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Tony Milton MRICS

BSc (Hons) Est Man

Tourism - National
Monday, 16 March 2009





Viet Nam has over 3,200km of coastline and many provinces have beautiful beaches but sea-borne tourism is still under-developed. However, things are changing quickly as investment in tourism in 2007 broke records for attracting foreign investment, reporting 47 projects totaling USD$1.86 bil­lion, triple the 2006 figure and equal to the total amount of the 7-8 previous years. Total registered foreign investment capital into hotel construction and tourism projects of the country now amounted to over USD$11 bil­lion or 10% of total FDI commit­ments. Foreign investors were particularly in­terested in building entertainment parks, hotels, resorts and golf courses on a large scale and with high-quality services. Over the past 15 years, tourist arrivals increased by 20% each year on average and increased 11 fold from 250,000 in 1990 to 3.5 million in 2005. Recent exemptions of visas for citizens from a number of coun­tries, including Japan, South Korea and some Nordic countries has been a most important factor in growth of the tourism industry. The long-awaited Tourism Law took effect January 2006, the most important legal document concern­ing tourism activities, and the national tourism action plan for 2006-2010 was approved, with the aim of turn­ing Vietnam into one of the leading tourism destinations in Southeast Asia. The objective of this plan is to grow tourism by 10 to 20%. In 2010 Vietnam should attract 6 million foreign visitors and 25 million domestic tourists, earning revenues of USD$4-$5 billion. Some USD$5.5 billion will be invested in 2006-2010 to make the country's tourism industry a fast growth engine. In the VNAT ac­tion program for 2006-10 about USD$1.5 billion will go to build­ing infrastructure, especially for nationally important tourism complexes and theme parks. The country is developing 4 tourism complexes of national importance : Halong­ Cat Ba in Quang Ninh and Haiphong; Canh Duong-Hai Van-Non Nuoc in Danang and Thua Thien-Hue Province; Nha Trang Bay in Khanh Hoa Province; and Dankia-Suoi Vang in Lam Dong Province.












The Vietnam Hotel Sur­vey 2007 (Grant Thornton Vietnam), examined the performance of 29No. 3-5 star hotels in big localities in Vietnam's 3 regions in 2006. Vietnam now has some 25No. 5­ star hotels, 64No. 4 star and 135No. 3 star ones with a total of 45,000 rooms spreading in 3 regions. Among types of guests, tourist groups made up 31.5% in 2006 (up 4.7% year-on-year), in­dividual tourists made up 28.4% (up 3.5%), but businesses made up 22.7% (down 2.4%). In 2006, the av­erage room rate at deluxe facilities from 3-5 stars increased to US$60.06 per room night, 7.7% higher than that in 2005 (US$55.78). The average room rate saw an in­crease of 21.1% in the North and 15.7% in the Central while the South remained the same. The North was also the leader in occu­pancy with 74.4% while the South took the second position with 59%.





Regarding the growth compared with 2005, only the Central saw the increase of 5.6% (to 57.8% from 52.2%) while the North and South saw the decreases of 5.3% and 5.4%, respectively. The peak business falls between October and March and the occupancy is between 90-95%, and even 100%, while in other months, the rate is much lower. Ex­penses for sales and marketing, in 2006 increased 5.7% in the central region; the figure was 3.4% in the North and 4.6% in the South compared with 2005. An employee working at a 5 star hotel earns US$330 a month while those working at a 3-4 star hotels can get US$159 and US$328 a month respectively. It is noteworthy that hotels in the central region spend more than those in other regions because there are 1.9 employees working for a room; the number is only 1.4 in the South and 1.3 in the North. Explaining this, some said that it is possibly because along the central region, there are more de­luxe resorts, which require a large number of employees to maintain specific characteristics of the es­tablishments.




In 2005, the revenue from rooms made up 63.4% while that from food and beverages was 26.4 %. However, in 2006, the revenue from food and beverages increased 4.9% to 27.7% while that from rooms decreased 3.6% to 61.1%. Compared with the northern and southern counter­parts, the food and beverages in the central region accounted for 37% of the total revenue.






