Analysis Of The Vietnamese Tourism Market

My friend and I have passion in tourism. My friend has several years of experience working for an international travel company in Ho Chi Minh City as a travel consultant cum tour operator. She have strong relationship with five star hotels and restaurants in Vietnam. I have chance to travel to many countries and study international tourism industry. I also have a part-time job as a tour guide for some travel companies. I understand what tourists expect from a knowledgeabe and friendly tour guide , quality service as well. Thus, combining her experience in Vietnamese tourism market and my understanding about international tourists’ demands, we decide to open a travel company, named “Luxury Tour Co.” in Ho Chi Minh City. Our target market is Spain. Within the next five year, we build “Luxury Tour” as the first choice for the Spaniard when they think of travelling to Vietnam. This name guarantees for “best service,best choice” as our slogan of “Think nothing, let us”. This marketing plan is designed to highlight significant steps and other related issues to run business well and meet the goal.

Market Overview

Tourism is considered as the key industry in the near future. Tourism involves three sectors, they are, domestic market, inbound market and outbound market (Helmut Wachwiak, 2006:48). Domestic tourism aims to local customers, while inbound tourism aims to attract international tourists to the country and outbound tourism aims to organising tour for local tourists who want to travel abroad. Among of which, inbound tourism is emphasized most. It not only creates more employment opportunities for the local people but also plays an important role to attract foreign investment in Vietnam as MICE tours becomes popular.

Tourism is based on a lot of factors. Here is the list of some changes influencing tourism in general and Luxury Tour business activities ( Lloyd E. Hudman, Richard H.Jackson, 2003:24)

Infrastructure in Vietnam . Understanding the contribute of the non-smoke industry, Vietnamese Government has invested in some projects, such as building metro, road etc. , and encouraged people take part in introducing beautiful image of Vietnam to the world ( Vietnam Tourism, 2010 )

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Social behavior. For example, considering the tour price, it depends on the suppliers’quotation. They are five star hotels, restaurants, transportation etc. In peak seasons when several tourists come to Vietnam, lack of commodation or waiters/waitresses is predictable. As the result, the tour price is higher, but tourists are served less.

Increased gas/petrol price. That is to say, it leads to the increase of price in transportation, flight ticket etc.

The rapid development of Internet and e-commerce. According to the CIA Factbook, in 2009, 50% of Spaniard use internet, and this number is increasing repidly. It push e-commerce developped more

Stable VND-Euro currency rate makes tour price stable and more competitive than other markets ( Vietnam Central Bank, 2010)

Stable politics makes international tourists feel safety while staying in Vietnam

New tourism trend. According to ITB World Travel Trends Report 2010/2011, Southeast Asia is sparkling as an ideal destination to EU market. They prefer enjoying “sun and beach” and discovering Eastern culture

Increased income. That is to say, more tourists want to spend their holidays at the highest standard

Customer Information

According to World Tourism Ranking, Spain ranks 11th in the world in terms of spend on international travel, but there has been significant growth in recent years in outbound travel. Growth is expected to continue as more and more Spaniards have holiday habits .Besides , Spanish long-haul travelers take advantage of very favorable Euro to VND exchange rate. The weakening of the VND could attract more interest in this destination .To understand clearly, here is the Spanish Outbound Travel Trend.

• Destination: Some competitive destinations to Vietnam are: Fiji, French Polynesia, Australia, China, Japan, Mexico, and the USA . However, Europe remains the main destination for Spanish travelers , only 27 % of the outbound trips are far beyond the European borders ( World Tourism Organization, 2007 )

• Travel season : Most of the Spanish decide to travel abroad in August , September – the time of summer vacations . However , short breaks are spread more widely through the year, in particular around public holiday times. The average length of stay for holidays abroad is around 9 nights.

• Purpose : Leisure (54.3%) remains the main reason for travelling outside Spain , followed by business events or work related (20%). The key driver for taking overseas holidays is visiting other countries, learning about their culture and seeing and doing lots.

