Vietnam fights a new battle: Boosting tourism industry

By: Reiner S.

HANOI (JP): For 26-year-old Hanoi-based tour guide Dang Ngoc Hung, four years experience in the tourism industry was enough for him to decide to spend all his savings on developing his own travel website.

"Vietnam's tourism is very promising. I want to capitalize on it," the English-speaking guide said.

Hung is just one of the millions of people among a new breed of the younger generation who have started to realize the crucial role tourism plays in generating hard currency.

Tourism experts unanimously agree that Vietnam has enormous potential in becoming a major tourist destination, particularly with its long sinuous coastline lined with sandy beaches, rugged mountains, a unique culture that is over a thousand years old and friendly, hospitable people.

"Tourism here will be booming within three to four years time," said John To, a hotel controller at Guoman Hanoi Hotel, a joint venture enterprise between Malaysia's Hong Leong Group and the Vietnamese government.

"Vietnam is a wonderful place. Potential is the key word," said Adam Riley, general manager of the Saigon Prince Hotel, a joint venture hotel in Ho Chi Minh City.

The government has also realized the benefit of tourism to the overall economy. In 1999, the Vietnam National Administration of Tourism (VNAT) launched an action program called "Vietnam: a destination for the New Millennium".

The campaign was aimed at changing local attitudes by helping both government officials and the public realize the important role of tourism in economy.

The government has also spent some US$1.4 million to promote Vietnamese tourist attractions overseas and another $200 million toward developing a tourism infrastructure.

The results, so far, seem to be encouraging. Between January and July this year, foreign arrivals had already reached 1.4 million compared to the full-year target of 2.2 million. The majority of visitors came from China, the U.S., Japan, France and Taiwan. Last year, foreign arrivals reached 2.1 million.

Ambitious target

VNAT recently unveiled an ambitious target. It hopes to boost the number of foreign tourists to 3.5 million per year by 2005, and 6 million by 2010.

The tourism authority predicted that tourism revenue would jump to $2.1 billion in 2005, and $4.5 billion in 2010.

Under the VNAT plan, some $2.5 billion in new investment is needed, including the development of more tourist facilities, hotel rooms and other infrastructure.

"There's so much opportunity for investors in the (Vietnamese) tourism sector," Riley said.

But experts say that there is still much work to be done in order for Vietnam to successfully market itself as a world-class tourist destination.

"This is our new battle," Hung said.

One of the immediate steps that needs to be taken is aggressive promotion overseas.

"The Vietnam of today is very different than that of two decades ago when the country was equivalent to war and suffering. We are now busy opening up our economy and courting foreign investors," said Ho Chi Minh City-based tour guide Nguyen Dinh An.

Would-be visitors have often complained of the difficulty obtaining hard information about Vietnam tourism attractions.

"It is much easier to obtain brochures about Thailand or Malaysia," one tourist from Europe said.

John To said that VNAT could not be blamed as it only received a very limited promotions budget of around $1.4 million, compared to $72 million received by the tourism authority of Thailand.

Hung hopes that his travel website at www.sivatravel.com can help promote Vietnam to tourists overseas.

Another problem that needs immediate attention is the relatively poor condition of roads and transportation in some areas. New investment is also needed to upgrade the condition of some tourist cites.

"The scenery here is very beautiful but the infrastructure needs improvement," said Leslie Snyder, a tourist from Columbus in the United States.

The government also needs to further ease visa arrangements. VNAT said that the growth in the number of tourist arrivals in the January-July period was partly a result of the recent easing in some visa restrictions and the re-opening of a number of international flights.

Economists said that, since the government had a very limited budget, it must further open up the economy to attract investors into the tourism sector, as well as the whole economy in general.

"The cost of doing business here in Vietnam is still very high," said one foreign businessman, pointing to the relatively high telecommunications cost as one example.

"Although the cost of labor is cheap here, other expenses are much higher when compared to Thailand and Malaysia," he added.

"The government has no other choice than to continue opening the economy. It's only a matter of time," said Pius Hugo Luechinger, general manager of Harbor View Hotel & Office Tower, the only international hotel in the port city of Haipong.

He argued that, with around 70 percent of Vietnam's 80 million population comprised of young people, the government needed to boost the economy to create more jobs.

The Vietnamese government started to open the economy in 1986. "I think they (the government) are doing a very good job. They are currently trying to resolve the various (economic) structural problems, but we must also understand that it will not be good for the country if it moves too fast (in liberalizing the economy)," Luechinger said.

Indeed, approved foreign direct investment (FDI) in the first seven months of this year jumped by 120 percent, to $1.08 billion, compared to the same period last year. So far, Singapore is ranked as the largest investor.

"Vietnam has great potential. The people are eager to learn and more people are learning English fast," said Daniel Sin, general manager of Singapore-based Deks Air Pte Ltd., which handles ticketing and cargo services for 16 airlines, including Vietnam Airlines.

"Singaporean investors always carefully calculate the risks when making investment. So if they are now here, it is a very good sign," he added.

Sin said that Deks had recently appointed PT Deks Aviation Internusa as its agent in Jakarta.

"It is about time that we enter Indonesia," he said, adding that Deks would help promote Vietnam in Indonesia in a bid to help increase trade and investment activities between the two countries as well as to attract Indonesian tourists to Vietnam.

Trade and investment activities between the two countries have been meager so far, but Indonesian visitors to Vietnam last year reached 7,061, which was a 198 percent jump from the 3,563 traveling there in 1999.(rei)