Figure 10 Swine flu's current situation

                      TOURISM INDUSTRY

                              Tourism Team
        College of Economics - Vietnam National University, Hanoi

                              Trinh, Tuan Anh
                             Nguyen, Quoc Tu
                           Nguyen, Linh Phuong
                             Nguyen, Thi Loan
              Specially conducted by Prof. Nguyen, Thuy Linh
     Specially supported by Chiba University of Commerce and College of

    Table of Contents


    List of tables and figures

    CHAPTER I ..........................................................................................................8
    1. The role of Travel and Tourism industry .........................................................8
    2. Travel and Tourism industry in the 3 tourism centers of the world .................9
    2.1. Asia ................................................................................................................9
    2.2. United States of America .............................................................................11
    2.3. Europe ..........................................................................................................13
    TRAVEL&TOURISM INDUSTRY ..................................................................15
    1. Impacts of the Financial Crisis in 2008-2009 ................................................15
    a.Economical impacts of the crisis .....................................................................15
    b.Social impacts of the crisis ..............................................................................17
    2. Impacts of the swine flu .................................................................................18
    3. Impacts of terrorism .......................................................................................20
    COUNTRIES ......................................................................................................21
    1. CASE STUDY 1: CHINA ..............................................................................21
    1.1.      Overview of the Tourism industry in China ............................................21
    1.2.      Problems occurred to that the Travel and Tourism industry ...................22
    1.3.      China Government’s strategies to help stimulate tourism .......................25
    EFFECTS EVALUATION: ................................................................................27

    2. CASE STUDY 2: JAPAN ..............................................................................28
    2.1. Overview of the Tourism industry in Japan ................................................28
    2.2. Problems that the industry has to encounter: ...............................................29
    2.3 Japan Government’s strategies to help stimulate tourism: ...........................31
    3. CASE STUDY 3: VIETNAM ........................................................................34
    3.1.     Overview of the Vietnam Tourism industry ............................................34
    3.2      Problems occurred to the Travel and Tourism industry...........................35
    3.3      Solutions to the problems .........................................................................40
    Chapter IV ...........................................................................................................43
    Conclusion and Recommendation ......................................................................43



    We would like to express our gratitude to all those who gave us the possibility
    to complete this thesis.
    First and foremost, we wish to express our sincere thanks to our supervisor
    Ms.Linh, Vice Director of Research, Cooperation and Development
    Department, whose help, suggestions and encouragements have helped us
    greatly in our research and completion of this thesis.
    Secondly, we would like to thank Ms. Ngan from Vietnam GPAC Team 2008,
    Prof. Hai Minh and Mr. Minh Anh for giving us many advices and pointers as
    well as comments on our work.
    Besides, during this work we have received remarkable help and
    encouragement from our beloved friends in class QH-2008-E QTKD, without
    whom we could not have completed the research.
    Last but not least, we are indebted to the Colleges of Economic and the
    Research, Cooperation and Development Department, for believing in us and
    giving us the opportunity to participate in GPAC 2009.

                                                                Hanoi, August 2009

                                      Nguyen Quoc Tu                Trinh Tuan Anh
                                      Nguyen Thi Loan          Nguyen Linh Phuong


   In July 2007, the global financial crisis of 2007-2009 began in the United
    States, and then started to spread to Europe and Asia. As the crisis deepened, a
    considerable number of banks, mortgage lenders and insurance companies
    failed, equity prices plummeted, and economic activities experienced a
    significant decline, sucking the economic world into a period high volatility.
   In April 2009, an outbreak of swine flu started in Mexico. Two months later, the
    virus spread globally, and the World Health Organization (WHO) declared the
    outbreak to be a pandemic. As all transmission of the virus is human to human,
    the virus spread internationally with such a surprising speed that healthcare
    systems worldwide were overwhelmed and put under stress.
   Beginning with what is considered the largest act of international terrorism - the
    incident of September 11, 2001 – the new wave of terrorism has put the world
    in fear.
    Other major terrorist attacks have also occurred around the globe: in New Delhi
    (Indian Parliament attacked); in Bali (car bomb attack); London subway
    bombings; Madrid train bombings and the most recent attacks in Mumbai
    (hotels, train station and a Jewish outreach center), deliberately target or
    disregard the safety of civilians.
   It was recognized that changes to the world’s climate nowadays are
    considerable and has become a cause for concern. Sea level rises threaten the
    viability of coastal zones and small islands. Temperature rises are predicted to
    change precipitation patterns that will likely cause problems about the water
    supply. Finally, extreme climatic events such as storms and sea surges are
    predicted to increase in both magnitude and frequency.

    Above are some of the main problems that has recently plunged the world into
    an economically and socially unstable state. As a result, the Tourism industry as
    a whole is facing a period of austerity and uncertainty in the near future.
    However, some regions have managed to turn the current crisis into
    opportunities, attracting millions of tourists and generating billions of dollars in
    revenue. In this paper, we first analyze in-depths the current situation of the
    Tourism industry, both wholly and regionally, to find out the impact of the
    world’s affairs on Travel and Tourism. Consequently, we discuss in details the
    current situation the government’s strategies and policies to support the
    Tourism industry in 3 Asian countries – Vietnam, Japan and China.

    List of tables and figures

    Figure 1: Contribution of the T&T Industry to Worlds' GDP and
    Figure 2: Contribution of South East Asia T&T Industry to Total GDP and
    Figure 3: South East Asia Tourism GDP real growth………………………...10
    Figure 4: Contribution of T&T industry to South Asia GDP and
    Figure 5: United States T&T industry’s growth rate and contribution to
    Figure 6: Contribution of US T&T industry to GDP and employment……….13
    Figure 7: European Union Travel and Tourism GDP………………………...14
    Figure 8: EU- Travel & Tourism Economy GDP and Employment…………..14
    Figure 9: Top Five-Overseas World Regions for Visitation to the U.S…..…….17
    Figure 10: Swine flu’s current situation……………………………...………………….18
    Figure 11: Contribution of Vietnam T&T industry to total GDP and
    Figure 12: Total international visitors to Vietnam……………………..……………..36
    Figure 13: Total international visitors to the United States………………...………37


    1. The role of Travel and Tourism industry

    The economy in the 21st century is dominated by three industries:
    telecommunications, information technology and tourism. In 2009, the Travel
    and Tourism Industry (T&T industry) as a whole provides 7.6% of global
    employment – which means more than 219 million people worldwide are
    employed in the sector – and contributes US$5.474bn to World's total GDP
    (9.4% of total GPD).