Market Information

According to Vietnam tourism, in 2010, there were 5,049,855 international tourists travelling to Vietnam, which was 34.8% higher than 2009. Most of them were from China, South Korea, Japan and other Asian countries. Obviously, compared to other markets, Western tourists have not known much about Vietnam. With the wave of Asian culture, Asia becomes an ideal choice, especially Southeast Asia. Following the new trend, Vietnamese government have encoraged travel companies to study and make plans to expand busiess into Western markets.

According to World Torism Organization, in Europe, with 19.7 billion USD spent in international tourism expenditure (2007), Spain ranked 11th in the world . This number seems to increase annually. However, according to Vietnam National Administration of Tourism, the number of Spanish tourists to Vietnam for leisure purpose is still low and recently, the government with promoting activities is aiming efforts at opening Spain market as our main target market in the near future

In Vietnam, there are two major travel companies which target Spanish markets, they are, ASCO Lotus Travel and Exotissimo Travel. ASCO have years of experience for Western tourists to operate tour to Vietnam, Laos, Thailand and Cambodia and ASCO while Exotissimo opened branches in Vietnam, Laos, Cambodia, Indonesia and Myanmar. They aims to high-and-above-income maket while Luxury Tour aims to serve mid and high income tourists with the highest standard. As a Vietnamese travel company, Luxury Tour understand Vietnamese business behavior. Thus it is easier to build strong relationship with local suppliers.

Industry Information

Nearly 1.6 billion is the expected number of international arrivals forecasted by UNWTO’s Tourism 2020 Vision by the year 2020. Among of them, 1.2 billion will travel to other countries and 378 million will take longer trips. It is obvious that travel between different regions (outbound and inbound) tends to grow at a faster rate than intraregional travel (domestics) . In 2007, interregional travel increased by 8% as against a growth of 6% for intraregional traffic.

According to Vietnam Tourism(2010), from October 10th to December 31st 2010, following “Vietnam-your destination” campaign, international tourists were welcome to Vietnam without visa. With this opened policies, Vietnam was successful in attracting inbound tourists, especially in Western markets. In 2011, it is expected that Vietnamese Government will consider its effectiveness and efficiency to making further decision better.

Product/Service Information

Luxury Tour wants to approach mid and high income Spaniards. Most of them are businessmen, specialists, and professors etc. who are too busy to enjoy their time. With the slogan of “Think nothing, let us”, Luxury Tour wants to be the useful right hand by bringing them into the most comfortable world with families and friends. We offer several tour packages with high quality. All customer requirements are satisfied perfectly. From the moment customers contact Luxury Tour to the end of the tour, customers will be serviced by friendly and professional staff, such as travel consultants, tour operators, tour guide and others

SWOT Analysis

STRENGTHS

High-quality service

Operational efficiency

Experienced and highly customer-oriented staff

Strong marketing and sales forces

Strong relationships with both suppliers and Spanish travel agencies

WEAKNESSES

New brand name in the market

Limited budget

No representative office in Spain, so Luxury Tour can not contact directly to the target customer

Depend on Spanish travel agencies

OPPORTUNITIES

Spain is a new emerging or developing market for Vietnamese tourism industry

Less competition

Rapid development of e-commerce

Support from government (i.e.: opened policies to encourage tourism)

Social changes: more Spanish want to travel to Southeast countries

THREATS

Financial crisis

The increasing of potential competitors

Social problems: there are many beggers who follow tourists from places to places

Objectives

The key objectives for Luxury Tour are:

Within 5 years , Luxury Tour becomes the Vietnamese leading tour operator in Spanish market segment with 30% of share market .

Integrated marketing services are established to present a unified image/brand identity of Vietnam as an ideal destination .

The number of loyal tourists is increased

After the first five year, Luxury Tour will expand business into other Western markets, such as the Portugal, the Netherland etc.

