PHU QUOC, VIETNAM

MARKET REPORT

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QUO Bangkok Co., Ltd.
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PHU QUOC, VIETNAM
MARKET REPORT
 PHU QUOC, VIETNAM’S NEWEST
TRAVEL DESTINATION TAKES OFF
Lying 62 miles off Vietnam’s southern coast
and known for pristine beaches and verdant
forests is the island of Phu Quoc. Now seeing
a major increase in attention from both tourists
and hospitality investors alike, this increasingly
attractive destination, however, still faces obstacles
as it looks to develop.
PHU QUOC SEES RAPID TOURISM GROWTH
Talked about as an up-and-coming tourist destination
for the past decade, very little development had
actually materialised until the last couple of years.
After significant government investment in local
infrastructure, including a new airport, and a strong
promotion campaign, tourist numbers have since
exploded, and with them, serious private investment in
resort facilities has followed.
“ Over the past 24 months, a safari, theme park, hospital
and golf course opened and an international standard
casino is under planning”, explains Peter Ryder,
CEO of Indochina Capital, a leading Vietnam-based real
estate developer and advisor. He adds that, “During
the early stages of a resort destination’s development,
infrastructure growth is critical and the Phu Quoc
authorities are demonstrating an ability to progress
rapidly.” He goes on to explain that these early
achievements have instilled confidence in developers and
international hotel brands to move forward with
new projects.
While attracting only 25,000 visitors back in the year 2000,
the number of tourists coming to Phu Quoc jumped to
over 1.5 million in 2015, with local Vietnamese visitors
doubling between 2014 and 2015 to reach 1.35 million.
2016 is expected to be another impressive year for Phu
Quoc as Kien Giang Province, where Phu Quoc is located,
is the major focus of the Vietnamese government’s Visit
Vietnam Year 2016 tourism promotion campaign. By 2020,
the government hopes on attracting three million visitors
per year.
ATTRACTING FOREIGN INTEREST
Despite this, foreign tourists currently constitute only a
relatively small percentage of overall tourist numbers,
with just 164,000 foreign tourists visiting Phu Quoc last
year out of a total of 1.5 million. Tourists from Russia,
Singapore, Malaysia and Thailand are those currently
showing the most interest in travelling to Phu Quoc
— although the destination is increasingly welcoming
tourists from Europe.
Flights from foreign countries directly to Phu Quoc
Airport have been on the increase lately. Recent visa
liberalisation for many nationalities has also further
encouraged arrivals to Vietnam by foreign tourists. In
addition to this, as Phu Quoc is a special economic
zone, the government is allowing visa-free travel to Phu
Quoc for up to 30 days for all nationalities.
MANAGING FUTURE GROWTH IN PHU QUOC
However, Phu Quoc faces some specific challenges.
Labour is foremost amongst them. The recent rapid
growth means that the local labour supply with
adequate skills and experience in travel and tourism is
incredibly limited, and hotel and travel operators need
to pay a premium to attract skilled personnel.
While infrastructure on Phu Quoc has greatly improved
of late, especially with the new airport and roads, further
development is still needed in terms of electricity as well
as sewage and water treatment. This is currently under
construction or in the planning stages.
A final major challenge for Phu Quoc as a destination
is one that has been faced by a number of other tourist
destinations in the past — how will it manage its image as
it grows and changes?
Earlier tourists came to Phu Quoc mainly due to it being
perceived as a new and “off the beaten track” destination
– attracted by its natural beauty and lack of development.
As Phu Quoc grows, however, these existing tourists
could be put off by the continuing development and may
venture on to newer, untouched destinations.
Contrasting this, Nguyễn Vĩnh Trân, CEO of MIK Group,
a leading Vietnamese real estate advisory with a number
of hotel projects in Phu Quoc, including the soon-to-open
Movenpick and Crowne Plaza resorts, explains that, “The
Vietnamese government has, in fact, been rather proactive
in terms of ensuring the preservation of the forest on Phu
Quoc, as well as restraining over-development and being
strict on wastewater treatment”.
With Phu Quoc currently transitioning into a more
mass-market destination, it is important the authorities
and private sector take the time right now, before
development continues too far, to carefully consider
what image Phu Quoc wishes to present to the world
and how it can differentiate itself from other mass-
market destinations.

…….......................................................................................
QUO wishes to express its thanks to Olivier Do Ngoc,
Managing Partner, Dynasty Investments, Peter R. Ryder,
CEO, Indochina Capital Corporation, Nguyễn Vĩnh
Trân, CEO of MIK Group and Marriott International for
invaluable support and insights on the development of
Phu Quoc.
 28km

PHU QUOC, VIETNAM

MARKET REPORT At 603m
MOUNT CHUA
is Phú Quốc
highest point

VINMEC
International
• Phu Quoc is a 589 sq km island district in Kien standard hospital
Over 50%
of Phú Quốc is
Giang province, in the Gulf of Thailand NATIONAL PARK

• Phu Quoc district includes Phu Quoc Island –

Vietnam’s largest island –and 28 smaller islands The economic capitals is
DUONGDONG

48km
• Part of the UNESCO World Biosphere Reserve
LONG BEACH
is the most popular
• Also referred to as “Pearl Island” beach on Phú Quốc
PHU QUOC
AIRPORT
is Vietnam’s
5th largest
• Known for production of fish sauce and international
airport
black pepper