          Figure 1: Contribution of the T&T Industry to World’s GDP and Employment

    Also, tourism is a global-scale industry with growing impacts on the
    environment, as well as profound implications for regional and local
    development. In many developed and developing countries, tourism
    increasingly provides new opportunities, employment and economic benefits to
    local communities. Many countries see tourism promotion as an expedient and

    relatively inexpensive strategy to attract foreign direct investment by, for
    example, showcasing natural areas and local indigenous cultures.

    2. Travel and Tourism industry in the 3 tourism centers of the world

    2.1.   Asia

    In Asia, mass travel has blossomed in recent years. Tourism has become one of
    the most important sectors in the economy in Asia Pacific countries, and the
    region is now regarded as a new centre of tourism. An emerging wealthy
    middle class of Asians are joining their European and American counterparts on
    their pleasure, business, and adventure trips around the globe. The rapid growth
    of the tourism industry has been attributed to a number of factors, among which
    are strong economic growth, increase in disposable income and leisure time,
    easing of travel restrictions, successful tourist promotion, and recognition by
    the governments.

    Unlike its EU and US counterparts, the tourism industry in Asia cannot be
    elaborated as a whole due to the vast diversity in geographical and cultural
    features of Asian countries. The continent is, from a tourism viewpoint, divided
    into 5 regions: North East Asia, Middle East, South East Asia and South Asia.
    Based on the focus of this study which revolves around Vietnam, Japan and
    China, we only discuss the statistical data of the tourism industry in South East
    Asia and South Asia.

    a. South East Asia.

    The Travel and Tourism Industry plays an important role in the economy of
    South East Asia. As we can see from the two charts below, in 2009 the industry

     contributes directly US$56 bn to total GDP, which is equal to 3.7% of total
     GDP. The tourism industry also directly creates more than 8 million jobs
     (representing 3.1% of total employment). As a whole, the contributions of T&T
     industry are even greater. In 2009, the T&T industry as a whole contributes
     US$156 bn (10.1% of total GDP) in revenue, and creates more than 23 millions

       Figure 2: Contribution of South East Asia T&T Industry to Total GDP and Employment

     However, due to the economic recession, South East Asia’s Tourism industry is
     facing a sharp drop in the period. In fact, it is predicted that at the end of 2009,
     the industry would experience a real decline of -3.2% in GDP growth.

                        Figure 3: South East Asia Tourism GDP real growth

     b. South Asia

     Although South Asian countries possess geographical and cultural features
     which are similar to their South East Asian counterparts in many ways, the
     Travel and Tourism industry in South Asia has somehow managed to develop
     significantly to become one of the main tourism markets in the world, standing
     at World’s No.1 in term of growth rate in recent years.

            Figure 4: Contribution of T&T industry to South Asia GDP and Employment

     According to WTTC, in 2009 the Tourism industry in South Asia contributes
     5.9% to total GDP and 5.8% to total employment of the region. Even though the
     T&T industry today has to face many issues and troubles, some countries such
     as China have managed to not only overcome those problems but turn them to
     their advantages. As a result of successful strategies and policies to encourage
     Tourism, China has achieved a positive growth rate of 0.6% in 2009, compared
     to the 0.0% of the region

     2.2.     United States of America

     U.S. Tourism has stood at the position of World’s No.1 in term of capital
     investment, generated revenue and number of visitors. With its natural wonders,

     cities, historic landmarks and entertainment venues, the U.S. attracts millions of
     international and domestic tourists each year. The Tourism Industry in the
     United States grew rapidly in the form of urban tourism during the late
     nineteenth and early twentieth centuries. New York, Chicago, Washington, D.C.
     and San Francisco, all major US cities, has already attracted a large number of
     tourists by the 1890s. By 1915, city touring had marked significant shifts in the
     way Americans perceived, organized and moved around in urban environments.

     Nowadays, T&T is one of the main sources of income of U.S. Economy. By
     2009 the tourism industry had climbed to contribute US$1,356.9 bn (9.5%) to
     the country’s total GPD.

     However, due to recent threats, particularly terrorism, financial crisis and the
     swine flu, there has been slower growth in travel volume, reflecting a maturing
     industry and a period of challenges and slowdown in the industry. In fact,
     according to a report of World Travel and Tourism Council (WTTC), in 2009
     U.S. T&T industry is expected to see real decline of 4.2%, the largest fall since
     9/11 terrorist attack.

            Figure 5: United States T&T industry’s growth rate and contribution to GDP

     In the future, as expected T&T industry will have more contribution to the total
     GDP. As a result, the number of employments in T&T industry will also
     increase but with a lower rate.

                Figure 6: Contribution of US T&T industry to GDP and employment

     2.3. Europe

     By far, Europe is largely considered the top travel destination in the world, with
     a gigantic resource of history, cultures, and cuisines. For those with an interest
     in the past, there are the fabulous art galleries, museums and old buildings,
     while those who enjoy the great outdoor have a wide range of opportunities
     from the golf courses of Ireland and Scotland to the hiking trails and snowy
     mountains of the Alps. Moreover, Europe generally provides high quality
     transport, accommodation and restaurant facilities to tourists though those in
     Western Europe can be expensive compared to other tourist destinations.

     Only after the Second World War is Europe’s tourism industry considered truly
     developed. Due to factors such as increasing personal income, lengthening life
     expectancy and the reduction of working hours, the tourism industry has now
     grown to directly contribute US$581 billion to the total GDP (which is
     equivalent to 3.4%). However, since Travel & Tourism touches all sectors of the
     economy, its real impact is even greater. EU’s Travel & Tourism economy

     directly and indirectly accounts for 9.9% of total GPD, which equals to
     US$1,668 billion, as described in the graph below.


