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Vietnam Today

Held back

Released at: 11:37, 24/03/2014

Held back

Vietnam's luxury travel segment requires a great deal more focus to bring its strengths into play. Ngoc Anh reports

by Ngoc Anh

Vietnam’s tourism sector has seen growth in recent times that ranks among the highest in the Asia-Pacific region. Of its many sub-sectors, luxury travel plays an important role in the sustainable development of the country’s tourism industry, “because it brings high turnover and profits and creates large numbers of jobs for local people,” according to Mr Nguyen Huu Tho, Chairman of the Vietnam Tourism Association. All countries in the region and around the world, he added, focus on the luxury travel segment. “Attracting greater numbers of luxury travellers is the goal of every country,” he said, and local culture, traditions and cuisine are particularly important in meeting such goals.

The concept of luxury tourism is understood differently by different people. According to Mr Tho, luxury tourists are those who travel for trade, investment, workshops, trade fairs and MICE purposes, while for Mr Pham Ha, CEO of Luxury Travel Ltd., they are usually free individual travellers (FITs), not group travellers, and they demand personal services. They are generally experienced, informed, well-travelled and adventurous, but have an eye for value for money. The age range varies, with some being younger and with money but little time, while others are older with both time and money. 

Local luxury

Considered an attractive destination for tourists or those who seek adventure, Vietnam has attracted tourists from different segments and high-end tourism is certainly on the rise. According to luxury travel insiders, Vietnam is now one of the Top 10 destinations in Asia, with luxury travel the fastest-growing segment. A recent survey of 1,200 travel experts during World Travel Market (WTM) London 2013 confirms that Vietnam has been shaping up as one of the most attractive destinations in Asia, just behind China. Prestigious tourism magazines have also commented that Vietnam now provides luxury tourism experiences with special dishes and high-end hotels of international standard, and features an abundance of cultural heritage sites, natural beauty, and diverse cuisine.

Vietnam is indeed now tempting luxury travellers to its shores, with new boutique hotels and tours and its tourism infrastructure has improved dramatically. It also has a fast-growing number of modern luxury and spa destinations and golf courses and has introduced luxury river cruises to ensure stress-free journeys away from the busy roads. The next “upcoming” destination in Vietnam is the Con Dao archipelago, with its intimate villa resort and undeveloped beaches. The beach town of Nha Trang is a popular haven for holidaymakers, and just 90 minutes north of its Cam Ranh Airport is Vinh Hy Bay, where the Amanoi, the latest property of Aman Resorts, sits by a secluded beach. “These places alone show that Vietnam has so much to offer upscale travellers,” Mr Ha said.

The most famous tourism magazine in the world, Lonely Planet, recently named eight hotels and resorts in Vietnam as being popular among foreign travellers, including La Veranda Phu Quoc Resort, Flamingo Suites Ha Van in Nha Trang, Ha An Hotel in Hoi An, Victoria Can Tho Resort, Dream Hotel in Da Lat, Thanh Thuy Hotel in Ninh Binh, Hanoi Elite Hotel, and Giang Son Hotel in Ho Chi Minh City.

In claiming increasing growth in the country’s luxury travel segment, Mr Tho said that in 2011 Vietnam attracted 6 million international arrivals and recorded total turnover (including from domestic tourism) of $5.6 billion, while in 2013 it attracted 7.5 million of international tourists and total turnover stood at $10 billion. This shows that income per traveller is increasing. “Attracting 7.5 million international arrivals in 2013, which was the target set for 2015, proves that Vietnam’s luxury travel segment has been growing,” he said. At destinations already attracting large numbers of luxury travellers, such as Hanoi, Ho Chi Minh City, Nha Trang, Da Nang, Ha Long Bay, Phan Thiet, and elsewhere, it is clear to see that infrastructure, services and human resources are meeting requirements. For example, Da Nang’s beachfront boasts many luxury hotels and resorts, such as HyattRegency, The Nam Hai, and the InterContinental. “Leading brands in luxury tourism are already present in Vietnam,” he said. There are nearly 60 five-star hotels in the country, against 30 or so in 2011, making Mr Tho believe that Vietnam’s tourism services are becoming more luxury oriented and its luxury travel segment increasingly growing and developing.