Vietnam will build an additional 28,000 hotel rooms to raise the total to 170,000 hotel rooms in 2010 - enough to cater to 6 million international arrivals and 25 million local tourists. The current figure is 142,000 rooms. Since 1990 the total number of tourists has strongly increased, averag­ing out at 30% annually. In 1990 the country's tour­ism catered to 150,000 foreign visitors and 1 million local tourists. In 2006 the figures shot to around 3.6 million in­ternational arrivals 17.5 mil­lion domestic tourists. Currently, the country has 7,040 tourist accommodation facilities including 25 five ­star hotels, 64 four-star ho­tels, 135 three-star hotels, 1,000 two-and one-star hotels and other sub-standard accommodation. Star-rated hotel rooms number only some 45,000. VNAT believes that the country will have more than 170,000 rooms to meet the demand of tourists in 2010.




The tourism industry has created more than 234,000 direct jobs and over 510,000 indirect jobs and so forms an important part of the government’s socio-economic development platform for the future. In the next 3 years Viet Nam will need 1.4 million more people to work in the hospitality industry. VNAT has predicted that to meet the personnel de­mand in the sector, approxi­mately 19,000 people will need to be trained annually in tourism management and hospitality skills in order to fill an expected 308,000 positions, including tour guides, receptionists and hotel staff.




Vietnam is witnessing a lot of for­eign investment in large tourism projects including hotels, entertain­ment parks, resorts and golf courses. According to the Ministry of Culture, Sports and Tourism, Vietnam li­censed 47 FDI tourism projects worth USD$1.86 billion in 2007, which was triple the number from 2006. Singapore's Banyan Tree Group received a license to build a deluxe resort project in Chan May-Lang Co Economic Zone in the central prov­ince of Thua Thien-Hue worth USD$276 million. The company plans to increase its capital to USD$1 billion. The 300 hect­are resort will include 10 hotels with 3,000 rooms, a tourist area, apart­ments, restaurants, golf course, ten­nis courts, interna­tional conference center, 470 houses and entertainment areas to serve at least 100,000 visitors. American firm Global C&D Inc along with a number of other investors, have also announced plans to develop the Dragon Beach Resort, a tourism ­entertainment com­plex in Dien Duong of Quang Nam worth USD$10 billion. The 400­ hectare complex will feature many luxury facilities including hotels, international conference centers, a golf course, a com­munity sports area and entertain­ment facilities. Investors are also looking to develop casino services as well. This is the biggest tourism project in the province as well as in Vietnam. Over the past 15 years many resorts have been developed and many, many more planned at beautiful beaches, especially those on the coast from the central region down to the south. According to some unofficial sources, there are about 100 resorts operational through­out Vietnam. Other sources say about 50 luxury resorts have been developed in the central region alone. A tour­ism official says there are more than 100 resorts opera­tional in Vietnam, but only 20 or so are up to interna­tional standards.



Vietnam’s Beaches Index – Comparison & Classification


Beach             Province        Location    Natural Factors   Service         Total  

Do Son             Haiphong             3                 3                           3                 9

Sam Son          Thanh Hoa           2                 2                            2                6

Cua Lo             Nghe An              2.5               2                           2                 6.5

Nhat Le            Quang Binh         2                  2                           3                 7

Lang Co            Hue                    4                  3.5                       3.5               11

Non Nuoc          Danang               4                 4                           4                 12

Cua Dai            Quang Nam         3.5               3                           4.5              11

Quy Nhon         Binh Dinh            3                  3                           3                  9

Nha Trang        Khanh Hoa           4                  4                           5                 13

Mui Ne            Binh Thuan           4.5               4                           4.5               13

Vung Tau         BR-VT                 4.5              3                           5                  12.5




Over the past decade the total number of foreign invested projects in the travel and leisure sector has mushroomed to 182 worth a combined USD$4.3 billion. Foreign investors poured more than USD$776 million into 17 major tourism projects around the country in the first half of 2007.



Ø     The French Association of Travel Agencies said, "Our country is cold for 6 months of the year which is why we love the idea of relax­ing by a warm sea. That's why we like Thailand and Sri Lanka, though not so much since the tsunami. What French tourists want is to spend 4-5 days in one province, be it in the north or south, and then a few days by the sea." The French usually took 15 days off for a holiday but if they spent the duration on the sort of north-to-south package tour organized by a Vietnam­ese company, they usually wound up tired from the long and arduous trip. "Moreover, a shorter tour would mean fewer stop overs and hotels, encouraging visi­tors to return to Vietnam to explore more." Vietnam's big advantage is the wonderful hospitality of the locals, he added. "You should capitalize on this." The French also think Vietnam’s publicity efforts are wanting. While many French people know about Angkor Wat in Cambodia, few know much or indeed anything about Vietnam’s listed World Heritage Sites like the Cham ruins at My Son.



