The homestay business started in Vietnam over the last 20 years. In the beginning, it targeted mainly foreign tourists, providing them a chance to experience the life of local people. The homestay model grew fast due to the increasing demand of both foreigners and Vietnamese tourists alike.
There were 6,200 homestays in Ho Chi Minh City by the year 2016. The number has soared to more than 15,000 by 2017 and reached over 20,000 by mid-2018, according to the market research company AirDNA.
In Hanoi, the number of 3,200 homestays in 2016 increased to more than 8,100 in 2017 and more than 11,200 in the first half of 2018.
Nguyen Van Dung, CEO of Luxstay, a platform for homestay renting, revealed that every month his company receives thousands of requests of house owners to join their system. Additionally, the booking rate via Luxstay increases 20% regularly thanks to the large supply and the great demand for travel experience. In high season, the company serves up to 15,000 reservations. It is forecasted to double at the end of the year.
For Minh Tuan, 28, a HCM City resident who regularly uses homestay services, homestays are not just a place to stay. “Homestay services are very suitable for organizing parties and entertainment activities for a big group,” he says. A room for 10 people costs VND3-5 million per night. The price is attractive in comparison with hotels and traditional accommodation. Homestays also bring a private and cozy atmosphere, Tuan added.
Tao Van Nghe, an expert in the hospitality industry, said that room-sharing service is growing fast and can not be held back. “Currently, many one-to-three star hotels are under influence of this service,” he said.
In addition to Luxstay, a Vietnamese platform, Airbnb, the global application for rental homestay, also joined this market. About two years ago, Airbnb had a few thousand rooms for rent, concentrated in big cities like Hanoi and HCMC. To date, Airbnb has more than 16,000 rooms in Vietnam. This figure is equivalent to the total number of rooms in two-to-four star hotels in HCMC.
The heat from the homestay service is making many hotel owners, especially the small-scale hotels, afraid that they will be defeated in the near future.