More than two years ago, Ngoc Thao, 25, left his job at the Ho Chi Minh City office to open a homestay in Da Lat, the tourist capital of the Central Highlands, famous for its cool climate all year round and its evergreen pine forests.
Initially, Thao’s homestay was filled with vacationers and his business flourished.
She said her profits would triple or even quadruple during the peak tourist season at the time.
But today, it welcomes 70% fewer tourists than at the start.
“We haven’t received any new reservations for over three months, forcing us to offer discounts on rooms,” Thao said. “But there are still no new guests.”
Faced with a bleak outlook, Thao scaled back its activity and canceled the rental contracts of its two establishments to reduce its losses. She’s done – packing her bags and going home.
“Many of my friends abandoned their businesses after suffering losses and even incurring debt while investing in foster care,” she added.
Thanh Luan’s homestay, with an area of 6,000 square meters, has also been dark since National Day.
Every week, Luan offers discounts of up to 30-40%, but he still hasn’t managed to attract more than a few customers.
The 35-year-old said he had to open additional cafe and catering services to make up for consecutive months of homestay losses.
Luan said the prolonged crisis is causing many famous homestay hotspots in Lam Dong, where Da Lat is located, to fade into oblivion, with only 60% of last year’s number still operational.
In Dambri region, once the homestay capital of Lam Dong, 40% of homestay establishments have closed down and others are barely able to cover their losses and survive . The problem is the same everywhere: no guests.
The homestay industry in Da Lat is no longer a popular trend due to fierce competition, according to insiders.
Minh Long, owner of a popular homestay in Da Lat, said the mass opening of homestays in the resort town has triggered fierce competition, as an average of four to five homestays spring up per day.
“When too many investors rush to open homestays, some must lower their room prices to compete with new facilities, generating insufficient revenue to cover operating expenses,” Long added .
The lack of unique tourism experiences at hospitality establishments is also a major challenge.
Dang Hung Vo, former vice minister of Natural Resources and Environment, said many investors spent large sums of money to build their homestays without investing in the quality of travel experiences that ‘they propose.
To develop this type of tourism, homestay establishments should focus on supporting services such as craft villages, sports or local specialties to attract tourists and create a unique experience, according to experts .
Four years ago, many homestay investors flocked to Da Lat to catch up on the travel fever to this destination, but they did not expect that the city would gradually start to lose its charm due to rapid urbanization, poor infrastructure and limited tourism experiences.
Once a favored summer destination for the French thanks to its year-round cool climate, many tourists have complained that Da Lat is warming due to the loss of pine forests to make way for high-rise buildings.
For foreign tourists, Da Lat is not a popular choice due to limited transportation infrastructure and tourist services. Due to its dangerous mountainous terrain and steep passes, road accidents remain an obsession for many tourists.
Room occupancy rates in Da Lat during the five-day Reunification and May Day holidays reached only 70% of capacity.
During the four-day National Day holiday (September 2), the room occupancy rate in Da Lat barely reached 50%.
Vo said the potential for developing accommodation services such as homestays in Da Lat is still viable, but they need to focus on developing unique tourism experiences to attract tourists and create their own identify.
Ton Thien San, chairman of the Da Lat Municipal People’s Committee, said leisure travel programs combining sports and culture will be the highlight of new tourism products in the tourism industry.
San said the city prioritizes tourism development in the suburbs that includes eco-friendly activities.
Central Da Lat will adapt new dynamic entertainment models at night, and suburban areas will form high-quality hotel complexes, he added.
