QUO, the world's leading branding agency for the hotel and travel sector, has conducted a survey of the rapidly developing hotel and tourism market of Phu Quoc in Vietnam

1. PHU QUOC, VIETNAM
MARKET REPORT
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2. PHU QUOC, VIETNAM
MARKET REPORT

3. 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
PHU QUOC, VIETNAM’S NEWEST
TRAVEL DESTINATION TAKES OFF
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.
“

4. 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”.

5. 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.

6. • Phu Quoc is a 589 sq km island district in Kien
Giang province, in the Gulf of Thailand
• Phu Quoc district includes Phu Quoc Island –
Vietnam’s largest island –and 28 smaller islands
• Part of the UNESCO World Biosphere Reserve
• Also referred to as “Pearl Island”
• Known for production of fish sauce and
black pepper
PHU QUOC, VIETNAM
MARKET REPORT
48km
28km
At 603m
MOUNT CHUA
is Phú Quốc
highest point
Over 50%
of Phú Quốc is
NATIONAL PARK
PHU QUOC
AIRPORT
is Vietnam’s
5th largest
international
airport
SAOBEACH
is one of the
most beautiful
beach in Asia
There are
28 ISLANDS & ISLETS
in Phú Quốc District
LONG BEACH
is the most popular
beach on Phú Quốc
The economic capitals is
DUONGDONG
VINMEC
International
standard hospital

7. average length
of stay
for foreign tourists
TOURISM
OVERVIEW
visa exemption
for visitors
introduced in March
2014
of region’s economy
is tourism
2.4
DAYS
30
DAYS
66%

8. 1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
TOURISM
FOREIGN & DOMESTIC ARRIVALS
2012 2013 2014 2015 (as of 7 Dec)
Total Tourist Arrivals Foreign Tourist Arrivals

9. Current airport
capacity
TOURISM
AIRLIFT
2017 airport capacity,
after VND 1 trillion
renovation
2.5
million
4
million
4
0
Ho Chi Minh City 1 hr 5 min
Hanoi 2 hr 10 min
Can Tho 50 min
FLIGHT
TIMES
AIRLINES
SERVING
PHU QUOC
Vietnam cities with
direct flights
(HCMC, Hanoi, Cantho,
Rachgia)
international cities with
direct flights (outside of
high season)

10. TOURISM
ARRIVAL BY SEA
CITIES
WITH BOAT
SERVICE
Ha Tien
Fast ferry 1 hr 20 min
Sslow ferry 3 hr
Rach Gia
fast ferry 2 hr 20 min
TOURISTS
ARRIVALS
Airplanes Boat
37%
67%
DUONG DONG
INTERNATIONAL
SEAPORT
cruise ships able to
dock at new port
expected
completion
6,000 2017
PHU QUOC ISLAND
HA TIEN
RACH GIA
Slow ferry
Fast ferry
AN THOI
DUONG DONG
TOWN
HAM NINH
VONG BEACH
120 KM
2H30
45 KM
1H30
DA CHONG
2H50

11. 6,000
4,000
2,000
0
TOURISM
SUPPLY & OCCUPANCY
2010 2012 2014 2015
Number of room
DANANG NHA TRANGPHU QUOC
$153 $80 $68
AVERAGE
ROOM
RATE
*per night for 3-to 5-star hotels and resorts
AVERAGE
OCCUPANCY
RATE
2010
2015
72%
64%

12. HOTEL SUPPLY
THE FUTURE
13
2,800
39.3%
DUONG DONG
of hotels of total supply
67% 48%
Hotel projects
in the pipeline as
of Q3 2015
Rooms in the
pipeline as of Q3
2015
CAGR of luxury and
upscale hotel room
supply between
2012 and 2015
Chez Carole Resort
Trang An Resort
Hoa Binh Phu Quoc
Sai Gon Phu Quoc
Sasco Blue Lagoon
Thien Hai Son
Kim Hoa Phu Quoc Resort
Orange Resort
Tropicana Resort
Arcadia Resort
La Veranda
Phu Van Resort
Long Beach
Famania Resort
Salinda
Cuu Long Phu Quoc
Eden Resort
Hong Bin Bungalow
Daisy Resort
4-Star Hotel 5-Star Hotel3-Star Hotel

13. 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.

14. 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.

15. INVESTMENT
OVERVIEW
NEW
PROPERTY LAWS
New regulations allowing foreigners to
buy landed property in Vietnam took
effect 1 July 2015. Properties come
with a renewable 50-year lease on land.
PHU QUOC’S
LARGEST INVESTORS
(VND 8 trillion)
(VND 7 trillion)
(VND 9 trillion)
(VND 8 trillion)
(VND 7 trillion)
INVESTMENT
INCENTIVES
15-year waiver on land rent
50% reduction in personal
income tax
0% tax on fixed assets
Master planned in
2004, Phu Quoc Island
is set to become a
Special Economic Zone
by 2020.

16. 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
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.
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.”
“