Vietnam an outbound market to watch

Destinations like the state of Penang are beginning to tap opportunities in the Vietnam outbound market

Reporting by Mimi Hudoyo, S Puvaneswary, Marissa Carruthers and Pamela Chow

Bolstered by growing intra-region connectivity and a strong economy, Vietnam is emerging as a source market, with regional NTOs and tour operators training their sights and developing strategies to woo more Vietnamese travellers to their shores.

The MasterCard Future of Outbound Travel in Asia Pacific Report, 2016-2021 revealed that Vietnam’s CAGR growth in outbound travel is expected to reach 7.5 million trips by 2021.

Destinations like Penang (pictured) are beginning to tap opportunities in the Vietnam outbound market

Abdul Hadi Che Man, director of Tourism Malaysia in Vietnam, told TTG Asia: “Vietnam is a very fast-growing market for Malaysia. Until September 2017, arrivals grew by 54 per cent and daily expenditure increased 49 per cent from RM399 (US$97) to RM594.

He added: “Last year set high expectations but we will push for continual growth this year. We will work closely with our travel agent partners to explore the possibility of working with OTAs to attract more FITs.”

Trade players in Malaysia attribute the growing air connections from Vietnam as a key factor to driving arrivals. Penang, for instance, is a key beneficiary of enhanced air links from Vietnam.

AirAsia began four-times-weekly flights between Penang and Hanoi from July 2018, in addition to stepping up frequencies between Ho Chi Minh City and Penang from four-times-weekly to daily since last March.

With improved air accessibility, Penang Global Tourism is working with AirAsia on joint tacticals to promote the state, and will also exhibit at the upcoming Viet Nam International Travel Mart in Hanoi this March and the 15th International Travel Expo in Ho Chi Minh City, according to Ooi Chok Yan, CEO, Penang Global Tourism.

For Indonesia, the average 10 per cent growth posted for Vietnam in recent years makes it a significant market for the archipelago, even as numbers are still small at present.

Visitor arrivals from Vietnam to Indonesia in 2017 totalled 77,466, and the number is expected to reach 100,000 in 2018 (full year statistics for 2018 not yet available at press time).

While Vietnamese outbound traffic to Malaysia has been aided by rising air links, Indonesia is hampered by the lack of direct connections. Currently, the only direct flight is operated by Vietnam Airlines between Ho Chi Minh City and Jakarta.

Heri Hermawan, head of marketing division – Indochina, Ministry of Tourism, Indonesia, said: “Vietnam has the potential to become a primary market (in South-east Asia). Vietnamese interest in Indonesia is high, but so far it is still Bali. The lack of direct flights is an issue.”

Vietnam has emerged as a promising market in Singapore too. In 2017, Vietnam broke into Singapore’s top 10 source markets with a year-on-year increase of 13 per cent, reaching 531,000 arrivals and rivalling arrival volume from Thailand.

More recently, from January-November 2018, the market posted the highest year-on-year percentage growth of all South-east Asian nations in arrival numbers to Singapore. It registered a 12.4 per cent increase, seconded by Brunei at 11.8 per cent.

Several ATF sellers that TTG Asia spoke with are keen to woo this emerging market, which is still largely characterised by groups.

Irwan Raman, director of business development, Panorama Destination Indonesia, d: “We have a marketing representative in Vietnam who supports us to penetrate the market beyond Ho Chi Minh City and Hanoi, such as to Danang, and introduce new destinations.”

Adam Kamal, general manager, Tour East Malaysia, said: “While Kuala Lumpur and Penang are still main draws, this year we are trying to promote Johor Bahru with overland transfers to Singapore.”

The Saujana Hotel Kuala Lumpur, senior director of sales marketing, M Manimaran, said: “At this show, we hope to connect with Vietnamese outbound agents selling golfing tours as we have two, 18-hole championship golf courses within the resort.

“Our property is a five-minute drive to Ara Damansara Medical Centre, so medical tourism is another market we are exploring with our local travel partners.”