                      Figure 7: European Union Travel and Tourism GDP

     Following a period of recession, in 2009 EU’s T&T Industry face a decline rate
     of 3.5% in term of Economy GPD and 3% in term of Employment. In spite of
     that, both growth rates in Tourism’s generated GPD and Employment are
     projected to increase sharply in the coming years

                Figure 8: EU- Travel & Tourism Economy GDP and Employment


     1. Impacts of the Financial Crisis in 2008-2009

     The world financial crisis occupies the first pages of newspapers all over the
     world for several months now. It is understandable that the tourism industry,
     being volatile and fragile as it is, may not stay unaffected by the crisis.
     According to The United Nations World Tourism Organization (UNWTO), the
     situation in the tourism sector is getting worse. There is a drop in demand from
     both business and leisure tourists. The slowdown has begun with the 2008
     summer holidays in the northern hemisphere. Further drop in the sector
     appeared in late 2008 and the first half of 2009.

     a. Economical impacts of the crisis

     Travel and Tourism investment are expected to suffer greatly during this time
     of recession, with the credit crisis causing firms and businesses to cut down on
     all deferrable costs. In fact, the total capital investment on Tourism in 2009 is
     US$ 1,220 bn, a 5.25% drop compared to the last year. Further decrease are
     also predicted over the next two years, especially in cooperate travel. Resident’s
     travel, which tends to be less affected, also experiences a 3% drop, despite the
     substitution of domestic travel over foreign trips.

     The global financial crisis will have had its heaviest impact on the real sectors
     of countries in the Middle East, such as Tunisia, Algeria, and Morocco, where
     export revenues, capital inflows and tourism are expected to slow significantly.
     In 2007, export revenues as a share of GDP was 44.7 percent in Algeria, 42.7

     percent in Tunisia and 19.5 percent in Morocco. The 3 countries are expected to
     witness deteriorating labor market conditions. Also, as unemployment in
     Europe rises, remittances from expatriates will decrease, affecting investment
     and household consumption. In 2007, remittance inflows made up around 9% of
     GDP in Morocco, 5% in Tunisia and 2.2 percent in Algeria. In addition to
     remittances, capital inflows from these countries are expected to reverse the
     growing trend, worsening the current account balance in these countries, which
     was had a 1 and 2.6 percent deficit in 2008 and is expected to further worsen by
     2012, according to IMF estimates.

     The situation is particularly critical in Morocco, where the T&T industry is
     threatened with a decline in its revenue from international tourism, expatriate
     remittances, and its external investment (the bank’s external deposits have lost
     around 7 percent), which has already decreased by 17 percent. These sources
     make up around $20 billion and have been traditionally used to finance
     Morocco’s external trade deficit. Though the government has publicly stated
     that the Moroccan economy will face difficulties in 2009 due to the wider
     spillover of the financial crisis and its potential impact on its revenues of hard
     currencies, Morocco has been slow to develop recovery packages.

     Those large tourism centers of the world also suffer from the current economic
     environment. An example is in the U.S, where international visits fell 12
     percent in May 2009 from the year before. Those still flying over spent a lot
     less – only $9.5 billion, down 22 percent from the same period last year. May
     was the seventh consecutive month in which international visitor spending
     declined. For the first five months of the year, international visitation fell 10

     percent, and spending dropped 14 percent to $50.1 billion relative to the first
     five months of 2008.

                                           (Source: U.S. Department of Transportation)
               Figure 9: Top Five-Overseas World Regions for Visitation to the U.S

     b. Social impacts of the crisis

     First of all, it can be seen that during the crisis period, many people lost their
     jobs, making it harder for them to support themselves and their families. Having
     a tighter budget, they have to save money by only buying necessities instead
     of luxuries goods such as branded products, jewelries, etc. It is also due to that
     reason that nowadays people are cutting down on travelling and vacations,
     therefore affecting the Travel and Tourism (T&T) industry. An example can be
     seen in American, where many Americans in the past used the equity in their
     homes to finance vacations, among other things. Now in the reality of tighter
     credit availability, people will be taking fewer, shorter vacations close to home.
     Tourists also expect to spend less on souvenirs and shopping, meals and
     entertainment, and on hotels.

     Besides, the soaring price of crude oil led to increased cost for airlines,
     trains, cruise lines, and bus lines, leaving them no option but to raise ticket
     prices or services costs, while at the same time consumers had less discretionary
     income for travel. Even though the price of oil has dropped tremendously in the
     last few months, the airlines still predict multi-million dollar losses in 2009 due
     to the projected three percent drop in number of passengers.

     However, people will not stop to travel. Even though the global economic crisis
     has   affected   tourism     industry, it’s generally understood         that instead      of
     continuing to decline, the tourism industry will flow in a different way. It is just
     like the first law of economics says: “the economy is self-adjusting” and the
     same is valid for tourism. Nevertheless, there will be change in the traveling
     behavior of the people, and it will be up to the managers and marketing
     departments in    the Tourism and Hospitality           businesses to adopt        different
     strategies to survive.
     2. Impacts of the swine flu


                              Figure 10: Swine flu’s current situation

     While the world economy should in principle be able to cope with the swine flu
     pandemic, there is a significant risk that it might trigger a set of unfavorable
     behavioral changes that tip the world back into recession.

     If the H1N1 virus mutates and results in a more severe outbreak in the autumn,
     this would hit the world economy just as it starts to recover from the credit
     crunch.   It would interfere with economic activity, threaten already fragile
     businesses and put further strains on financial markets and fiscal balances.
     People would be reluctant to travel and would avoid public spaces. This could
     generate a vicious cycle that postpones the economic recovery – as well as that
     of travel and tourism – for another couple of years.

     As an illustration of a bad case scenario, Oxford Economics estimates that an
     epidemic in the UK with a 30% infection rate and a 0.4% death rate might knock
     5% off GDP, including a 60% shortfall in tourist arrivals for six months and a
     30% cut in discretionary spending by UK consumers.

     Such a scenario is not yet any more than a possibility which is difficult, if not
     impossible, to quantify. In the meantime, consumers still have to face the weak
     economic environment. Although Europeans have been willing to postpone or
     cancel their secondary holidays, the majority are expected to protect their
     principal summer holidays, thus suggesting that arrivals Figures over the current
     quarter will be only slightly lower than those in the same period of 2008. But
     there is general agreement that consumers will be economizing: lengths of stay
     will be shorter and spending lower, and domestic travel may benefit at the
     expense of international destinations.

     3. Impacts of terrorism

     It can be said that terrorist attack is one of the biggest threat to human being.
     This type of activities often occurs in public places, where there are many
     people coming to and gathering. The victims are visitors attracting spots such as
     supermarkets, commercial centers, great buildings or crowded cities. Because
     of this, when the terrorists attack these places, the damage is very huge and

     First of all, it will destroy infrastructures of society in general and of tourism
     industry in particular. As a result, the fall in the number of visitors to these
     places will appear. It is because of a fact that, when these structures are
     attacked, they will become less attractive to travelers than before.

     Secondly, the regions that are attacked or in the danger of being attacked by
     terrorists or in the cases of wars cannot have as many visitors as they used to.
     When hearing about the threat of terrorists or even the warning about it, people
     become afraid of traveling or coming to crowded places. They think they can be
     attacked whenever and wherever and may be they will be dead. The fear is
     always beside them. They decide to stay at home and reduce traveling as much
     as they can to be safer. However, traveling doesn’t stop in that case, people still
     travel but in nearer distance or travel to safer destinations. This is not only bad
     for domestic tourism industry but also not good for international tourism
     industry. Especially, today with high technology’s development, people around
     the world can update information very quickly and exactly, so it is easy for
     them to choose safer destination as well as avoid dangerous places.

     In the other hand, terrorist can bring chance in some cases. Some countries
     which have stable politics and peaceful environment can take advantage of this
     event to attract more tourists. In this situation, they become safer than the rest
     so they can develop their T&T industry in this period of time.


                              1. CASE STUDY 1: CHINA

     1.1.      Overview of the Tourism industry in China

     Thanks to the great importance attached by the government, the tourism
     industry in China has become a new but most dynamic and potentially strong
     factor in the industry. It has been serving as a new growth point in China’s
     national economy. And in many parts of the country, tourism has been regarded
     as a pillar, superior or priority industry in bringing up the local economic
     development. The position of tourism in the national economy continues to be
     enhanced and upgraded.

     In 2002, China ranked the fifth in the world in inbound tourism in terms of both
     overnight tourist number and foreign exchange earnings. While its domestic
     tourism was among the world’ s biggest, fastest- growing and most potential
     markets, China’s outbound tourism also saw steady development with each
     passing year. The international tourism development of China has investment
     environment, intensified the opening to the outside world, and helped the
     growth of related industries. It has played an active role in increasing internal

     demand and employment, in enhancing the structural readjustment and inter-
     regional economic link, and in assisting the poor areas to break away from
     poverty. Moreover, it has greatly promoted the economic prosperity and social
     development of China’s and the friendly exchanges between the Chinese people
     and the peoples of the world.

     From 1996- 2002, tourism in China has been growing by 2- digit numbers for
     seven straight years, which is far above the average GDP growth rate of the
     same period, and has thus become a new growth point in the national economy
     of the country.

     Currently, China has become an important tourism destination in Asia.
     Domestic tourism is also growing vigorously. In 1999, the number of domestic
     tourists reached 719 million, spending a total of 283.2 billion Yuan-14.3
     percent and 15.9 percent increases over 1995, respectively. With the
     improvement of the Chinese people's living standards, Chinese citizens have an
     increasingly strong interest in traveling abroad. In recent years, Chinese citizens
     have traveled to Southeast Asia and Europe. Foreign travel agencies are now
     opening offices in China to attract Chinese to travel abroad.

     1.2.      Problems occurred to that the Travel and Tourism industry

     Despite of the fact that China’s Tourism industry has consistently been
     achieving two-digit growth rates since the last decade, it is due to the current
     inhospitable economic and social environments that the industry is facing many
     challenging problems that, if left unsolved, can lead to the industry’s first real
     decline in more than 10 years.

     a. The swine flu and its comparison to the SARS epidemic in 2003

     The first difficult challenge that the T&T industry in China has to overcome in
     recent years is none other than the 2009 swine flu pandemic. It is reported by
     Saturday’s China Daily that the flow of outbound tourists in China has largely
     decreased due to people's concern over A/H1N1 flu. Group tours to Chinese
     mainland travelers' favorite destinations such as Hong Kong, Japan, the republic
     of Korea, the United States., Europe, Australia and Southeast Asia dropped the
     most. Tours to almost all overseas destinations have seen a big drop, though
     many of these places have not reported even a single case of A/H1N1 infection.

     The outbreak of the flu also imposed a forced holiday on travel agency
     employees. Statistics from Beijing-based China M&R Special Tours showed
     about 40 percent of the firm's tour guides and group leaders are out of business
     because of the flu scare. Domestic travel, on the other hand, seems to be
     enjoying a raise in the number of tourist because of the flu. In Taipei, Taiwan,
     the spread of swine flu cases in neighboring Asian nations is inducing a
     growing impact on the tourism industry here, prompting more travelers to
     cancel trips to affected areas and opt for domestic tours.

     It is still hard to appraise at this stage how profound the impact on overall
     business will be, but the increasing A (H1N1) cases in Japan and other
     neighboring Asian nations are forcing tour operators to extend their discounts
     for overseas trips and persuading their customers to take domestic tours.

     One of the key factors is the concern of growing swine flu abroad. In addition
     to promoting domestic tours targeted at local residents, the larger travel

     agencies are also assigning more manpower and resources to cope with
     increasing tourist arrivals from China. Some travel agents said Chinese tourists
     will help offset the possible decline in revenues caused by the drop of overseas
     trips. Also, shares of hotels and other firms in the tourism and transport sectors
     made impressive rises on the Taiwan Stock Exchange.

     However, according to the impact so far and the predictions of experts in the
     field, the H1N1 pandemic is not going to leave as big an impact on China’s
     T&T industry as the SARS epidemic in 2002-2003. For a few months in 2003,
     SARS held Hong Kong in virtual quarantine. Schools closed. Employees
     worked from home. Hardly anyone traveled. When they did go out, many
     people wore surgical masks. As a result, there was an abrupt backslide in the
     year 2002 when the revenues earned by the China tourism industry dropped
     from $67.3 billion to $59 billion in the year 2003, causing the economy as a
     whole to lose billions more of US dollars.

     b. Natural disasters – 2008 Earthquake in Sichuan Shake Tourism Industry

     The 8-magnitude earthquake that devastated Sichuan province on May 12, 2008
     has seriously hampered tourism in affected regions. Given the difficulties of
     restoring the damaged infrastructure, it was difficult to resume trips to Sichuan,
     not to mention that many tourists would be reluctant to visit affected areas
     because of the "psychological shadow" casted by the disaster.
     Many customers bound for other regions in China cancelled their trips with the
     company after the quake.

     The quake is the second disaster to negatively impact the country's tourism
     industry this year, after the worst blizzards to hit China in half a century
     wreaked havoc on the southern part of the country in February. Prolonged cold

     weather put the chill on travelers' enthusiasm during Spring Festival. That year,
     the country's tourism industry earned 39 billion Yuan ($5.62 billion) during the
     Golden Week, 6.2 percent less than in 2007, China National Tourism
     Administration (CNTA) Figures show. Many popular tourist sites reported
     fewer visitors during the period, as weather and traffic concerns led many
     people to cancel travel plans.

     1.3.      China Government’s strategies to help stimulate tourism

     With holiday tourism developing vigorously and going to the standard, the State
     Council of China has been paying great attention and giving support to the
     development of tourism.

     The Chinese Government Tourism industry has stated that “China's tourism
     industry has worked out a long-term plan for development prospects for
     following 20 years. Based on the historical leaping over from a country with
     only rich tourist resources to an important tourist country in Asia over the past
     20 years, China will continue to develop itself from an important tourist country
     in Asia to the one in the world after another 20 years of efforts”

     And to ensure that outcome, the government has issued a series of projects and
     plans to stimulate tourism in different regions of China. From rural tourism
     development and encouraging eco-tourism to organizing worldwide events to
     attract both international and domestic tourists, China has proved its
     determination to turn the country in to the largest tourist destination in the

     China 'Disaster Tourism' Policy as a Subsidy to Devastated Areas

     Cashing in on huge public interest in one of the deadliest earthquakes of recent
     history, China has officially endorsed 'disaster tourism' as a form of economic
     subsidy to devastated areas. As part of the project, home debris and whole
     sections of partially wiped out cities and villages during last year's massive
     earthquake in southwestern China will now be open to tourists.

     The severity of the quake, which ripped through the mountainous areas of
     Sichuan province on May 12 last year, killing 90,000 people and the
     government's initial tolerance of reports from the disaster area have generated
     huge interest among a Chinese public unaccustomed to official news of public
     suffering and devastation.

     Ruins from the quake have become a draw for visitors - attracting hundreds of
     thousands of tourists - the state agency reported. Donghekou village where only
     300 of more than 1,400 villagers survived a landslide triggered by the
     earthquake is now amongst the hottest tourist destinations in the Sichuan
     province. More than 260,000 tourists have visited the Donghekou Relics Park
     since it opened last November.

     As a site of some of the most devastating earthquakes in modern history, China
     should be equipped to deal with remembrance, with consigning the pain to the
     past and drawing lessons. But, a year after the Sichuan earthquake the country
     is grappling with to how to commemorate the dead without raising
     uncomfortable questions.


     In our opinion, there are both advantages and drawbacks to this strategy. On
     one hand, taking advantages of the attraction of the devastated areas will
     contribute in recovering a part of the material damages, thus helping the local
     community in some way. Secondly, by establishing a tourism center in
     devastated areas, the local community can attract the attention and sympathy of
     both national and foreign individuals and groups that may decide to support
     them in the future. Also, people that have learnt about the disaster in this way
     will also learnt the cause of these horrific accidents, and become more aware of
     the effects their actions may have on the environment.

     On the other hand, there are situations when ignorant tourists have worsened the
     pain of the locals that have lost their family members with indifferent or even
     cruel comments and jokes. Also, there are sometimes questions over whether
     this type of tourism can be considered extorting the pain and suffering of the
     people in those areas, which makes it an immoral way of earning money of the
     travel agencies.

     Report has shown that this new trend of disaster tourism to Sichuan province
     boosted visitors to record levels during the recent May Day holiday, after a 10%
     slump in revenue last year, according to the provincial tourist bureau

                              2. CASE STUDY 2: JAPAN

     2.1. Overview of the Tourism industry in Japan

      Tourism today remains a vital part of the Japanese economy and society. The
     contribution of the tourism industry to the overall Japanese economy is equal to
     the leading and typical industries such as automobile and electric machinery.
     The share of tourism industry in total GDP was 2.2% in 2000, whereas the
     automobile industry was 2.3%, telecommunication 2.0%, electricity 1.9% and
     agriculture 1.5% respectively.

     The share of tourism industry in total employment was 2.9% in 2000, compared
     with government employee 3.2%, electric machinery 3.0%, finance/insurance
     3.0%, and food industry 2.3%.      As the tourism market continues to grow
     steadily, tourism industry is expected to become the leading industry of Japan
     throughout the 21s t century.

     The contribution of the Japanese tourism industry to its national economy,
     however, has been relatively small compared to foreign countries. According to
     the survey by MLIT in 2000, for example, the share of tourism in total GDP in
     Australia amounted to 4.5%, followed by Chile 3.8%, New Zealand 3.4%,
     Canada 2.4%, the United States and Japan identically at 2.2%. Also the share of
     tourism in total employment in Australia was 5.4%, followed by New Zealand
     4.1%, Canada 3.5%, the United States 3.5%, Chile 3.2%, and Japan 2.9%

     In particular, the ratio of tourism consumption by foreign visitors to overall
     tourism consumption has been remarkably smaller in Japan compared with

     foreign countries. Based on the survey by MLIT in 2000, the ratio was only
     6.2% in Japan, whereas the ratio was as high as 35.6% in France, 30.0% in
     Canada, 22.0% in Australia, and 20.9% in the United States respectively.

     2.2. Problems that the industry has to encounter:

     a. The swine flu:

     Although in the first months of 2009, the industry were expecting that they
     could somehow manage to keep the figures close to that in 2008, there has been
     a huge drop in the number of visitors to Japan this year. Comparisons to the
     banner year of 2008 can be misleading, but even when compared with 2007
     there is a drop of about 40 per cent. Experts consider the H1N1 virus to be
     blamed for this situation.

     As an example we now look at a case study of the Prince Edward travel agency.
     Two companies, P.E.I. Select Tours and Prince Edward Tours, cater almost
     exclusively to Japanese tourists. P.E.I. Select Tours said 80 per cent of their bus
     tours for the Japanese have been cancelled. They've had to lay off four staff.
     Prince Edward Tours said it would normally host between 10 and 30 Japanese
     visitors per day, and Thursday they had only one.