Ø     Viet Nam was recognised both as a gourmet paradise and as one of the safest destinations in the world for travelers. A Footprint Travel author writes that the country's "environment is captivating and the food divine. I think it's the best food in the world." Aon Insurance Company ranked Viet Nam among the safest countries in 2005. Vietnam was chosen as Most Outstanding Place in the Far East at the 2005 Viaggiatori International Tourism Fair held in the Swiss city of Lugano.



Ø     In mid-2007 Belgium’s DeMorgen newspaper has published an article proclaiming Vietnam as one of the 3 safest countries for tourists to visit together with Costa Rica & Ireland.



Ø     Of Vietnam’s total foreign direct investment of USD$5.15 billion in the first 9 months of 2006, upto USD$2.2 billion was invested in the tourist industry.



Ø     In 2006 the ADB recently granted Vietnam a USD$3 billion loan to sustain economic development with a focus on tourism.



Ø     Tiger Airways plans to open a route between Singapore and Da Nang and future expand the route from Danang to other South East Asian countries. The air carrier hopes to transport 1 million visitors to Danang each year.



Ø     Investments in the Asia Pacific hotel sector are expected to exceed USD$7 billion in 2007 - up 33% from 2006. New markets such as mainland China, India and Vietnam are expected to see increasing investor interest while Singapore, Hong Kong and Tokyo will remain favoured destinations.



Ø     A Pacific Asia Travel Association – PATA – and Visa survey, which was con­ducted earlier this year, points out 49% of the respondents in such large markets as Austra­lia, Canada, Germany, Swe­den, the United Kingdom and the United States name low cost goods and services as their top reason for choosing Vietnam. The reasons that follow up are natural beauty (44%), Viet­namese culture (41 %), adven­ture tourism (38%), and friendly local people (35%). Vietnam is also emerging as a new favored destination for international travelers, par­ticularly those from Europe. Overall, 52% of the respon­dents are considering Asia as their next travel destination in the coming 2 years, up 9% from the previous year's survey results. The first Asia Travel Inten­tions Survey in 2005 revealed 34% planned to come to Asia. The 2007 survey ranks Thai­land as the number one desti­nation on travelers' holiday lists, followed by Japan and China. The findings do not list Vietnam in the top 3 destinations because "Viet­nam is still at the beginning stage of tourism while Thailand is a very strong destina­tion," said Thomas Cook. The World Travel and Tourism Commission esti­mates that tourism and travel will account for over 10% of Asia Pacific's Gross Domestic Product in 2007, which equates to USD$1.3 trillion in economic activity.



Ø     Life Resorts "recommends investment in Vietnam because it is a new destina­tion and has a `shelf life' that is much longer than Bali, Phuket or Langkawi. Bali has long been popular with Australians but is still suffering after the bombings, and Phuket will take some time to recover from the tsunami. Langkawi is still new enough that, as a destination, it poses a threat to Vietnam."



Ø     Vietnam Airlines said the air­line was targeting annual growth of 12-14% between now and 2010 despite the increasingly fierce competition from both domestic and foreign airlines. In 2006 it transported more than 6.8 million passengers, 3.1 million of them foreigners – an increase of 1 million on 2005.In 2007 it aims for 7.7 million – up 14% on 2006 – with 3.4 million foreigners – up 10%.




Ø     Over 2.12 million foreign visitors travelled to Viet Nam in the first half of 2007 – up 15% over the same period in 2006. Tourism brought the coun­try USD$1.75 billion in revenue during the first half an most foreign tourists came from mainland China, fol­lowed by South Korea, the US, Japan, Taiwan, Australia, France, Cambodia, Thailand and Malaysia. Vietnam aims to attract over 4 million international and 19­-20 million domestic visitors in 2007 earning USD$3.5 billion.


Last Updated ( Monday, 26 October 2009 )
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