Luxury hotels across Vietnam are still struggling to shift their focus with a view to increasing their occupancy rates in the remaining months of the year. In the first nine months of the year, the number of foreign tourists arriving in Vietnam dropped by 16 per cent from the same period last year, according to the National Administration of Tourism.

According to market research by CB Richard Ellis company, in 2008 five-star hotels in the capital had an average occupancy rate of 63 per cent, while in the same period this year the rate had dropped to 55 per cent.

In Ho Chi Minh City, five-star hotels had an average occupancy rate in Q3 of 2008 of 58.9 per cent, and in 2009 this dropped to 49.1 per cent.

The current situation is a marked contrast to 2007, when occupancy rates were as much as 70-80 per cent and hotels reported having to turn customers away at times.

In HCM City, the Rex Hotel saw an average occupancy rate of only 46 per cent in the first nine months of the year, the Thoi bao Kinh te Sai Gon (Sai Gon Economic Times) reports.

Large hotels in HCM City centre have attributed the drop to the world recession and swine flu which has dramatically reduced the number of foreigners visiting the country.

The marketing director of the New World Hotel in HCM City, Nelson Balilo, said the number of visitors from the EU, US and Japan had strongly dropped off.

Hotels are increasingly shifting their focus to attract Asian and domestic tourists. Big name hotels are reporting more Vietnamese coming to the hotels for lunch or dinner, and greater attention is being paid to attracting MICE tours (Meetings, Incentives, Conferences, Exhibitions) by giving special incentives. To survive in this context, hotels must have active policies, said Tao Van Nghe, general director of the Majestic Hotel.