PHU QUOC, VIETNAM

MARKET REPORT

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QUO Bangkok Co., Ltd.
22nd Floor, Ocean Tower II
75/40-42 Sukhumvit 19
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Thailand
PHU QUOC, VIETNAM
MARKET REPORT
 PHU QUOC, VIETNAM’S NEWEST
TRAVEL DESTINATION TAKES OFF
Lying 62 miles off Vietnam’s southern coast casino is under planning”, explains Peter Ryder,
and known for pristine beaches and verdant CEO of Indochina Capital, a leading Vietnam-based real
forests is the island of Phu Quoc. Now seeing estate developer and advisor. He adds that, “During
a major increase in attention from both tourists the early stages of a resort destination’s development,
and hospitality investors alike, this increasingly infrastructure growth is critical and the Phu Quoc
attractive destination, however, still faces obstacles authorities are demonstrating an ability to progress
as it looks to develop. rapidly.” He goes on to explain that these early
achievements have instilled confidence in developers and
PHU QUOC SEES RAPID TOURISM GROWTH international hotel brands to move forward with
new projects.
Talked about as an up-and-coming tourist destination
for the past decade, very little development had While attracting only 25,000 visitors back in the year 2000,
actually materialised until the last couple of years. the number of tourists coming to Phu Quoc jumped to
After significant government investment in local over 1.5 million in 2015, with local Vietnamese visitors
infrastructure, including a new airport, and a strong doubling between 2014 and 2015 to reach 1.35 million.
promotion campaign, tourist numbers have since 2016 is expected to be another impressive year for Phu
exploded, and with them, serious private investment in Quoc as Kien Giang Province, where Phu Quoc is located,
resort facilities has followed. is the major focus of the Vietnamese government’s Visit
Vietnam Year 2016 tourism promotion campaign. By 2020,
“ Over the past 24 months, a safari, theme park, hospital the government hopes on attracting three million visitors
and golf course opened and an international standard per year.
ATTRACTING FOREIGN INTEREST While infrastructure on Phu Quoc has greatly improved
of late, especially with the new airport and roads, further
Despite this, foreign tourists currently constitute only a development is still needed in terms of electricity as well
relatively small percentage of overall tourist numbers, as sewage and water treatment. This is currently under
with just 164,000 foreign tourists visiting Phu Quoc last construction or in the planning stages.
year out of a total of 1.5 million. Tourists from Russia,
Singapore, Malaysia and Thailand are those currently A final major challenge for Phu Quoc as a destination
showing the most interest in travelling to Phu Quoc is one that has been faced by a number of other tourist
— although the destination is increasingly welcoming destinations in the past — how will it manage its image as
tourists from Europe. it grows and changes?

Flights from foreign countries directly to Phu Quoc Earlier tourists came to Phu Quoc mainly due to it being
Airport have been on the increase lately. Recent visa perceived as a new and “off the beaten track” destination
liberalisation for many nationalities has also further – attracted by its natural beauty and lack of development.
encouraged arrivals to Vietnam by foreign tourists. In As Phu Quoc grows, however, these existing tourists
addition to this, as Phu Quoc is a special economic could be put off by the continuing development and may
zone, the government is allowing visa-free travel to Phu venture on to newer, untouched destinations.
Quoc for up to 30 days for all nationalities.
Contrasting this, Nguyễn Vĩnh Trân, CEO of MIK Group,
MANAGING FUTURE GROWTH IN PHU QUOC a leading Vietnamese real estate advisory with a number
of hotel projects in Phu Quoc, including the soon-to-open
However, Phu Quoc faces some specific challenges. Movenpick and Crowne Plaza resorts, explains that, “The
Labour is foremost amongst them. The recent rapid Vietnamese government has, in fact, been rather proactive
growth means that the local labour supply with in terms of ensuring the preservation of the forest on Phu
adequate skills and experience in travel and tourism is Quoc, as well as restraining over-development and being
incredibly limited, and hotel and travel operators need strict on wastewater treatment”.
to pay a premium to attract skilled personnel.
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 WASTEWATER TREATMENT

Phu Quoc’s current international airport “ We need around VND2 trillion [$91.87 million]
opened in 2012, enabling the island to to invest in a wastewater treatment system for
receive larger aircraft and international the entire island, without which Phu Quoc will
flights. be polluted in the coming years.”

ROADS ELECTRICITY
A 50 km north-south axis road between A 50 km north-south axis road between
Bai Thom and An Thoi was completed Bai Thom and An Thoi was completed
in 2015. A 99.5 km road encircling the in 2015. A 99.5 km road encircling the
island is approximately 50% finished. island is approximately 50% finished.