Figuring out Strategic Vision for Tourism Property

The global economic slowdown has forced many realty investors to stop their projects. However, tourism property remains a long-term investment.

Joining hands

Tran Ngoc Quang, General Director of Vinaconex Investment & Tourism Development Joint-stock company (Vinaconex ITC) and the investor of Cai Gia- Cat Ba Tourism Resort in Haiphong, said in the context of the economic recovery, companies will face difficulties if they mobilise capital by themselves. Therefore, cooperation with partners to develop large-scale projects is the strategy of many investors. The Cai Gia- Cat Ba project is the combination of three firms of Vietnam Construction and Import – Export Corporation (Vinaconex), Vietnam Export Import Commercial Joint Stock Bank (Eximbank) and Agribank Securities.

“The tourism property market sees many opportunities to attract investment. However, it only generates profits for long-term investment. Investors must have a comprehensive look for their projects. For this project, we not only think of selling villas for investors but only join hands with them for the project operation to make higher profit. We will not select investors who only wish profit in the short term. We want to find ones who pledge to go with us for the entire project”, Quang said.

He added that, no one wants to live in villas or apartments near the sea for their whole life, but only likes relaxing here and expressing their pride to own these tourism property projects. Investors must find the ways to help customers to operate them. Therefore, Vinaconex- ITC will set up a tourism realty company which will re-hire people’s land and house for tourism businesses and then will pay part of profit for them. “This is very popular in Vietnam”, Quang said.

Most of experts said that the tourism property market offers chances for companies which have clear strategies and capital capacity. Investment in tourism property requires big capital and flexibility of investors and is also drawing great attentions for both local and foreign companies.

Focusing on infrastructure investment

According to experts, the Vietnamese tourism reality market is more attractive than that of Phuket in Thailand and Bali in Indonesia. In Vietnam, the land lease time is between 50 and 70 years, while other countries’ time is just 30 years. In addition, land rentals in Vietnam are lower than that of Thailand and Indonesia. However, the tourism real estate market, particularly guest-house segment, has been tens of years less developed than Phuket and Bali. Many local firms said that the development of tourism realty market in Thailand and Indonesia are attributed to the fact that Indonesian people only concentrate on developing the realty business in potential areas such as Pattaya, Hua- Hin, Phuket and Samui in Thailand and Bali in Indonesia. Phuket is seen as a tourism paradise which deserved to be compared with Caribe and the Mediterranean Sea. Thailand built Phuket Airport in the 1980s and it then established Amanpuri resort in 1988, the most modern of its kind this area.

In the early 1990s, Thailand zoned other tourism resorts. To date, Phuket has more than 5,600 apartments and villas and over 650 hotels of a combined room number of 38,000 which are enough to meet demand of all festivals and events. Thus, with seven golf courses and four wharves, Phuket Airport can serve over 300 domestic and international flights per week. Meanwhile, visitors want to go to Ninh Thuan and Binh Thuan from Ho Chi Minh City, they have to spend a day with vehicles. This is among reasons discouraging them for coming there for the second time.

Vu Ngoc Tu, General Director of Ninh Van Bay Real East JSC, said the Vietnamese tourism property market promises much potential, especially in the context of the economic rebound. There will be a big change in the trend of selecting entertainment places of both domestic and international tourists. They will prefer separated villas instead of luxurious resorts.

Tourism property experts said, in addition to advantages, Vietnam should deal with a number of issues to develop the tourism property market. This sector needs experienced experts, but excluding Ninh Van Bay, other companies are still puzzled to seek solutions for the development. The potentials of entertainment services have not yet been fully tapped. Vietnam should improve the situation and concentrate on sci-tech and human resource development to catch up with other countries in the sector.

Investors should study the market carefully before deciding the investments.

Posted by VBN on Mar 26 2010. Filed under Tourism. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry