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VIETNAM
TOURISM REPORT
INCLUDES 5-YEAR FORECASTS TO 2017
ISSN 1747-9061
Published by:Business Monitor International
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CONTENTS
BMI Industry View ............................................................................................................... 7
SWOT .................................................................................................................................... 8
Political ................................................................................................................................................... 9
Economic ............................................................................................................................................... 10
Business Environment .............................................................................................................................. 11
Travel .................................................................................................................................................. 17
Table: Vietnam Methods of Travel, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Hotels .................................................................................................................................................. 18
Table: Vietnam Hotel Accommodation 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table: Vietnam Domestic Hotels and Restaurants Industry Value, 2010-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Page 4
Methodology ...................................................................................................................... 53
Methodology ........................................................................................................................................... 53
Tourism Industry .................................................................................................................................... 53
Tourism Ratings - Methodology ................................................................................................................ 54
Page 5
2010, 2011 and 2012 saw substantial increases in inbound arrivals with particularly strong growth of
19.09% in 2011. While we don't expect this exceptional growth to continue, we do expect to see not
insubstantial growth of close to 6% per year for the remainder of the forecast period to 2017 with total
inbound arrivals expected to reach over 9mn that year. Outbound travel from Vietnam is expected to show
even stronger year-on-year (y-o-y) growth, increasing from 3.1mn in 2012 to 5.5mn in 2017 as the domestic
economy continues to expand.
2013 saw the launch of the National Tourism Year, reflecting the Vietnamese government's prioritisation of
the industry. As part of efforts to expand the tourism market the government is also making a series of
investments in improving the country's transport infrastructure, with expansion of the international airports
including a new terminal at Noi Bai Airport in Hanoi and investments in the country's rail network.
Vietnam has a wide range of tourist attractions. The picturesque beaches of Phu Quoc and Ha Long Bay
bring in leisure travellers, while the eco and wildlife tours cater for the more adventurous. The country also
has a wide variety of cultural attractions such as Thien Mu Pagoda and historical attractions like the Ci Chi
Tunners (used by the Viet Cong during the Vietnam War). As such there is plenty to entice first-time
travellers, and to encourage their return.
Hotels continue to expand their presence in Vietnam, with several major resorts due to open in the future.
BMI expects that the value of the hotel industry will increase by between 11.7% and 12.9% per year
between 2013 and 2017.
The government continues to invest in improving the country's transport infrastructure, including the
building of a new international airport due to open by 2020.
Arrivals will continue to be dominated by countries from within the Asia Pacific region particularly
China, South Korea and Japan.
Key events in Vietnam in 2013 include the Ho Chi Minh City Flower Festival, the Hung Kings Festival,
the International Tourism Expo in September and various sporting events.
This quarter BMI has given Vietnam an overall Tourism Risk/Reward rating of 59.3, placing it ninth in
the Asia Pacific region, ahead of Malaysia but behind New Zealand.
Page 7
SWOT
Vietnam Tourism SWOT
Strengths
The country is in a prime position to take advantage of expanding markets in the Asia
Pacific region.
Weaknesses
The government is still prone to arbitrary and disruptive policy decisions at the
macroeconomic level.
Opportunities
The government is easing some visa requirements opening the country to a wider
range of visitors.
Threats
Other countries in the region, such as Thailand, are more established tourist
destinations for Westerners.
Recovery in other regional tourism markets could encourage a shift away from
Vietnam.
Page 8
Political
SWOT Analysis
Strengths
Relations with the US have witnessed a marked improvement, and Washington sees
Hanoi as a potential geopolitical ally in South East Asia.
Weaknesses
Corruption among government officials poses a major threat to the legitimacy of the
ruling Communist Party.
There is increasing (albeit still limited) public dissatisfaction with the leadership's tight
control over political dissent.
Opportunities
The government recognises the threat corruption poses to its legitimacy, and has
acted to clamp down on graft among party officials.
Threats
Although strong domestic control will ensure little change to Vietnam's political scene
in the next few years, over the longer term, the one-party-state will probably be
unsustainable.
Relations with China have deteriorated over recent years due to Beijing's more
assertive stance over disputed islands in the South China Sea and domestic criticism
of a large Chinese investment into a bauxite mining project in the central highlands,
which could potentially cause wide-scale environmental damage.
Page 9
Economic
SWOT Analysis
Strengths
Vietnam has been one of the fastest-growing economies in Asia in recent years, with
GDP growth averaging 7.1% annually between 2000 and 2012.
The economic boom has lifted many Vietnamese out of poverty, with the official
poverty rate in the country falling from 58% in 1993 to 14.0% in 2010.
Weaknesses
Vietnam still suffers from substantial trade, current account and fiscal deficits, leaving
the economy vulnerable to global economic uncertainties in 2012. The fiscal deficit is
dominated by substantial spending on social subsidies that could be difficult to
withdraw.
Opportunities
WTO membership has given Vietnam access to both foreign markets and capital,
while making Vietnamese enterprises stronger through increased competition.
The government will in spite of the current macroeconomic woes, continue to move
forward with market reforms, including privatisation of state-owned enterprises, and
liberalising the banking sector.
Threats
Inflation and deficit concerns have caused some investors to re-assess their hitherto
upbeat view of Vietnam. If the government focuses too much on stimulating growth
and fails to root out inflationary pressure, it risks prolonging macroeconomic
instability, which could lead to a potential crisis.
Page 10
Business Environment
SWOT Analysis
Strengths
Vietnam has a large, skilled and low-cost workforce, which has made the country
attractive to foreign investors.
Vietnam's location - its proximity to China and South East Asia, and its good sea links
- makes it a good base for foreign companies to export to the rest of Asia, and
beyond.
Weaknesses
Vietnam's infrastructure is still weak. Roads, railways and ports are inadequate to
cope with the country's economic growth and links with the outside world.
Opportunities
Vietnam is pressing ahead with the privatisation of state-owned enterprises and the
liberalisation of the banking sector. This should offer foreign investors new entry
points.
Threats
Ongoing trade disputes with the US, and the general threat of American
protectionism, which will remain a concern.
Labour unrest remains a lingering threat. A failure by the authorities to boost skills
levels could leave Vietnam a second-rate economy for an indefinite period.
Page 11
Industry Forecast
BMI View: We are expecting to see growth across
all areas of the tourism market in Vietnam between
10,000
5,000
2017f
2016f
2015f
2014f
2013f
2012
2011
0
2010
Inbound travel will see a similar increase, dependent on the recovery of the global economy and the
continued growth of the travel market in the Asia Pacific region, with annual arrivals expected to reach over
9mn by 2017.
Vietnam already benefits from relatively well developed international transport links, with several
international airports. However if tourism numbers are to continue to rise then the country will need to
make substantial investments in the improvement and expansion of airport facilities. The country's rail
network will also need to be expanded, as will the road network is tourism to the further regions of the
country is to be expanded. The country's 15 domestic airports provide good regional connectivity.
Most of the major hotel groups have some presence in Vietnam, and many have plans to expand on this in
the future, not only in Vietnam, but across the wider Asia Pacific region. As such BMI expects to see
substantial growth in the value of the hotels and restaurants industry between 2013 and 2017.
