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Cablegate: Hcmc Tourism Seminar Draws Large Crowd, but Can Vietnam?

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 HO CHI MINH CITY 000782

SIPDIS

E.O. 12958: N/A
TAGS: ECON SENV ETRD CASC VM
SUBJECT: HCMC TOURISM SEMINAR DRAWS LARGE CROWD, BUT CAN VIETNAM?


SUMMARY
-------
1. Despite recent setbacks from SARS and the avian flu, the
number of foreign tourists to Vietnam has been growing steadily
over the past decade. Provincial and local governments, as well
as the central government, have been pushing to make Vietnam a top
tourist and leisure destination. Yet the percentage of tourists
coming from the U.S. has actually declined. At a recent American
Chamber of Commerce seminar in HCMC, visiting foreign experts
advised the burgeoning travel and leisure industry to pool their
financial resources in order to place Vietnam on the radar screen
of American tourists. Consul General Yamauchi urged the
Vietnamese government to improve consular notification and access
practices and to establish a tourist police. Visiting experts
suggested that the GVN streamline visa, immigration, and customs
procedures, allow firms to bring in foreign management and
technical staff without putting obstacles in their way, and to
develop sensible infrastructure plans and projects. But will the
GVN focus on any of these issues?

GVN NEEDS TO SHAPE UP
---------------------
2. On May 14, the American Chamber of Commerce (AmCham) in Ho Chi
Minh City (HCMC) hosted a seminar on "Marketing Vietnam as a
Destination for American Travelers." AmCham assembled a slate of
travel industry executives, market analysts, entrepreneurs, and
travel writers to share their insights with their Vietnamese
counterparts, who have repeatedly expressed befuddlement over the
best way to attract American tourists. The event drew more than
200 travel industry professionals, Vietnamese and expatriate
alike. Keen local interest in how to draw American leisure
travelers halfway around the world -- bypassing many attractive
and more convenient destinations enroute -- meant the meeting hall
was standing-room only by the time Consul General Yamauchi and
Vice Chairman Nhan of the HCMC People's Committee delivered
opening remarks.

3. The good news is easy. Vietnam is an exotic destination with
beautiful beaches, scenic mountains, and a range of historic
sights and sites. The bad news is that so do Thailand, the
Philippines, and Indonesia, and those are just the regional
competitors for American tourist dollars. The one trump card
Vietnam has to play -- the perception that it is the safest
destination in Southeast Asia -- may not be enough to overcome a
host of obstacles.

4. In opening remarks, CG Yamauchi emphasized USG concerns for
the safety and security of AmCits in Vietnam. At present, there
is no reliable system of consular notification and access when
Americans run afoul of the law and are arrested/detained. This
unpredictability deprives AmCits (and other foreign nationals) of
timely access to consular officers and contravenes international
obligations under the Vienna Convention on Consular Relations. In
the case of the U.S., Vietnam often does not fulfill the terms of
the bilateral Agreed Minute. While HCMC Office of External
Affairs efforts to notify the ConGen of AmCit illnesses, injuries,
and deaths have improved, provincial efforts are still woefully
lacking in many cases. Prompt consular notification and access are
indeed linked to Vietnam's reputation as a tourist destination.

5. On behalf of the HCMC consular corps (30 consulate generals),
the CG reiterated the need for HCMC to establish a tourist police
force. The lack of tourist police means visitors in trouble are
left to navigate the vagaries of the Vietnamese justice and
medical systems without much in the way of assistance. (Post
Note: This suggestion is one that the consular corps in HCMC has
put forward to the HCMC government previously. Since the public
security/police budget is controlled by the central GVN, the HCMC
People's Committee has requested additional funding from Hanoi for
a tourist police force these past two years. Both times their
request has been refused. End note.)

6. A number of speakers mentioned the difficulty journalists, in
this case travel writers, have in obtaining visas to visit
Vietnam. Travel articles are powerful, cost-free, advertising
tools, but the onerous visa process limits the number of articles
on Vietnam. Moreover, when journalists or any other visitor does
finally board a plane for Vietnam a rude surprise may await them
at the other end. The immigration arrival and customs clearance
process can be quite lengthy. One visiting writer told the crowd
he waited in line for two hours upon arrival, an experience which
left a "bad taste" in his mouth.

