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Vietnam’s luxury tourism segment Discussion With a Trendsetter

March 15, 2014 Headline News No Comments Email Email

Mr Pham Ha, CEO of Luxury Travel (www.luxurytravels.asia), discusses the state of Vietnam’s luxury tourism segment with Global Travel Media.

How many people have visited Indochina in recent years and for what purpose? Have the numbers been increasing?

The luxury travel segment is increasing and we enjoy 30 per cent growth annually. Ten per cent of arrivals are travellers looking for a quality holiday.

We serve 10,000 each year. The purpose varies, including cultural tours, private yacht cruises, family travel, luxury adventures, MICE, and customised tours, among others.

Indochina has become increasingly appealing to global travellers. In Vietnam we have seen the completion of many luxurious resorts with names such as Hyatt, Intercontinental and Six Senses. Vietnam in particular is increasingly being recognised as a destination for high-end global tourists. Its tourism infrastructure features a growing list of modern luxury and spa destinations, iconic colonial and boutique properties, recently opened golf courses, seaplane and helicopter flights from Hanoi to Halong Bay, and the launch of luxury yacht and river cruise services that provide a stress-free journey away from busy roads. Such improvements have contributed to the recent growth in popularity of the country and prove that an enigmatic and alluring country such as Vietnam has nowhere to go but up.

What are the strengths and weaknesses of Indochina in developing a luxury travel niche?

PhamHa

PhamHa

Indochina has three distinct products: Vietnam, with its beaches, culture and heritage, Cambodia with its heritage, and Laos with its ecotourism. All offer the charms of Indochina. Luxury travel is all about the experience, not just luxury hotels but everything. Over the last three years there have been many hotels built in different categories, such as those meeting the highest world standards and in modern or colonial styles, suitable to the tastes of many types of guests, to offer greater options.

In Vietnam the number of luxury hotels is increasing in main cities like Hanoi, Ho Chi Minh City and especially coastal cities like Da Nang, Nha Trang, and Mui Ne, and are managed by international brands. This is a good sign for the development of the luxury market. International airports have been recently built in coastal cities and direct international flights within Southeast Asia and between Southeast Asia and Europe, the US, and Australia have been opened.

Regarding weaknesses, being considered “Third World” means that infrastructure in Indochina has not developed comprehensively, especially in isolated areas, where roads are in poor condition and travel is difficult. Vietnam has beautiful travel products for luxury travellers but one weakness is its image and the absence of PR and marketing for Indochina as a luxury destination. National tourism organisations don’t pay attention to this segment and don’t support private sector travel agencies.

What are Vietnam’s strengths in competing with regional countries?

Southeast Asian countries have many similarities regarding culture, people, and, of course, geography, making it difficult for Vietnam’s tourism to compete. But the attraction of Vietnam is its magical mixture of tropical beaches, post-colonial charm, world heritage sites, stunning inland scenery, world-renowned cuisine and a home-grown flair for hospitality. With new luxury hotels and world class golf courses recently opening, luxury trains, exclusive cruises and upscale private tours spanning the length of the country, Vietnam is fast emerging as the world’s latest luxury destination. Many hotel brands have also won prestigious international hospitality awards from world tourism organisers, magazines and travel websites, which have helped to highlight Vietnam and its central coast and put it on the world luxury tourism map.

All of this means the region is attracting attention from both local and international investors. There are more and more prestigious local and international hospitality groups operating or due to come here soon. The scale and structure of investment in the region is changing rapidly towards the luxury market.

Why should Vietnam invest in the luxury travel segment? Does it need more travel companies, hotels and resorts, and human resources to develop the segment?

Tourism in general brings a lot of opportunities for a country, as when people come they pay for accommodation and buy souvenirs, food and other things, so it increases income to the government and also to individual businesses. Together with tourism, related industries develop as well. It creates jobs and wealth and can account for around 10 per cent of GDP. For ten years or more Vietnam has welcomed a lot of backpackers, but now it’s time to develop the luxury segment. This represents a huge opportunity for Vietnam, together with the development of other industries and the opening up of its market economy. The number of tourists from strong economies such as the UK, the US, Germany, Switzerland and elsewhere has increased over the last ten years and they bring a lot of potential benefits for the country.

It’s not about how many travel companies there are but how they work. It’s better to develop in depth, which means upgrading services, especially human resources and facilities, as luxury tourism focuses on every single detail of the services being offered. Well-trained staff play a big role, from wait staff to the management level, and they must be professional and skilled in whatever they do.

To develop the luxury segment Vietnam needs more well-trained staff at different levels and must find ways to offer a taste of luxury to the less affluent segment while being careful not to alienate our traditional markets or cannibalise our full service offerings. Each traveller must be treated as a VIP. A key development in the luxury travel market is that while fewer people can afford to pay the extra for all-out luxury, more people want to experience it.

Does the quality of luxury tour packages in Vietnam meet accepted international standards? What is the level of service awareness among Vietnamese tourism enterprises involved in the luxury travel segment?

Vietnam is on its way to exploiting the luxury segment. We have many resources (human and natural) but we haven’t yet made use of all of our strengths. We have the tools in hand, however, to provide luxury tour packages that meet international standards. Besides, most large hotels in Vietnam are managed by international brands such as Accor, Intercontinental, Hyatt, and Aman, which signal luxury international standards in terms of quality.

There is no formula at the moment to determine how Vietnamese travel enterprises perform in the luxury travel segment. Each tourism company, from small to large, must find their own way to develop their business. I believe they don’t truly understand luxury and simply try to copy the services of reputable companies to tap into the market but are yet to fully meet the expectations of luxury travellers.

How should local authorities support Vietnamese enterprises to stimulate the luxury travel market?

Travel agencies now largely work on their own, without much in the way of support from the Vietnam National Administration of Tourism (VNAT). Even local tourism associations don’t work efficiently enough. Vietnam’s tourism is not united from up to down, which results in inconsistencies. As the industry leader, VNAT should have a wider vision at the national level, adopting more suitable policies to encourage tourists to come to Vietnam, building the country’s image as a luxury destination and supporting local enterprises at international travel fairs.

It should also focus on strategic planning to develop national tourism before discussing money or fees. For example, increasing the cost of a visa is simply not a good idea. Increasing prices without improving service quality will only cut the number of visitors to Vietnam. Look at other countries in Southeast Asia such as Thailand, Malaysia, and Singapore. They always have policies to encourage tourists and those policies don’t come from local travel agents but from their governments.

The Vietnamese Government should also give more focus to investment and upgrading infrastructure. Vietnam has embassies in almost all developed countries, and it would be great if VNAT could work closer with those embassies in building up Vietnam’s tourism image, as embassies are good channels to develop tourism.

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