Page 12
Inbound Travel
Vietnam saw impressive growth in inbound travel in 2012 of an estimated 13.86%. Although we expect the
rate of growth to decline slightly, BMI expects growth to remain substantial at close to 6% per year for
inbound tourism. By 2017 we expect that the total number of annual arrivals will reach over 9mn.
Figures for arrivals from the Middle East, Africa and Latin America are currently unavailable, however
forecasts for the other regions are shown below.
2010
Total Arrivals, '000
Total Arrivals, '000, % change yo-y
In-bound, arrivals by region,
North America, '000
In-bound, arrivals by region,
North America, % change y-o-y
In-bound, arrivals by region, Asia
Pacific, '000
In-bound, arrivals by region, Asia
Pacific, % change y-o-y
2011
2012e
2013f
2014f
2015f
2016f
2017f
19.09
13.86
5.68
5.56
5.97
5.97
5.58
533.20
546.30
557.39
576.14
577.77
582.22
588.27
596.42
0.00
2.46
2.03
3.36
0.28
0.77
1.04
1.38
25.45
10.37
6.63
719.90
770.20
926.96
946.71
0.00
6.99
20.35
2.13
6.64
6.98
6.79
6.40
3.43
4.00
3.06
Page 13
On The Up
10,000
5,000
5,000
2,500
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013f
2014f
2015f
2016f
2017f
Outside of the Asia Pacific region Vietnam gets many visitors from the USA and France. By 2017 we
expect that the USA will drop down from its current fourth place to sixth, as arrivals from Taiwan and
Cambodia see particularly strong growth.
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
China
905.40
1,416.80
1,428.69
1,549.34
1,672.59
1,812.98
1,966.11
2,140.72
South Korea
495.90
536.40
700.92
784.10
875.44
983.03
1,105.36
1,191.58
Japan
442.10
481.50
576.39
578.12
579.85
581.59
583.33
585.08
USA
431.00
439.90
443.83
464.04
467.62
472.30
476.70
482.66
Taiwan
334.00
361.10
409.39
417.61
437.77
460.94
485.74
514.29
Cambodia
254.60
423.40
331.94
383.27
430.65
473.83
507.74
546.32
Page 14
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
Malaysia
211.30
233.10
299.04
297.00
313.91
332.75
347.14
363.92
Australia
278.20
289.80
289.84
307.87
309.66
311.45
313.24
315.04
Thailand
222.80
181.80
225.87
234.07
247.14
261.95
277.87
296.66
France
199.40
211.40
219.72
218.03
221.14
225.34
229.68
235.64
Outbound Travel
BMI has seen steady improvements in the domestic economy in Vietnam, with GDP growth of 5% in 2012
expected to rise to 7% in 2013 and continue at this rate through to 2017. By 2017 we therefore expect GDP
to reach US$271.12bn, up from US$161.59bn in 2013.
At the same time, we expect to see growth of 5.6% to 6.1% per year in terms of private financial
consumption, declining lending interest rates and a steady reduction year on year in unemployment rates.
These factors are resulting in the development of an affluent middle class able to spend more money on
outbound travel from Vietnam.
2010
Total Out-bound, tourist
departures, '000
Out-bound, tourist departures, %
change y-o-y
2011
2012e
2013f
2014f
2015f
2016f
2017f
20.76
17.69
11.30
11.99
11.60
12.08
11.52
0.03
0.03
0.04
0.04
0.04
0.05
0.05
0.06
0.06
5.58
0.08
0.10
0.11
0.12
0.14
0.15
-46.60
10,049.0
9
-98.58
22.78
11.34
12.04
11.57
10.37
54.30
57.84
64.84
72.14
80.79
90.09
100.49
111.43
14.40
6.51
12.11
11.25
11.99
11.52
11.55
10.88
1.29
1.70
2.15
2.36
2.67
3.04
3.37
3.76
Page 15
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
24.47
32.40
26.23
9.72
13.05
13.79
11.00
11.48
27.55
21.06
17.78
10.77
11.50
11.29
11.79
11.30
73.21
78.61
96.62
117.23
140.89
162.84
189.15
216.86
5.92
7.37
22.92
21.33
20.18
15.58
16.15
14.65
47.07
62.47
76.59
91.12
108.31
126.79
147.46
169.18
23.84
32.70
22.61
18.97
18.87
17.06
16.30
14.73
500
0
-500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011e
2012e
2013f
2014f
2015f
2016f
2017f
Source: BMI
Page 16
The top 10 markets by departures table below gives further insight into the nature of outbound travel from
Thailand, reflecting the dominance of countries from within the Asia Pacific region. In fact only two
countries from outside this region, the USA and Russia, make the top 10.
Cambodia is likely to remain the most popular destination for travellers from Vietnam, though Laos is likely
to remain close behind. Thailand and Singapore are also popular destinations, with Thailand in particular
benefiting from a variety of inexpensive and convenient travel links.
Russia forms a very popular destination, following a long history of close cooperation between the two
countries and substantial investment from Moscow in the Vietnamese tourism industry.
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
Cambodia
514.29
614.09
763.14
860.29
929.22
1,017.15
1,134.61
1,258.10
Thailand
380.37
496.77
617.80
665.68
735.70
805.36
886.03
965.38
Laos
431.01
561.59
615.68
656.68
747.82
841.18
960.60
1,103.87
Singapore
322.85
332.23
400.77
475.12
559.04
645.21
730.94
814.33
Malaysia
159.27
173.85
218.55
229.02
249.96
277.84
307.90
339.53
Russia
68.63
73.85
91.17
111.97
135.49
157.32
183.51
211.11
South Korea
71.12
84.55
86.66
102.07
110.08
117.86
125.86
140.70
Saudi Arabia
46.10
61.53
75.33
89.70
106.74
125.06
145.56
167.10
80.11
68.12
71.58
70.87
70.09
69.38
68.77
57.84
64.84
72.14
80.79
90.09
100.49
111.43
Hong Kong
USA
54.30
Travel
Currently data is not available for transport and travel items receipts however we can see from the table
below that growth is expected both in terms of air and rail travel, reflecting the potential of the transport
industry in Vietnam. This growth is not only a result of the global economic recovery, but also arises from
Page 17
the investment the Vietnamese government has put into infrastructure developments in recent years, with
over 14 airport expansion projects alone currently underway.
We expect that the number of air passengers will grow from 18.5mn in 2012 to 29.47mn in 2017, growth of
9-10% per year. At the same time we will see growth of around 9% per year in the number of domestic and
international take offs. We expect to see smaller growth in the number of railway passengers per year of
between 2.45% and 3.1% as travellers increasing turn to air travel in favour of long distance rail travel.
These increases demonstrate the strength of the tourism market in Vietnam and the long term potential for
investment.
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
14.10
16.27
18.50
20.18
22.16
24.31
26.81
29.47
27.32
15.39
13.72
9.07
9.82
9.69
10.27
9.95
103.46
116.65
130.21
140.41
152.45
165.50
180.67
196.88
23.58
12.74
11.63
7.83
8.58
8.56
9.16
8.97
12.66
3.25
3.10
2.95
2.78
2.61
2.45
Hotels
Currently only limited data on the number of hotels is available for Vietnam. Based on industry evaluations
we expect to see growth in the number of hotels present in the country throughout the forecast period, with
growth of over 6% per year leading to the total number of establishments reaching over 10,000 by 2017.
