Saigontourist, Investment Strategy and US Market Attraction

5:28:37 PM | 6/25/2007

To expand the US tourism market, Saigon Tourism Corp. (Saigontourist) has introduced many strategies to position its trademark, diversify and improve product and service quality, and raise the professional service level.

The Vietnam-US Bilateral Trade Agreement (BTA), effective December 2001, marked a milestone in the normalisation of relations between the two countries. For more than 5 years, with the expanding political and diplomatic relationship, trade ties between Vietnam and the US have continuously developed. The US is an important market in Vietnam’s tourism development strategy. US tourist arrivals have increased 13 per cent annually in recent years. Vietnam welcomed 230,000 US visitors in 2001; 259,000 visitors in 2002; 218,000 visitors in 2003 (falling due to SARS pandemic); 272,000 visitors in 2004; 333,000 visitors in 2005; 385,000 visitors in 2006, and 123,000 in the first three months of 2007. However, the number of US visitors to Vietnam was too small in comparison with 49.9 million outbound US travellers in 2005. We pin high hopes on the rapid increases in tourism, as the two countries have not fully tapped their tourism potential.

The participation of many US travel, aviation and tourism companies in “Vietnam Days in Washington D.C.” in March 2005 showed that US investors were keen on the Vietnamese tourism market.

The US is one of the top markets generally and is a potential key market for Saigontourist. US customers to Saigontourist increased 10.1 per cent on average in recent years.

In Vietnam, Saigontourist is now the largest tourism trademark. It has more than 100 hotels, tourist sites, restaurants, travel firms, transport firms and entertainment centres. The diversification of business forms, products, services and personnel is an advantage, allowing Saigontourist to introduce Vietnamese cultural products for American visitors.

To make the Saigontourist trademark more impressive for visitors, Saigontourist is calling both domestic and foreign investors for hotel and tourist site projects in provinces and cities. This activity not diversifies and improves the product and service quality of the Saigontourist system, but also contributes to the development of the Vietnamese tourism industry. We are proud to be a pioneer in developing Vietnamese tourism, particularly tourism sites in Hue, Ha Long, Nha Trang, Phu Quoc and Mui Ne.

Presently, Saigontourist is upgrading the Rex, Grand, Kim Do and Continental Hotels to five-star rating in Ho Chi Minh City, after successfully turning the Majestic Hotel into a five-star facility in February 2007. In April 2007, Saigontourist kicked off construction on the international standard Saigon Trade Fair and Exhibition Centre in District 7, the largest of its kind. This US$200 million facility consists of a 4-5 star hotel with around 1,000 rooms, in addition to conference halls aiming to exploit MICE (Meeting, Incentive, Conference and Exhibition) visitors. Other major investment projects in Ho Chi Minh City include the Ethnic Culture History Park (District 9), high-rise office block at 34 Ton Duc Thang Street (District 1) and Saigon Golf Course (District 9).

Regarding investment in other localities, Saigontourist has poured capital into various projects like Saigon - Kim Lien Resort, Saigon - Quang Binh Hotel and Saigon - Ninh Chu Hotel. In the coming time, apart from picking locations for luxury hotels and resorts in Hanoi, Sapa and Da Nang cities, Saigontourist will bring many hotels and resorts into service, like Saigon - Phu Yen, Saigon - Dak Lak, Saigon - Da Lat, Saigon - Vinh Long and Saigon - Con Dao hotels, all rated four-stars and up. Besides, Saigontourist will invest in Bai Dai resort (Cam Ranh City) and the 209-hectare Phu Quoc resort (Phu Quoc Island).

Concentrating on financial investment is one of Saigontourist’s important strategies. Currently, apart from investment in the tourism industry, Saigontourist also contributes capital to finance and aviation, for example buying stakes of Saigon Industrial and Commercial Joint Stock Bank, Vietnam Import - Export Bank (Eximbank), Oriental Bank, Kien Long Commercial Joint Stock Bank, Vietnam Investment Fund, Pacific Airlines, South Saigon Development Company and others. Saigontourist also has acquired stakes in international investment funds. These are preparatory steps for listing Saigontourist shares on the stock market in the coming time. The investment strategy will also help Saigontourist fulfil its targets of US$500 million revenue in 2010 and US$1 billion revenue in 2015.

Accompanying Vietnamese President Nguyen Minh Triet during his visit to the US in May 2007, Saigontourist will call on US investors to join Saigontourist projects. We believe the comparative advantages of Vietnamese tourism and the prestige of the Saigontourist trademark will create more opportunities for US investors interested in the tourism and hotel markets in Vietnam.

Saigontourist investment portfolio:

- Project	- Area	- Investment - (million)
- Phu Quoc ecological tourist site (Kien Giang Province)	- 208 ha	- US$85
- Saigon - Cam Ranh tourist site (Khanh Hoa Province)	- 22 ha	- US$34.2
- Saigon - Sapa tourist site (Lao Cai Province)	- 45 ha	- US$12.5
- Can Gio coastal urban zone (HCM City)	- 600 ha	- US$473.889
- Saigon - Ninh Chu tourist site (Ninh Thuan Province)	- Area for second phase: 6.55 ha - Grade: four-star	- US$7.3
- Ghen Rang tourist site (Binh Dinh Province)	- 150 ha - grade: four-star	- US$3
- Expanded Saigontourane Hotel (Da Nang City)	- grade: four-star	- US$13.3
- Saigon - Ban Me Hotel (Dak Lak Province)	- 2.73 ha - grade: four-star	- US$5.4
- Bao Ninh tourist site (Quang Binh Province)	- 4.2 ha - grade: four-star	- US$3.6
- Saigon - Vinh Long Hotel (Vinh Long Province)	- 1.1 ha - grade: four-star	- US$8.4