Hanoi (VNS/VNA) - The number of people coming to Vietnam combiningbusiness with tourism has increased significantly in recent times, and is oneof the reasons for arrival numbers to jump in recent years.

According to the General Statistics Office, last year 15.6 millioninternational visitors came, 2.7 million higher than in 2017. Nearly 7.3million have arrived in the first five months of this year.

Many opt for vacation rentals and homestays because they find it cheaper thantraditional accommodation at hotels.

Besides, it enables them to experience living together with locals and so hasbecome a popular choice, especially among young people who like to travel andexplore cultures and eat, live and work with homestay hosts.

Thanks to its many advantages, homestay tourism is also increasingly preferredby foreign tourists and also many Vietnamese, especially younger tourists.

The homestay and vacation rental business models are growing as a result.

Seeing their potential, many Vietnamese are renovating their houses and turningthem into accommodation targeted at young local and foreign visitors.

According to tourism sector insiders, the homestay business appeared in Vietnama few years ago but has only become popular across the country in the last twoyears.

A report from Vietnam National Administration of Tourism said in 2017 Vietnamhad 1.76 million homestays with 12.94 million rooms.

They accounted for 10.1 percent of the country’s total accommodationfacilities.

But many tourism experts dispute these figures saying they are incomplete andthe actual number must be much higher.

According to market research firm AirDNA, the number of Hanoi homestays topped11,200 as of the middle of last year while in Ho Chi Minh City it was over20,000 after increasing quite rapidly in the year or so before that.

As of August 2018 the two cities had 21,994 properties on Airbnb. The averagerental was around 36 USD per room per night in Hanoi and 44 USD in HCM City.

Trinh Thanh Hung, the owner of a villa in HCM City he offers as vacationrental, said he earns 200 million VND (8,564 USD) a month in revenue.

The rent for a room at the villa is relatively high at 1.2 -1.6 million VND (51-8 USD) per day, he said.

Phan Thi Man Chi, owner of the Nam Thi Homestay in Tien Giang province’s Cai Betown, said she earns around 20 million VND a month. The average price of a roomis 900,000-1 million VND per night.

It is quickly becoming popular because developing it involves little difficultyon the part of house owners, especially if they are young and tech-savvy.

They can easily advertise their services at no cost on social media and amyriad of other platforms.

Some market observers said the success of homestays and vacation homes dependson digital marketing and so it is not just about investing in a property butembracing technology.

This explains why most homestay investors are young people who are not fazed bythe latest technologies.

Many tourism experts are of the opinion that it might be profitable in theshort-run but not in the long-run since this model mainly caters to adventuretourists, whose tastes are constantly changing.

According to Vina Retail, many young people seem to think it is as simple ashaving a house or apartment and renting it out whereas this business modelinvolves a lot of different factors and if they fail to work things outcarefully, they could lose heavily.

In fact, many young investors have suffered severe losses in the early stagesand even wound up because of unexpected expenses and lack of tenants.

Nguyen Thuy Trang rents out a house with a garden near the forest in thecoastal district of Can Gio for 8.5 million VND (364 USD) a month.

She said she runs the business herself and only hires cleaners so that costsare not so high. But it was very hard for her to find guests during the rainyseason, which lasts nearly six months in a year.

“I have to find a way to make up for it during the dry season,” she said.

Villa owner Hung said the cost of running the vacation home is quite high. Hisstaff wages are 20 million VND a month, while his income could be as low as 30million VND during the off-peak season from November to March.

Experts said the demand is very high now and so the market is likely toflourish for the next three to five years but it is fragmented and needs timesto develop. Profit margins in the business are not high compared to traditionalaccommodation services such as hotels and condotels, they said.

All mergers and acquisitions (M&A) deals by large enterprises are likely tobe required to be reported to authorities.

This is included in a draft decree to guide the Competition Law from the VietnamCompetition and Consumer Protection Authority.

Article 13 of the draft decree requires enterprises to notify the nationalcompetition authority about economic concentration activities they intend topursue such as M&A deals and share purchases.

The four instances when notification is mandatory are when the firm’s totalassets amount to 2 trillion VND (85 million USD) or more; its revenues are 2trillion VND or more; the value of the tentative M&A deal is at least 1trillion VND; and the combined market share after the acquisition amounts to 20percent.

The decree gives the competition authority 30 days from the date of receivingthe communication to announce its preliminary verdict to either allow theM&A deal or subject the firms to an official appraisal.

If the authority fails to make the announcement, the firms are automaticallypermitted to go ahead with their M&A transaction.

The M&A scene in Vietnam has become increasingly active, with more and morelocal enterprises setting up ties with global partners as a strategy to expandtheir global reach or foster their growth at home.

Vietnamese corporations signed M&A deals worth 9.9 billion USD last year, a160 percent jump from a year earlier.-VNS/VNA