Thien Minh Chairman: Tourism is the growth engine of the economy

Thien Minh Chairman: Tourism is the growth engine of the economy

TMG – “If we look closely, any community with developed tourism will be very prosperous, creating jobs for all kinds of people; tourism is a driving force for other economic sectors,” Thien Minh Group Chairman Tran Trong Kien shared.

Mr. Tran Trong Kien is chairman of a trillion-Vietnamese-dong tourism group, yet there’s a calm, simple way about him, with a black backpack slung over his shoulder. He has great enthusiasm for the tourism industry, evidenced by Thien Minh Group’s 29-year history.

Growth tied to the development of the tourism industry

Once a medical student, Mr. Kien found another calling in his twenties when he fell in love with the tourism industry.

Mr. Kien shared: “I graduated from Hanoi Medical University in 1994. Because I got married early, I would not have been able to support my family if I had pursued a medical career, so I decided to change course. At that time, the country was opening up, the US embassy had just opened, and many foreigners were coming to Vietnam. I saw the potential of the tourism industry so I decided to learn more about this sector.”

The event that marked Mr. Kien’s first foray into the tourism field was the establishment of Buffalo Tours. Mr. Kien said: “I started out with USD 2,000 to start Buffalo Tours in 1994 with 3-4 employees, the predecessor of what would become Thien Minh Group, targeting adventure tourism products and unique destinations. Buffalo Tours later became one of the core businesses of Thien Minh Group.”

After 3-4 years of operation, the company expanded to 50-60 employees, and the owner of Thien Minh decided to develop his destination management enterprise into a professional travel company, expanding its offerings. It took about 10 more years for Thien Minh to really make its mark on the market with acquisitions in the tourism and hotel sectors.

In 2001, Thien Minh began expanding its accommodation facilities with Mai Chau Lodge. In 2004, Thien Minh purchased shares in the Festival Hue Hotel, now renamed ÊMM Hotel Hue.

In 2005, the company partnered with Australian tour operator Intrepid Travel Pty Ltd. to establish Intrepid Indochina Travel Company Limited (now Intrepid Vietnam) with the goal of expanding tourism activities in Southeast Asia as well as in other tourism markets in Asia. In 2008, Mr. Tran Trong Kien officially established the Thien Minh Tourism Joint Stock Company (Thien Minh Group).

In 2011, Thien Minh garnered buzz when it completed the acquisition of five properties belonging to the Victoria hotel chain in Vietnam (now including Victoria Hoi An Beach Resort & Spa, Victoria Chau Doc Hotel, Victoria Nui Sam Lodge, and Victoria Can Tho Resort) and opened Victoria Xiengthong Palace in Luang Prabang, Laos. This was the largest deal up to that time in Vietnam’s tourism and hotel sector.

That same year, Thien Minh began its foray into the aviation field by partnering with another travel entity to establish Hai Au Aviation Joint Stock Company, providing seaplane tourism and flight services (air taxis).

By 2018, Thien Minh sold Buffalo Tours in order to expand its destination management, tourism, and travel businesses. However, Mr. Kien has always affirmed that travel is the group’s core business segment which it plans to continue developing.

Challenges come after a series of successes

“Everything was going very well until the pandemic happened; the tourism industry experienced two of the most difficult years ever. The same went for Thien Minh. Moreover, the company was developing many different sectors in the industry which led to serious consequences. In 2020, the company had to postpone major projects including Kite Air, and had to sell two hotels in Sapa and Phan Thiet. At the same time, it had to find ways to increase cash flow, increase capital, and reduce all unnecessary expenses”, Mr. Kien recalled.

The owner of Thien Minh shared that the group tried to put in place all commercial activities possible in each locale, changing the function of hotels into restaurants and beer gardens to serve Vietnamese guests while reducing costs to the extent possible, including the reduction of employee salaries by 50%. He and the group’s leadership board did not receive any salaries during this entire period.

The pandemic also impacted the company’s human resources; many employees resigned and changed careers. Thien Minh lost about 800 employees, accounting for approximately 40% of the group’s personnel.

However, in risk, there is always opportunity. Mr. Kien shared that Thien Minh actively researched, bought, sold, and merged companies with potential.

Although severely affected by the pandemic, Mr. Kien is still dedicated to his profession and affirmed: “Travel is an indispensable part of life, especially for the current generation and those born during the war. Tourism nourishes the soul, is a bridge connecting people to each other, and is an important growth pole for the country.”

