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Vietnam Tourism Report Q4 2009Published by: Business Monitor International Published: Oct. 7, 2009 - 52 Pages Table of Contents
AbstractTourist Arrivals Suffer In 2009Figures released by the Vietnam National Administration of Tourism (VNAT) in August indicate that theindustry is suffering more than first expected. In the first seven months of the year, tourist arrivals fell by18.7% year-on-year (y-o-y), to 2.2mn. Arrivals in July alone fell by 16% to 277,998. This followedminimal growth of 0.6% y-o-y in 2008 and indicates that Vietnam is suffering from a prolonged downturnin the industry. While Vietnam, like many other countries, is suffering from the global economicdownturn, it is perhaps surprising that it is suffering such a major decline in tourist arrivals. However, theglobal outbreak of the H1N1 (swine flu) virus in April has hit the country hard, with more than 1,000cases by August. As a result, it seems that tourists have been discouraged from visiting Vietnam. Webelieve that tourist arrivals will begin to pick up towards the end of the year, particularly around the endof year holiday season. But with arrivals in the first seven months of the year being so poor, we arerevising our full-year 2009 forecast down to 3.82mn arrivals. Industry Opens Up To Foreign Firms In a sign of the problems being experienced by the domestic travel industry, the government has openedup the domestic tourist market to foreign firms, albeit on a trial basis. From August 2009 until December2010, foreign companies that are part of a joint venture with Vietnamese firms will be able to offeroutbound tours and travel services from Vietnam. Previously, foreign firms could arrange for tours withinVietnam but not arrange tours starting in Vietnam to go on to another country. This should increaseinterest in Vietnam’s tourism industry among foreign travel agents, who may now find it easier to bookmulti-leg tours. However, there are concerns that the new regulations may increase competition fordomestic firms, potentially putting some out of business. It is for this reason that the new regulations areon a trial basis only, and foreign firms must enter a joint venture with a Vietnamese firm to be eligible. Vietnam Airlines’ Profit Slumps In H109 In line with the generally depressing outlook for the Vietnamese tourism industry, state-owned carrierVietnam Airlines experienced a significant decrease in profit in H109. The airline’s pre-tax profit fell toVND28bn (US$1.6mn), a 77% fall y-o-y. Total revenue in H109 fell to US$630mn. The airline said itsperformance had been adversely affected by the global economic downturn and the outbreak of swine flu. The downturn has largely been felt with international arrivals, with foreign passengers declining by11.8% y-o-y, to 1.5mn. In contrast, domestic tourism has been resilient, with domestic passengers up by8.8% y-o-y to 2.9mn. Despite this sharp fall in profit, it is positive that the airline has remained in profit atall, and we view this as a reflection of its positive fundamentals. The company remains confident and isusing the downturn to reposition itself for the expected industry recovery. To this end, it is continuing toexpand its fleet, having agreed to purchase 32 Airbus aircraft, 11 Boeing and 11 ATR 72s. Get Full Details About This Report >> |
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