Executive Summary

Operating environment

Vietnam has maintained its healthy economic progress with a total growth of 62% over the review period of 1999-2004. In particular, the 2004 growth rate of 7% is in line with government expectations and ranked second in Asia, after China.

As a result of successful economic reforms, Vietnamese disposable income increased 37% over the review period. However, due to SARS and bird flu, disposable income in 2004 decreased by over 3% compared to the previous years figure. Showing a similar picture, Vietnamese expenditure in 2004 decreased 1% compared to 2003 in current prices.

Industry issues

Vietnams travel and tourism industry is fully controlled by the Vietnam National Administration of Tourism (VNAT). All activities in the industry follow the Tourism Ordinance passed by the government on 20 February 1999. However, VNAT is currently drafting a new Law of Tourism to be completed and submitted to the government by the third quarter of 2004, and to be submitted for the National Assemblys approval by 2005.

Currently, the Vietnamese travel and tourism industry is facing a ratio of 15% in repeat tourism, which is rather low compared to its neighbour Thailand. Therefore, VNAT is warning that Vietnam need to pay attention to the issue of sustainable tourism development now.

The Vietnamese government has been expanding its cooperation with many other countries worldwide for its tourism industry. Currently, Vietnam is a member of World Tourism Organization (WTO), Asia-Pacific Tourism Association (PATA), and ASEAN Tourism Association (ASEANTA). Simultaneously, it has signed many tourism cooperation agreements internationally.

Demand factors

Officially and commonly, Vietnamese has 12 days for annual leave and 8 days of public holidays.

Thanks to improved incomes, there has been an increase in the level of holiday taking of Vietnamese, from 11% of population in 1999 to 24% in 2004. Among travellers, females account for a higher share, but this share decreased from 59% in 1999 to 51% in 2004. In addition, those aged between 25 and 34 always accounted for highest proportion over the review period. The majority of trips are short, from 1 to 3 days, and the peak months in 2004, in order, were January, February, December, and November.

Tourism parameters

As a result of the increasing inflow of international arrivals, the Vietnamese tourism industry has been enjoying strong growth in incoming tourism receipts. In current value terms, 2004 incoming tourism receipts grew 64% compared to 1999, and 6% compared to 2003. However, tourism expenditure per capita per trip increased slightly, by 4% over the review period, but decreased 8% compared to 2003. This is a reversal of government expectations.

As a result of a huge rise of Vietnamese going abroad thanks to improved disposable income, there was a remarkable increase in outgoing expenditure in 2004, with growth of 168% from 1999 and 44% from 2003. Overall, the industry is enjoying a positive and increasing balance of payments, with growth of 52% over the review period.

International arrivals

In recent years, Vietnamese tourism has recorded a high growth rate and attracted more and more foreign visitors. Although affected by bird flu, the country will lure an estimated 2.8 million foreign arrivals in 2004, increasing 15% over the previous year and 57% over the period 1999-2004. This number of arrivals is low compared to some other ASEAN countries, and Vietnam is ranked fifth out of 10 ASEAN countries. Among international arrivals, those from China, Taiwan, the US, Korea, Japan are highest.

Air is still the main means of transportation for international arrivals coming to Vietnam, with its share of 60% in 2004. However, it is said that there is an increasing tendency of travelling by sea, according to sources in the shipping industry. In 2004, the number of travellers coming by sea increased 15% over the previous years figure.

Arrivals coming to Vietnam for leisure in 2004 accounted for the highest proportion of 49% in total arrivals, and increased 11% compared to 2003. Simultaneously, thanks to its open-door policy, Vietnam has attracted many foreigners coming to Vietnam to work; as a result, the number of arrivals coming to Vietnam for business has increased continuously, with growth of 116% over the review period.

Departures

2004 experienced a huge rise of Vietnamese going abroad, thanks to improved disposable incomes. It is recorded that the number of departures increased significantly by 110% in the five years from 1999 to 2004, and 30% in 2004. Among destinations, Thailand, China, Singapore and Malaysia are still the most popular locations for outgoing travel.

Going abroad by air is still a main means of transportations for travellers, accounting for 70% of outgoing travel in 2004. This is because air is the fastest and the most convenient method of travel. In 2004, thanks to discounts from airlines, the number of outbound travellers by air increased 40% over 2003, and 127% over the review period.

