In the open period of 2022, the central city of Da Nang is recovering by focusing more on branded tourist real estate projects. Moreover, Da Nang continues to develop smart urban areas with the ambition to put the city into the map of a high-class living and resort urban area.

For the first half of 2022, the city received a total of 1.33 million tourist arrivals served by established accommodations, up by 26% year-on-year.

MICE guest numbers recorded in February and May jumped eight-fold compared to the previous year.

In the first half of 2022, there were two new properties, Radisson Hotel Da Nang (182 rooms) and Mikazuki Da Nang (294 rooms).

Da Nang’s four and five-star hotel market had 81 projects with 15,343 rooms. The number of 5-star and 4-star rooms accounted for 38% and 62%, respectively.

For the first six months of 2022, in Da Nang, the ADR (Average Daily Rate) averaged 70 USD per room per night, up 11% year on year and the occupancy rate was reported at 26.3%, up by 15%.

The city expects to welcome 10 new properties with 2,442 rooms, lifting the total supply to 91 properties with nearly 18,000 rooms for the rest of 2022.

By 2022, ADR is forecast to rise by 30% year on year standing at 79 USD/room/night, and occupancy would be reported at 53.2%, up by 43.5% year on year.

In 2024, the city’s four and five-star hotel market is projected to have 99 properties with over 21,000 rooms. The greater number of branded projects enhances the upscale hotel market performance. Following that, ADR is expected to increase at the Compound Annual Growth Rate (CAGR) in 2021 to first half of 2024 by 25% per year, possibly reaching 119 USD/room/night in 2024. Occupancy will rebound to a pre-pandemic level of 63%.

Exports of wood products decline after years of growth

After years of double-digit growth, the wood products export value in the first eight months fell by 3% year-on-year, according to the General Department of Vietnam Customs.

During the Vietnam International Furniture and Home Accessories Fair (VIFA-EXPO) on August 31, Phung Quoc Man, vice chairman of the Handicraft And Wood Industry Association of HCMC, said it would be challenging to achieve the US$16.5-billion export target of 2022.

In August, the export revenue from wood and wood products reached US$1.35 billion. The total value hit US$11.07 billion in the January-August period, soaring by 6.2% over the same period last year.

However, the export revenue of wood products dropped 3% to US$7.77 billion in the first eight months of this year.

According to Man, this is the first time in many years that Vietnam’s wood product exports have decreased. Earlier, the lowest rate of growth was 8-9%.

Since July, many enterprises’ exports have fallen by over 30%, even 70-80%, compared to the first 5-6 months of the year.

Runaway inflation in the U.S. and Europe has affected the demand for imports, which has a direct impact on Vietnam’s exports of wood and wood products.

The export demand for wood and wood products is likely to be higher in the second half of the year than the first, mostly due to the need for interior demand in the major export markets.

Still, challenges remain as a result of inflation and post-Covid-19 excess inventories.

Rubber exports hit US$320 million in August

Vietnam exported around 210,000 tonnes of rubber worth US$320 million in August, up 6.9% in volume and 0.3% in value against the previous month.

According to the statistics of Import and Export Department under the Ministry of Industry and Trade, the figures also represented year-on-year increases of 11% in volume and 3% in value.

The rubber export price averaged US$1,523 per tonne in August, down 6.2% against July and 7.2% as compared to the same period last year.

The first eight months of this year saw Vietnam ship abroad 1.19 million tonnes of rubber valued at US$2 billion, up 7.8% and 8.1% year-on-year, respectively.

Vietnam is one of the five largest rubber suppliers to China along with Thailand, Malaysia, Japan and the Republic of Korea. Statistics show it was China’s second largest rubber supplier in the first seven months of the year, with a total value of US$1.18 billion up 10.6% year on year.

Vietnam’s rubber market share in China’s total import value also rose 0.1% to 15.4% in the reviewed period.

Vietnam issues national plan on aquaculture development for 2021-2030

Deputy Prime Minister Le Van Thanh has signed a decision to promulgate a national plan on aquaculture development in the 2021 – 2030 period.