Strategy

With Luxury Tour, tourists will experience the finest service, enjoy the most delicious Vietnamese cusine and stay at the most comfortable hotels. Our efforts are to make tourists remember uniqueness and hospitality of Vietnam in general and Luxury Tour in particular. It is can be measured by the increased number of Spanish tourists coming back to Vietnam annually.

What Luxury Tour try to sell is not only tours themselves but also benefits. A good tour operator knows how to control income factors and how to balance incomes and outcomes ( customer requirement) to satisfy three parties, that is to say, tourists are pleased with service, suppliers are happy to serve and Luxury Tour gets profits and more importantly, customer awareness.

Product

To be more competitive in the market , our tour itineraries are designed with two advantages : Quality and Customer service.

*** In term of Quality :Tour itinerary is designed based on 5H model , that is the combination of Hospitality, Honesty , Heritage, History,Heroic

**** In term of Customer Service :

Speed :We have hotline served 24/7 to answer all customers’ questions and complain

Flexibility : Tour itinerary can be re-designed to fit each customer’s requirement

Reliability : all needed info is provided to customers before they book tours , including warning (if applicable )

Pricing

Our target customer is from mid-income and above. They usually prefer to enjoy holidays in their own tastes and required to be served at the highest level. Thus we mix two price strategies, good-value pricing strategy and value-added pricing. Luxury Tour will design a basic package price which combines high standard, good service at reasonable price. From the basics, this tour is tailor-made to fix each customer demand. The price is changeable based on the seasons, supple-demand balance and other unforeseen situations. Normally our estimated price is around USD 2,200 / pax.

Distribution

For the short term , to perform activities to attract tourists from Spain to Vietnam and expand distribution channel to meet market needs and serve customers better, Luxury Tour has partnered with tourism companies in Spain. With this partnership, Luxury Tour has been in the big cities of Spain, such as Barcelona , Madrid , Valencia etc. For the long term, within the next 5 years , Luxury Tour opens one representative agency in Madrid to approach customers’ needs easily and efficiently

Promotion

Website:

Luxury Tour launches and operates Internet site effectively as a virtual tourist office in which customers can find a lot of information about Vietnam and useful tips for their tour . The website is designed with friendly screen and easy-to-follow instructions. Besides, our online travel consultants are willing to help customers design suitable tour itineraries with reasonable price and support them during and after journey.

Search Engines Optimisation:

To be recognized among millions of tourism websites, we will corporate with some internet search engine sites such as :

http://www.ivivu.com/

http://www.skydoor.net/

http://www.chudu24.com/

http://yeudulich.vn/

http://www.tourism-review.com/

Instead of buying a place on their website, Luxury Tour offer them a business corporation opportunity, this is, banner exchange. This is a win-win corporation

Advertising:

As a new brand name in luxury tourism industry, we decide to focus on bringing our image to the target customers. Our target customer segmentation is from mid and high income. Choosing a reliable magazine is the first choice. Among of which is “Travel and Entertainment” magazine – the publication of Ministry of Culture, Sport and Tourism and the leading magazine in tourism of Vietnam. It is available in Vietnam Airlines, Indochina Airline and Royal Brunei Airline.

Public Relations:

To build strong relationship with Spanish travel companies as well as to prove them our outstanding service offered, Luxury Tour usually invites partners and Spanish press to have trips to Vietnam for free of charge. It is not only a normal business trip but also a chance to introduce Vietnam beauty and its tourism potentials as well. Besides, Luxury Tour also have budget to sponsor for community activities such as planting tree, building houses for the poor etc. to emphasize that Luxury Tour image is not connected to business only, it is the combination between social responsibility, environmental protection and business.

Promotions:

Luxury Tour usually takes part in some trade exhibitions in Vietnam and foreign countries. This form of promotional activity enables promotion directly to the consumer for creating ‘word-of-mouth’ channel. We offer 10% discount for who books tours at exhibitions

Branding:

Luxury Tour wants to build a friendly image and impress current and potential customers by service quality. Our logo is design with the main color of green and the image of a typical tourist. Our slogan is “think nothing.Let us”.

