Although Danang has a large workforce,
the lack of hospitality schools means that
it is difficult to find staff with enough skills
to work in the 4 and 5 star properties. The
larger properties with structured training
programs are able to train new staff and
progressively move them into more senior
roles, while the smaller properties are
unable to do so and hence face recruitment
challenges. Meanwhile, the large increase
in supply in recent years has lead to fierce
competition for experienced staff which
has put an upward pressure on labour
costs. For entry level rank and file positions,
labour costs range from US$110 - US$180
per month, increasing to US$500 - US$800
for local middle management level and can
further double for local HODs and GMs.
Expatriate staff are still by far the most expensive
options.
The well developed infrastructure system in
Danang means that electricity and utilities
tend to be in the range of 5% to 6% of total
revenue for efficiently operating properties.
Construction costs in Danang are similar
to those in HCMC and Hanoi, with average
construction costs for a resort ranging from
US$600 psm for a low rise mid scale and self
managed property to US$1,200 - US$1,300
for a resort of an international standard. In
certain cases, such as the InterContinental
Danang, construction costs can be much
higher due to the challenging location and
infrastructure requirements as well as the
deluxe interiors and decorations. Construction
costs of the interior fit out can increase
exponentially when predominantly imported
materials are used.