Market Survey On Japanese's Preference For Accommodations

Alternative Real Estate Service Co., Ltd
Unit 23, 26 Ly Tu Trong Street
District 1, Ho Chi Minh City
Vietnam
T +84 836 028 591 E info@alternaty.com W www.alternaty.com
MARKET SURVEY ON JAPANESE‘S PREFERENCE FOR ACCOMMODATIONS
Alternaty, a boutique real estate consulting firm, has recently carried out a research study on
Japanese Accommodations in Vietnam. This research provides a master view of preference for
accommodation types and services for Japanese nationals working in Vietnam, in particular
Greater HCMC and Hanoi City.
Foreign Direct Investment from Japanese companies, as well as high commitments to supporting
Vietnam in developing infrastructure and technologies, has always been an important part of
Vietnam’s economic growth. Just as investment has been growing over the past several years,
the long term demand for accommodations is also expected to continue increasing. With new
supply also increasing and moving to more refined products, Vietnamese developers should be
able to understand more clearly the requirements of specific markets such as of Japanese on the
main factors of selections for short or long term stay. Alternaty has completed a market survey
interviewing directly Japanese companies doing business in Greater HCMC and Hanoi, as well as
Japanese nationals living in Vietnam, with the purpose of identifying the key demand factors for
accommodations, specifically for serviced apartment properties. This brief introduction will
illustrate some of the main findings. For full details please contact the author.
METHOD OF STUDY
A total of 133 companies and individuals were surveyed and a series of questions related to the
preference in term of accommodation was presented. The survey was conducted via telephone
and via personal face-to-face interviews at main hubs in HCMC and Hanoi. Several factors have
come out as influencers of renters’ choices in terms of properties and services. The respondents
have been categorized into two subgroups based on length of stay:
- Long-Term Basis: Individuals with long-term assignments or positions in Vietnam.
- Short-Term Basis: Individuals in Vietnam on short-term assignments, typically sent by their
overseas headquarters.
QUESTIONS

Vietnam
1. HOW MUCH TIME DO YOU SPEND IN VIETNAM?
Long term (months) Short term (days)
Average 38 4.6
Minimum 3 1
Maximum 84 14
The average length of stay for long-term assignments for most companies was 38 months, while
for short-term assignments, stays were often less than a week with an average of 4.6 days.
2. WHAT ARE THE MOST IMPORTANT FACTORS IN CHOOSING A SERVICED APARTMENT?
When asked to indicate the most important facilities when searching for accommodations, there
is similarity between the short-term and long-term subgroups. Out of all respondents,
approximately 95% indicated safety/security as a critical factor of decision. This not only includes
the security of the building itself, but also the safety of the surrounding area. Safety also includes
a well-implemented fire-protection system and fire escape options. In the case of a low
safety/security building, the rental price and other factors become an irrelevant element of the
choice. As expected, for short-term residents, safety and security is slightly more important
compared to long-term respondents. This is due to the lack of familiarity with the local area and
the need for more protection.
Unsurprisingly, the second most important factor for decision making is rental price, with 80%
of long-term respondents identifying offered rates as critical to the decision making process. The
Factors that influence choice of accommodation
long term basis short term basis

Vietnam
number rises to 95% for short-term respondents, since they are usually more price sensitive due
to the availability of more short-term accommodations choices including hotels.
Access to shopping is also important for more than half of the respondents, the most preferred
solution is convenient shopping located within close proximity to the building. The location,
indicated with travel-time to work, has less impact on the decision making process for half of the
respondents, however, location should still be in popular areas with access to facilities and major
thoroughfares.
The Japanese market seems to be moving away from the requirement for specific traditional
Japanese style and facilities within the property, to expecting a more international and modern
design. As a result, a Japanese-oriented design is only required by approximately 25% of the
respondents.
3. WHAT IS THE SIZE AND NUMBER OF BEDROOMS THAT YOU PREFER?
As part of the survey, we requested interviewees to express preferences in term of sizes of units
and number of bedrooms. In the long-term category, 38% of the respondents indicated 1
bedroom as the preferred option, followed by 26% for studios. This is in line with the existing
supply in HCMC, where 45% of the total units in superior categories are studio or one-bedroom
units. Based on the survey, the single bedroom should be a minimum of 45 sqm and offer
separate areas for living and sleeping while the studio is mostly defined as having less than 45
sqm of living space as well as no dividing walls between living and sleeping areas. Not
45%
36%
16%
4%
Ho Chi Minh City Serviced Apartment
Supply by
Number of Bedroom
1BR 2BR 3BR 4BR
10%
26%
38%
26%
Preference of Room Size
Room (30sqm max) Studio (45sqm max)
1 Bedroom (45 - 70sqm) 2 Bedroom (>70sqm)

