A second strategy that can be applied to Vietnamese hotel businesses is the case of Saigon Morin Hotel. This business model is successful because Saigon Morin Hotel has taken advantage of the network of chain hotels in the group (an advantage similar to the franchises of international hotel groups) and the regular guests of its strategic partner, Saigontourist travel agency. In addition, Saigon Morin Hotel also takes advantage of the management experience, training of professional staff from experts in Saigontourist Corporation and the support of the Corporation in participating in the global reservation system (GDS). Although the Morin brand and the French architectural style of the hotel are also factors that attract guests to the hotel, only when the hotel has the right business strategy and strategic linkage with Saigontourist can the hotel have the competitiveness it has today. This business model is very suitable for state-owned hotel enterprises that own old hotels from the French era and are associated with famous tourist destinations. The Saigon Morin model is a typical example for Vietnamese hotels that want to reach international standards while still maintaining their pure Vietnamese business characteristics.
The case study of Hoa Binh Hotel shows the hotel's certain success in conquering the market of business travelers and tourists with average spending ability in big cities due to its intangible resources, which are the long-standing brand name left by the French and its location advantage. However, the competitiveness of Hoa Binh Hotel is still limited due to the lack of suitable business strategies as well as taking advantage of the advantages that the hotel has in the Hanoi Tourism Corporation. Although the room occupancy rate is always high due to the demand for business travelers and the sudden increase in the number of visitors to Hanoi in recent years while the hotel projects have not been completed, Hoa Binh Hotel may face fierce competition in the coming time when the hotel construction projects are completed. In particular, if international hotel chains participate in the market segment of tourists with average spending ability
Average calculation. This typical case study shows that many hotels in Vietnam, although operating effectively due to many objective reasons such as the sudden increase in the number of visitors to Vietnam, owning hotels in central locations, do not have clear business strategies to improve their competitiveness with potential international competitors.
Chapter 2 Conclusion
Chapter 2 analyzed the current state of competitiveness of Vietnam's accommodation business system. These analyses were conducted on both macro aspects (national business environment and industry business environment) and micro aspects through case studies.
The overall analysis and assessment of competitiveness as well as business strategies through surveys at 03 hotels of different types and ownership in the 3 largest cities/tourist centers of Hanoi, Hue and Ho Chi Minh City shows a clearer picture of competitiveness and strategies to improve competitiveness that can be applied at these hotels compared to foreign hotels.
Most Vietnamese hotels have weaker competitiveness than foreign hotels due to limited resources and management experience. One of the weaknesses of Vietnamese hotels is that there are no large hotel chains, no separate customer exploitation channels in major customer markets, and customer exploitation activities mostly depend on relationships with travel agencies sending customers. Furthermore, due to limited resources and management experience, most Vietnamese hotels have not participated in the global distribution system (GDS) and developed strategic partners such as airlines and travel agencies sending customers around the world. The application of advanced technology in business and service is also limited. This greatly affects the business performance and competitiveness of Vietnamese hotels.
However, it is necessary to see that, along with international economic integration, competition
With increasingly fierce domestic competition, hotels will have to face many strong foreign competitors right in their traditional areas. Meanwhile, improving competitiveness depends on many factors of each enterprise's internal strength. Each hotel must improve its competitiveness to meet integration requirements. Efforts should focus on the following areas: investing in creating competitive products, improving service quality suitable for each target market, finding solutions to expand the market, saving costs; building a team of professional workers and managers. Hotels need to have policies to attract good managers and have a strategy to train and develop long-term human resources.
Although these analyses are general in nature and suggest some directions for hotel managers with similar physical conditions and ownership types to the above case studies. The results drawn from these case studies, combined with the analysis of the current state of industry competitiveness and national competitiveness, will be the basis for State management agencies to have effective policies, management measures and support for Vietnamese hotels. More specific recommendations will be discussed in more depth in Chapter 3.
CHAPTER 3
PROPOSED DIRECTIONS AND SOLUTIONS TO IMPROVE CAPACITY
COMPETITION OF VIETNAMESE HOTELS
3.1. Development trends of the international tourist market
According to the report of the World Tourism Organization, in 2007 international tourist arrivals reached 898 million, compared to 800 million in 2005 and 800 million in 2006, an increase of 6% in most regions of the world. Although the world economy in 2008 had many uncertainties with fluctuating oil prices, inflation and financial crisis, the growth of tourists in 2008 was still maintained.
