AN ACCOMMODATION SERVICE BUSINESS (ACCOMMODATION BUSINESS) IN VIETNAM

Currently, with the development of tourism, an accommodation service business is one of the attractive business sectors that has the ability to create significant profits for investors and businesses.                                

This service sector is not only a potential business sector but also a necessary and important element in the integration era. Thus, what is an accommodation service business? Through this essay, NPLaw will provide you with some content relating to an accommodation service business.

I. What is an accommodation service business (accommodation business)?

1. What is an accommodation service business? 

Accommodation service business (accommodation business) means the activities of a service business that rents a tourism accommodation establishment’s rooms.

Tourism accommodation business means the business activities of tourism accommodation establishments for providing accommodation services, food and beverage services, and other services that satisfy the needs of the tourist’s temporary stay in a province, area, or country with tourism development.

2. Characteristics of the accommodation service business 

The accommodation service business includes accommodation services and additional services, and they have the following characteristics:

• These services don’t exist in physical form and are provided for customers, especially tourists;
• During the operation, the business of accommodation service doesn’t establish new products and values;
• The business of accommodation service’s activities through the use of hotel’s technical infrastructure and staff’s service activities has gradually transferred value from physical form to monetary form in the form of “Depreciation”;
• The accommodation business doesn’t belong to manufacturing sectors, but to service business sectors.

3. Roles of a tourism accommodation business

The roles of a tourism accommodation business include:

• Resolution on the job demands;
• Contribution to economic restructuring;
• Bring income to the State’s budget;
• Contribution to popularizing the country and people of Vietnam.

II. Types of accommodation service businesses

Types of accommodation service businesses include:

• Types of hotels such as Resort, Motel* and Floating Hotel;
• Tourist Villa;
• Condotel;
• Guest House;
• Cruise ship;
• Tourist camping site (Campground);
• House with a rented bedroom.

III. The regulations for the accommodation service business

According to the Law on Tourism, the accommodation service business also means professions providing services to serve the accommodation demand of short-time and long-term visitors with other services, such as restaurant, food & beverage, entertainment, health care, etc., to ensure particular conditions and procedures.

1. Conditions of the accommodation service business

Pursuant to Clause 22, Article 3 and Section 3, Chapter V of Decree No. 168/2017/ND-CP, If enterprises want to participate in the accommodation service business, they have to satisfy conditions on security, public order, food hygiene and safety, fire fighting and prevention, environment protection, technical facilities, and service for each of the particular accommodation service business types, as follows:

• Minimum conditions on technical facility and service of a hotel: ensuring the room amount; having reception and wc; having the parking lot for resorts and motels; having the kitchen and food & beverage service for resorts, motels and floating hotels; having the bed, mattress, pillow, face towel and wash towel; replacing new bedding (bedclothes), duvet cover, pillowcase, face towel and wash towel; having staff on duty twenty-four (24) hours per day.

• Minimum conditions for the technical facility and service of a tourist villa: necessary equipment and rooms with convenient functions must be fully ensured.
• Minimum conditions for the technical facility and service of a condotel: necessary equipment and rooms with essential functions and power must be fully and conveniently ensured.
• Minimum conditions for the technical facility and service of a cruise ship: having the reception area, bedroom (cabin), badroom, WC, kitchen, and food & beverage service; full necessary equipment for customers (use by themselves or serving staff).
• Minimum conditions for the technical facility and service of a guest house, house with rented rooms, or tourist camping site: ensuring minimum convenience and necessary requirements for health, security, etc.,

Besides, the accommodation business establishments also have responsibilities, as follows:

• Promulgating rules (internal regulations);
• Checking the identity documents of tourists;
• Recording the Customer’s information in the management book (or computer) fully;
• Implementing the declaration of temporary residence fully;
• Checking, managing and recording the identity documents of the tourist’s relationship fully;
• Archiving information about tourists and tourists’ relationships within at least thirty-six (36) months.

2. The procedures for the accommodation service business

NPLaw has professional lawyers and specialists willing to support Client settlement procedures for registering the accommodation service business, as follows:

• Registering a tourism accommodation business;
• Applying for a certificate of fire prevention and fighting according to the Law on Fire Prevention and Fighting;
• Applying for a certificate of security and order;
• Ensuring the requirements for food hygiene and safety when providing food & beverage service.

Besides, if entrepreneurs are Vietnamese people staying aboard, they need to bring a foreign passport; and if entrepreneurs are foreign people, they need to have the temporary residence card granted by the competent authorities in Vietnam.

IV. Questions arise when implementing the accommodation service business

1. Is the residential building combined with an apartment for rent or a residential building for employees necessary to grant a certificate of fire prevention and fighting?

