Tag Archives: Vietnam tourism

Saigon Galloping in Vietnam’s Year of the Horse

This is shaping up to be a break-out year for Ho Chi Minh City (Saigon), Vietnam’s business and financial center, and its most populous city — 9 million headed toward 14 million by 2025.

Sales and services revenue is up 12% this year and approaching $5 billion. February exports are up 15% to $1.8 billion.  Agricultural production is up 6%. The city hosted nearly 400,000 tourists in February, a 10% increase, and licensed 2,700 new businesses accounting for 25,000 new jobs.

And all of this precedes the conclusion of Trans-Pacific Partnership (TPP) negotiations that are expected to boost trade further between HCM City and the US, Australia, Malaysia, and Singapore, among others.

Perhaps the strongest sign of robust economic conditions in HCM City is the rise in foreign direct investment (FDI).  The city says it granted 12% more investment licenses so far this year than at this time last year (46) — with an aggregate of $164 million capital, up 267%.

This suggests the year of the horse will be powerful for the former Saigon — and as goes Saigon so goes all of Vietnam.

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Will Vietnam Become China’s Las Vegas?

China reports nearly 100 million of its people traveled last year to foreign countries, where they spent $100 billion.  That’s a 17% increase — and another sign of opportunity for one of China’s most convenient and accessible tourism destinations: Vietnam.   

Moreover, China’s rapidly growing middle class is just beginning to impact the world’s tourism industry.  The average Chinese now spends $75 a year to travel abroad, only about one-fourth the average for Americans and well under 10% of the per capita foreign travel expense for Germans, Canadians and Australians. 

In 2014, Vietnam was the destination for just 2% of China’s foreign travelers, but that was 35% more than in 2013.  And the increase in traffic from China to Vietnam for investment purposes is far bigger — with Chinese foreign investment in Vietnam up six-fold last year to $2.3 billion.

Partly because of the coming inundation or tourist from China, some of those investors believe 2014 is the right time to commit to restaurants, hotels, entertainment services, and … casinos.

This may be the year Vietnam overcomes its historic reluctance to bring Las Vegas to provinces up and down the coast.  Among the sites were Casino projects are underway or nearing approval are Lang Son and Quang Ninh Provinces on the China border; Danang and Quang Nam Provinces on the central coast;  Phu Yen Province on the south central coast; Phu Quoc Island in the Gulf of Thailand; and Vung Tau near Saigon.

All of them will be awaiting the influx of Chinese travelers who are expected to be the world’s dominant casino consumers by the start of the next decade.

The Cost of Living with Big Macs in Vietnam

Now that McDonalds opened its first restaurant in Vietnam this month, it will take a while to measure the effect on Vietnamese consumers — hungry for all things American but leery of the potential health consequences.  But the fast food giant already has made a significant contribution to anyone considering living in or visiting Vietnam — thanks to Big Macs.

The entry of the company’s trademark oversized hamburgers on the streets of Saigon has immediately made Vietnam a member of The Economist’s Big Mac Index.  The index is an elegant (though obviously imprecise) measurement of purchasing power in countries where McDonalds sells Big Macs.

So now we know that the Big Mac sells for the equivalent of $2.84 in Ho Chi Minh City, considerably less than the $4.62 price in the US.  By comparison, the extremes in Big Mac pricing are $7.80 in Norway and $1.54 in India.  The Economist arrives at those numbers by dividing the price charged at McDonald’s by the official exchange rate of the country; In Vietnam, consumers pay 60,000 Vietnamese dong for a Big Mac, and the Economist used 21,090 as the exchange rate.

What’s interesting about this is that the index indicates the actual cost of living in Vietnam — as opposed to the implied cost you get from the official exchange rate.  In this case, it suggests Vietnam is much cheaper than you’d expect.  In fact, if a Big Mac (and presumably everything else) cost as much in Vietnam as in the US, we’d be getting 12,975 VND for our dollar rather than the 21,090 the bank offers.

Purchasing Power Parity is a relatively good way of understanding the true cost of living in a foreign country, but it is tends to be subject to the biases of whoever calculates it.  The Big Mac Index is a convenient way to demonstrate that Vietnam is an inexpensive place to live — at least until McDonald’s raises its prices there.

Vietnam’s Most Treasured Import: Cash

More than five million Vietnamese people do not live in Vietnam.  They migrated to 100 nations around the globe, and include 500,000 Vietnamese guest workers in other countries.  Together, at year’s end, they will have sent $11 billion in cash back to relatives in their native country.  That includes nearly $5 billion sent to Ho Chi Minh City alone.

Most of the money comes from the West — especially Europe and the US, top_site_international_businesshome to 1.5 million Vietnamese Americans, many of whom are affluent.  The cash is transferred through banks, such as Dong A Money Transfer (that received $1.5 billion in 2013) and Sacomrex, which expects the total to be $1.7 billion, (15% more than it had expected).

