Investment in Tourism Infrastructure System: Closer PPP Needed

According to the Draft Tourism Development Strategy of Vietnam, in 2015, Vietnam will have some 12 million of international arrivals and 28 million domestic arrivals. The turnover generated by tourism is expected to reach US$8.9 billion in 2015 and US$15.9 billion in 2020.

 

However, the capital investment has only met part of factual investment demand and there exists a lack of cooperation in investment and exploitation of tourism infrastructure. Hence, cities and provinces cannot balance the capital source, which makes many tourism infrastructure works fall behind schedule. Waste happens in many works due to a lack of common planning. For instance, in tourism real estate area, Saigon Tourist is an enterprise which has invested a quite large amount of capital. Saigon Tourist currently has 70 hotels, relaxation resorts and is having many more projects implemented. However, according to Mr Tran Hung Viet, General Director of Saigon Tourist, the process of investment into development of tourism infrastructure is still subject to heaps of obstacles. Many localities have not extended their support to enterprises. On the other hand, investment in the sector’s transport infrastructure has exposed many irrational facts. An Giang province has recently proposed to construct an airport with a view to creating advantages for tourism development. Many other provinces make the same proposal afterwards despite the fact that the distance from such provinces to the airport in their neighbour’s land is less than 100km.

 

Experts believe that it is pivotal that transport development to assist tourism sector be appropriate with actual demand. Demand for air travel in provinces is little. It is sure that there will be a big loss if there are only one or two flights per day.

 

Results from recent surveys reveal that local airports all make big losses. This is a costly lesson for tourism infrastructure development planning. Instead of making investments of thousands of billions of dong in airport construction, provinces can mobilize capital investment for development of their road system, water ways or overcome the existing troublesome transport situation which chases tourists away, warn economic experts. According to Mr Tran Dat Duy, Deputy Chairman of Mekong River Delta Tourism Association, the investment in tourism infrastructure in local places is still scattered. A common plan is lacked. There has not been any inter-regional connection which serves as orientation for constructing infrastructure appropriate with unique features of the tourism sector, especially in terms of transport infrastructure. If we want to exploit tourism potentials of each locality, the most important action is to re-prepare the regional plan and construct further transport system in addition to the national road route connecting localities together.

 

According to Associate Professor Dr. Pham Trung Luong, Deputy Chairman of Institute for Tourism Development and Research, although the revenue brought by tourism is highly appreciated, the proportion of GDP contributed by tourism sector to national GDP is still low and not corresponding to the strategic goal of turning tourism sector into the spearheaded economy.

 

Mr Luong thinks that some lessons for tourism development in the next period should be drawn. Such lessons will serve as foundation for establishment and implementation of strong policies on organization, management, investment, personnel training and tourism promotion. In the immediate time, in order to attract tourists, unique tourist products to serve different market segments will be developed. Tourists coming from neighbouring markets such as ASEAN and East North Asia with payment capability and long accommodation period will be particularly exploited via new products including MICE, health tourism and beauty tourism, etc. Mr Luong also advises to continue to exploit traditional markets including Western Europe, North Europe, North America, and Australia as well as newly emerged markets like Russia, Ukraina and Belarus. At the same time, it is crucial that further research be undertaken to attract tourists from such potential markets as India, Latin America, South Africa and the Middle East with high class products. In the time to come, promotion activities also need to be organized on the basis of studies about markets. Promotion via images should be switched to specific products and brand names such as beach tourism and tourism products with strong attachment to culture and history.

 

In many fora on tourism development, there exist opinions that tourism infrastructure planning should be re-prepared by planners with knowledge about tourism in order to avoid ineffective plans.

 

To that end, the State needs to support provinces to create a linkage for planning the transport infrastructure and other supportive elements for the tourism sector. Each locality with its own plan cannot result in a synchronous plan. With the availability of a regional plan, localities will abide by such plan. This model can be regarded as public – private partnership in tourism development.

 

Mr Tran Hung Viet, General Director of Saigon Tourist, holds it that unless the local authorities make investments in urban infrastructure, tourism enterprises’ investment in infrastructure serving accommodation will show no effect. As such, public – private partnership will be a hitch which helps the tourism sector share responsibility in implementing the development programme.