7. Vietnam's tourism industry is in its infancy, and the human
resources needed are not always available locally. Skilled
managers and marketing professionals are needed, but bringing in
expat workers involves bureaucratic hassles that the GVN could
streamline or abolish to encourage tourism development.

8. American-born entrepreneur turned Thai citizen William
Heinecke who operates hotels and resorts in Thailand, among other
successful businesses, pointed out the role of government in
overall regulation of development. He noted that everyone agrees
Vietnam is seriously lacking in various kinds of infrastructure
and the GVN must sensibly decide where and how those
infrastructure improvements are made. Heinecke told the audience
that no tourist wants to vacation next-door to a new industrial
processing zone or commercial port. In his view Vietnam is at a
crossroads and in many areas the government will have to choose
between tourism and industrial development. This is sound advice
for a country where it is not unheard of to see "eco-tourism zone"
side-by-side with "industrial park" or "commercial port" on
government master plans.

Pool Resources for Vietnam Advertising Campaign
--------------------------------------------- --
9. For the tourism industry itself, speakers pointed out several
key areas for improvement. Vietnam has no real marketing or
tourism image, no catchy slogan, no unified ad campaign, and no
one-stop source of information about the country. Panelists
advised Vietnamese counterparts to pool funds for ads designed to
promote Vietnam as a place, rather than an individual resort or
tour.

10. One bright spot on the horizon is the recent interest in
Vietnam by major U.S. airlines. In the wake of the recent civil
aviation agreement, American Airlines has hired a local agent and
set up a new code share arrangement, and United hopes to fly its
own planes on a San Francisco-Hong Kong-HCMC route within the next
12 months. Both airlines helped sponsor the AmCham seminar.

GVN and Industry Partnership Needed
-----------------------------------
11. The role of public-private cooperation was discussed toward
the end of the seminar. A speaker from the Pacific Asia Travel
Association (PATA) related his experiences working on tourism
campaigns in Hong Kong and Singapore. He said the key element of
both successful campaigns was a taskforce made up mostly of
tourism industry professionals, but headed by a strong figure from
the national government. The taskforce leader was someone with
sufficient stature to effect change within the government,
whenever it became apparent that a government-induced impediment
was holding back the industry.

12. The lack of positive GVN participation, except to promote
state-owned tour companies, was clearly a frustration for seminar
attendees. In a bold comment, a Vietnam Airlines panelist
complained that no GVN officials other than HCMC's deputy mayor
attended the seminar, who made opening remarks and then left.

13. AmCham, through its Tourism Committee, will follow up on
seminar recommendations and form a Vietnam tourism taskforce
composed of some non-
AmCham members as well. Once the task force is set up, it will
ask the GVN to participate. The chairs of the AmCham tourism
committee will call on the Vietnam Administration of Tourism
(VNAT) headquarters in Hanoi to "report" the findings of this
tourism conference to the central GVN authority responsible for
regulating the industry and promoting Vietnam as a destination.

COMMENT
-------
14. Travel to Vietnam is by no means stagnant. In 2003, over 2.4
million foreigners visited, including 220,000 Americans.
According to VNAT, at least 1.6 million of these visitors came as
tourists or to visit relatives. These numbers are down from 2002,
but the decline was relatively small for a year marked by SARS and
the war in Iraq. The long-term trend is one of growth, with 2003
seeing four times as many visitors as 1993. The frustration for
industry insiders is that the share of the market comprised of
U.S. visitors, who are relatively big spenders, is actually
shrinking. According to PATA, Americans made up 17 percent of
foreign arrivals to Vietnam in 1993. Today they account for 9
percent, and Vietnam attracts only 7 percent of American trips to
Asia.

15. Vietnamese, European, and Australian travel and tourism
professionals here wonder what makes American tourists tick. A
recurring theme was "We don't understand Americans and need help
figuring out the U.S. market." Some portion of the problem may be
solved by spending money on professional advertising in the U.S.
and more exposure to American tourists over time. They seem,
however, to miss a fundamental point. Vietnam is far away, and it
takes a great deal of money and time to get here. This cuts out
most American tourists. For the remaining few, Vietnam will have
to compete for their tourist dollars by outperforming its
neighbors. The increase of U.S. tourists as a function of market
share will likely be incremental, especially since the GVN seems
unwilling to do more at this time to market Vietnam as a
destination. There may also be a bigger underlying problem --
virtually no attention was devoted at the seminar to the subject
of keeping tourists happy and safe once they arrive.
YAMAUCHI

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