Page 18
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
6.09
6.78
7.47
7.96
8.48
9.06
9.67
10.28
- % change y-o-y
5.53
11.35
10.12
6.63
6.44
6.86
6.80
6.31
Source: BMI
The strength of the tourism market in Vietnam is further reflected by the growth forecast in terms of the
domestic hotels and restaurants industry value shown below.
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
80,788.00
19.87
30.56
11.49
12.95
12.40
11.85
11.65
11.72
4.23
5.11
5.63
6.36
7.26
8.21
9.27
10.41
11.59
20.85
10.33
12.80
14.23
13.14
12.92
12.28
3.19
3.67
4.44
4.74
5.72
6.68
7.73
8.68
17.78
15.33
20.76
6.91
20.52
16.82
15.75
12.28
4.08
4.16
3.99
3.95
3.91
3.88
3.86
3.84
48.09
57.51
62.78
70.10
79.28
88.85
99.41
110.65
10.39
19.57
9.18
11.65
13.10
12.07
11.89
11.30
5,194.90
6,035.74
6,411.70
6,973.35
7,689.68
8,409.40
9,188.74
9,993.24
7.11
16.19
6.23
8.76
10.27
9.36
9.27
8.76
Page 19
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
Between 2013 and 2017 we expect the value of the industry to grow from US$6.36bn to US$10.41bn, at a
rate of approximately 13% per year. At the same time, due to the increasing strength of the domestic
economy we expect that the value of the industry will decline as a percentage of the country's overall GDP.
This is however a reflection of wider growth in the economy as opposed to a decline in the tourism market
as demonstrated by the market's increasing value per capita and per employee.
Overall therefore the future is looking very promising for the tourism market in Vietnam. The strong
domestic economic conditions will drive up outbound tourism and see improvements in the country's
transport infrastructure which will provide a further long term boost to inbound travel. We therefore expect
to see growth across all market indicators including the overall hotel and restaurant industry values making
Vietnam an attractive prospect for investment.
Page 20
Economic Analysis
Economic Outlook
BMI View: The State Bank of Vietnam's surprise decision to cut its policy rate by 100 basis points from
10.00% to 9.00% suggests that policymakers are under increasing pressure to stimulate economic growth
in 2013. We believe that the latest move will help reinforce government efforts to boost private sector
investment. Given that money supply growth remains considerably low by historical standards, we believe
that the risks of reigniting inflationary pressure remain manageable.
The State Bank of Vietnam (SBV) cut its policy rate (refinancing rate) by 100 basis points from 10.00% to
9.00% on December 24 2012, just days before the General Statistics Office published its preliminary
estimate for GDP growth to come in slightly weaker than expected at 5.0% for 2012 (compared
with Bloomberg consensus of 5.2%). The surprise rate cut came amid growing concerns that mounting bad
debt across the banking sector is deterring banks from issuing new loans to businesses, and that this could
severely undermine government efforts to reignite economic growth in 2013. From our perspective, the
move also suggests that policymakers are under increasing pressure to adopt more aggressive measures to
stimulate economic growth in an attempt to stem the growing number of bankruptcies among small-andmedium enterprises (SMEs) and rising unemployment. This is closely in line with our view that the
Vietnamese government's economic agenda will remain skewed towards boosting growth in 2013.
Page 21
Recovery On Track
Vietnam - Real GDP, VNDbn (LHS) & % chg y-o-y (RHS)
We are seeing evidence that credit conditions are beginning to improve and expect demand for private
sector credit to pick up gradually in H113. In addition to aggressive monetary policy easing by the SBV, the
government has also announced plans to slash corporate income tax rates by two percentage points to 23%
in 2013. We believe that lower lending rates and tax incentives will help to reinforce government efforts to
attract foreign direct investment and boost private sector investment over the coming quarters.
International organisations including the World Bank and IMF have warned against easing monetary policy
too aggressively, which risks reigniting inflationary pressure. Although we acknowledge these risks, we
highlight that the recent rebound in money supply growth remains considerably weak by historical
standards. As the accompanying chart shows, prior to periods in which Vietnam experienced very high
inflation (2008 and 2011), M2 money supply was expanding at a rate of 33.3% and 46.1% in 2007 and
2010, respectively. This compares with M2 growth that came in at a record low of just 6.0% in 2012 and
Page 22
our forecast for a mild pickup towards 11.0% for 2013, suggesting that inflation is likely to remain
manageable at under 7.0% in 2013.
We acknowledge that the risk of a potential surge in commodity prices in 2013 - especially food prices,
which make up around 40% of the consumer price index basket - could turn out to be a wildcard for
policymakers. For now, we believe that overall conditions in Vietnam remain in favour of our forecast for
real GDP growth to come in relatively strong at 7.0% in 2013.
Expenditure Breakdown
Private Consumption: We expect private consumption to grow at a robust pace of 5.6% in 2013. However,
we note that the risk of a sustained collapse in exports and further bankruptcies among SMEs could
potentially lead to widespread job losses in export-driven sectors. Uncertainties over the outlook for
employment could, in turn, prompt households to cut back on spending.
Page 23
Gross Fixed Capital Formation: We foresee a significant pickup in private sector investment growth in
2013. We believe lending rates will gradually ease over the coming months as the effect of recent rate cuts
by the SBV begins to kick in. We are also seeing evidence that credit conditions are improving.
Accordingly, we expect gross fixed capital formation growth to accelerate from 4.3% in 2012 to 5.9% in
2013.
Public Spending: We expect total public spending to remain relatively resilient in 2013, expanding at a
respectable pace of 5.4%. However, there is limited room for the government to increase spending further
owing to concerns over the need to finance a potential bailout of ailing state-owned commercial banks.
Net Exports: Net exports remain the biggest downside risk to our outlook for the Vietnamese economy,
although we expect external demand to pick up as we head into H113. Vietnam has been recording an
average monthly trade surplus of US$172mn since June 2012 (resulting in a year-to-date surplus of US
$77mn) and we see the case for a substantial pickup in external demand on the back of a rebound in
regional growth over the coming month. However, we believe that China's structural imbalances will return
in H213, becoming a drag on regional growth. Accordingly, we still expect exports to expand at a moderate
pace of 6.5% in 2013.
2009
Nominal GDP,
VNDbn 2
2010
2011e
2012e
2013f
2014f
2015f
2016f
2017f
Nominal GDP,
US$bn 2
93.16
103.53
122.82
141.44
161.59
185.42
211.56
240.43
271.12
Real GDP
growth, %
change y-o-y 2
5.3
6.8
6.0
5.0
7.0
7.2
7.2
7.0
6.9
1,072
1,178
1,383
1,576
1,782
2,025
2,289
2,577
2,881
86.9
87.8
88.8
89.7
90.7
91.6
92.4
93.3
94.1
Industrial
production
index, % y-o-y,
ave 1,4
6.7
14.1
10.9
7.0
12.0
14.0
13.0
12.0
11.0
Unemployment,
% of labour
force, eop 4
6.0
4.3
4.5
6.0
4.8
4.7
4.6
4.5
4.4
Notes: e BMI estimates. f BMI forecasts. 1 at 1994 prices. Sources: 2 Asian Development Bank, General Statistics Office; 3
World Bank/UN/BMI; 4 General Statistics Office.
