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.