Foreign investors eye tourism

Long and beautiful coasts in the southern province of Binh Thuan are attractive places for investors to build hotels and resorts. Foreign investment in these projects accounts for only 10 per cent of the country’s total foreign investment. VietNamNet Bridge - Demand for new properties, Government incentives and the country’s natural advantages are driving foreign investment in the tourism industry. Phan Huu Thang, head of the Ministry of Planning and Investment’s Foreign Investment Agency, said Viet Nam’s favourable conditions for tourism included good economic growth, social stability, foreign investment, and improved roads as well as airports and seaports. "Viet Nam has great potential, including scenic landscapes, a long and beautiful coast and a diversified culture," said Thang. "The Government encourages all sources, especially foreign capital, to develop tourism so it can become a key industry," Thang told participants at a two-day conference and exhibition on property opportunities in tourism that wrapped up yesterday in HCM City. "The State applies incentives on land, taxation, and credit for investors in areas that include protection and restoration of tourism resources and environment, tourism human resources, and construction of tourism infrastructure, among others," he said. Thang also praised FDI companies, including five-star hotels in Ha Noi and HCM City, the Victoria hotels in Sapa, Hoi An and Can Tho, and the Furama resort in Da Nang, for their significant contributions to the tourism industry. "The Government will do its best to support investment in the tourism sector and we will strongly commit to advance the legal environment to draw more investment resources," he said. Foreign investment in hotels, resorts and leasure projects, however, are still modest, representing around 10 per cent of the country’s total foreign investment capital of US$104 billion. Thang said a strong increase had been seen in the tourism sector during the first quarter, especially in HCM City, Da Nang, Quang Nam Province, Hue, Khanh Hoa Province and Binh Thuan Province. Marc Townsend, managing director of the US real estate consultancy firm CB Richard Ellis, said Viet Nam’s land prices had become too high and needed to be lowered. Although there was a trend of shifting capital out of developed markets and into developing ones, investors might look elsewhere because of the high prices and the lengthy procedures for gaining land-use rights and land clearance, he said. Townsend also saw Viet Nam as an attractive tourist destination for various factors including its charm. But there was an insufficient number of hotel rooms and infrastructure was still poor, he said. For example, he said it was not easy or comfortable to fly to Phu Quoc, Viet Nam’s popular tourist island in Kien Giang Province, attributing the problem to Viet Nam Airlines’ lack of capital for expansion. Around 350 projects from 12 cities and provinces including Lao Cai, Hue, Binh Dinh, Ninh Thuan, Lam Dong and HCM City were on display at the exhibition. The two-day event organised by the Phuquocland East Asia Corporation aimed to promote investment in tourism real estate development and provide a platform for industry players to discuss business opportunities and talk with authorities about a better investment environment.