In Appendix 1 of Decree No. 136/2020/ND-CP on November 24th, 2020 of the Government, Business Households belonging to the following types of businesses must satisfy and comply with the conditions on fire prevention and fighting, as follows:

• Nursery school and kindergarten, Center for continuing education, or other education institutions as defined by the Education Law in Vietnam;
• General and specialist clinics, or other health facilities as defined by the Law on Medical Examination and Treatment in Vietnam;
• Business establishments for karaoke service, discotheque, bar and club; beauty salon or massage service;
• Electronic supermarket and supermarket, department and convenience store, restaurant and food & beverage service;
• Hotel and guesthouse, boarding house, or other accommodations as defined by the Law on Tourism in Vietnam;
• Physical training (fitness) and sports center, or other sports facilities as defined by the Law on Physical Training and Sports in Vietnam;
• Museum and library; exhibition hall (gallery); show room, warehouse, book store and fair ; or religious institutions;
• Business for repairing and maintaining cars and bicycles;
• Car garage and parking lot as defined by the Law in Vietnam;
• Business of petroleum, flammable liquid and natural gas;
• A sump producing, maintaining, and using the explosives; a storehouse of combustible materials (goods and supplies) or incombustible materials with flammable packaging; or a storage yard of goods and supplies, and waste materials with an area of over 500 square meters;
• A house combined with production, business of goods, flammable substances (inflammable), and goods with flammable packaging is called a Household.

=> In this case, the residential building combined with an apartment for rent or residential building for employees must also have a certificate of fire prevention and fighting. Besides, if the owner business changes the purpose of an apartment from rent (or building for employees) to accommodation service business, they have to apply to grant a new one.

2. Can a person with responsibilities for the business establishment’s security and order be granted a certificate of security and order to operate the accommodation service if such a person is punished by a suspended sentence and by the Court and is on probation?

Pursuant to Article 7 of Decree No. 96/2016 ND-CP, a person who belongs to the following cases isn’t responsible for the business establishment’s security and order:

- For Vietnamese people:

• A person who has taken criminal proceedings, and procedural agencies in Vietnam and abroad are conducting investigations, lawsuits (prosecution) and judgments (try);
• A person who has a criminal record with the crime of infringing upon the national security or the other crimes as intentional mistakes sentenced over three (3) years of prisonment and ever erased criminal records; is suspending execution on the prison sentence; is executing probation; is keeping under surveillance, prohibition of residence, prohibition of holding office and investment business profession with the conditions of security and order according to the Court’s decision;
• A person who is being applied to educational measures at the commune, ward, and town; has a decision of administrative sanction within the pending period of decision execution; is addicted to drugs; is suspending a decision execution on entering mandatory educational institutions and drug rehab centers.     

- For Vietnamese people settling abroad and having foreign passport or foreign people:

• A person who hasn’t been granted a residence permit.

=> Therefore, the Law doesn't prohibit a person who is punished by a suspended sentence by the Court and is on probation from being responsible for the business establishment’s security and order.

3. Is a boarding house an accommodation?

In the system of the business registration industry code in Vietnam. The industry codes from 551 to 5510 specify the short-term accommodation service, which includes:

• Services providing accommodation to tourists, paying guests for every day or week (in the main, it’s short-term services). Accommodations include rooms for rent with available furniture or self-contained apartments with the kitchen and kitchenware (cookware) that have or don’t have cleaning services accompanied; or they can be accompanied with other services, such as food & beverage, parking lot, laundry service, swimming pool, exercise room, entertainment service, meeting room and meeting room’s equipment.
• Accommodations’ operating sectors are as follows: hotel and resort; room or apartment of a hotel; guest house; boarding house; caravan accommodation (stay boarding); and student’s dormitory and sanatourism ( nursing process).

Except for: The industry code 6810 specifies the long-term services, which are often every month or year, will include the following services: rent for rooms, houses, and apartments that have or don't have available furniture.

=> Therefore, if a boarding house rents with available furniture, such a boarding house will be an accommodation service establishment.

These are all information relating to the accommodation service business as prescribed by Vietnamese Law. Please don’t hesitate to contact us if the clients have any further questions.

NPLaw specializes in providing legal services all-around relating to domestic and abroad investments such as Enterprise, Real Estate, Intellectual Property, Labor; Drafting Consultation, negotiations and concluding support for the Commercial Contract, domestic and abroad Service Contract; consultations and support for implementing licensed procedures of licenses, etc,. With our professional Lawyers and Specialists, we have the full ability to consult with and support customers as they implement the above procedures. 

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