     In a normal year, about 10,000 Japanese visit P.E.I. That represents about one
     per cent of the Island's annual visitors, but they are worth more than that in
     dollars. P.E.I.'s Tourism Department says the average North American visitor
     spends $67 a day during their P.E.I. vacation, but Japanese visitors spend at
     least $88 a day.

     Earlier this year, tour operators were hoping more Japanese tourists would
     come to P.E.I. in September and October. But now, with health officials
     predicting a major jump in swine flu infections in the fall, that situation seems

     b. The economic crisis

     The Japanese economy is facing “twin crises”
     (1) The short-term crisis (the risk of a negative spiral)
     Amid the deepening “global financial crisis” and the “synchronized global
     recession”, the Japanese economy is facing a rapid contraction of exports and a
     severe financial environment.
     Under these circumstances, the risk of a negative spiral, including the case that
     the deterioration of the real economy destabilizes the financial system further,
     which in turn will aggravate the economic condition, is growing.

     (2) The structural crisis

     The Japanese economy is also confronted with a “structural crisis.” Over the
     past decade or so, the global economy continued to grow strongly under global
     imbalances, while Japan enjoyed an economic recovery mainly led by exports.
     The current financial and economic crisis makes it inevitable for the global
     economy to undergo a “great adjustment” as countries around the world explore
     a new balance. In addition, it is likely that common challenges facing the world
     such as achieving a shift to a low-carbon society and ensuring health and
     longevity will become increasingly important when the global economy recovers
     from the crisis.

     2.3 Japan Government’s strategies to help stimulate tourism:

     a. Strategic framework for promoting foreign visitors

     New Tokyo International Airport (Narita Airport) opened its second runway on
     April 18, 2002, just in time for the 2002 FIFA World Cup Soccer games. The
     2180 meter strip increases the total number of departures and arrivals to 200
     thousand a year from the current 135,000. Since Narita Airport is the Japan’s
     gateway to the world, Ministry of Land, Infrastructure and Transport (MLIT)
     intends to utilize the airport strategically for promoting foreign visitors.

     Welcome Plan 21
     International tourism enhances mutual understanding among people in different
     nations of different cultures. In order for Japan to foster the long-standing
     friendship and trust among nations, it is highly important to facilitate overseas
     visitors to Japan and gain true understanding of the Japanese.

     The number of Japanese overseas travelers in 2000 reached 17.8 million, while
     incoming foreign visitors to Japan in the same year was 4.76 million, only one
     fourth of outbound flows. In terms of visitor arrivals, this figure ranks Japan
     below neighboring countries and other developed countries around the world.
     This substantial imbalance between outbound and inbound volumes is an
     unfavorable situation for the development of tourism in Japan.
     Based on the above background, “Welcome Plan 21” or the “Plan to double the
     number of incoming visitors to Japan” was set up in 1997, together with the
     enactment of the “Law to Promote Inbound International Tourism”. To be
     concrete, the Ministry of Transport (MOT) decided to take all possible
     measures, together with parties concerned, to increase the number of incoming

     visitors to 8 million by 2007.

     Visit Japan Campaign by Japan National Tourist Organization (JNTO)

     JNTO has been actively developing strategic promotional activities overseas in
     cooperation with overseas Japanese embassies, local governments, tourism
     industries and foreign national tourist organizations (NTOs).        In particular,
     JNTO lays an emphasis on creating an image of Japan itself as a tourist
     destination, such as inherent natural beauty, art, culture, tradition, festival and
     food, instead of an image of industrial and manufacturing country.
     In 2001 JNTO carried out numerous public relations activities for the purpose of
     inbound market development. In conducting the campaign, JNTO strategically
     varied the appealing points in correspondence to the respective market
          1. TV spot advertisements in Korea, China and Hong Kong
          2.   Advertisement in influential newspapers and magazines in Korea,
     China, Hong Kong, North America and the United Kingdom, which directly
     appealed to 150 million consumers in total
          3. Invitation of foreign press and travel agents to Japan
          4. Seminar for inbound market development

     JNTO extensively upgraded its website in 2001, providing latest and attractive
     tourist information to all over the world in ten languages. The JNTO website
     ( was accessed by 17 million visitors in 2001.

     In April 2002, JNTO, together with international airport authorities in Japan,

     produced a “Visit Japan promotion video”, taking the great opportunity to host
     the 2002 FIFA World Cup Soccer games. Minister of Land, Infrastructure and
     Transport Ms. Chikage Oogi appears in the promotional video in person,
     introducing tourist attractions of Japan and inviting foreign travelers to visit
     Japan. The video is shown in the cabin of incoming international flights of
     Japanese airlines and eight airport terminals nationwide until the end of this

     China-Japan Mutual Visit Year 2002

     Since year 2002 is the 30      anniversary of the establishment of diplomatic
     relations between Japan and the China, a variety of commemorative events and
     cultural exchange programs are planned in both countries. In this connection
     MLIT and CNTA (China National Tourism Administration) design to organize a
     large-scale mutual tourism exchange program. 5,000 Chinese people from all
     provinces came to Japan in May, attended the commemorative ceremony in
     Tokyo, and visited all over Japan afterwards in separate groups to deepen the
     mutual understanding and friendship. In September this year, 10 000 Japanese
     tourists are scheduled to visit China in return, participating the commemorative
     ceremony in Beijing and grass roots exchange programs. It is indeed a good
     opportunity to promote Japanese culture, people and other tourist attractions to
     Chinese people. MLIT intends to expand the number of visitors from China
     through such exchange programs.

     b. Other policies goals with priority
     Safety and mobility of physically handicapped and elderly travelers
     Projects are under way to build the environment that improves convenience and

     safety of the physically handicapped and elderly travelers in tourist facilities,
     pavements, public transportation, accommodation, etc. For example, installation
     of elevators, escalators and wheel chair lifts at stations and bus/ship terminals,
     widening of the pavements and installation of guidance tiles for the vision-

     Diversification of prices and services in the field of travel and transport
     All stakeholders in the tourism industry are working on the diversification of
     prices and services for foreign visitors, aiming at changing the image of Japan as
     “an expensive country”. Efforts are also being made to develop new resources
     such as experience-oriented, self-fulfillment type tourism. An example is the
     “Interpretation Program” which aims to foster nature guide tours.