Page 24
Rewards
Limits of
potential
returns
Tourism
Market
Risks
Country
Structure
Risks to
realisation of
potential returns
Market risks
Country
Risk
Tourism
Rating Rank
Hong Kong
75.32
83.33
63.29
77.82
80.22
75.86
76.07
Thailand
75.99
85.30
62.04
60.64
68.09
54.54
71.39
Singapore
65.29
71.67
55.73
80.55
85.47
76.52
69.87
Australia
63.83
58.33
72.06
82.42
78.40
85.72
69.40
Macau
70.00
78.33
57.50
67.20
65.00
69.00
69.16
Taiwan
68.62
75.00
59.04
64.09
73.21
56.63
67.26
South Korea
63.93
60.00
69.83
66.58
70.39
63.46
64.73
New Zealand
49.88
26.67
84.69
83.25
76.65
88.66
59.89
Vietnam
60.91
60.00
62.26
55.57
65.19
47.70
59.30
Malaysia
54.33
50.00
60.83
67.13
74.52
61.09
58.17
10
Sri Lanka
57.66
60.00
54.14
50.31
63.77
39.29
55.45
11
Japan
46.12
25.83
76.55
67.96
67.99
67.93
52.67
12
Laos
56.48
61.67
48.70
41.76
63.88
23.66
52.06
13
China
48.02
43.33
55.05
58.97
77.14
44.10
51.30
14
Cambodia
56.89
66.67
42.21
36.25
33.02
38.90
50.69
15
India
42.22
40.00
45.54
46.72
35.61
55.82
43.57
16
Indonesia
36.47
32.50
42.41
51.13
63.64
40.89
40.86
17
Source: BMI
This is an evaluation of the sector's size and growth potential in each state, along with broader industry/
state characteristics that may inhibit its development. The reward ratings for tourism take into account the
numbers and % growth of tourist arrivals over the past year and our forecasts for future growth over 2013.
Vietnam has seen large increases in inbound travel in recent years and figures are expected to continue to
rise. Although the fragile international economy means arrival figures may be depressed this should be
Page 25
compensated for by growth from countries in the Asia Pacific region. The overall figures for tourism
receipts and hotel occupancy were similarly enhanced and offset, and factored in accordingly, giving
Vietnam a Tourism Market figure of 60.
The Country Structure score takes into account labour costs and infrastructure. Vietnam has a relatively
well developed infrastructure however it is in need of substantial investment for expansion and
improvement projects across several areas including rail and air travel. As such Vietnam has a score of
62.26, relatively high in comparison to other countries in the region.
Risks To Realisation Of Returns
This section offers an evaluation of industry-specific dangers and those emanating from the state's political
and economic profile that call into question the likelihood of anticipated returns being realised over the
assessed time period. The market risks score takes into account short term political stability and regional
stability - which is relatively strong in Vietnam. However, it also considers Vietnam's vulnerability to
external factors - in particular continuing tensions with China. As such Vietnam scores 55 which accounts
for the possibility for regional and domestic tensions impacting on tourism figures.
Finally, BMI's proprietary country risk scores cover corruption, legal framework, bureaucracy, market
openness and security risks. Vietnam repeatedly suffers from allegations of corruption at high levels of
government and business which can deter international investment and as such it has a mid-range score of
47.7.
Overall Vietnam is ranked ninth out of 17 countries in the Asia Pacific region with a Tourism Market figure
of 59.3.
Page 26
Interstate
Terrorism
Criminal
Composite
domestic risk
Regional
rank
Singapore
91
87
99
93
1=
92
Australia
98
83
92
88
91
2=
Japan
90
92
91
91
91
2=
Taiwan
71
95
79
87
6=
82
South Korea
68
86
88
87
81
Malaysia
81
84
69
77
78
6=
North Korea
48
98
88
93
1=
78
6=
Vietnam
60
98
71
85
6=
76
China
80
85
59
72
74
9=
Thailand
84
66
71
68
10
74
9=
Indonesia
88
68
52
60
11
69
11
Philippines
84
49
40
45
13
58
12
India
68
47
53
50
12
56
13
Pakistan
46
26
37
31
14
36
14
State
Composite
security risk Ranking
Source: BMI
Overall, expatriates living in Vietnam are not at high risk from physical safety threats, such as physical
violence or kidnapping. The local community is at risk from petty crime, as well as the threat of bird
flu. There is little or no terrorism risk in Vietnam. Thus, it receives a terrorist risk rating of 98.
Vietnam's bid to normalise its defence and diplomatic relations has led to some cooperation on defence
issues and the country taking on a more prominent role in the international community, such as its recent
Page 27
non-permanent membership of the UN Security Council. By taking on such a role, Vietnam will no doubt
be forging stronger ties with many states. However, it will also have to balance its new position against the
expectations of more established allies.
The country is ranked eighth in the region, reflecting its relative vulnerability to terrorism, which could
have an impact on inbound tourism in the event of a large-scale event.
Page 28
Market Overview
BMI sees a very positive future for the tourism
20
3.5
2.5
inbound travel.
2017f
2016f
2015f
2014f
2013f
2012
2011
1.5
2010
Plans are also underway to develop the country's rail network, with the government investing US$9.5bn in
the next three years in the improvement and expansion of the rail network. Projects are however frequently
delayed by a lack of available funds, however with the improving domestic economy we should see more
progress in the infrastructure improvements. This is part of the wider construction sector, which BMI
expects will expand by around 5.3% in 2013.
Page 29
Project Name
Sector
Airports
Value (US
$mn)
Capacity/
Length
Timeframe
27 na
2009-2015
Status
Planning stage - Approved in February
2009
September
10mn
2012 passenger November
960 s /year
2014
3mn
2009 passenger December
780 s/yr
2012
Airports
Airports
100mn
passenger
6700 s /year
2015-2020
5mn
passenger
At planning stage, government to arrange
595 s/year
2011 - 2020 financing for 2012 (Nov 2011)
Airports
Airports
4mn
passenger
1000 s /year
-2025
na
Airports
80mn
passenger
s /year
2010-
At planning stage
500000
passenger 2011-2030
105 s /year
(first phase)
At planning stage
February
2mn
2013 - 2015
passenger (first phase); At planning stage, seeking financing
240 s/yr
- 2025
(November 2012)
Airports
2-5mn
Preparation to be finalised by 2012, Project
passenger
site moved to Doan Ket commune (Jan
250 s/yr
2013 - 2015 2012)
Airports
na
na
2011 -
Airports
1200 na
October
2012 -
Airports
62.6 na
January
At planning stage, project announced
2012 - 2020 (January 2012)
Page 30
The tourism industry in Vietnam is founded on a wide range of attractions, varying from rural eco and
wildlife parks to vibrant metropolitan cities like Ho Chi Minch City. A range of UNESCO World Heritage
sites including Ha Long Bay, Hoi An Ancient Town and the Citadel of the Ho Dynasty and historical
tourism attractions are also very popular. On top of these attractions Vietnam also offers pristine white
sandy beaches for traditional vacationers.
