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Travel and Tourism in Vietnam, Key Trends and Opportunities to 2016

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Travel and tourism in Vietnam contributed about XX% to the national GDP in 2011, which indicates a significant increase from the XX% it contributed in 2010. Travel and tourism also accounted for XX% of the country’s total employment in 2011. Vietnam’s tourist volume, which includes inbound, domestic and outbound tourists, increased during the review period (2007–2011). The main reasons for this growth include Vietnam’s growing economy, hosting of international fairs and exhibitions, government initiatives to promote the country as an attractive tourist destination, and increasing level of leisure and business travel. In 2011, Vietnam recorded the fourth-fastest inbound tourism growth in the world. The main growth drivers over the forecast period will be the government’s efforts to increase inbound tourism, the country’s improving consumer confidence and the high demand for promotional offers provided by travel and tourism suppliers.

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									Travel and Tourism in Vietnam,
Key Trends and Opportunities to
2016
Market Intelligence Report

Reference code: TT0011MR
Published: March 2012
www.timetric.com




Timetric

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Tel: +44 (0)20 7936 6400

Fax: +44 (0)20 7336 6813




                             www.timetric.com
 EXECUTIVE SUMMARY



1 Executive Summary
        Vietnam was ranked the fourteenth most attractive destination to develop travel and tourism businesses
        within the Asia-Pacific region in 2011, according to the Travel and Tourism Competitive Index (TTCI).
        Travel and tourism in Vietnam contributed about 5% to the national GDP in 2011, which indicates a
        significant increase from the 3.9% it contributed in 2010. Travel and tourism also accounted 3.0% of the
        country’s total employment in 2011. Vietnam’s tourist volume, which includes inbound, domestic and
        outbound tourists, increased from 25.30 million in 2007 to 34.65 million in 2011, at a compound annual
        growth rate (CAGR) of 8.18% during the review period (2007–2011). The main reasons for this growth
        include Vietnam’s growing economy, hosting of international fairs and exhibitions, government initiatives
        to promote the country as an attractive tourist destination, and increasing level of leisure and business
        travel.

        Large volume of inbound tourism

        According to the WTO, Vietnam accounted for the fifth-largest number of inbound tourist arrivals among
        ASEAN countries in 2011. Vietnam also recorded the fourth-fastest tourism growth in the world in the
        same year. The favorable trend in inbound arrivals is the result of the country’s hosting of several
        international events and fairs, aggressive promotional tourism campaigns and increasing government
        investment in travel and tourism. Tourism revenue in the country reached US$6.2 billion in 2011,
        compared to US$4.6 billion in 2010. There were 5.25 million inbound tourist arrivals in the country in
        2011, and the top three countries accounted for 36% of the total inbound arrivals. The peak season for
        inbound tourism is September to March. International tourist arrivals are expected to increase at a CAGR
        of 6.72% over the forecast period (2012–2016), to reach 7.19 million tourists in 2016. The main growth
        drivers over the forecast period will be the government’s efforts to increase inbound tourism, the
        country’s improving consumer confidence and the high demand for promotional offers provided by travel
        and tourism suppliers.

        Cruise tourism on rapid growth in Vietnam

        Vietnam is developing into a popular destination for cruise tourism, and holds strong potential for the
        future growth of cruise tourism. The country benefits from its location between North and South Asia, and
        its close proximity to the region’s cruise hubs of Hong Kong and Singapore. The Vietnamese cruise
        tourism market registered steady growth during the review period, and cruise passenger volume reached
        65,198 passengers in 2011. In addition, several cruise line operators, including Royal Caribbean, Costa
        Croisieres, Cunard and StarCruises, have recently added Vietnam to their itineraries. The cruise tourism
        market’s growth will be supported by the introduction of attractive tours, supportive government policies
        and quality service over the forecast period.

        Hotel market poised for strong growth

        The increasing tourism levels and positive investment environment in Vietnam is encouraging several
        international hotel operators to invest in the country. Hotel operators are entering the country through
        direct investments, joint ventures, management contracts and franchise agreements. Luxury hotel
        companies such as Accor, Hilton, Sheraton, Hyatt, Marriot, Banyan Tree, Intercontinental group and Sol
        Melia opened new hotel properties during the review period, and expanded their brands in popular tourist
        destinations such as Hanoi, Da Nang, Ho Chi Minh, Vung Tau, Nha Trang, Hoi An and Quang Ninh.
        Several existing operators are also renovating their properties to capitalize on the increasing inbound
        tourist arrivals. However, there is scarcity of hotel rooms in Vietnam’s small tourist locations,
        mountainous areas and countryside.




Travel and Tourism in Vietnam, Key Trends and Opportunities to 2016                                              Page 2

© Timetric. This product is licensed and is not to be photocopied                                  Published: March 2012
 EXECUTIVE SUMMARY



        Government efforts to improve tourism

        The Vietnamese government has implemented various initiatives to encourage inbound tourists to visit
        the country. The Vietnam National Administration of Tourism (VNAT) selected some cities and provinces
        to host festivals such as the Mekong festival, Nha Trang sea festival and Can Tho fruit festival. These
        festivals included activities such as exhibitions and fairs, which attracted domestic and inbound tourists.
        The government also organized several tourism events, such as the International Travel Expo (ITE) in Ho
        Chi Minh City, National Tourism Year 2011 in Phu Yen and Caravan Week in Quang Ngai province
        during 2011. In addition, Vietnam is preparing to host events such as the National Tourism Year 2012
        and Hue Festival in 2012 to promote tourism. The country will continue to participate in international
        tourism events such as ITB ASIA in Singapore, JATA in Japan, WTM in the UK and road-shows in
        different countries to promote itself as an attractive tourism destination to foreign countries. Travel
        suppliers such as hotels, airlines, tour operators and car rentals are also offering discounts to attract
        tourists. Some of the tour operators have partnered with airlines to offer discount tours for tourists. These
        initiatives will attract more inbound tourists over the forecast period.

        Aviation market anticipating strong growth

        The Vietnamese aviation market is expected to register significant growth due to the high demand from
        domestic and business passengers. According to the International Air Transport Association (IATA),
        Vietnam is expected to be the third-fastest-growing aviation market in the world, following China and the
        United Arab Emirates. The IATA also expects the country to register second-fastest growth worldwide in
        domestic passenger volume after China. Despite the country’s large population, the low-cost carrier
        (LCC) penetration is low compared to other Southeast Asian countries. This provides huge potential for
        the growth of LCCs in Vietnam. Domestic carriers have started increasing their flight frequency and
        number of routes to benefit from the rising aviation demand. The competition among airlines is expected
        to increase on main routes over the forecast period, and airlines will be forced to offer lower ticket prices
        to attract more passengers. The country’s strong economy, favorable demographics, expanding tourism
        industry and gradual liberalization of the aviation market offer strong prospects for the market to
        capitalize on.




Travel and Tourism in Vietnam, Key Trends and Opportunities to 2016                                                  Page 3

© Timetric. This product is licensed and is not to be photocopied                                      Published: March 2012
 TABLE OF CONTENTS



TABLE OF CONTENTS

1      Executive Summary .............................................................................................................. 2
2      Introduction ............................................
								
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