Initiatives in the Tourism Industry in Vietnam

First of all, if you are looking for a website to learn more about Vietnam and particularly Saigon, I highly recommend this website – Saigoneer. Its section on street food is a great start. It’s in English and has lots of details.

There are a few upcoming initiatives announced recently in the industry:

  • There will be bi-weekly direct flights form Zurich to Saigon
  • Vietnam Airlines will soon operate direct flights from Danang to Japan
  • Vietnam Airlines is exploring the possibility of direct flights from Vietnam to America
  • Vietnam Tourism Association will soon carry out exams to classify tour guides in the country. Tour guides will be given 3 to 5 stars based on the results of the exams which will be free of charge and voluntary. Also, freelance tour guides are now mandated to be under contracts with authorized tour companies in order to do business
  • BBC Sport reported that a 2020 race in Hanoi, Vietnam was now secured barring an official announcement

Three points here. First, the tourism industry brought in $13 billion in the first half of 2018, an increase of 22% compared to last year. It is huge for a country like Vietnam. We have a lot to offer. A long coast throughout the country. An authentic and exotic cuisine. We have beaches, mountains and Mekong Delta, everything that a tourist can hope to experience. But our tourism has been plagued by the lack of standards in services leading to the poor return rate of guests. Our country is pretty much a myth that is worth exploring once and no more. In business, it costs 6 times more to acquire a new customer than to retain one. This is the same case. Even though the tour guide exam’s effectiveness remains to be seen (we Vietnamese are not known for world class execution), it is a small step towards the right direction. If we want to compete and have more guests return, maintaining high service standards is instrumental.

Secondly, having more direct flights is huge. Thailand and Singapore have two airport hubs in the region and look what the airports have done to their tourism. Direct flights will reduce the hesitation from guests when they have to make a decision on where to visit. Vietnam’s two biggest airports sorely need major upgrade. It’s a pity that some bureaucracy red tape has prevented the expansion of the airport in Ho Chi Minh City. We have the land to do so and the airport is ridiculously right next to the city center. I have been to quite some airports and I haven’t seen one that close to a city center. Nonetheless, having more direct flights will increase our appeal as a destination.

Lastly, I have been hoping for annual international event in Vietnam for years. Singapore’s F1 Grand Prix has been a remarkable success since its debut in 2008. Otherwise, Singapore wouldn’t keep hosting it. A race is usually a combination of music concerts, press conference, other activities and of course the racing itself. With the reach of Formula 1, Vietnam’s brand awareness which has been under-marketed due to lackluster branding and marketing efforts will hopefully be boosted.

McDonald’s and Burger King’s failure in Vietnam

CNBC released a short video clip on McDonald’s and Burger King’s failure in Vietnam despite glowing success in other countries and particularly other Asian countries such as China and Japan. While McDonald’s and Burger King have struggled in Vietnam, Pizza Hut and KFC have managed to attain some success in the market.

The video mentioned the following as the main reasons for the failure:

  • A lot of substitutes at a much cheaper price from street vendors
  • Burgers don’t fit Vietnamese cuisine preference of sharing food during meals

Personally, I have lived in the US for more than two years and I can count on one hand the number of times I have been to chains such as Wendy’s, McDonald’s, Burger King or Chipotle. All of them were with friends or on our way back from trips. Burgers don’t appeal to us. We have a quite similar dish in Banh Mi, which is very delicious, quick to prepare and significantly cheaper. I lived in Danang for a year, the 3rd biggest city in Vietnam. It is half an hour of a scooter ride from Hoi An, where you can find some of the best Banh Mis in Vietnam. The price for local is about 50cents (maybe 1 dollar for foreigners), but the price at McDonald’s or Burger King’s restaurant is several times more expensive.

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Banh Mi Hoi An (Credit: Hoi An Fun Bike Tours)

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This is how Banh Mi is prepared and delivered, in about 1-2 minutes maximum. (Credit: Hoi An Tour Food)

I still remember the buzz when McDonald’s came to Vietnam the first time. People lined up to experience it. Nonetheless, when the hype wore off after a while, it comes down to whether McDonald’s offerings are competitive and whether they fit the culinary buds of the Vietnamese people. Apparently, they don’t. This is a failure of not understanding the end users’ preferences.

Towards the end of the clip, it was mentioned that McDonald’s is trying to localize the menus with Pho and Broken Rice. Well, I am not sure that will work because the same thing will happen. There are hundreds of street vendors whose product is so tasty and much cheaper than the well-known chain’s.