According to Lee Pearce – General Manager of Novotel Phu Quoc Resort cited from “Focus economics” in the recent conference about real estates in tourism, another year of stellar growth of Vietnam economy is expected, thanks to continued robust demand for manufacturing exports and an ongoing surge in FDI inflows that should support export-oriented industries.
Rising household incomes and an expansion in private credit should help keep private consumption growth robust. Focus Economics panelists expect the economy to expand 6.7% in 2018, which is up 0.1 percentage points from last month’s forecast, and 6.6% in 2019. This is all good news for both developers and investors alike.
From a tourism standpoint Vietnam is inexpensive. It is one of the cheapest countries not only in Southeast Asia but in the entire world. The value of Vietnam’s currency extremely low. For instance, one US dollar is around 22,000 Vietnamese dong.
Naturally, even luxurious hotels or guest houses, food and internal travelling is very much affordable for foreign tourists. This is the most important factor driving the growth of Vietnam tourism.
Another major factor is that tourists from many countries have visa exemption in Vietnam. The visa application process is extremely simple for US and Australian citizens too; and consequently, a large number of tourists prefer to visit Vietnam over other countries.
The Vietnam government has realised tourism to be a key to its future prosperity and is now accordingly implementing appropriate strategies and policies to transform Vietnam into a leading tourism destination in Asia.
According to the WTCC, spending on leisure travelling accounted for 90.0% of the GDP of the travel and tourism industry in 2015 (VND 339,480.0 billion) compared to 10.0% for spending on business travelling (VND 37,577.9 billion).
Spending on business travel is estimated to grow by 8.5% in 2016 to VND 40,765.7 billion, and rise by 6.1% p.a. to VND 73,474.1 billion in 2026. Spends on leisure travel are likely to grow by 4.0% in 2016 to VND 353,007.0 billion, and increase by 6.6% p.a. to VND 669,906.0 billion in 2026.
This all spells good news for both sides of the development equation with developers and investors given confidence the future demand for short term holiday accommodation will continue to grow.
This along with the increasing support of government to the sector and the multiplying international desire to visit Vietnam, the time would be ripe so to speak for developments of this type.
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