Reality has proven that in the first nine months of 2023, it’s estimated that domestic tourists reached 15.7 million; international visitors returning to Vietnam reached 8.9 million visitors, exceeding estimates for the entire year. This year, it is forecast that international visitors to Vietnam may reach 12 million visitors.

Nurturing the domestic market, expanding the international market

Drawing lessons from the pandemic, Mr. Kien affirmed that to develop sustainable tourism, we cannot only focus on international visitors but also need to nurture domestic tourism.

In addition, the international tourism market must be rebuilt. Before the pandemic, large numbers of international tourists came to Vietnam but these numbers weren’t sustainable. More than 55% of international visitors depend on the Chinese, Korean and Japanese markets, of which Chinese visitors account for one-third of the total number of visitors.

Vietnam has promising markets such as Australia, North America, Canada, Europe, and the US, but it has not been able to tap the full potential of these markets. For example, pre-pandemic, the number of Australian visitors to Vietnam was about 300,000 visitors/year, but in other countries in the region such as Thailand, it was 1.2 million visitors and Indonesia had more than 1 million visitors, so the potential for Australian visitors to Vietnam could increase threefold.

At the same time, new markets must also actively be developed, such as India and the Middle East. It’s very close to fly directly from India to Vietnam, so it’s very realistic to develop this market.

“If Vietnam consistently develops these tourism markets, even if the Chinese and Korean markets do not achieve the expected results, the tourism industry can still be much more competitive and develop more sustainably compared to before,” the chairman of Thien Minh affirmed.

However, Mr. Kien also said that if Vietnam wants more international visitors to return, open policies are needed. Although Vietnamese visa policies have changed greatly, the country still needs to expand the list of visa-exempt countries. Visas are very important in attracting international tourists. Currently, some countries in the region such as Thailand waive visas for 64 countries and territories; Singapore and Malaysia waive visas for 162 countries and territories. In comparison, Vietnam is still lagging behind when it comes to visa exemptions.

In addition, Vietnam needs to place more emphasis on marketing at the national level as well as destination marketing. There should also be added focus on developing people and resources.

The chairman of Thien Minh proposed researching and developing travel corridors such as Hue – Da Nang, Hue – Quang Binh, Quang Tri connected to each other by 3 regional airports and 6 UNESCO-recognized cultural heritage sites from Son Doong Cave to the ancient capital of Hue and Hoi An Ancient Town. “If done well, this travel corridor can completely surpass other tourist destinations like Bali and Phuket,” Mr. Kien said.

Vietnamese tourism can be one of the top 3 industries able to compete with the world

Speaking of the potential for developing Vietnam’s tourism industry, Mr. Kien said that the Vietnamese Party and Government want to turn tourism into a key economic sector by 2030, contributing 17% of GDP, and the industry’s competitiveness could put it in the world’s top 30 and top 3 in Southeast Asia, creating about 8.5 million jobs, including 3 million direct jobs with a view to welcoming at least 50 million international visitors and 160 million domestic visitors.

If we have good policies and clear roadmaps to support the tourism industry, the above goals are completely within reach. Tourism can account for 15-17% of Vietnam’s GDP. This year the industry’s revenue may return to 9% of GDP. By 2030 it can account for 17% of GDP, contributing about USD 100 billion, equal to the contribution of Thailand’s tourism industry pre-pandemic, creating 5-6 million stable jobs.

Mr. Kien also pointed out: “If we look closely, any community with developed tourism will be a very prosperous one, creating stable jobs for all kinds of people. A smartly developed community needs the development of tourism. Tourism is the best way to connect people with the world and is a driving force in promoting other economic sectors.”

Regarding the development of the tourism industry, the Thien Minh chairman said that the group will continue to invest in developing people in a creative and professional direction to work in the tourism sector. At the same time, it’s looking to expand its scale, increase assets and asset quality, and maintain its position in the top 3 hotel and resort chains.

Thien Minh will focus heavily on the travel segment because this is its core sector, expanding travel to the world, and focusing on Asian and European markets. This year, the company will develop markets including Thailand and Japan, and next year Singapore, Philippines, China, and Spain. Next year, Thien Minh will look to expand the markets in France, Italy, Greece, and more. In the following years, it will consider the markets in Africa and America, South America, North America, Australia, and New Zealand, with the aim of serving 5 million visitors by 2030.

Source: Mekong ASEAN