The World Tourism Organization predicts that in 2010, the number of international tourists worldwide will reach 1,046 million, tourism revenue will reach 900 billion USD and the tourism industry will create about 150 million more jobs, mainly concentrated in the Asia-Pacific region [102, p.5]
Europe still dominates the global tourism market, with 480 million visitors in 2007, accounting for more than 54% of the international market, followed by the Americas. Although the growth rate of international tourist arrivals to these two leading destinations has continued to increase strongly in recent years, the market share of these two regions in the global tourism market has slowed somewhat. This decline may be offset by the increase in the Asia Pacific region's market share. The Asia-Pacific region covers 46% of the world's area, has a population of 2.6 billion people, accounts for about 40% of the world's population, approximately 60% of GDP and more than 57% of the value of world trade. In terms of tourism, this region has attracted tourists for more than 30% of the total number of global tourists.
According to the Pacific Asia Travel Association (PATA) in 2006, the number of international tourists to this region exceeded 300 million out of a total of 800 million tourists worldwide. Forecast, growth rate
international tourists reached 8-10% per year [93, p. 9]. This change may benefit Vietnam although at present and in the coming years Vietnam still holds a modest position in the global tourism market.
Table 3.1: Major tourist destinations in the world
Unit: million views
Number of international arrivals | Market share | Average growth military % | |||||
1990 | 1995 | 2000 | 2005 | 2006 | |||
World | 436 | 536 | 684 | 803 | 846 | 100 | 3.6 |
Europe | 262.3 | 310.8 | 392.5 | 438.7 | 460.8 | 54.4 | 2.7 |
Northern Europe | 28.3 | 35.8 | 42.6 | 51.0 | 54.9 | 6.5 | 4.3 |
Western Europe | 108.6 | 112.2 | 139.7 | 142.6 | 149.8 | 17.7 | 1.2 |
Central/Northern Europe | 31.5 | 60.0 | 69.4 | 87.8 | 91.2 | 10.8 | 4.7 |
Southern Europe/Mediterranean | 93.9 | 102.7 | 140.8 | 157.3 | 164.9 | 19.5 | 2.7 |
Asia Pacific | 56.2 | 82.5 | 110.6 | 155.3 | 167.2 | 19.8 | 7.1 |
Northeast Asia | 26.4 | 41.3 | 58.3 | 87.5 | 94.00 | 11.1 | 8.3 |
Southeast Asia | 21.5 | 28.8 | 36.9 | 49.3 | 53.9 | 6.4 | 6.5 |
Oceania | 5.2 | 8.1 | 9.2 | 10.5 | 10.5 | 1.2 | 2.2 |
South Asia | 3.2 | 4.2 | 6.1 | 8.0 | 8.8 | 1.0 | 6.4 |
America | 92.8 | 109.0 | 128.2 | 133.2 | 135.9 | 16.1 | 1.0 |
North America | 71.7 | 80.7 | 91.5 | 89.9 | 90.7 | 10.7 | -0.2 |
Caribbean | 11.4 | 14.0 | 17.1 | 18.8 | 19.4 | 2.3 | 2.2 |
Central America | 1.9 | 2.6 | 4.3 | 6.3 | 7.0 | 0.8 | 8.2 |
South America | 7.7 | 11.7 | 15.3 | 18.2 | 18.8 | 2.2 | 3.5 |
Africa | 15.2 | 20.1 | 27.9 | 37.3 | 40.7 | 4.8 | 6.5 |
North Africa | 8.4 | 7.3 | 10.2 | 13.9 | 14.9 | 1.8 | 6.5 |
Sub Sahara | 6.8 | 12.8 | 17.7 | 23.3 | 25.8 | 3.0 | 6.5 |
Middle East | 9.6 | 13.7 | 24.5 | 38.3 | 41.8 | 4.9 | 9.3 |
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Source: General Department of Tourism
According to tourism studies in the world, especially the recent study by the Vietnam Marketing Plan Development Group 2008-2015, although there is a large gap in market share figures between Europe and the rest of the world, it is particularly important to point out that the Asia Pacific region is currently in second place and growing at an average rate three times higher than that of Europe (See Table 3.1). It is clear that the growth prospects are really different depending on the regions of the world. For example, Europe should have quality growth (quantity is of secondary concern), while Asia Pacific should focus on the “quantity” aspect first, especially because its resources are not yet saturated. According to the research team's forecast, the total number of tourists by region shows that in 2020 the top three regions receiving visitors will be Europe (717 million), Asia Pacific (397 million) and the Americas (282 million), followed by Africa, the Middle East and South Asia. The East Asia and Pacific, Asia, the Middle East and Africa regions are forecast to have a record growth rate of over 5% per year compared to the world average of 4.1% [ 11, p. 10 ].