Operational Plan

Sucessful tourism business depends on the service quality. Tourism is unlike other industries. We try to sell invisible products. The key points are how to persuade them to trial our service and how to make them feel undisappoited about their decision.To meet that goal, Luxury Tour must pay attention to setting up a quality control system strictly. Not only checking service from suppliers, employee force must be trainned to serve customer 24/7 . Any problems before, during and after tour need to be solved soon. After each tour, based on their feedback, Luxury Tour have some change to improve more and serve better.

Sales promotion

Dyring the first six month, Luxury Tour aims to attract customer awareness and introduce our service. We offer customers 5%-10% discount program. When customers know more about us, so discount strategy is not applied. Instead, we focus on added benefits, for example, booking tour to travel across Vietnam, tourists get one buffet ticket at Caravelle Saigon.

Advertising

Our target segmentation is mid and high income customers. Most of them are businessmen who usually travel by airplain. Thus in our marketing budget, there are amount of money spending to advertising on airline magazines, such as “Travel and Entertainment” .

Public relations

Public relation is a tool to improve company image positively. It needs long-term plan. Developing a brand name with the image of friendliness and hospitality, Luxury Tour will organize some special tours called “community connection”. Joining this, tourists do not only have chance to travel to Vietnam but also join community activities, such as teaching children, planting tree, farming etc. It makes tourists feel that their money is reinvested into society.

Direct Marketing

In term of direct marketing, there are many forms. To maximize marketing effectiveness, we suggest to combine direct mail, email marketing, social network, brochure and magazine advertising. To get the mid and high income customer database, Luxury Tour could buy from market research companies or take advantage of current database of Spanish travel agencies. Then we will send them our company profile and e-brochure to introduce our service and encorage them to log in our website to receive a 10%-discount travelling coupon for the first visit.

Online Marketing

Owning a well-designed and multi-function website is a tool to approach targeted customers. Our online travel consultants who comminicate well in English and Spanish are willing to assist customers to search info, design tour itineraries. Customers can book and pay online. The payment method is variable, from bank transfer to PayPal, Master Card, Credit Card etc. Once payment is done, confirmation, receipt, flight e-ticket and a package of Vietnamese information are sent to customer’s email box.

Budgets and action plan

Item

Jun-11

Jul-11

Aug-11

Sep-11

Cost

( USD)

Department / Employee name

Measure of Success

Making business plan, design logo, slogan and complete register documents

1st

1st

2,000

Nguyen Mai Ly – The genaral Director

Recuit human resource

1st

1st

1,000

HR Department

recruit experienced employees

Design tour itineraries and deal with suppliers

1st

31st

1,500

Operation Department

Tour itineraries are design to meet Luxury Tour targerted market requirement and local suppliers are pleased with our request and agree to offer competative price

Contact with some Spanish travel companies, pursuade them to corporate with Luxury Tour and sign the contracts

15th

15th

5,000

Operation Department

At least 10 Spanish travel companies are interested in our offers and agree to cooperate with Luxury Tours

Design Website and brochure

1st – 15th

1,000

Admin Department

The website is well designed , easy-to-follow and imformative

Discuss with tourism websites for banner exchange

15th

15th

1,000

Sales and Marketing Department

our banner is posted at all sites as listed

Print brochure and distribute at luxury hotels, Tan Son Nhat airports and other entertainment centers

15th

15th

3,000

Sales and Marketing Department

Our brochures are delivered to the targeted customers

Advertising on travel magazines and newspapers

15th June – 15th December 2011

700

Sales and Marketing Department

Luxury Tour information is advertised for 7 months ( June – December 2011)

Organize tours for 10 major Spanish travel representative and 10 Spanish travel journalists to Vietnam

15th

5th

20,000

Operation Department

All guests are pleased with our service and after this tour, ten articles will be written and published over the next month in major travel magazines and website in Spain

Opening ceremony

8th

2,000

100 invited guests, including suppliers, Spanish travel companies, press, Spanish businessmen in HCMC and others

TOTAL

37,200