Vietnam
surprisingly, rooms 30 sqm or smaller have less preference among long-term guests, with only
10% of respondents opting for them. A large number of respondents (26%), mainly with families,
would request more spacious 2-bedroom units with more than 70 sqm of space. Each of the
respondents has confirmed that, disregarding the size, essential facilities should include a fast
wifi connection, refrigerator and microwave oven for the kitchen, sofa and table in the living
room and a large TV screen with international channels.
4. WHAT SERVICES YOU BELIEVE TO BE VERY IMPORTANT FOR YOUR STAY?
As expected, the must-have amenities are convenient stores and Japanese restaurants. The
respondents have confirmed that they would not require these to be inside the building but that
they should be located within walking distance.
A surprisingly high number of respondents have indicated Japanese-speaking staff as preferred
options, together with Japanese newspapers, and mail-service support.
Swimming Pool, Karaoke facilities, and Lounge have not been suggested as important facilities.
0 20 40 60 80
Convenience store
JPN language staff
Wifi
JPN restaurant and bar
Storage of luggage
PC, business lounge
Handling of mail
Library JPN book and mags
JPN newsp and mags
Golf driving range
IT, IT device rental
Small meeting room
Large Japanese style bath
Fitness gym
Lounge with large TV
Tennis court
25m swimming pool
Karaoke
Important Services
very important important

Vietnam
A gym was a preferred facility but not strictly necessary, although it seems that a gym plays an
important part during the guest’s selection of serviced apartments, even if a large number of
guests may not make use of it.
5. WHAT IS YOUR BUDGET?
Monthly Budget Long-term Stay Daily Budget Short-term Stay
Average $1,371 $81
Minimum $500 $25
Maximum $3,200 $350
The decision of choosing accommodations also depends largely on budget. As expected, this
varies widely based on the seniority of their positions. For long-term basis respondents, the
majority of monthly budget ranges between US$1,000 and US$2,000. An average budget of
around US$1,371per month, including VAT and electricity, was most commonly indicated by
respondents.
Individuals with higher budgets tend to stay in internationally-branded and fully serviced
apartments, generally located in the core central areas. Often those properties are classified as
Grade A buildings.
For short-term basis respondents, daily budgets mostly range from as low as US$50 up to
US$100 per day with the average indicated budget being approximately US$81. This budget
would allow access to three- and four-star hotels in HCMC and Hanoi but not to upscale
properties.
CONCLUSION
With the growing interest of Japanese companies to locate in Vietnam, and the high potential
for the two countries’ long term partnership and cooperation, the Japanese market is evidently
a reliable source of current and future demand for short and long term accommodations.
Japanese contribution into infrastructure development and investment in industrial parks will
keep fuelling the request for serviced apartments both in CBD locations and locations close to
main industrial hubs or office complexes. According to Mauro Gasparotti, Executive Director at
Alternaty Vietnam “Despite the common belief that the Japanese guest requires dedicated

Vietnam
design and facilities, from our market survey it appears that international standard designs are
now widely accepted and only limited custom-made adjustment should be taken into
consideration, mainly into services and specific F&B facilities”. Mr. Mauro added that “It was clear
that the careful study of the area where the serviced apartment is located is also important for
the planning of the building facilities and services, with security and access to shops and
restaurant among the first priority for long-term guests. Before designing hotels or serviced
apartments, Vietnamese developers should carefully consider target market, positioning and
expected performances in order to carefully plan facilities, sizes, unit mix, back of houses,
building circulations and avoid costly mistakes during construction or into future operation”.
ABOUT ALTERNATY
Alternaty is a market-leading real estate consulting firm specialized in the hotels and resorts
sector and is based in Ho Chi Minh City, Vietnam.
Alternaty’s bespoke consulting services include initial project planning, feasibility study, market
analysis, cash flow projections, hotel operator selection and developer representation.
Clients include international developers and some of Vietnam’s largest real estate firms, banks
and state-owned enterprises for whom Alternaty is acting as real estate development advisor on
landmark projects throughout Vietnam, Cambodia and Laos.
Alternaty was highly commended in the Best Property Consultancy (Vietnam) category at the
South East Asia Property Awards held at the Shangri-La Hotel in Singapore in October 2013.

Vietnam
Mauro Gasparotti
Executive Director
T: +84 908 556 492
E: Mauro.gasparotti@alternaty.com
For further information, please contact us: Alternaty – Alternative Real Estate Service Co., Ltd.
Nhung Pham
Business Development Manager
T: +84 934 345 630
E: nhung.pham@alternaty.com
Hien Ngo
Administrative Assistant
T: +84 1676 097 491
E: hien.ngo@alternaty.com

Market Survey On Japanese's Preference For Accommodations

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