The attraction of the country has been recognised by the world's top ten global hotel chains, many of whom
have a presence in the country, in particular Accor, Best Western International, Hilton, Hyatt,
Starwood, Marriott and Intercontinental Hotels Group (IHG). Accor is one of the largest, with 15 hotels
at a range of locations across the country including the capital city and several luxury beach resorts. The
other chains have between 2 and 5 hotels in the country, with many having plans for new developments in
the near future including Starwood's new Le Meridian resort due to open in 2014.
Presence in Vietnam
Accor Hotels
No Presence
No Presence
No Presence
No Presence
Best Western
Hilton
Hilton
Hyatt
Marriott
JW Marriott, Renaissance
Starwood
Wyndham
No Presence
No Presence
Source: BMI
Page 31
Upwards Trend
10,000
10
5,000
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013f
2014f
2015f
2016f
2017f
Page 32
Company Profile
Huong Giang Tourist Company was established in 1976 in Hue. It concentrates on the
hotel industry, restaurants and other travel services, focusing on high end luxury travel.
The group has expanded considerably since 1976 with a nationwide network of offices
and support facilities.
The company is part of the Pacific Asia Travel Association, the Japanese Association of
Travel Agents and the American Society of Travel Agents. The Vietnamese industry's
concentration on attracting tourists from the US and the start of direct flights between
the countries bodes well for future occupancy rates. The firm has interests in:
It has a presence in all the major Vietnamese cities, including Hanoi, Ho Chi Minh City,
Da Nang and Hue. The company is involved in joint ventures, affiliated investments and
cooperation with domestic and international partners. It has expanded rapidly
throughout Asia and has offices in Laos, Cambodia and Myanmar, as well as in
Europe. As part of its expansion strategy, the group has linked up with companies such
as Turkish Airlines, Hai Long Junks and Bhaya Cruises to offer more travel options.
Company Details
Page 33
Saigontourist
Company Overview
Saigontourist Travel Service Company was originally established by the state in 1975,
and is now part of the Saigontourist Holding Company which was incorporated in
1999 at the behest of the Ho Chi Minh City People's Committee. The group's activities
include accommodation, food and beverages, recreation, travel and food processing but its primary focus is hotels.
The group owns more than 70 hotels ranging from three to five stars at a range of
locations across the country. The company has more than 10% of the Vietnam's rated
hotels. It operates eight travel service companies, 13 resorts and 28 restaurants,
underlining its status as a 'state favourite' in investment terms. Saigontourist Travel
Service Company is the biggest tour operator in Vietnam, offering both domestic and
international tours.
The company is an official member of a number of foreign travel agent associations,
including the American Society of Travel Agents. Saigontourist said it will continue
cultivating its links in international markets including Japan, China, Taiwan, Singapore
and South Korea. The company is also working with several cruise companies such as
Costa and SuperStar, to take advantage of Vietnam's inclusion in cruise routes.
Moving forward the group is expanding its tour services, having recently opened the
country's biggest travel information centre in HCMC offering a range of tourist services
across several languages. The company continues to perform well, with tourism
revenue in 2012 reaching VND 2.08 trillion, up 26% on 2011 figures. Overall the group
provided services for over 450,000 domestic and international tourists in 2012 reflecting
the breadth of the company's market coverage.
Company Details
Saigontourist
23 Le Loi, District 1
Ho Chi Minh City
Vietnam
Page 34
On The Rise
2,000
1,500
1,000,000
1,000
500,000
500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012e
2013f
2014f
2015f
2016f
2017f
Regionally, the Middle East will benefit the most. Total receipts are estimated to be US$46.1bn for 2013, a
12.3% rise from 2012. The dominant theme will be a rise in tourist arrivals within the region encouraged by
the calmer political landscape, the region will see an extra 4.67mn visitors for this year taking total arrivals
to 58mn. However, the Asian- Pacific region will also see an increase in total receipts of 7.2% to US
$326.8mn for the year, while Africa will see growth of 8.7% and Latin America of 5.3%.
Page 35
After posting a 3.8% growth in total receipts for 2012, levels in developed states are estimated to be at US
$727.1bn for 2013, an increase of 4.7%. In terms of global receipt levels, developed states make up 57.5%
of total world tourism receipts. Going forward, we forecast that this region will benefit from the global
economic recovery. Arrivals are set to rise by between 2% and 4% per year from 2013 to 2017, which will
mostly be comprised of inter-regional European travel. From 2014 onwards, the growth in receipts is likely
to be around 7% per year, taking overall receipt value in 2017 to just under the US$1trn.
From 2013 to 2017, international tourist arrivals are to increase on average between 4-5.5% per year, with
1.2bn arrivals expected in 2017 across the BMI tourism universe. This is likely to be confirmed with tourist
receipts levels set to grow between 5-8.5% per year, which will total to US$1.78trn at the end of 2017.
Country
2012
(US$bn)
Rank
Country
2013
(US$bn)
US
200.01
US
210.17
Spain
66.13
Spain
68.60
France
62.32
France
65.28
China
55.29
China
60.47
Germany
53.88
Germany
56.01
Italy
43.50
UK
44.37
UK
42.95
Italy
44.08
Hong Kong
35.57
Hong Kong
38.79
Macau
34.54
Australia
36.98
10
Australia
34.49
10
Macau
36.97
11
Thailand
33.65
11
Thailand
35.42
12
Turkey
28.01
12
Turkey
29.25
13
Austria
22.94
13
Austria
23.92
14
Malaysia
20.52
14
Malaysia
22.03
15
Netherlands
20.46
15
Netherlands
21.39
16
Canada
19.76
16
Canada
20.98
17
Switzerland
18.81
17
Switzerland
20.51
18
Singapore
18.21
18
Singapore
19.85
19
South Korea
18.07
19
Russia
19.75
Rank
Page 36
Rank
20
Country
2012
(US$bn)
Rank
Country
2013
(US$bn)
Russia
17.71
20
India
18.89
On an individual country-by-country basis, the US remains the top earner with regards to the tourism
industry, and we forecast this will bring in around US$210bn for the country in 2013, an increase of 5.1%
y-o-y from 2012. The next biggest earners are Spain, France, and Germany, whose tourism receipts will
each see increases of over 3%. China, which overtook Germany in 2010 to become the fourth biggest
tourism earner, is forecast to see tourism receipts worth US$60bn in 2013. Larger investment into tourist
infrastructure and facilities within the country has made China a more attractive tourist destination for both
Western and Eastern tourists. Chinese tourist arrivals for 2013 will grow by over 2mn to 29.8mn in 2013,
showing y-o-y growth of 8.6%.
Other notable movers are Australia, Russia and India. Australia will move into ninth place, overtaking
Macau and we forecast receipts will grow by 7.2% in 2013. Russia and India will be in 19th and 20th places
respectively. We forecast that Russia's tourism receipts will grow by over 10% in 2013, reaching US
$19.75bn, this will be buoyed-up by higher arrivals of over 30mn. India will earn US$18.9bn from
international tourism in 2013. This is in part due to the country's ongoing infrastructure developments,
boosting its attractiveness as a tourist destination. Both Russia and India are likely to climb up the list over
the next five years. Major tourism marketing and global sporting events will see Russia move to thirteenth
in 2017 with receipts of US$32bn. India in 2017, will move to eighteenth with US$28bn.