     Provision of tourism-related infrastructure
     Development of “Multi-modal transportation system” is in progress in order to
     produce effective and convenient traffic environment by enabling higher speed
     and smoother connections through the coordination in multiple transportation
     means of the air, land and water. Integration of airports and high-speed railway
     networks is, for example, under way.


     3.1.   Overview of the Vietnam Tourism industry

     Vietnam is one of many countries which have great beauty spots and famous
     natural landscapes. This is one of many advantages helping Vietnam develop
     Travel and Tourism industry. Thus, because of this, T&T industry has become

     one of the main sectors in economics of Vietnam. In some recent years, T&T
     industry in Vietnam has developed rapidly and stably. Moreover, the situation
     of politics in Vietnam is very stable and peaceful. This also helps Vietnam
     attract more and more visitors all over the world.

          Figure 11: Contribution of Vietnam T&T industry to total GDP and Employment

     Every year, the contribution of T&T industry to GDP increases gradually.
     Although it has had a little decline in 2009 but it has still accounted for 13.1%
     to GDP (VND 234,776.0 billion). Besides, the distribution of this sector to the
     employment has raised and is expected to remain level at 4,862,000 jobs in
     2009, 10.4% to the total employment. In the next ten years, it is expected to
     reach the number of 5,675,000 jobs, 10.4% of the total employment.

     3.2. Problems occurred to the Travel and Tourism industry

     However, as many other countries and regions, Vietnam also has to suffer the
     impacts from terrorists, financial crisis and recent swine flu.

     What happens to Vietnam’s T&T industry when these affairs occur?

     a. The impact of terrorist on Vietnam’s T&T industry

                        Figure 12: Total international visitors to Vietnam

     In this period of time, the T&T industry of Vietnam can see a rapid
     development every year. In 2001, the 9/11 attack happened in New York and
     had many negative impacts on economics in general and in T&T industry in
     particular. But, being famous for its peace and stability of politics, it sound that
     Vietnam didn’t get any damage from this event. The number of international
     visitors to Vietnam still increased from 2,140,000 in 2000 to 2,330,000 in 2001
     and to 2,628,000 in 2002. Despite giving not much damage, this event also
     reduced the growth rate of this sector in Vietnam as the above chart described.
     This is because of the fact that when this attack happened, people became afraid
     of traveling. In the other hand, this helped Vietnam attract more international
     visitors because now they feel that traveling in the countries like Vietnam is

     safer and better for them and their relatives. Whereas in the United States of
     America, the tourism industry had to faced a tough situation.

                               year                 Total international visitors
         1                     1998                 46,377,000
         2                     1999                 48,509,000
         3                     2000                 51,238,000
         4                     2001                 46,927,000
         5                     2002                 43,581,000
         6                     2003                 41,218,000
         7                     2004                 46,086,000

                Figure 13: Total international visitors to the United States

     The number of international visitors decreased sharply from 51,238,000 in 2000
     to 46,927,000 in 2001 and to 43,581,000 in 2001. Evenly, it still decreased

     down to 41,218,000 visitors in 2003. This big decline was the impacts of not
     only the 9/11 attack but also of SARS. Also because of this epidemic, the
     number of international visitors to Vietnam declined a bit to 2,429,000 visitors
     in 2003. However, after 2003, Vietnam’s tourism industry had a recovery and
     continued to develop with a stable growth rate.

     b. The impact of financial crisis on Vietnam’s T&T industry

     After the above period, Vietnam’s tourism industry continued to develop
     rapidly. Estimately, international visitors to Vietnam in December 2005 gained
     308000 arrivals. Totally, international visitors in this year reached 3.467.757
     arrivals, increasing 18.4% in comparison with year 2004. Next, international
     visitors in 12 months of year 2006 reached 3,583,486 arrivals, 3% higher than
     those in the same period of year 2005. Until to 2007 when the financial crisis
     occurred, our tourism industry still maintained the rapid developing rate with
     4,171,564 arrivals, 16.0% higher than those in the same period of year 2006 and
     in 2008 with 4,408,000 arrivals, 0.6% higher than those in year 2007. However.
     due to the result of the financial crisis, the developing rate was slow down very
     dramatically in 2008.

     During this time, the T&T industry still developed continuously in Vietnam.
     The number of arrivals increased very quickly although the growth rate was a
     bit slowdown. Directly, the financial crisis in lately 2007 did not have much
     affect on the tourism industry of Vietnam. Europe and the US are the countries
     that had to suffer the biggest impacts of the world financial crisis. This crisis
     caused unemployment so people decided to cut down their spending on luxury
     things and traveling to afford their livings and necessities. However, most of

     travelers to Vietnam were from Europe and the US and as a result the growth
     rate of tourism industry was down in 2008. A sharp drop in the number of
     visitors from these high-income countries, such as the US and Canada, is also
     causing great concern within the tourist industry because visitors from high-
     income markets like these countries account for 40 per cent of the total number
     of foreign arrivals.

     The concomitant fall in hotel room occupancy is also worrisome. Many luxury
     hotels reported room occupancy rates of only 55 per cent in the first ten months
     of 2008, 10-15 per cent lower than the rate recorded during the same period of

     Although the global financial crisis and economic recession are regarded as the
     main culprits for the decline, there were additional factors behind the drop in
     overseas visitors, including natural disasters, floods, weak infrastructure, and
     the low quality of guides and services provided by the hospitality sector.

     c. The impact of H1N1 epidemic on Vietnam’s T&T industry

     The first six months of the year 2009 have been also a tough time for the global
     tourism industry in general and Vietnam’s tourism industry in particular. With
     the global economic crisis and the A/H1N1 virus, foreign visitors coming to
     Viet Nam dropped by 70% during May and June.

     The last three months, which has seen the A/H1N1 flu virus arrive in Vietnam,
     has been particularly bad, causing visitor numbers to drop even more sharply.

     From 2008 to 2009, the number of arrivals has dropped from 4,408,000 to
     3,814,780 (as expected). This has been a very significant decline in some recent
     years since 1998.