Although accounting for highest share of total departures, the number of Vietnamese going abroad for business had a lower growth rate than that for leisure purposes, and saw its share diminish from 58% in 2003 to 54% in 2004. Meanwhile, the number of Vietnamese taking outbound tours for leisure increased significantly, by 45% over the 2003 figure and 512% over the review period.

Domestic travel

As a result of increasing disposable income, the number of Vietnamese taking domestic tours has been increasing over time. It is said that on average, one out of every six Vietnamese people takes one trip within Vietnam each year.

It is estimated that total domestic spending in 2004 was VND29.5 trillion, increasing 50% in comparison to 2003 and 196% in comparison to 1999. In terms of mode of transportation, land travel accounts for the highest proportion in all domestic tours. On average, a traveller spends from VND1.2 million to VND1.5 million per trip domestically.

Travel accommodation

Despite the bird flu outbreak in the early part of the year, the current value of travel accommodation in 2004 increased 13% compared to 2003, with a corresponding 9% increase compared to 2003 in the volume of bed nights.

Hotels still dominate travel accommodation sales, accounting for almost 80% of total accommodation value sales over the review period, with 75% of total outlets. Among Vietnamese regions, almost 46% of hotels are located in the South of Vietnam. About 28% of hotels are ranked from one to five-star level, the rest are non-classified hotels. Chained hotels dominate the hotel sector, with a high share of 75% of total hotel sales in 2004.

Key players are Saigontourist, National Oil Service Co of Vietnam (OSC), Accor Group, Swiss Belhotel International (SBI) and Furama Hotels & Resorts International (FHRI).

Transportation

Over the review period, Vietnamese transportation sales increased 65% compared to 1999, with air transportation accounting for the highest share of around 74%.

Vietnam Airlines, Pacific Airlines, and the Vietnam Aviation Service Co (VASCO) are the only scheduled airlines in Vietnam. In 2004, airlines had a 3% capacity increase over the previous year, with seats sold accounting for 61% of airline capacity. The majority of airline sales are from economy class and short-haul flights.

The key player in the airline sector is Vietnam Airlines, with a more than 85% share.

Car rental

Over the review period, car rentals enjoyed a good growth rate of 77% in sales value in current prices. The number of cars for rent in 2004 increased 8% from 2003, although the average fleet size for one operator is small.

Short-tem car rentals for business are seen as a major part of the car rental businesses, accounting for 70% of total car rental value in 2004. Car rental sales for leisure increased 52% from 1999, of which 29.1% of the sales value was from non-airport rentals. The rental duration for leisure purposes tends to be relatively longer.

Key players in this area are Saigontourist, Mai Linh Co Ltd, and Peace Tour.

Travel retail

In 2004, Vietnamese travel retail enjoyed good growth of 78% compared to 1999 and 19% compared to the previous year, in current value terms. There has been a supply excess in travel retail.

In this field, there are no exchange services, and 78% of outlets are travel agents. More than 54% of travel agents sales come from package tours, 56% come from package holidays, and 43% come from beach destinations. For tour operators, more than 55% of their value sales are made by direct selling to travellers. About 67% of tour operators sales are from package holidays, and 49% from cultural destinations.

There are no key players among travel agents, while key players among tour operators are Saigontourist holding Co, Exotissimo-Cesais and Apex Vietnam.

Tourist attractions

In 2004, total sales from tourist attractions increased 53% compared to 1999 and 9% compared to 2003, of which 39% and 35% of total sales were from historic buildings/sites and national parks/areas of natural beauty respectively.

The most popular tourist attractions in Vietnam are Ha Long Bay, Dallat, Phong Nha-Ke Bang, Hanoi, Cat Ba, Hue, and Hoi An.

Internet transactions

In general, Internet transactions in the Vietnamese travel and tourism industry are at an early stage. Currently, only some of big hotels and foreign-invested tour operators have made bookings available via the Internet in recent years, but these contribute a small share of total sales value.

Future outlook

With continuous economic development, demand for leisure as well as travel and tourism in Vietnam will remain high, offering business opportunities for both existing and potential players. It is expected that the number of incoming tourists, domestic tourists, and departures will continue to increase over next five years.

In 2005, a new Law of Tourism is to be issued, in which local players may receive more favours from the government.

By giving free visas to Koreans in late 2004, the number of Korean travellers coming to Vietnam in 2005 is predicted to increase sharply. The major source countries of international travellers for Vietnamese tourism will be China, Taiwan, the US, and the emerging Korea.

