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Cablegate: Hanoi's Tourist Landscape and Post-Sars Terrain

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HANOI 001840

SIPDIS

STATE FOR EAP/BCLTV

E.O. 12958: N/A
TAGS: ECON CASC SOCI VM
SUBJECT: HANOI'S TOURIST LANDSCAPE AND POST-SARS TERRAIN


1. (U) Summary. Tourism dropped significantly in Vietnam
due to SARS -- at least 30 pct nationwide and as much as 90
pct in Hanoi -- in spring 2003. The GVN is trying to get
back on track with new promotions and reach earlier targets
for 2005. Europeans and Americans, combined, make up about
20 pct of total visitors; Chinese comprise nearly 28 pct.
Hanoi tour operators have blamed "excessive" media coverage
of SARS for the continuing dearth of tourists. End Summary.

THE OFFICIAL VIEW: BAD, BUT JUST WAIT
--------------------------------------

2. (U) According to statistics provided by the Vietnam
National Administration of Tourism (VNAT), 2.6 million
international visitors came to Vietnam in 2002, including
approximately 260,000 Americans. Available nationwide
figures released by VNAT showed a modest year-to-year
increase in March 2003 of 1.3% (to 219,302 from 216,488),
but a sharp year-to-year drop of 30% in April (from 222,299
to 155,165). The drop-off was even steeper in May -- 54 % -
- from 217,169 to only 99,816. Figures are not yet
available for June. (Note: VNAT listed 724,390 Chinese
visitors in 2002; it is unclear whether this number includes
those who enter Vietnam for daily commerce in border towns.
end note)

3. (U) VNAT now estimates that 1,830,000 international
visitors will arrive in 2003, a 31% reduction from 2002.
VNAT predicts that it will not be before 2004 that monthly
visitor averages return even to 2001 levels. Despite these
gloomy numbers, VNAT has reiterated Vietnam's tourism goal
for 2005 of 3.5 million international arrivals. VNAT Vice
Chairman Pham Tu has described publicly the GVN's measures
taken to combat SARS in Vietnam, including: tightening
border controls; imposing temporary restrictions on tourists
from SARS-affected areas; and offering training courses on
preventing and containing SARS. As part of VNAT's strategy
for attracting tourists back to Vietnam, it is utilizing
familiarization trips, press-trips from SARS-free source
markets, h
otel price promotions
, and television advertisements,
as well as taking Vietnam's message abroad on road shows and
to international tourism fairs.

PRIVATE SECTOR BLUES
--------------------

4. (U) At a recent luncheon to publicize Embassy's American
citizen services, Hanoi tour operators (variously catering
to clients from backpackers to high-end travelers)
complained about drops in tourism of as much as 85 to 90%
over the past four months due to SARS. Stressing that
tourism was the "first to suffer, but the last to recover"
from such problems, the group described 2002 as a "very good
year," and admitted that year 2004 would be the "real key"
to assessing the longer-term impact from SARS. Tour
operators also complained that "excessive" media coverage of
SARS had compounded the problem for the tourist industry,
but expressed appreciation for the fact-oriented, objective
information produced by WHO and CDC.

5. (U) Tour operators also described new efforts to provide
additional services beyond those normally found in regional
destinations such as Malaysia and Thailand. One of the
larger tour operators promotes Vietnam as a distinctly
"cultural destination." In this vein, most operators try to
stress the uniqueness of Vietnam with a rich cultural
heritage to enjoy, exemplified by Vietnam's ethnic
minorities.

6. (U) Most of these tour operators claimed their current
policies were to avoid discounting prices in order to lure
back travelers, however. One Vietnamese-owned firm noted
that its clientele consisted mainly of European travelers
who book tours after arriving in Vietnam -- "walk-ins."
(Because these travelers have already invested in travel to
Vietnam, the logic goes, operators can set pricing to
reflect a certain willingness to bear higher prices.)
Online bookings remain a small slice of several companies'
overall tour bookings, with operators noting that technology
can cut both ways: online cancellations were proportionate
to online bookings during SARS-period.

7. (U) Comment: The challenges to returning to
profitability and riding out the post-SARS storm remain
formidable. Vietnam's hosting of the SEA Games in December
2003 should provide a pick-up in regional bookings, while
the expected 2004 ASEM summit should provide good
international exposure. Relatively low labor costs also
help the tourism sector to absorb the unexpected downturn,
but tourism officials in both the private and public sectors
continue to have their work cut out for them.
BURGHARDT

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