     Despite a large fall in demand, many hotel rooms have actually increased in
     cost due to taxes, inflation and increases in electricity and water. Some hotels
     around the country have increased their rooms to be 30 to 40% higher than
     countries in the region. This is also one of some reasons leading to the drop in
     the number of visitors to Vietnam.

     With the situation, Vietnam’s tourism industry is finding it difficult to achieve
     the target of 4.5 million foreign visitors this year. They may welcome more than
     3.8 million visitors instead, a decrease of around 20% compared with last year.
     In the next years, according to statistics of World Travel and Tourism council,
     the number of international visitors to Vietnam will continue to decline till 2010
     and after that it will get a recovery and maintain the developing rate.
     To sum up, through the period from 1998 to 2009, among three main factors, it
     can be said that H1N1virus and swine flu epidemic has had the biggest negative
     impact on Vietnam’s T&T industry. In the next months, the impact may
     become heavier and heavier because at present the cases of H1N1 virus have
     continued to increased every day.

     3.3Solutions to the problems

     Recently, in spite of being impacted by negative above factors, tourism industry
     in Vietnam still develops gradually. The number of visitors to Vietnam has been
     improved due to one of the main reasons is that in 2008 Vietnam held Miss
     Universe 2008. This event attracted many travelers coming to Vietnam. This

     also helped to minimize the negative impacts of crisis on the tourism industry.
     However, recently due to impacts of both financial crisis and A/H1N1 virus, the
     number of visitors dropped sharply. So what can we do in this situation?
     Vietnam’s Government and some tourism firm in Vietnam gave some following

      Broadcasting promotional campaign called “Vietnam Impressive”, with the
     participation of media in and outside the country, especially in key markets;
     General Department of Tourism has built a website for promotions to the
     domain:; organized Famtrip and Presstrip groups for
     travel companies and foreign press to Vietnam

      Establishing nine market groups, including international travel companies
     and Vietnam Airlines, with the participation of some hotels, restaurants and
     shops. This is the core for developing the promotion

      Creating new tourism products. This is a long-term solution, to give favored
     conditions for sustainable development of Vietnam’s tourism, as a base to
     attract international visitors and promote domestic tourism services such as
     hotels, transport businesses and tourist companies should reduce tour prices and
     provide special treatment to international visitors. The tourism industry should
     promote and advertise destinations to neighboring countries, namely Thailand,
     Singapore, China and Korea

      More types of insurance:
     According to some travel companies, athough it's the high time of tourism the
     number of tourists to foreign countries reduced significantly due to the swine

     flu A (H1N1). Many have cancelled or changed their tours. The increase of
     insurance and A(H1N1) insurance by travel companies have ensured tourists in
     their tours. Saigontourist has increased AIG insurance fees for outbound
     tourists. Special insurances are applied for natural calamities, diseases,
     accidents and baggages. Outbound tourists of Saigontourist and its agents in
     Hanoi, Da Nang, Can Tho, Quang Ninh have maximum insurance of
     USU$50,000/person to Europe and US$10,000/person to other places. The
     insurance also includes the service of International SOS with free hot-line call
     and health care of international standards. Saigontourist staff will ensure
     maximum safety for tourists. In addition, A(H1N1) patients of Saigontourist
     will be granted US$5,000 a person and US$100 per day in case of

     For its part, Vietravel has increased its insurance fee to US$75,000/person to
     European tour and US$10,000 for other countries, while local tourists are also
     granted insurance of US$5,000 at maximum. Cantho tourist has bought global
     tourist insurance from AAA for A (H1N1) for outbound tourists with a
     maximum of US$75,000/person. With the application of such insurance
     packages, the number of outbound tourists has resumed. Vietravel
     representative disclosed that tours to Singapore, Malaysia, China, Thailand,
     Cambodia and especially Europe have increased. Those have cancelled their
     tours have resumed the tours again.

      New low cost tours:

     In addition to insurances, travel companies have also introduced new promotion
     tours, especially outbound tours with attractive prices, some even at half price.

     Among tours to the countries in the region, “Sale trade fair 2009” in Thailand is
     the most attractive tour. Saigontourist has introduced a shopping and golf tour
     in Thailand with US$225-345/person as well as Vietravel with a 6-day tour in
     Thailand at VND2.8-4.4 million/person. Travel companies have also developed
     promotion tours to Singapore, Bali, Malaysia, Cambodia, Hong Kong.
     Saigontourist has launched super-saving Iko travel to Phu Quoc, Tuy Hoa, Ha
     Long, Nha Trang with good services at 4-5 star hotels and resorts and special
     savings for families. In Phu Quoc, for example, the savings are up to
     VND300,000-550,000 per family. For its part, Vietravel has increased tours to
     both Nha Trang, Phan Thiet, Phu Quoc in the South and Hanoi, Ha Long, Ninh
     Binh in the North with savings of VND2 million/person.

     Chapter IV:
     Conclusion and Recommendation

     Although having a relatively short history, the Travel and Tourism industry has
     shown a vigorous ability to grow, and it has been playing an important role in
     the economy of countries all around the world. In fact, the Tourism industry
     each year contribute an average of about 10% to the total global GDP and more
     than 200 million jobs to global employment. There are now countries such as
     Switzerland that generates most of its income from Tourism. However, it is true
     that the Travel and Tourism industry is facing a period of challenges, from the
     financial crisis and credit crunch that cause the sharp drop in tourism capital
     investment to the swine flu pandemic that swindles greatly the number of
     tourists. The new wave of terrorism and the unstable political environment in
     recent years are also factors that have harmfully affected the Tourism industry.

     In order to tackle the crises, many governments have issued policies and put in
     action strategies and projects to stimulate the indigenous Tourism market.
     These strategies range from developing local tourism to issuing nation-wide
     policies to attract tourists both in the country and abroad. While most of these
     strategies have given some initial benefits, they have their own drawbacks so
     that the governments would have to consider carefully before putting these
     projects into action.

     Taking these matters in mind, we would like to propose that one solution for the
     governments to overcome the current crises would be to work together to
     strengthen the cooperation and solidarity between the countries. By establishing
     regional organizations with the aim of each organization being developing that
     region’s Travel and Tourism industry, the countries in that region would be able
     to more effectively stimulate both inbound and outbound Tourism, as well as
     having coordinated plans to overcome any challenges they may have encounter.



Shared By:
fanzhongqing fanzhongqing http://