Similar increases in receipts levels for transport services for the forecast period 2013-2017 confirm the view
of larger movements in tourist passengers. We forecast that overall global growth for this period will grow
between 3% and 5% per annum until 2017, amounting to US$174.2bn in 2013 and US$216.9bn in 2017.
Transport services will continue to make up around 15% of global total receipt levels.
Page 37
Year
Country
City/Cities
Event
Sport
2013
Russia
Moscow
Mixed
2013
South Africa
Rustenburg, Johannesburg,
Nelspruit, Durban, Port Elizabeth,
Football
2013
Brazil
Football
2013
Myanmar
Naypidaw
Asia Games
Mixed
2013
Sweden
Malmo
Singing
2013
Czech republic
Prague
Football
2013
England
London
Football
2014
Bangladesh
Cricket
2014
Brazil
Football
2014
Not Confirmed
Mixed
2014
Wales
Cardiff
Football
2014
Scotland
Auchterarder, Gleneagles
Ryder Cup
Golf
2014
Russia
Winter Olympics
Mixed
2014
Scotland
Glasgow
Commonwealth Games
Mixed
2014
China
Nanjing
Mixed
2014
South Korea
Incheon
Asian Games
Mixed
2014
Portugal
Lisbon
2015
Not Decided
Cricket
2015
England
Rugby
2015
Canada
Football
2015
Canada
Toronto
Mixed
2015
Morocco
Football
2015
Georgia
Tibilisi
Football
2015
Singapore
Not Decided
Asian Games
Mixed
Page 38
Year
Country
City/Cities
Event
Sport
2015
Australia
Asia Cup
Football
2016
Football
2016
France
2016
Brazil
Rio de Janeiro
Olympics
Mixed
2016
India
Not Decided
Cricket
2016
USA
Chaska
Ryder Cup
Golf
2016
Norway
Lillehammer
Mixed
2017
Libya
Not Decided
Football
2017
England
London
Mixed
2017
Russia
Football
2018
Russia
Football
2018
South Korea
Pyeongchang
Winter Olympics
Mixed
2018
Australia
Commonwealth Games
Mixed
2018
France
Paris
Ryder Cup
Golf
2019
Not Decided
Cricket
2019
Japan
Rugby
2020
USA
Sheboygan
Ryder Cup
Golf
2020
Football
2021
Qatar
Not Decided
Football
2022
Qatar
Football
Football
Source: BMI
Page 39
Global Assumptions
Our global real GDP growth estimates are unchanged since our last Global Assumptions update, at 2.9% for
2013 and 3.4% for 2014. In line with our view, global economic activity has picked up modestly in the past
few months, following near-recessionary conditions in parts of 2012. Growth momentum in the US and
China, especially, have impressed in the first two months of 2013, and suggest that a global recovery is still
on. The eurozone remains a lingering concern, although we believe that the crisis has migrated from an
acute to a more chronic phase that suggests tail risks of disintegration have reduced and output will begin to
stabilise towards the end of the year.
We continue to foresee a renewed slowdown in Chinese economic activity in the second half of the year,
but for now, the global economy appears to be on more solid ground. For the time being, loose monetary
policy and the removal of some major tail risks mean that the risks to global growth are more tilted to the
upside than they were in 2012. Our headline global industrial production index increased by a modest 0.3%
y-o-y in January, up marginally from 0.2% the previous month and confirming the return to positive growth
in November. With trend growth around 2.5%, the recovery in production clearly has a long way to go.
Meanwhile, we believe that real global consumption growth has bottomed, with 1.9% y-o-y growth in Q412
marking an uptick from what we believe to be the trough of 1.7% in Q312.
The most notable growth forecast changes include a downgrade of the eurozone growth forecast in 2013 to
-0.1% (from 0.0% previously), which incorporates a downward revision to our projections for key eurozone
members including the Netherlands and Italy. We have also downgraded the US growth outlook slightly for
2013, owing mainly to base effects from a poor end to 2012; we still expect a second half rebound in
growth, followed by a stronger 2014, however. Meanwhile, we have upgraded our Japanese growth
forecasts owing to increasingly expansionary fiscal and monetary policy, but we remain wary of the longterm outlook.
Page 40
2012e
2013f
2014f
2015f
2016f
2017f
2018f
2.2
2.1
2.7
2.6
2.4
2.4
2.4
-0.6
-0.1
1.1
1.5
1.7
1.8
1.8
Japan
1.9
1.4
1.3
1.0
0.9
1.1
1.0
China
7.7
7.5
6.7
6.0
5.8
5.8
5.8
World
2.7
2.9
3.4
3.4
3.4
3.5
3.5
USA
2.1
2.1
2.1
2.1
2.1
2.1
2.1
Eurozone
2.3
1.8
1.8
1.9
2.1
2.2
2.0
Japan
0.0
0.0
0.6
1.3
1.8
2.3
2.7
China
2.7
2.8
2.9
2.8
2.7
2.7
2.7
World
3.5
3.4
3.3
3.2
3.2
3.2
3.2
0.00
0.00
0.00
0.00
1.00
2.25
3.00
0.75
0.75
0.75
0.75
1.00
1.50
2.00
0.10
0.10
0.10
0.10
0.25
0.50
0.75
US$/EUR
1.27
1.34
1.27
1.23
1.20
1.20
1.20
JPY/US$
79.85
91.00
94.00
97.00
98.50
100.50
93.75
CNY/US$
6.31
6.27
6.38
6.45
6.55
6.60
6.60
109.50
104.40
101.00
95.20
93.25
93.30
93.35
111.70
110.00
105.00
102.50
101.00
99.00
99.00
Source: BMI
Page 41
We have revised down our British pound sterling average forecast to US$1.53/GBP from US$1.61/GBP in
2013, and to US$1.57/GBP from US$1.60/GBP in 2014. Although we have been targeting the US
$1.55-1.65/GBP range for a while now, we warn that the outlook for the pound is now fundamentally
changing for the worse, with substantial monetary easing, the government's austerity drive losing
credibility, and the reversal of safe haven flows to the UK.
Page 42
2012e
2013f
2014f
2015f
World
2.7
2.9
3.4
3.4
Developed States
1.2
1.2
1.9
2.0
Emerging Markets
4.7
4.9
5.1
5.0
Asia Ex-Japan
6.1
6.3
6.1
5.6
Latin America
2.8
3.5
3.7
3.8
Emerging Europe
2.5
3.0
3.7
4.3
4.3
5.8
5.8
6.1
4.8
3.9
4.5
4.0
2012e
2013f
2014f
2015f
Eurozone
US$/EUR, ave
1.27
1.34
1.27
1.23
Japan
JPY/US$, ave
79.85
91.00
94.00
97.00
Switzerland
CHF/US$, ave
0.94
1.03
1.07
1.06
United Kingdom
US$/GBP, ave
1.59
1.53
1.57
1.60
2012e
2013f
2014f
2015f
6.31
6.27
6.38
6.45
1,126.39
1,150.00
1,100.00
1,050.00
China
South Korea
CNY/US$, ave
KRW/US$, ave
India
INR/US$, ave
53.42
52.00
51.00
49.00
Brazil
BRL/US$, ave
1.95
2.00
2.10
2.23
Mexico
MXN/US$, ave
13.15
12.50
12.30
12.50
Russia
RUB/US$, ave
31.06
30.51
31.25
31.75
Turkey
TRY/US$, ave
1.80
1.80
1.79
1.79
South Africa
ZAR/US$, ave
8.21
8.99
9.55
9.64
Source: BMI
Page 43
Developed States
Our developed state aggregate growth estimate for 2013 has fallen slightly to 1.2% from 1.3%, while we
continue to eye a rebound in 2014 to 1.9%. We have downgraded our US forecast for 2013 to 2.1% from
2.3%, due mainly to negative base effects from late 2012. Nonetheless, our core view remains the same,
which is that US economic activity should pick up as the year progresses, led by business and residential
investment. Our 2014 growth forecast of 2.7% represents a major bounce from 2013, and is an upgrade
from our previous projection of 2.5%.
