How much it costs to open a homestay in Vietnam, and when it breaks even
HostBooking · · 8 min read
Opening a homestay takes a rent deposit, renovation, furniture, linen, fire-safety kit and a reserve for a few slow months. To see whether it pays, split fixed monthly costs from per-night costs, then work out how many nights you must sell to break even. This post walks through a rented 5-room homestay.
The assumptions
Every figure below is an assumption to show the method, not surveyed market prices. Rent, building work and wages vary a great deal between wards and cities. Replace them with your own quotes.
- A 5-room homestay in Da Lat, in a rented three-storey house; no land purchase.
- Average daily rate (ADR) of VND 700,000 a night.
- Half the nights come from OTAs at 15% commission, half are direct bookings.
- A 30-night month: 150 room-nights to sell.
Startup capital
| Item | Assumption | VND million |
|---|---|---|
| Rent deposit | 3 months × 25 million | 75 |
| Renovation: paint, wiring, plumbing, bathrooms | An older house needing moderate work | 150 |
| Furniture for 5 rooms | Beds, mattresses, wardrobes, curtains, lights: 40 million a room | 200 |
| Linen and supplies | 2–3 sets of sheets and towels per bed: 6 million a room | 30 |
| Fire safety | Extinguishers, emergency lights, signs | 10 |
| Photos, signage, paperwork | Photography, printing, travel | 10 |
| Total spent | 475 | |
| Reserve | 3 months of fixed costs | 155 |
| Total to have ready | 630 |
The reserve is not a cost, but have it. The first month is usually quiet because there are no reviews yet, and low season can last several months. Beyond money, allow time for paperwork: household business registration, fire safety, the security and order certificate, then a stay notice for every guest.
Monthly costs
Two groups. Fixed costs are paid with or without guests. Per-night costs only arise when a room is sold.
| Item | Type | Assumption per month |
|---|---|---|
| Rent | Fixed | 25 million |
| Electricity, water, gas | Fixed (roughly) | 8 million |
| Wages: 1 manager + 1 part-time housekeeper | Fixed | 16 million |
| Internet, TV | Fixed | 1 million |
| Small repairs and upkeep | Fixed | 1.5 million |
| Management software | Fixed | 0 (free plan) and up |
| Laundry, single-use supplies | Per night | VND 60,000 a night |
| OTA commission | Per night | 15% of OTA bookings, on average VND 52,500 a night |
Fixed costs in the example come to VND 51.5 million a month. Each night sold leaves 700,000 − 60,000 − 52,500 = VND 587,500 after laundry, supplies and commission, to cover the fixed costs.
Break-even
- Break-even nights = fixed costs ÷ what each night leaves = 51,500,000 ÷ 587,500 ≈ 88 nights a month.
- Break-even occupancy = 88 ÷ 150 ≈ 59%.
- At 70% occupancy (105 nights): 105 × 587,500 − 51,500,000 ≈ VND 10.2 million profit a month, before tax.
- Paying back the 475 million spent: 475 ÷ 10.2 ≈ 47 months, nearly four years.
Four years is a warning: on a rented house, the lease should run longer than the payback period, with clear terms on rent increases and on the renovation when you hand the house back. Put your own figures into the homestay revenue calculator to try several scenarios.
What moves the result most
| Scenario | ADR | Occupancy | Profit/month (est.) | Payback of 475 million |
|---|---|---|---|---|
| As above | VND 700,000 | 70% | 10.2 million | ~47 months |
| Price up VND 100,000 | VND 800,000 | 70% | 19.9 million | ~24 months |
| Fewer guests | VND 700,000 | 55% | −3.0 million | Loss |
| All bookings direct | VND 700,000 | 70% | 15.7 million | ~30 months |
The two biggest levers are room rate and share of direct bookings. An extra VND 100,000 a night goes almost straight to profit, because fixed costs do not change. OTA commission takes a real slice; see relying less on Booking and Agoda to win more direct guests, and ADR, RevPAR and occupancy to measure it.
Costs people forget
- Tax: revenue in the example at 70% is about VND 882 million a year, above the 500 million threshold, so VAT and personal income tax must be filed. See Vietnam homestay tax 2026.
- Replacing linen, mattresses and air conditioners after a few years: set something aside each month.
- Refunded deposits when guests cancel, and bank fees if any.
- Your own time: if you manage it yourself, still count a wage to see whether the homestay truly makes money.
- Low season: judge profit on the yearly average, not your busiest month.
Tracking real profit once you open
A spreadsheet before opening is a forecast. After opening, record revenue per booking and every cost, and compare with the plan each month. In HostBooking, bookings feed revenue automatically, you log expenses by category (recurring ones like rent write themselves) and see profit and loss month by month. HostBooking takes no commission per booking; the Free plan is enough for a small homestay, see pricing.
Frequently asked questions
How much capital does a 5-room homestay need?
It depends on the place and the house. In this post’s example (a rented house in Da Lat, assumed costs), spending comes to about VND 475 million, or about 630 million with a three-month reserve. Get real quotes before deciding.
What occupancy does a homestay need to break even?
Break-even occupancy = monthly fixed costs ÷ (what each night leaves after per-night costs) ÷ room-nights available. The example needs about 59%.
Rent or buy a house for a homestay?
Renting needs less capital, but the risk sits in the lease: a rent rise or losing the house before you pay back. If you rent, sign for longer than the expected payback period.
How much does OTA commission affect profit?
In the example, turning all OTA guests into direct guests lifts monthly profit from about VND 10.2 to 15.7 million, because 15% commission no longer comes off half the nights.