World Bank says Vietnam is one of the top ten countries receiving remittances from overseas.  Others include India ($71 billion), China ($60 billion), and the Philippines ($26 billion).

The cash remittances are a cultural statement about the intensity of Vietnamese family connections.  The money significantly raises the standard of living of relatives in Vietnam.  And it helps build Vietnam’s social infrastructure — such as access to education and health — family by family.

The $11 billion inflow represents nearly 8% of Vietnam’s GDP.  It strengthens and widens the bridge between Vietnam and the US.  It helps explain the warm reception that often surprises first-time American visitors to Vietnam.

The Road to Vietnam’s Own Las Vegas

If money speaks louder than tradition in Vietnam,  the country’s longstanding resistance to exposing its population to LasVegas style gambling and entertainment may soon end.  That’s because Sheldon Adelson recently visited Vietnam to press his plans with the country’s top planners.

As chairman of Las Vegas Sands, Adelson is accustomed to getting what he wants.  As America’s 3rd wealthiest citizen (nearly $27 billion, according to Forbes), he has the capacity to provide whatever incentives it takes.

Over the past decade, investors in Las Vegas and elsewhere in the world have eyed Vietnam as a Southeast Asian gambling hub, and some have spent tens of millions establishing beachheads in Saigon, Hanoi, Vung Tau and elsewhere.  Some envision Phu Quoc Island in the Gulf of Thailand as SE Asia’s version of Macau.

But Adelson, the world’s 15th richest person, may have more clout than any of his predecessors.  His net worth is nearly one-fifth of Vietnam’s GDP.  

Broadening his Sands proposal announced last year to spend $6 billion on resorts in Hanoi and HCM City, he told Vietnamese government leaders that his group wants to build a large-scale integrated resort in the northern province of Quang Ninh.  This could include a hotel, restaurants, conference center, exhibition hall, shopping malls, spas, sports arenas, theaters, a museum, and other entertainment facilities.

But even Adelson may face a challenge getting Vietnam’s government to allow its citizens to do what attracts many of them to the US:  play in Las Vegas style casinos.  That’s not consistent with communist Vietnam’s political philosophy.

 

Rescuing Vietnam’s 882 Endangered Species

While Vietnam cultivates its industry and agribusiness, one arm of the government is looking to rescue economic development’s innocent bystanders:  882 endangered species of floral and fauna.  That number is up from 161 species 20 years ago even though some of those have become extinct, including nine kinds of animals.

Coming to the aid of non-human forms of life, Vietnam’s environment department this week introduced a national strategy to create 41 new nature reserves.  When and if that happens, 9% of Vietnam’s land mass and 45% of its forests will be protected — and there will be 10 biosphere reserves and 10 ASEAN heritage parks.  The agency’s biodiversity master plan also calls for 23 reserves by 2030 in addition to the 148 existing ones and the 41 to be established by 2020 (accounting for nearly 3,000 square miles of land).

Vietnam does not have a good reputation with organizations like the World Wildlife Fund, partly because the country — as one of the world’s most diverse — has so much to protect.  WWF and others have criticized Vietnam for not being more aggressive in combatting illegal trading of wild animals and habitat fragmentation that results from hydropower and other trappings of economic growth.

Even so, Vietnam has a passionate population of environmentalists who see biodiversity as the foundation of a green economy, a key to dealing with climate change, and a significant contributor to quality of life.  They want to balance the economic dreams of Homo sapiens with the needs of other species.

 

Vietnam’s Cops May Get a Lot Friendlier

For years, Vietnam enjoyed a reputation as a destination where tourists were relatively safe from petty thieves and bag snatchers foreigners  encounter worldwide.  That has changed.

Vietnam is considering creating an English-speaking tourism police force to treat foreign visitors kindly and crack down on anyone who hassles them.  That’s because a slowdown in visits to Vietnam was attributed in part to experiences like that of a Chinese tourist who was robbed at knife point by a taxi driver last month in Hanoi’s Old Quarter.

Like most sectors in Vietnam, tourism has become a huge, and fast-growing business — $7.6 in revenue last year (6% of GDP).  Foreign tourists increased from 1.4 million in 1995 to nearly 7 million in 2012.  The growth in Vietnamese traveling in their own country is even greater — up 7 million to 33 million over the same period.

So far in 2013 foreign visitors increased 2.6% over last, compared to 14% and 18% the previous two years.  Authorities say the decline has been accompanied by more incidents of swindling, extortion and hassling — especially in Hanoi, Saigon, and beach areas.  Also, a new European Union-funded survey of tourist facilities finds that languages and soft skills remain a big problem for Vietnam’s tourism industry.

The prime minister has ordered his government to make sure Vietnam is safe and friendly.  Police have been told to be friendly to visitors and step up patrols in tourism destinations — eliminating thieves, aggressive street vendors, and extorting taxi drivers.  Also, each large tourist destinations will open an assistance center for tourists.