1. EXECUTIVE SUMMARY

2. OPERATING ENVIRONMENT

2.1 GDP

• Table 1 GDP 1999-2004

2.2 Disposable Income

• Table 2 Disposable Income 1999-2004

2.3 Leisure Expenditure

• Table 3 Consumer Expenditure on Leisure 1999-2004

3. INDUSTRY ISSUES

3.1 Political and Legislative Environment

3.2 Terrorism and Security

3.3 Sustainable Tourism

3.4 International Co-operation in Tourism

3.5 Positive Growth Factors

• Summary 1 Positive Growth Factors

3.6 Negative Growth Factors

• Summary 2 Negative Growth Factors

4. DEMAND FACTORS

4.1 Leave Entitlement

• Table 4 Paid Holiday and Public Holidays 2004

4.2 Holiday Taking

• Table 5 Levels of Holiday Taking 1999-2004

16. Demographics

• Table 6 Holiday Taking by Demographic Groupings 1999-2004

17. Length of Trip

• Table 7 Holiday Taking by Length of Trip 1999-2004

18. Seasonality

• Table 8 Month in which Holidays are Taken 2004

5. TOURISM PARAMETERS

5.1 Incoming Tourism Receipts

• Table 10 Incoming Tourism Receipts % Growth: 2000-2004
• Table 9 Incoming Tourism Receipts: 1999-2004

5.2 Outgoing Tourism Expenditure

• Table 11 Outgoing Tourism Expenditure: 1999-2004
• Table 12 Outgoing Tourism Expenditure % Growth: 2000-2004

5.3 Balance of Tourism Payments

• Table 13 Balance of Tourism Payments: Value 1999-2004

23. Number of Arrivals

• Table 14 Total Arrivals: 1999-2004

24. Mode of Transport

• Table 15 Arrivals by Mode of Transport: 1999-2004
• Table 16 Arrivals by Mode of Transport: % Breakdown 1999-2004

25. Purpose of Visit

• Table 17 Arrivals by Purpose of Visit: 1999-2004
• Table 18 Arrivals by Purpose of Visit: % Breakdown 1999-2004

26. Country of Origin

• Table 19 Arrivals by Country of Origin: 1999-2004
Table 20 Arrivals by Country of Origin: % Breakdown 1999-2004

27. Per Capita Expenditure

• Table 21 Per Capita Expenditure per Arrival: 1999-2004

28. Number of Departures

• Table 22 Total Departures: 1999-2004

29. Mode of Transport

• Table 23 Departures by Mode of Transport: 1999-2004
• Table 24 Departures by Mode of Transport: % Breakdown 1999-2004

30. Purpose of Visit

• Table 25 Departures by Purpose of Visit: 1999-2004
• Table 26 Departures by Purpose of Visit: % Breakdown 1999-2004

31. Destination

• Table 27 Departures by Destination: 1999-2004
• Table 28 Departures by Destination: % Breakdown 1999-2004

32. Per Capita Expenditure

• Table 29 Per Capita Expenditure per Departure: 1999-2004

33. Number of Trips and Expenditure

• Table 30 Total Number of Domestic Trips: 1999-2004
• Table 31 Domestic Tourist Expenditure: 1999-2004

34. Trips by Mode of Transport

• Table 32 Domestic Trips by Mode of Transport: 1999-2004
• Table 33 Domestic Trips by Mode of Transport: % Breakdown 1999-2004

35. Trips by Destination

• Table 34 Domestic Trips by Destination 1999-2004
• Table 35 Domestic Trips by Destination: % Analysis 1999-2004

36. Per Capita Expenditure

• Table 36 Per Capita Expenditure Per Domestic Trip 1999-2004

5.18 Tourism Spending

• Table 37 Spending on Tourism 1999-2004
• Table 38 Spending on Tourism: % Breakdown 1999-2004

38. Method of Payment

• Table 39 Method of Payment for Tourism Spending: % Breakdown 2003

6. TRAVEL ACCOMMODATION

6.1 Market Size

• Table 40 Travel Accommodation Market 1999-2004
• Table 41 Travel Accommodation Market: % Growth 1999-2004

6.2 Sales by Sector

• Table 42 Travel Accommodation Value Sales by Sector: Value 1999-2004
• Table 43 Travel Accommodation Value Sales by Sector: % Value Breakdown 1999-2004