SAOBEACH
There are is one of the
28 ISLANDS & ISLETS most beautiful
in Phú Quốc District beach in Asia
TOURISM
OVERVIEW

2.4 30 66%
DAYS DAYS

average length visa exemption of region’s economy

of stay for visitors is tourism
for foreign tourists introduced in March
2014
TOURISM
FOREIGN & DOMESTIC ARRIVALS
1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2012 2013 2014 2015 (as of 7 Dec)

Total Tourist Arrivals Foreign Tourist Arrivals

TOURISM
AIRLIFT
AIRLINES
SERVING
PHU QUOC

2.5 4 4
million million Vietnam cities with
direct flights
(HCMC, Hanoi, Cantho,
Rachgia)
Current airport 2017 airport capacity,
capacity after VND 1 trillion
renovation 0
international cities with
direct flights (outside of
high season)
FLIGHT Ho Chi Minh City 1 hr 5 min
TIMES Hanoi 2 hr 10 min
Can Tho 50 min
TOURISM
ARRIVAL BY SEA
TOURISTS CITIES Slow ferry
ARRIVALS WITH BOAT PHU QUOC ISLAND
HA TIEN
SERVICE
2H50
DA CHONG

45 KM
1H30
HAM NINH
Fast ferry
Ha Tien
DUONG DONG
TOWN

Fast ferry 1 hr 20 min

VONG BEACH

120 KM

Sslow ferry 3 hr
2H30

RACH GIA
AN THOI

37%
Rach Gia
fast ferry 2 hr 20 min
67%

DUONG DONG
INTERNATIONAL
SEAPORT
Airplanes Boat
6,000 2017
cruise ships able to expected
dock at new port completion
TOURISM
SUPPLY & OCCUPANCY
6,000
AVERAGE
4,000
OCCUPANCY
2,000
RATE
0
2010 2012 2014 2015

Number of room
72%
2010
AVERAGE
ROOM
RATE $153 $80 $68
64%
PHU QUOC DANANG NHA TRANG

*per night for 3-to 5-star hotels and resorts 2015

HOTEL SUPPLY
THE FUTURE
13 DUONG DONG
Chez Carole Resort

Trang An Resort
Hotel projects
Hoa Binh Phu Quoc
in the pipeline as Sai Gon Phu Quoc Hong Bin Bungalow
of Q3 2015 Sasco Blue Lagoon
67% 48% Thien Hai Son

2,800
Kim Hoa Phu Quoc Resort
Orange Resort

Rooms in the of hotels of total supply Tropicana Resort Daisy Resort

pipeline as of Q3
Arcadia Resort
2015
La Veranda

39.3%
Phu Van Resort
Long Beach
Famania Resort
CAGR of luxury and
upscale hotel room Salinda
supply between Cuu Long Phu Quoc
2012 and 2015 3-Star Hotel 4-Star Hotel 5-Star Hotel Eden Resort
HOTELS
IN THE PIPELINE

INTERCONTINENTAL
Began construction 2015. Planned five-star with 336 rooms, 115
apartments and 5 villas. 9.2 ha. Formerly envisioned as a Crowne Plaza.
Developed by BIM.

JW MARRIOTT
Developed by Sun Group.
Developed by BIM.

CROWNE PLAZA
Crowne Plaza Starbay Khem Beach. Developed by MIK Land.
Developed by BIM.
HOTELS
IN THE PIPELINE

MÖVENPICK
Scheduled to open 2017 with 250 hotel rooms, 100 residences and 50
pool villas, plus retail village, waterpark, 1,000 sqm conference facilities
and on-site hotel school. 51.62 hectares.

MELIA
Phu Quoc Resort Sol House. Developed by MIK Land.

RITZ-CARLTON
Developed by MIK Land.
INVESTMENT
OVERVIEW
Master planned in PHU QUOC’S
2004, Phu Quoc Island LARGEST INVESTORS
is set to become a
Special Economic Zone
by 2020.

(VND 9 trillion)
NEW INVESTMENT
PROPERTY LAWS INCENTIVES
New regulations allowing foreigners to 15-year waiver on land rent
buy landed property in Vietnam took (VND 8 trillion)
(VND 8 trillion)

effect 1 July 2015. Properties come 50% reduction in personal

with a renewable 50-year lease on land. income tax
(VND 7 trillion)
(VND 7 trillion) 0% tax on fixed assets
INFRASTRUCTURE
ACCOMPLISHMENTS & CHALLENGES
ACCOMPLISHMENTS
& CHALLENGES
AIRPORT
Phu Quoc’s current international airport
opened in 2012, enabling the island to
receive larger aircraft and international
flights.
ROADS
A 50 km north-south axis road between
Bai Thom and An Thoi was completed
in 2015. A 99.5 km road encircling the
island is approximately 50% finished.
WASTEWATER TREATMENT
“ We need around VND2 trillion [$91.87 million]
to invest in a wastewater treatment system for
the entire island, without which Phu Quoc will
be polluted in the coming years.”
ELECTRICITY
A 50 km north-south axis road between
Bai Thom and An Thoi was completed
in 2015. A 99.5 km road encircling the
island is approximately 50% finished.