With US macro data looking strong, the Cyprus-triggered uncertainty in the euro area stands in stark relief.
We have made downgrades to our 2013 real GDP growth forecasts for Italy, the Netherlands, and Portugal,
which have translated into a drop in our 2013 eurozone growth forecast to -0.1% from 0.0% previously, and
for 2014 to 1.1% from 1.2%.
With leading indicators in Japan showing much sought-after improvements, we believe the optimism of a
fiscal and monetary regime change will help drive a pickup in economic activity in 2013. As such, we have
revised up our forecast for Japanese real GDP growth in 2013 to 1.4% from our previous forecast of 0.9%.
That said, we maintain our view that the government's policies will not return the Japanese economy back to
the path of recovery, but rather heighten the risk of a fiscal crisis.
2012e
2013f
2014f
2015f
1.2
1.2
1.9
2.0
G7
1.4
1.4
2.0
2.1
Eurozone
-0.6
-0.1
1.1
1.5
EU-27
-0.4
0.2
1.3
1.8
Australia
3.6
2.1
1.8
2.5
Austria
0.4
0.9
1.5
1.9
Belgium
-0.5
0.4
1.6
1.9
Canada
2.0
1.9
2.5
2.5
Denmark
-0.1
1.2
1.4
1.6
Page 44
2012e
2013f
2014f
2015f
Finland
-0.4
0.8
1.5
1.9
France
0.1
0.4
0.9
1.6
Germany
0.7
0.8
1.9
1.8
Ireland
-0.5
0.3
1.4
2.0
Italy
-2.4
-1.3
0.1
0.7
1.9
1.4
1.3
1.0
-1.1
-0.6
0.9
1.5
Norway
3.2
2.8
2.5
2.5
Portugal
-3.2
-2.4
0.3
0.7
Spain
-1.4
-1.7
0.3
1.1
Sweden
0.8
1.0
2.5
3.2
Switzerland
0.7
1.5
1.8
1.6
United Kingdom
0.0
1.1
1.4
2.0
2.2
2.1
2.7
2.6
Japan
Netherlands
Source: BMI
Page 45
Emerging Markets
We estimate emerging market (EM) real GDP growth of 4.9% in 2013, with a slight acceleration in growth
in 2014 to 5.1%. Our forecasts for most EM countries have remained relatively stable since our last monthly
update, with downgrades to our forecasts for Thailand and Turkey representing the most notable changes.
Emerging Asia will remain an economic outperformer, with real GDP growth of 6.3% in 2013 reflective of
a strong but temporary bounce in Chinese activity in H113 (the 2014 and 2015 projections mark a
deceleration to 6.1% and 5.6%, respectively, from 7.5% in 2013). China's economic recovery continues to
gain traction and we expect this to remain the case over the coming months. Signs of an early tightening
cycle have faded in recent months, and inflation, although picking up, is of no real concern as of yet.
However, we remain bearish on the country's growth prospects over H213 as rising inflation is set to put
pressure on the People's Bank of China to cool the economy once again. Meanwhile, growth in Latin
America, Sub-Saharan Africa, and emerging Europe is also set to pick up the pace in 2013, with reasonably
steady growth going into 2014.
2012e
2013f
2014f
2015f
4.7
4.9
5.1
5.0
Latin America
2.8
3.5
3.7
3.8
Argentina
2.0
1.6
3.0
3.9
Brazil
0.9
3.5
3.6
3.9
Mexico
3.9
3.6
3.8
3.5
Middle East
4.8
3.9
4.5
4.0
Sub-Saharan Africa
4.3
5.8
5.8
6.1
South Africa
2.3
2.8
3.4
3.5
Nigeria
6.6
6.8
7.2
7.3
Saudi Arabia
6.8
4.1
3.7
2.3
UAE
3.9
3.7
3.8
3.8
Egypt
2.2
2.6
3.7
5.6
Page 46
2012e
2013f
2014f
2015f
Emerging Asia
6.1
6.3
6.1
5.6
China
7.7
7.5
6.7
6.0
Hong Kong
1.4
3.3
3.6
3.7
India*
5.0
6.2
6.7
6.6
Indonesia
6.2
6.1
6.4
6.5
Malaysia
5.6
4.6
4.4
4.2
Singapore
1.3
2.5
3.2
3.2
South Korea
2.1
3.0
4.6
4.6
Taiwan
1.3
3.0
4.0
4.1
Thailand
6.4
4.0
4.5
4.4
Emerging Europe
2.5
3.0
3.7
4.3
Russia
3.6
3.4
3.6
4.1
Turkey
2.6
4.0
4.7
5.2
Czech Republic
-1.2
0.5
1.9
2.4
Hungary
-1.7
-0.2
1.9
2.7
2.0
1.9
3.0
4.1
Poland
BMI is below consensus on growth in China (compared with the Bloomberg survey of analysts). However,
we are more optimistic on the growth prospects of India and the US. We are in line with consensus on the
eurozone.
Page 47
Table: BMI Versus Bloomberg Consensus Real GDP Growth Forecasts (%)
2013
2014
US
Eurozone
Japan
Brazil
China
Russia
India
Bloomberg Consensus
1.9
-0.1
1.2
3.4
8.1
3.4
5.4
BMI
2.1
-0.1
1.4
3.5
7.5
3.4
6.2
Bloomberg Consensus
2.7
1.1
1.3
4.0
8.0
3.8
6.5
BMI
2.7
1.1
1.3
3.6
6.7
3.6
6.7
Page 48
Demographic Forecast
Demographic analysis is a key pillar of BMI's macroeconomic and industry forecasting model. Not only is
the total population of a country a key variable in consumer demand, but an understanding of the
demographic profile is key to understanding issues ranging from future population trends to productivity
growth and government spending requirements.
The accompanying charts detail Vietnam's population pyramid for 2011, the change in the structure of the
population between 2011 and 2050 and the total population between 1990 and 2050, as well as life
expectancy. The tables show key datapoints from all of these charts, in addition to important metrics
including the dependency ratio and the urban/rural split.
