Hanoi guesthouses or ‘nha nghi’ have turned to renting out rooms on a monthly basis as the by-the-hour hotel sector suffers an inexplicable slump.
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| Guesthouses have experienced a recent slump in business (illustrative picture) |
Hanoi guesthouses are often busy during Christmas, New Year, Valentine’s Day or Tet. But in these tough economic times, owners have suffered 40% - 60% slump compared to the end of 2010, despite reasonable prices of around VND100,000 (USD4.75) per two hours or VND250,000 (USD11.88) per night.
Fewer guests mean less income to cover business costs, such as staff salaries. In an attempt to recover their capital and pay staff salaries, many guesthouses are renting out rooms on a monthly basis to households or companies at just VND1.5-2million (USD71.31-95.07) per room.
Hung, an owner of three guesthouses on Nguyen Van Cu Street said that he had to put his house up for sale after he had less than ten guests during Tet.
Newcomers to the business have been most hard hit. They have had to borrow at high rates to build guesthouses that cost up to VND5-8billion (USD237,687-380,300).
Thanh, an owner of a guesthouse near Chuong Duong Bridge told that he had borrowed VND6billion (USD285,225) to build an eleven-storey guesthouse in the hope of improving his family's income. But after several months of slow business, he had to lay off 70% of his staff and convince his family to help out. He also intends to rent out some floors as family accommodation in order to be able to pay his bank loan.
