Vietnam – Hot, Not, But Some Recovery On Way

Vietnam flag smallTourism branding expert David Keen has called the marketing of Vietnam a “catastrophe” as the once-hot destination struggles to regain its mojo. According to participants in the Vietnam panel at HICAP Update, Vietnam peaked in 2007, hit a low in 2009, and has been doing it tough since. But there is some hope, although with a government tourism marketing budget of around US$1 million it will largely be up to the operators to turn things around.

Monika Dubaj, VP Development at Hyatt Hotels and Resorts, described 2009 “as a very tough year in Saigon and Hanoi. They “since seem to have recovered with significant improvement in 2010/11. The forecast for 2012 is quite optimistic.” However, she added: “We are looking at very small markets – there’s less than 3000 in the five star category – and it doesn’t take much in terms of performance (either way) to have an impact.”

Vietnam’s regional tourism markets, where access is difficult and business travellers rarely penetrate, have also been having a hard time. Baron Ah Moo, CEO of Kalan Real Estate, was involved in the development of the Hyatt Regency at Da Nang and says it has fallen short of expectations. “We thought we’d do better than we did. It’s nobody’s fault, just timing.”

That said, Baron Ah Moo is “bullish” on Da Nang’s long term future, a view supported by respected property lawyer Frederick Burke of Baker & McKenzie, even though he expects construction of the proposed new airport to be delayed, “possibly by 10 years”.

All participants agreed that access is a major issue for the destination and that the acquisition of a 70% stake in Jetstar Vietnam by Vietnam Airlines may not be a good thing, giving the government owned carrier a virtual aviation monopoly.

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