Although COVID-19 is sadly still raging in some parts of the world, countries that have dealt with it effectively can now look to the future. Việt Nam is at the very top of that list, recording no deaths and less than 400 cases.
This fact has not been lost on the world and I’m delighted to think that Việt Nam’s near-perfect handling of the pandemic will now be the first thing that springs to mind when people think of my adopted home, rather than past troubles.
The country’s hugely effective contact tracing and testing programme, strong leadership and ability to ramp up domestic production of protective equipment have further highlighted the qualities which make Việt Nam such an attractive prospect to international investors. Its handling of the crisis also positions it to pull ahead in another key area: tourism.
Here, tourism currently accounts for 12 per cent GDP, which is significant but far behind that of neighbouring countries which are more established on the Southeast Asia trail. As the pandemic continues, many of those remain hotspots for all the wrong reasons, while in contrast, we have already been able to restart domestic travel. They, of course, have our sympathy, but the fact remains that we are poised for a long-overdue rebalancing. Our attractions are more than equal to theirs and we can undoubtedly look forward to Việt Nam being more firmly on the global tourism map once international travel restrictions are lifted.
Why go anywhere else?
Meanwhile, domestic tourism is set to thrive even further. It is a testament to the beauty, rich heritage and vibrancy of Việt Nam that 83 per cent of its travellers last year were domestic. Amid the continuing coronavirus threat, the Vietnamese will be rightly thinking, "Why go anywhere else?"
The new 'Vietnamese People Travel in Việt Nam' tourism promotion campaign has gauged the mood of the nation just right to my mind. It also aligns with significant global trends for both domestic and international tourists.
Airbnb’s co-founder Brian Chesky recently came out to predict that the future of travel is not hurriedly descending on a couple of over-crowded tourist districts, but rather a more thoughtful approach taking in destinations off the beaten track. Shorter trips, but more regular enjoyment of travel, is likely to be many people’s new approach. It has long been mine since living in Việt Nam since there is so much to see and do here.
Savouring the journey
Flying will continue to be important, but the current restrictions are likely to open minds to alternative (and let’s be honest, more pleasant) forms of travel. Going by rail or water can make the journey as much a part of the holiday as arriving and I personally can’t think of a better start to a trip than taking in the beauty of Hạ Long Bay, for instance. The knock-on benefits for infrastructure and employment are clear to see.
It seems clear that Việt Nam’s domestic tourism industry is entering boom times, with international visitors hopefully close behind. The boost to the economy could be immense. But what of the companies in the sector?
Capitalising on the opportunity
These shape-shifting times look set to make – and break – businesses in equal measure. The opportunities are immense for those that see and adapt to the changes in attitudes and habits taking place, but tourism companies will need to act fast. The Government is being incredibly supportive of the sector, but competition will be healthily fierce.
For our part, S&P is already moving to help Việt Nam’s tourist companies to catch-up and adapt their models through our business consultancy arm, and to get the funding they need to capitalise new opportunities. There is also a thriving M&A scene getting underway as firms join forces to interweave their respective strengths.
Tourism is a sector that requires a great depth of on-the-ground expertise and experience. But adapting successfully to changing trends also calls for a high-level overview that we’re really enjoying providing. Helping businesses position for the 'next normal' in travel and tourism is a really exciting part of my current work, and I urge any entrepreneurs pondering the future to get in touch.
High deal flow means having great – and growing – wisdom to share. I only hope that I can keep adding trips to my own itinerary as S&P gets busier!
Here’s to happy travels – in business, and through this beautiful country.
* Brian Spence is managing partner of S&P Investments. He has over 35 years of experience in the UK financial services industry as an investment manager, financial planner and M&A specialist. He is a regular contributor to the UK financial press and has a deep understanding of the financial services community. Brian’s column will reflect on all the challenges and opportunities within the Vietnamese market, bringing a fresh perspective to today’s hottest issues. The columnist’s email address is email@example.com.