6.3 Outlets by Sector

• Table 44 Travel Accommodation Outlets by Sector: Units 1999-2004
• Table 45 Travel Accommodation Outlets by Sector: % Volume Breakdown 1999-2004

6.4 Hotels by Region

• Table 46 Hotels, Rooms and Beds by Region 2003

6.5 Hotels by Star Ratings

• Table 47 Number of Star Rated Hotels by Region 2003

6.6 Hotels by Ownership

• Table 48 Hotel Sales by Independent vs Chained Outlets: Value 1999-2004

6.7 Internet Transaction Trends

• Table 49 Travel Accommodation Internet Transactions Sales: Internet Transaction Value 2001-2004

47. Revenue Rankings

• Table 50 Key Players by Revenue 2003/2004

48. Market Share

• Table 51 Hotel Companies by Market Share 2001-2004

49. RevPAR

• Table 52 Key Hotel Players by RevPAR 2003/2004

6.11 Forecast Sales by Sector

• Table 53 Forecast Travel Accommodation Sales by Sector: Value 2004-2009

6.12 Forecast Outlets by Sector

• Table 54 Forecast Travel Accommodation Outlets by Sector: Units 2004-2009

7. TRANSPORTATION

7.1 Market Size

• Table 55 Transportation Market 1999-2004
• Table 56 Transportation Market: % Growth 1999-2004

7.2 Sales by Sector

• Table 57 Transportation Sales by Sector: Value 1999-2004
• Table 58 Transportation Sales by Sector: % Value Breakdown 1999-2004

7.3 Airline Capacity and Utilisation

• Table 59 Airline Capacity by Type 1999-2004
• Table 60 Airline Utilisation by Type 1999-2004
• Table 61 Airline Utilisation by Type: % Breakdown 1999-2004

7.4 Airline Sales by Seat Class

• Table 62 Airline Volume Sales by Seat Class 1999-2004
• Table 63 Airline Volume Sales by Seat Class: % Breakdown 1999-2004

7.5 Airline Sales by Distance

• Table 64 Airline Volume Sales by Distance: % Breakdown 1999-2004

7.6 Internet Transaction Trends

59. Revenue Rankings

• Table 65 Key Players by Revenue 2003/2004

60. Passengers Carried

• Table 66 Key Players by Numbers of Passengers Carried 2003/2004

61. Market Share

• Table 67 Airline Companies by Market Share 2001-2004

7.10 Forecast Sales by Sector

• Table 68 Forecast Transportation Sales by Sector: Value 2004-2009

8. CAR RENTAL

8.1 Market Size

• Table 69 Car Rental Market: 1999-2004
• Table 70 Car Rental Market % Growth: 1999-2004

8.2 Fleet Size and Number of Operators

• Table 71 Structure of Car Rental Market 1999-2004

8.3 Sales by Sector and Location

• Table 72 Car Rental Sales by Sector and Location: Value 1999-2004
• Table 73 Car Rental Sales by Sector and Location: % Value Breakdown 1999-2004
• Table 74 Car Rental Sales by Sector and Location: % Breakdown 1999-2004

8.4 Rental Duration

• Table 75 Car Rental Average Duration by Sector 1999/2004
• Table 76 Average Car Rental Duration: % Breakdown 1999/2004

8.5 Time of Booking

• Table 77 Time of Booking: % Breakdown 2004

69. Revenue Rankings

• Table 78 Key Players by Revenue 2003/2004

70. Fleet Size

• Table 79 Key Players by Size of Fleet 2001-2004

71. Average Daily Rate

• Table 80 Key Players by Average Daily Rate for Car Hire 2003

72. Market Share

• Table 81 Key Players by Market Share 2001-2004

8.10 Forecast Sales by Sector and Fleet Size

• Table 82 Forecast Car Rental Sales by Sector: Value 2004-2009
• Table 83 Forecast Car Rental Fleet Size 2004-2009

9. TRAVEL RETAIL

9.1 Market Size

• Table 84 Travel Retail Market: 1999-2004
• Table 85 Travel Retail Sales % Growth: 2000-2004

9.2 Outlets by Sector

• Table 86 Travel Retail Outlets by Sector: Units 1999-2004
Table 87 Travel Retail Outlets by Sector: % Volume Breakdown 1999-2004

77. Services

• Table 88 Travel Agency Value Sales by Service: % Breakdown 1999-2004

78. Type of Holiday and Destinations

• Table 89 Travel Agency Value Sales by Type of Holiday: % Breakdown 1999-2004
• Table 90 Travel Agency Value Sales by Destination: % Breakdown 1999-2004

