Photo: Viet Tuan
Phu Quoc Island is being targeted by a number of local developers with major projects already built and in the pipeline.
In December last year the Novotel Phu Quoc Resort welcomed the first group of a total of 5,000 Swedish tourists who had flown non-stop in a B-787 Dreamliner chartered by TUI Nordic, a tour operator based in Stockholm, for a two-week vacation. Phu Quoc International Airport will welcome Swedish groups staying at the resort every week over the next six months. Satisfied with the first-class airport and the quality of the services at the island’s four- and five-star hotels and resorts during a visit last March, TUI Nordic’s Senior Product Manager Mr. Tommy Serban chose to stay here and believes the hotels and resorts have enabled the company to introduce the island as a destination for a full season.
Phu Quoc Island is becoming a popular resort destination among domestic and overseas tourists. In the first nine months its airport welcomed 1.6 million visitors, an increase of 47.2 per cent compared to the same period of 2015. “Visitor numbers have increased strongly in recent times, with high-spending tourists enjoying four- and five-star services,” said Ms. Duong Thuy Dung, Director of Research and Consulting at CBRE Vietnam. “The hospitality sector on Vietnam’s largest island will see breakthroughs in 2016 and the years to come.”
The growth in tourist numbers on the island has been largely due to improvements in infrastructure and tourism facilities. According to CBRE, in 2014, besides undeveloped infrastructure, one of the reasons the return-rate to the island was low was its lack of hotels and resorts, especially those meeting four- and five-star standards.
The island is now seen as an ideal destination for tourists as well as hospitality investment thanks to support policies from local authorities, such as tax exemptions, alongside rapid infrastructure development, most notably the Phu Quoc International Airport, An Thoi Seaport, and the Ha Tien-Phu Quoc underground electricity cable. Other major projects are also underway, including the Duong Dong International Seaport and a cable car system linking An Thoi and Hon Thom islands. Phu Quoc is also home to a safari park, the second-largest in the world, and has been given the green light by the government to build a casino; a major advantage in attracting more domestic and international holidaymakers.
Major local developers such as Vingroup, the Sun Group, the BIM Group and the CEO Group have established a presence on the island with a series of million-dollar projects in resort real estate.
Vingroup led the way in bringing the new concept of hospitality and resort complexes. The other local developers soon followed, with expectations of making a difference in the local hospitality sector. Each has focused on developing different locations on the island.
The north of the island boasts the Vinpearl Resort Phu Quoc complex, which includes the five-star Vinpearl Paradise Villas, Vinmec International Hospital, and Vinpearl Safari Zoo. Late last year Vingroup opened the first phase, featuring 606 hotel rooms, 33 luxury villas, the Vinpearl Land entertainment area, and a 27-hole golf course. It has also received the go-ahead to pump more than VND1.6 trillion ($74.7 million) into building the Phu Quoc Passenger Port under the build-transfer form and envisages turning 80 ha of land, previously part of the former Duong Dong Airport, into a shopping center.
The Sun Group, meanwhile, is developing a resort and entertainment facilities in the south of the island, with total investment of VND20 trillion ($900 million), according to Mr. Dang Minh Truong, Deputy Chairman and CEO, including the JW Marriott Phu Quoc Emerald Bay Resort & Spa, to be opened by the end of this year, the cable car system and the Hon Thom marine entertainment complex by May 2017, and a Ritz-Carton premier resort, the beachside Premier Village Phu Quoc Resort villas, and the Condotel Premier Residences Phu Quoc Emerald Bay projects, which are now being built.
The BIM Group is focusing on the island’s west, with Phu Quoc Marina, a resort and a recreation complex. With total capital of $180 million, Phu Quoc Marina covers 155 ha and is connected to seven entertainment and resort facilities: the InterContinental Phu Quoc Long Beach Resort & Residences, the Regent Phu Quoc Resort, Fusion Suites Phu Quoc, the Sailing Club Phu Quoc, Mini House Waterfront, a five-star condotel project, and a theme park.
Like BIM Group, the CEO Group is investing $133.7 million on developing the Sonasea Villas & Resorts complex on the western coast. In October the local developer expanded its land bank to 450 ha for the complex, becoming the largest investor in the Long Beach area. Earlier this year the Novotel Phu Quoc Resort, a part of the integrated complex with 400 five-star rooms, was opened and occupancy has been over 90 per cent since. During holidays such as the lunar new year (Tet) and April 30 and May 1 (Reunification Day and May Day) the resort is filled to capacity.
The more projects that appear the greater the choice for tourists in multiple segments, according to Ms. Dung from CBRE. “This will create healthy competition in the hospitality market and attract more tourists,” she said.
2017 will see continued prosperity in the island’s hospitality sector, with a number of new major projects being completed. Local developers are confident in the future of the island and are keen on long-term investment commitments. The CEO Group has decided to transfer its strategic investment focus from Hanoi to Phu Quoc, as “the island’s potential is still to be awakened,” said Mr. Tran Dao Duc, Deputy CEO and CEO of the group’s Phu Quoc Investment and Development JSC. “If good M&As present themselves, we will seize them and turn the island to into a ‘vacation paradise’ and a new tourism center in Southeast Asia.”
The growth of the market, however, will be based on three factors, insiders say. The first is non-stop flights connecting other cities in the world. Most foreign tourists arrive by air after transiting in Hanoi or Ho Chi Minh City.
Secondly, Ms. Dung from CBRE said, the island must maintain its natural surroundings and keep the local environment clean by limiting the effect of commercial activities. And lastly, tourism products must become more diverse and attract tourists to stay longer, rather than the usual two or three days. Services at hotels and resorts are yet to be comprehensive so cooperation with tourism companies is needed. “It will then be able to compete with destinations such as Phuket,” she said.
Phu Quoc Island is expected to earn revenue of $771 million from providing hospitality services to 2 to 3 million tourists annually by 2020, 40 per cent of which are to be foreign visitors. Last year it welcomed more than 873,600 visitors, including 151,700 foreigners. Mr. Serban from TUI Nordic sees a bright future for the island and plans to increase the number of Swedish tourists in the years to come.
“Phu Quoc is on its way to becoming Sentosa in Vietnam, with its prime geographic location, natural beauty, and incredible potential. Through creating tourism, resort and entertainment ecosystems with international standards as well as completing high-end tourism service supply chains, we will contribute to attracting a number of tourists to ‘Pearl Island’ in the near future.”
“We plan to invest in developing diverse products and commit long-term investment on the beautiful island. If good M&As present themselves, we will seize them and turn the island to into a ‘vacation paradise’ and a new tourism center in Southeast Asia. We are confident about the differences that will mark our brand in Phu Quoc.”