phu quoc, vietnam - tourism market report
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PHU QUOC, VIETNAMMARKET REPORT
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QUO Bangkok Co., Ltd.22nd Floor, Ocean Tower II75/40-42 Sukhumvit 19Bangkok 10110Thailand
PHU QUOC, VIETNAMMARKET REPORT
Lying 62 miles off Vietnam’s southern coast and known for pristine beaches and verdant forests is the island of Phu Quoc. Now seeing a major increase in attention from both tourists and hospitality investors alike, this increasingly attractive destination, however, still faces obstacles as it looks to develop.
PHU QUOC SEES RAPID TOURISM GROWTH
Talked about as an up-and-coming tourist destination for the past decade, very little development had actually materialised until the last couple of years. After significant government investment in local infrastructure, including a new airport, and a strong promotion campaign, tourist numbers have since exploded, and with them, serious private investment in resort facilities has followed.
Over the past 24 months, a safari, theme park, hospital and golf course opened and an international standard
PHU QUOC, VIETNAM’S NEWEST TRAVEL DESTINATION TAKES OFF
casino is under planning”, explains Peter Ryder,CEO of Indochina Capital, a leading Vietnam-based real estate developer and advisor. He adds that, “During the early stages of a resort destination’s development, infrastructure growth is critical and the Phu Quoc authorities are demonstrating an ability to progress rapidly.” He goes on to explain that these early achievements have instilled confidence in developers and international hotel brands to move forward with new projects.
While attracting only 25,000 visitors back in the year 2000, the number of tourists coming to Phu Quoc jumped to over 1.5 million in 2015, with local Vietnamese visitors doubling between 2014 and 2015 to reach 1.35 million. 2016 is expected to be another impressive year for Phu Quoc as Kien Giang Province, where Phu Quoc is located, is the major focus of the Vietnamese government’s Visit Vietnam Year 2016 tourism promotion campaign. By 2020, the government hopes on attracting three million visitors per year.
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ATTRACTING FOREIGN INTEREST
Despite this, foreign tourists currently constitute only a relatively small percentage of overall tourist numbers, with just 164,000 foreign tourists visiting Phu Quoc last year out of a total of 1.5 million. Tourists from Russia, Singapore, Malaysia and Thailand are those currently showing the most interest in travelling to Phu Quoc — although the destination is increasingly welcoming tourists from Europe.
Flights from foreign countries directly to Phu Quoc Airport have been on the increase lately. Recent visa liberalisation for many nationalities has also further encouraged arrivals to Vietnam by foreign tourists. In addition to this, as Phu Quoc is a special economic zone, the government is allowing visa-free travel to Phu Quoc for up to 30 days for all nationalities.
MANAGING FUTURE GROWTH IN PHU QUOC
However, Phu Quoc faces some specific challenges. Labour is foremost amongst them. The recent rapid growth means that the local labour supply with adequate skills and experience in travel and tourism is incredibly limited, and hotel and travel operators need to pay a premium to attract skilled personnel.
While infrastructure on Phu Quoc has greatly improved of late, especially with the new airport and roads, further development is still needed in terms of electricity as well as sewage and water treatment. This is currently under construction or in the planning stages.
A final major challenge for Phu Quoc as a destination is one that has been faced by a number of other tourist destinations in the past — how will it manage its image as it grows and changes?
Earlier tourists came to Phu Quoc mainly due to it being perceived as a new and “off the beaten track” destination – attracted by its natural beauty and lack of development. As Phu Quoc grows, however, these existing tourists could be put off by the continuing development and may venture on to newer, untouched destinations.
Contrasting this, Nguyễn Vĩnh Trân, CEO of MIK Group, a leading Vietnamese real estate advisory with a number of hotel projects in Phu Quoc, including the soon-to-open Movenpick and Crowne Plaza resorts, explains that, “The Vietnamese government has, in fact, been rather proactive in terms of ensuring the preservation of the forest on Phu Quoc, as well as restraining over-development and being strict on wastewater treatment”.
With Phu Quoc currently transitioning into a more mass-market destination, it is important the authorities and private sector take the time right now, before development continues too far, to carefully consider what image Phu Quoc wishes to present to the world and how it can differentiate itself from other mass-market destinations.
…….......................................................................................QUO wishes to express its thanks to Olivier Do Ngoc, Managing Partner, Dynasty Investments, Peter R. Ryder, CEO, Indochina Capital Corporation, Nguyễn Vĩnh Trân, CEO of MIK Group and Marriott International for invaluable support and insights on the development of Phu Quoc.