Many economists believe that tourism is the largest service industry in the world, accounting for 40% of the value of global service trade. The tourism industry in the world is one of the fastest growing industries, with a growth rate of about 3.8% per year in visitor numbers and about 14.6% per year in foreign exchange revenue. Total tourism revenue tends to increase along with the increase in international tourist arrivals. Tourism has contributed to the prosperity of both rich and poor countries. The tourism industry employs about 1/10 of the world's workforce, especially in remote and rural areas.
Like other economic sectors, the tourism industry plays an important role in our country's economy although, in recent years, the growth rate of restaurant and hotel services has tended to increase. Tourism is an important source of employment for Vietnam, both directly and indirectly, estimated
The tourism industry contributes approximately 2% of the country's total employment.
The 9th National Party Congress of the Party identified tourism as a key economic sector in the socio-economic development strategy “…Developing tourism to truly become a key economic sector, improving the quality and efficiency of operations on the basis of exploiting advantages in natural conditions, ecology, cultural traditions, history, meeting domestic tourism needs and rapidly developing international tourism, soon reaching the level of tourism development of the region…” The Resolution of the 10th Party Congress continued to affirm the importance of tourism development to the national economy.
The Party and State's interest in tourism development is demonstrated in the establishment of the State Steering Committee on Tourism, the approval of the National Action Program on Tourism 2006 - 2010. The approval of the master plan for Vietnam's Socio-Economic Development Strategy for the period 2006 - 2010, with a vision to 2020, affirms that Vietnam's tourism is a key economic sector: "...Developing Vietnam's tourism rapidly, sustainably and becoming a key economic sector..." (Local authorities are very interested in tourism development. Every year, provinces/cities across the country organize Tourism Year or important events to contribute to promoting tourism.
Vietnam's tourism development strategy for the period 2001 - 2010 has set a growth target of 11-11.5%/year. In 2010, international visitors to Vietnam will be from 5.5 to 6 million, domestic visitors will be from 25 to 26 million, the quantity and quality of tourism infrastructure will develop to meet the diverse accommodation needs of visitors. Tourism revenue in 2010 is estimated to reach 4 to 4.5 billion USD, accounting for 6.5% of the country's GDP [18, p.3].
The tourism industry's tourist attraction results in recent years have had an average growth rate of about 7% per year. After joining the WTO, Vietnam is showing good signs of MICE tourism. In addition, Vietnam is becoming more attractive to tourists from countries in the region. In the first seven months of 2008, although the world's tourism industry was greatly affected by the economic crisis, the number of tourists from Singapore increased by 27.5%, from Malaysia by 21.6%, and from the Philippines by 10.6%.
55.1% and from Thailand increased by 41.4%. According to a recent report by the Singapore Tourism Board, tourism from Vietnam is becoming popular with the people of the Lion Island. Despite the economic downturn, the number of Asians traveling abroad this year is still increasing and nearby destinations are the priority.
The World Travel and Tourism Council (WTTC) also published research on the tourism and travel situation in 2006 for 174 countries, according to which in the period 2007 - 2015, the growth rate of Vietnam's tourism industry will be maintained at 7.5% and ranked sixth in the ten most popular destinations in the world [100, p.36]
However, Vietnam is facing fierce competition from other countries in the region in attracting international visitors. Although the annual growth rate of international visitors to Vietnam is always higher than that of other countries in the Southeast Asian region, Vietnam has not been able to catch up in terms of absolute numbers of visitors compared to its main competitors in the region such as Thailand and Malaysia.
3.2. Impact of WTO accession and issues raised on the competitiveness of Vietnamese hotels.
Vietnam officially became the 150th member of the World Trade Organization (WTO) on November 7, 2006. Vietnam's economy officially integrated into the world economy. The economic development of each country is always influenced and bound by each other through international economic institutions and events. This creates new opportunities and challenges for the tourism industry in general and Vietnam's hotels in particular.
3.2.1. Positive impacts and opportunities
Regarding the commitment to open the service market, Vietnam has committed to about 110 sub-sectors out of a total of 155 sub-sectors in 11 service sectors according to the WTO classification. Compared to the Vietnam - US Trade Agreement (Bilateral Trade Agreement - BTA), Vietnam's commitment on services in the WTO is broader in terms of