Upscale Hotel Markets in Vietnam’s Coastal Tourism Cities: Supply, Demand and the Risk of Overbuilding

Vietnam’s coastal destinations absorbed the largest share of hotel investment during the country’s post-pandemic tourism recovery, and by the third quarter of 2025 they held roughly 60 per cent of a national midscale-to-luxury stock of more than 192,000 rooms. This paper asks whether the upscale room supply now under construction in those destinations can be absorbed by plausible demand growth, and it develops a transparent method for answering that question when only published aggregates are available. The analysis rests on an accounting identity linking arrivals, length of stay and room stock to occupancy, expressed in ratio form so that forward projections depend on growth rates rather than on unobserved behavioural parameters. Three markets are examined, Da Nang, Nha Trang–Cam Ranh and Phu Quoc, with Ho Chi Minh City as an urban comparator. Phu Quoc carries a construction pipeline equal to about 70 per cent of its existing stock, scheduled for completion before the 2027 APEC summit, which would require arrivals to grow by 30.4 per cent a year simply to hold occupancy at its 2025 level. Under a demand path of 15 per cent a year, well above the national plan, upscale occupancy on the island falls from about 70 per cent to roughly 55 per cent by 2027. An Oversupply Risk Index built from five rule-based components places all three coastal markets far above the urban comparator, with structural fragility the common factor: around 60 per cent of coastal rooms sit outside the star-rating system and roughly two thirds of upscale stock nationally remains owner-operated. The paper argues that the binding constraint in these markets is not the level of demand but the mismatch between a supply response measured in years and a demand signal measured in quarters, and it sets out licensing, disclosure and measurement responses that would make the mismatch visible before it is capitalised into distressed assets.