• Phu Quoc is a 589 sq km island district in Kien Giang province, in the Gulf of Thailand
• Phu Quoc district includes Phu Quoc Island – Vietnam’s largest island –and 28 smaller islands
• Part of the UNESCO World Biosphere Reserve
• Also referred to as “Pearl Island”
• Known for production of fish sauce and black pepper
PHU QUOC, VIETNAMMARKET REPORT
48km
28km
At 603mMOUNT CHUAis Phú Quốc highest point
Over 50%of Phú Quốc isNATIONAL PARK
PHU QUOCAIRPORTis Vietnam’s 5th largest international airport
SAOBEACHis one of the most beautiful beach in Asia
There are28 ISLANDS & ISLETSin Phú Quốc District
LONG BEACHis the most popular beach on Phú Quốc
The economic capitals isDUONGDONG
VINMECInternationalstandard hospital
average length of stay
for foreign tourists
TOURISMOVERVIEW
visa exemption for visitors
introduced in March 2014
of region’s economy is tourism
2.4DAYS
30DAYS
66%
1,600,0001,400,0001,200,0001,000,000
800,000600,000400,000200,000
0
TOURISMFOREIGN & DOMESTIC ARRIVALS
2012 2013 2014 2015 (as of 7 Dec)
Total Tourist Arrivals Foreign Tourist Arrivals
Current airport capacity
TOURISMAIRLIFT
2017 airport capacity, after VND 1 trillion
renovation
2.5million
4million
4
0
Ho Chi Minh City 1 hr 5 minHanoi 2 hr 10 minCan Tho 50 min
FLIGHT TIMES
AIRLINES SERVING PHU QUOC
Vietnam cities with direct flights
(HCMC, Hanoi, Cantho, Rachgia)
international cities with direct flights (outside of
high season)
TOURISMARRIVAL BY SEA
CITIES WITH BOAT SERVICEHa Tien Fast ferry 1 hr 20 minSslow ferry 3 hrRach Gia fast ferry 2 hr 20 min
TOURISTS ARRIVALS
Airplanes Boat
37%
67%
DUONG DONG INTERNATIONAL SEAPORT
cruise ships able to dock at new port
expected completion
6,000 2017
PHU QUOC ISLANDHA TIEN
RACH GIA
Slow ferry
Fast ferry
AN THOI
DUONG DONGTOWN
HAM NINH
VONG BEACH
120 KM2H30
45 KM1H30
DA CHONG2H50
6,0004,0002,000
0
TOURISMSUPPLY & OCCUPANCY
2010 2012 2014 2015
Number of room
DANANG NHA TRANGPHU QUOC
$153 $80 $68AVERAGE ROOMRATE
*per night for 3-to 5-star hotels and resorts
AVERAGE OCCUPANCYRATE
2010
2015
72%
64%
HOTEL SUPPLYTHE FUTURE
13
2,800
39.3%
DUONG DONG
of hotels of total supply
67% 48%
Hotel projects in the pipeline as
of Q3 2015
Rooms in the pipeline as of Q3
2015
CAGR of luxury and upscale hotel room
supply between 2012 and 2015
Chez Carole Resort
Trang An ResortHoa Binh Phu Quoc
Sai Gon Phu QuocSasco Blue Lagoon
Thien Hai SonKim Hoa Phu Quoc Resort
Orange Resort
Tropicana Resort
Arcadia Resort
La VerandaPhu Van Resort
Long BeachFamania Resort
SalindaCuu Long Phu Quoc
Eden Resort
Hong Bin Bungalow
Daisy Resort
4-Star Hotel 5-Star Hotel3-Star Hotel
HOTELSIN THE PIPELINE
INTERCONTINENTALBegan construction 2015. Planned five-star with 336 rooms, 115 apartments and 5 villas. 9.2 ha. Formerly envisioned as a Crowne Plaza. Developed by BIM.
JW MARRIOTTDeveloped by Sun Group. Developed by BIM.
CROWNE PLAZACrowne Plaza Starbay Khem Beach. Developed by MIK Land. Developed by BIM.
HOTELSIN THE PIPELINE
MÖVENPICKScheduled to open 2017 with 250 hotel rooms, 100 residences and 50 pool villas, plus retail village, waterpark, 1,000 sqm conference facilities and on-site hotel school. 51.62 hectares.
MELIAPhu Quoc Resort Sol House. Developed by MIK Land.
RITZ-CARLTONDeveloped by MIK Land.
INVESTMENTOVERVIEW
NEW PROPERTY LAWSNew regulations allowing foreigners to buy landed property in Vietnam took effect 1 July 2015. Properties come with a renewable 50-year lease on land.
PHU QUOC’S LARGEST INVESTORS
(VND 8 trillion)
(VND 7 trillion)
(VND 9 trillion)
(VND 8 trillion)
(VND 7 trillion)
INVESTMENT INCENTIVES
15-year waiver on land rent50% reduction in personal income tax0% tax on fixed assets
Master planned in 2004, Phu Quoc Island is set to become a Special Economic Zone by 2020.
INFRASTRUCTUREACCOMPLISHMENTS & CHALLENGES
ACCOMPLISHMENTS & CHALLENGES
AIRPORT Phu Quoc’s current international airport opened in 2012, enabling the island to receive larger aircraft and international flights.
ROADSA 50 km north-south axis road between Bai Thom and An Thoi was completed in 2015. A 99.5 km road encircling the island is approximately 50% finished.
WASTEWATER TREATMENT
ELECTRICITYA 50 km north-south axis road between Bai Thom and An Thoi was completed in 2015. A 99.5 km road encircling the island is approximately 50% finished.
We need around VND2 trillion [$91.87 million] to invest in a wastewater treatment system for the entire island, without which Phu Quoc will be polluted in the coming years.”
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