Image weakness

In Mr Ha’s opinion, with its many sites and range of high-end accommodation, Vietnam has potential in the luxury tourism segment, but despite demand growing, especially among foreigners, challenges such as a lack of infrastructure and marketing still limit high-end travel. Vietnam has failed to properly promote its image as a peaceful country and has no doubt missed potential opportunities, particularly from long-haul destinations. Some people view Vietnam as a poor destination, suitable only for backpackers, and it is hard to convince them that it has many quality tourism products, world-class beaches, and fine cuisine. “All the while, the Vietnam National Administration of Tourism (VNAT) focuses on the number of tourists and not on encouraging high-spending travellers, so the country will continue to have an image crisis,” Mr Ha said.

Many people come to Vietnam, he went on, because they have heard good things from friends and relatives who have already visited, not because of any meaningful marketing campaigns. “If VNAT positions Vietnam as a cultural destination, travellers will only visit once, but if we promote ourselves as a holiday destination with beautiful beaches, fun activities, entertainment, shopping, improved infrastructure, and new destinations opening every year, holidaymakers will return again and again,” he believes.

Acknowledging the weaknesses in marketing and building tourism products, Mr Le Anh Tuan, Director of the Marketing Department at VNAT, told a recent national workshop on “Positioning the Vietnamese Tourism Brand” that the tourism industry is yet to be developed in line with the country’s potential. “Information and the image of Vietnam’s tourism have been limited and lacklustre in many parts of the world,” he said. “The competitiveness of Vietnam’s tourism in the international tourism market remains low, and the number of international travellers to Vietnam has therefore been lower than in other regional countries.” It’s no easy matter, he added, to answer questions about whether Vietnam has built up its tourism brand or what Vietnam’s tourism brand actually is.

Despite seeing rapid growth in the luxury travel segment recently, products and services for luxury travellers in Vietnam are anything but evenly distributed throughout the country. In major destinations such as Da Nang and Nha Trang there are perhaps too many hotels and resorts, but elsewhere they are totally absent. Mr Ha Van Sieu, Director of the Institute for Tourism Research and Development, attributes this to a “herd mentality” among investors.

Vietnam has no clear message, no strong focus on products or unique selling propositions, Mr Ha said, and at trade shows VNAT’s staff are largely unprofessional and some lack even basic English skills. “We will be unable to attract more cruise passengers if our seaports are in poor condition and don’t have specific facilities,” he said. “Airports must provide VIP services so that private jets and more luxury airlines will fly here. Hotel classifications don’t meet expectations and damage the image of high-end tourism. These problems stem from VNAT not focusing on the niche luxury market like our competitors in Thailand and Malaysia.”

Fixing issues

Mr Tho believes that the potential for Vietnam to develop its luxury tourism segment is huge, “but our problem now is to strengthen and expand institutions, technology and human resources,” he said. In order to develop the segment further this year and in subsequent years, Vietnam must firstly adopt proper strategies and then create new products and services to serve high-end travellers. It also needs to boost its marketing campaigns, not only for Vietnam in general but also for every region and destination in the country, so that travellers know what each destination has and what may suit them.

At the “Positioning the Vietnamese Tourism Brand” workshop, a Japanese professor said that when coming to Vietnam to conduct research for the first time he was impressed with the exotic beauty of Sapa. But not many Japanese people have even heard of it. This he put down to a lack of adequate investment in promotional campaigns.

Mr Tuan recognises that building Vietnam’s tourism brand must not just stop at logos and slogans; it requires investment in tourism promotional activities. “Positioning and developing Vietnam’s tourism brand needs to be done more professionally in the future,” he said.

For Mr Tho, the most important factor in the development of tourism, especially the luxury travel segment, is human resources. Service staff must be highly professional and, in particular, speak foreign languages, as this is a basic premise in providing the services that luxury travellers expect. “Foreign language skills and a professional service style will boost the development of luxury tourism,” he believes. “Staff that are proficient in foreign languages are a major asset of tourism companies,” he said.

In order to attract more luxury travellers, he concluded, it is necessary to maintain product quality. Any degradation will ruin the reputation of Vietnam’s tourism sector. Vietnam must learn how to properly use overseas media and television, especially the internet, to promote the country and its people.

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