Page 49
1990
1995
2000
2005
2010
2012e
2015f
2020f
Total
67,102
74,008
78,758
83,161
87,848
89,730
92,443
96,355
0-4 years
9,340
9,212
7,002
6,776
7,186
7,186
7,026
6,529
5-9 years
8,685
9,193
9,124
6,921
6,703
6,885
7,143
6,982
10-14 years
7,504
8,604
9,142
9,038
6,844
6,539
6,668
7,104
15-19 years
7,127
7,408
8,535
9,064
8,963
8,161
6,806
6,628
20-24 years
6,492
7,003
7,305
8,420
8,954
9,115
8,892
6,745
25-29 years
5,893
6,361
6,879
7,167
8,284
8,602
8,862
8,803
30-34 years
4,884
5,779
6,250
6,765
7,058
7,475
8,202
8,779
35-39 years
3,965
4,794
5,688
6,163
6,677
6,770
6,991
8,131
40-44 years
2,420
3,884
4,710
5,614
6,086
6,304
6,609
6,925
45-49 years
2,039
2,358
3,802
4,653
5,548
5,761
6,012
6,536
50-54 years
1,933
1,968
2,287
3,739
4,580
4,936
5,449
5,914
55-59 years
1,946
1,843
1,887
2,201
3,617
4,001
4,446
5,305
60-64 years
1,544
1,822
1,737
1,767
2,076
2,573
3,455
4,268
65-69 years
1,283
1,391
1,659
1,582
1,621
1,649
1,927
3,233
70-74 years
919
1,084
1,194
1,439
1,389
1,384
1,438
1,729
1,127
1,305
1,559
1,852
2,264
2,388
2,516
2,743
75+ years
Page 50
1990
1995
2000
2005
2010
2012
2015f
2020f
0-4 years
13.92
12.45
8.89
8.15
8.18
8.01
7.60
6.78
5-9 years
12.94
12.42
11.58
8.32
7.63
7.67
7.73
7.25
10-14 years
11.18
11.63
11.61
10.87
7.79
7.29
7.21
7.37
15-19 years
10.62
10.01
10.84
10.90
10.20
9.10
7.36
6.88
20-24 years
9.68
9.46
9.27
10.13
10.19
10.16
9.62
7.00
25-29 years
8.78
8.60
8.73
8.62
9.43
9.59
9.59
9.14
30-34 years
7.28
7.81
7.94
8.14
8.03
8.33
8.87
9.11
35-39 years
5.91
6.48
7.22
7.41
7.60
7.55
7.56
8.44
40-44 years
3.61
5.25
5.98
6.75
6.93
7.03
7.15
7.19
45-49 years
3.04
3.19
4.83
5.59
6.32
6.42
6.50
6.78
50-54 years
2.88
2.66
2.90
4.50
5.21
5.50
5.89
6.14
55-59 years
2.90
2.49
2.40
2.65
4.12
4.46
4.81
5.51
60-64 years
2.30
2.46
2.21
2.12
2.36
2.87
3.74
4.43
65-69 years
1.91
1.88
2.11
1.90
1.85
1.84
2.08
3.36
70-74 years
1.37
1.46
1.52
1.73
1.58
1.54
1.56
1.79
75+ years
1.68
1.76
1.98
2.23
2.58
2.66
2.72
2.85
Page 51
1990
1995
2000
2005
2010
2012
2015f
2020f
75.5
71.2
60.5
49.7
42.1
40.9
40.6
41.6
28,859
30,790
29,679
27,609
26,006
26,031
26,717
28,321
57.0
58.4
62.3
66.8
70.4
71.0
71.1
70.6
38,243
43,218
49,079
55,552
61,842
63,699
65,725
68,034
66.8
62.5
51.5
40.9
33.5
32.4
31.7
30.3
25,529
27,009
25,268
22,735
20,732
20,610
20,837
20,615
8.7
8.7
9.0
8.8
8.5
8.5
8.9
11.3
3,330
3,780
4,411
4,874
5,274
5,421
5,881
7,706
f = BMI forecast; 1 0>15 plus 65+, as % of total working age population; 2 0>15 plus 65+; 3 15-64, as % of total
population; 4 15-64; 5 0>15, % of total working age population; 6 0>15; 7 65+, % of total working age population; 8 65+.
Source: World Bank, UN, BMI
1990
1995
2000
2005
2010
2012
2015f
2020f
Urban population, % of
total
20.3
22.2
24.3
26.4
28.7
29.7
31.2
33.9
79.7
77.8
75.7
73.6
71.3
70.3
68.8
66.1
13,438.6
16,201.6
18,865.4
21,940.1
25,212.5
26,649.9
28,842.1
32,664.4
52,761.4
56,778.4
58,770.0
61,166.2
62,635.9
63,080.4
63,600.5
63,690.7
Page 52
Methodology
Methodology
BMI's industry forecasts are generated using the best-practice techniques of time-series modelling. The
precise form of time-series model we use varies from industry to industry, in each case being determined, as
per standard practice, by the prevailing features of the industry data being examined. For example, data for
some industries may be particularly prone to seasonality, ie seasonal trends. In other industries, there may
be pronounced non-linearity, whereby large recessions, for example, may occur more frequently than
cyclical booms.
Our approach varies from industry to industry. Common to our analysis of every industry, however, is the
use of vector autoregressions. Vector autoregressions allow us to forecast a variable using more than the
variable's own history as explanatory information. For example, when forecasting oil prices, we can include
information about oil consumption, supply and capacity.
When forecasting for some of our industry sub-component variables, however, using a variable's own
history is often the most desirable method of analysis. Such single-variable analysis is called univariate
modelling. We use the most common and versatile form of univariate models: the autoregressive moving
average model (ARMA).
In some cases, ARMA techniques are inappropriate because there is insufficient historic data or data quality
is poor. In such cases, we use either traditional decomposition methods or smoothing methods as a basis for
analysis and forecasting.
It must be remembered that human intervention plays a necessary and desirable part in all of our industry
forecasting techniques. Intimate knowledge of the data and industry ensures we spot structural breaks,
anomalous data, turning points and seasonal features where a purely mechanical forecasting process would
not.
Tourism Industry
There are a number of principal criteria that drive our forecasts for each tourism sector variable.
Figures for the tourism sector data are based, where possible, on industry associations/operators,
government/ministry sources and official data. Where these are unavailable, tourism forecasts are based on
a range of variables:
Page 53
Government policy, industry trends and expenditure levels stated in international and national press.
Industry trends and expenditure levels stated in tourism company official financial reports or releases.
Likely expenditure and growth patterns owing to international developments and demographic patterns.
Our approach in BMI's Tourism Risk/Reward Ratings (RRRs) is threefold. First, we seek accurately to
capture the operational dangers to companies operating in this industry globally. Second, we attempt, where
possible, to identify objective indicators that may serve as proxies for indicators that were traditionally
evaluated on a subjective basis. Finally, we include aspects of BMI's proprietary Country Risk Ratings
(CRR) that are relevant to the tourism industry. Overall, the ratings system, which integrates with those of
all 16 industries covered by BMI, offers an industry-leading insight into the prospects/risks for companies
across the globe.
Ratings System
Rewards: Evaluation of sector's size and growth potential in each state, and also broader industry/state
characteristics that may inhibit its development.
Risks: Evaluation of industry-specific dangers and those emanating from the state's political/economic
profile that call into question the likelihood of anticipated returns being realised over the assessed time
period.
Indicators
The following indicators have been used. Overall, the rating uses three subjectively-measured indicators,
and 41 separate indicators/datasets.
Page 54