hotel.

If you have your mind set on a hotel perhaps you could look if some experienced people could help or be hired in the first year(s).
Otherwise I would go for the renting out option.

However, with the right business plan and right location any guesthouse/hotel could work in Hanoi . May be ask an experienced person in Hanoi for an opinion and help with a business plan.

#4 eastwest has been a member since 17/12/2009. Posts: 778
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Posted by dha6892 on 10/8/2010 at 16:19

Posted from within Vietnam.

Thank you for your opinions.
Actually my parents will be the ones who run the hotel and I am just helping them. We are considering this business very seriously. We have some friends in the industry and some of them do own their own hotel. We have asked for their advices and they said it will be fine. We understand well about the initial difficulties and we are willing to invest seriously. The house can be transform into a 10 room hotel. We will be very strict about room and service quality and we may keep the price in the $15-25 range.
However, the thing that confuses us the most is the location of our house. Right now there is a temporary outdoor fruit market in front of the house. The pavement is free and small transport like motorbikes can still travel through the street. Traveling by car to the place would not be a problem because the house is right around the corner of the street. The backdoor of the house is on a military street. It's in the old quarter, 5mins walk to the more popular old streets (Hang Ma street,Bat Dan street, Lan Ong street, etc) so it's convenient if the traveler wants to visit the old streets. It's also 5 mins walk to a park and the oldest water tower of Hanoi, 15mins walk to the military museum and the flag tower of Hanoi, 15 mins walk to Tong Duy Tan street (Vietnam cuisine street), about 20-25mins walk to Hoan Kiem lake or West lake. It's close to many restaurants (both vietnamese and western cuisine). There are many mini supermarket near the house and there is a cinema next to the back side of the house, etc.
I am not very sure if the outdoor market can be a problem. Do you really mind the market if you are the guest? Another thing is that I usually see tourists in my street but there hasn't been any hotel on this street yet.
Can you please give your opinions about this location? And what kind of guests you think we should aim for?
Thank you very much!

#5 dha6892 has been a member since 10/8/2010. Posts: 3

Posted by eastwest on 10/8/2010 at 20:11

It seems that you're determined about this. I'll give my two cents worth of advice since I don't know the exact location, your parents, your budget and everything else that's important. So this will also be my last reply.

- It sounds like a flashpacker place to me. Tourists in late 20's till 40's who like to travel, experience local things but are not on a tight budget. They have jobs and are on holliday with money to spend but are not looking for "package-holiday" experience. The market setting is interesting (what about smell and noise?) and accessibillity to sights is also good.
If you aim for these people you probably have to make your rooms (amenities, decoration, service and price) around 30-50 dollars. Comfortable, well decorated, air-con but not yet boutique.

- Backpackers could also be interested but they spend far less money and 15-25 is too expensive for most. You need more volume but less investment is needed. It wouldn't be my choice. High turnover of guests and aim for high occupancy with little profit per guest.

- Keep in mind that if you are not really in an area that has hotels already it is more difficult to get your guests and you'll need to put more effort in advertising the place. Most people tend to go to areas with high density of hotels and then shop around. Especially if you go for flashpackers you should work on bookings (internet, travel agents) and depend less on walk-ins.

Good luck. By the way: the way you describe it I would be interested in staying there if it were a flashpacker place.

#6 eastwest has been a member since 17/12/2009. Posts: 778
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Posted by daawgon on 10/8/2010 at 22:49

Eastwest has given excellent ideas. I too travel as a flashpacker, and Hanoi is my favorite city in VN by far. I usually spend between $20. and $30. for a room. For this Nov I've booked the Gia Thinh again because 1. it gives me everything I need at a good price 2. excellent location on Hang Bac

I consider the Gia Thinh to be well run and above average in it's category. Their bathrooms are modern (American style), the hotel is well maintained (door locks actually work well), the staff is professional, helpful and efficient (they do not push tours on the guest), the in-room computer is a plus, so is the daily fruit plate and buffet breakfast. I consider the $27. room rate to be a bargain.

I usually stay in more than one hotel in Hanoi (I just get bored spending the entire trip in one location). Chances are that I will also stay at the Especen on Tho Xuong - their huge family rooms with balcony are very nice at $24. Another thing I like about the Especen is the location near the Cathedral, and the friendly staff downstairs (very helpful). I do not like the bathrooms at the Especen, the lack of breakfast, and the single computer in the lobby. The biggest complaint I have about small hotels in Hanoi are those rooms without a window or decent view.

#7 daawgon has been a member since 17/4/2007. Posts: 1,152
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