US embassy cable - 03HANOI1840

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