79. Exchange Services

80. Source of Sale

• Table 91 Tour Operator Value Sales by Source of Sale: % Breakdown 1999-2004

81. Type of Holiday and Destinations

• Table 92 Tour Operator Value Sales by Type of Holiday: % Breakdown 1999-2004
• Table 93 Tour Operator Value Sales by Destination: % Breakdown 1999-2004

82. Sales by Outlet and Type

• Table 94 Exchange Service Value Sales by Outlet: % Breakdown 2003
• Table 95 Exchange Services Value Sales by Currency vs Travellers Cheques: % Breakdown 2003

9.9 Online Travel Agencies

• Table 96 Travel Retail Sales: Internet Transaction Value 1999-2004

84. Revenue and Market Share

85. Revenue and Market Share

• Table 97 Tour Operators: Revenue Rankings 2003/2004
• Table 98 Tour Operators: Market Share 2001-2004

86. Revenue and Market Share

9.13 Forecast Sales and Outlets

• Table 100 Forecast Travel Retail Outlets by Sector: Units 2004-2009
• Table 99 Forecast Travel Retail Value Sales: 2004-2009

10. TOURIST ATTRACTIONS

10.1 Market Size

• Table 101 Tourist Attractions Market: 1999-2004
• Table 102 Tourist Attractions Market % Growth: 1999-2004

10.2 Sales by Sector

• Table 103 Tourist Attractions Sales by Sector: Value 1999-2004
• Table 104 Tourist Attractions Sales by Sector: % Value Breakdown 1999-2004

10.3 Visitors by Sector

• Table 105 Tourist Attractions Visitors by Sector: 1999-2004
• Table 106 Tourist Attractions Visitors by Sector: % Breakdown 1999-2004

92. Visits

• Table 107 Major Tourist Attractions by Visitors 2002-2004

10.5 Forecast Sales and Visitors by Sector

• Table 108 Forecast Tourist Attractions Sales by Sector: Value 2004-2009
• Table 109 Forecast Tourist Attractions Visitors by Sector: 2004-2009

11. KEY STRATEGIC ALLIANCES

11.1 Trends

12. GROWTH COMPANY PROFILES

12.1 Saigontourist Holding Co

• Summary 3 Saigontourist Holding Co: Key Facts
• Summary 4 Saigontourist Holding Co: Summary of Key Events 1999-2004
• Table 110 Saigontourist Holding Co: Financial Summary 1999-2004

12.2 Accor Group

• Summary 5 Accor Group: Key Facts
• Summary 6 Accor Group: Summary of Key Events 1999-2004
• Table 111 Accor Group: Financial Summary 1999-2004

12.3 Vietnam Airlines Corp

• Summary 7 Vietnam Airlines: Key Facts
• Summary 8 Vietnam Airlines: Summary of Key Events 1999-2004
• Table 112 Vietnam Airlines: Financial Summary 1999-2004

12.4 Mai Linh Corp

• Summary 9 Mai Linh Corp: Key Facts
• Summary 10 Mai Linh Corp: Summary of Key Events 1999-2004
• Table 113 Mai Linh Corp: Financial Summary 1999-2004

12.5 Apex Vietnam

• Summary 11 Apex Vietnam: Key Facts
• Summary 12 Apex Vietnam: Summary of Key Events 1999-2004
• Table 114 Apex Vietnam: Financial Summary 1999-2004

13. FUTURE OUTLOOK

13.1 Market Opportunities

• Summary 13 Opportunities for Growth and Investment

13.2 Tourism Receipts and Expenditure

• Table 115 Forecast Incoming Tourism Receipts: 2004-2009
• Table 116 Forecast Outgoing Tourism Expenditure: 2004-2009

13.3 Balance of Payments

• Table 117 Forecast Balance of Tourism Payments: Value 2004-2009

13.4 Number of Arrivals

• Table 118 Forecast Visitor Arrivals: 2004-2009

13.5 Number of Departures

• Table 119 Forecast Visitor Departures: 2004-2009

13.6 Travel and Tourism Markets

• Table 120 Forecast Sales by Travel and Tourism Markets: Value 2004-2009

13.7 Developments in Internet Transaction Sales

• Table 121 Forecast Sales in Travel and Tourism Markets: Internet Transaction Value 2004-2009

14. DEFINITIONS