Vietnam an emerging outbound market to watch

LONDON – Vietnam is an emerging outbound market to watch. Departures in 2007 grew by 20 percent to reach 1.2 million people.

This combined with a plethora of new developments and rising consumer confidence will result in 22 percent growth every year between 2007 and 2012, according to Euromonitor International.

This growth is faster in percentage terms than Vietnam’s neighbours China and India.

Players choosing to target Vietnamese travellers in the near future will be in prime position to see huge long-term benefits as they catch Vietnamese consumers at the start of the travel boom.

Several factors will transform Vietnam from a small source market to a more substantial one.

The first is its marked economic growth to date, putting the country in good position for growth due to increased per capita income and improved living standards.

Its membership to the WTO in 2007 also marks the beginning of the country’s growing wealth, which is key to growing its large source market over the next few years.

The number of higher-income earners is increasing rapidly in Vietnam with over 700,000 households with monthly disposable income of over US$500 (high purchasing power locally) in 2007.

This group will more than quadruple to over 3.4 million households by 2015, presenting huge opportunities for more frequent travel for this income group.

Airlines and travel operators in the region have also risen remarkably in number over the past few years.

Last year alone as many as 100 new outbound travel agencies were established and low cost carriers have developed a strong presence in the market.

This has spurred more competitive pricing with average prices of travel products 20-40 percent cheaper than two years ago. A package holiday to Thailand is now often cheaper than taking a domestic holiday for local consumers.

E-commerce is also emerging in a big way for the travel and tourism industry with Vietnam already holding 12 million internet users in 2007.

The Vietnam National Postal and Telecommunication Corp plans to create over 2,000 free internet access points in key cities over the next two, including Hanoi, Ho Chi Minh City, Dam Dinh, Nghe An and Da Nang, Daklak and Can Tho, opening up opportunities for marketing in this new and dynamic distribution channel.

Local travel retailers such as Vietravel, Saigontourist and Appex Vietnam are already bringing e-commerce to their business models and selling their tours online with other players likely to follow suit.

Looking ahead, package tours will represent over 90 percent of overseas travel products for holiday makers as they lack experience and are more comfortable in groups when travelling abroad.

Destinations still close to home, such as China, Singapore, Thailand and Malaysia, will dominate, although opportunities for long-haul package tours will grow significantly as they attract consumers in the higher income bracket.

Amongst younger consumers, education travel is a big trend to watch. The US and Australia are currently the favourite destinations, but Singapore, Japan and China are increasingly considered good alternatives.

Demand for “relatives-visiting” tours, tailored for the growing number of relatives wishing to visit their students overseas is also set to grow as one of the many products and trends to emerge in the dynamic Vietnamese outbound travel market.