The scheme’s overall aims is to develop aquaculture sustainably in response to climate change. The plan is also being set in place to improve productivity, quality, value, and competitiveness of aquatic products. This will help meet demand from domestic and international markets as aquaculture develops further in Vietnam.

As per the plan, by 2025, the total aquaculture production and export value will reach 5.6 million tonnes and 7.8 billion USD per year, with an annual rate of value growth averaging 4%.

It set the goal for the domestic production to be capable of supplying a large volume of products and sufficient breeding facilities for aquatic animals with high value.

Meanwhile, more than 30 concentrated aquaculture rearing and breeding areas will be invested and upgraded serving production requirements.

The plan also sets out a target of building a supply chain, processing and consumption to ensure a stable output for over 30% of the total aquatic production.

By 2030, the yield of the sector is expected to hit 7 million tonnes annually, and contribute to better job creation and income improvement for workers.d provide domestic services serving production and cost reduction.

Addressing agricultural emissions key to green production in Vietnam

Increasing attention has been given to the reduction of greenhouse gas emissions in Vietnam’s agriculture sector, particularly rice production, in a bid to protect the environment given complex climate change developments.

According to Nguyen The Hinh from the Ministry of Agriculture and Rural Development’s agricultural project management board, currently, agricultural production contributes about 30% of the country’s total greenhouse gas emissions.

The emissions come mainly from wet rice cultivation, animal husbandry, the use of fertiliser, and burning of plant residues, among other fields.

Dao Ha Trung, head of the Ho Chi Minh City high-tech association, said paddy cultivation accounts for a high rate of emissions generated in agriculture.

He added that this poses a great challenge to the nation, particularly the Mekong Delta which makes up 50% of Vietnam’s total rice plantation and yield annually.

Nguyen Xuan Khoa, Vice Chairman of the Union of Science and Technology Associations of the Mekong Delta province of Bac Lieu, said it is necessary to continue promoting agricultural production models toward the building of value chains, linkages, and economic efficiency improvement in line with criteria set for environmental protection and climate change adaptation.

Hinh, meanwhile, suggested converting inefficient paddy fields to areas for growing non-mechanised crops, which produce little emissions.

Tourism sector pushes digital transformation for future growth

Digital transformation has been essential for the tourism sector in the post-COVID-19 period by optimising operations, cutting expenses, improving efficiency, and attracting more visitors.

From 2015 to 2019, online searches for tourism information surged over 32-fold in Vietnam. Up to 88% of domestic travellers looked up information on the internet, and there were over 5 million searches in Vietnamese for tourism products each month, according to the Vietnam Tourism Association.

However, the effectiveness of digital transformation within Vietnamese travel companies remained modest during that period, with up to 80% of the domestic online tourism market held by foreign online travel agents (OTAs) such as Agoda.com, Booking.com, Traveloka.com, and Expedia.com. Local OTAs like Vinabooking.vn, Chudu24.com, Ivivu.com, VNTrip, Mytour.vn, and Gotadi only made up 20% with a limited number of transactions.

Ngo Minh Duc, founder of Gotadi - a provider of online travel services, said that to gain a firm foothold in the domestic market, businesses should master information technology, which is also why his firm has invested in an OTA platform.

In particular, in the post-pandemic period, when most consumption habits have changed and moved to online platforms, it’s time for travel businesses to enter a fierce competition on cyberspace, from client access to tickets, tours and room bookings.

This new trend also means business efficiency, Chairman of the Vietnam Tourism Association Vu The Binh said, noting that as travellers switch to booking services online and companies do not act accordingly, they will be missing out.

Travelogy Vietnam has undergone this transformation. Thanks to the application of digital technology, each of its employees can now handle 500 bookings per day, instead of 10 employees needed to deal with 100 bookings per day in the past.

Recently, Crystabaya Pte Ltd, an online platform providing tourism services, has applied blockchain to help clients directly monitor the availability of rooms and other services. The application has also reportedly assisted hotel and resort owners to cut down expenses as their data is stored safely using this technology.

Apart from enterprises, ministries, sectors, and local authorities are also acting to meet the demand for “contactless” services by stepping up technology use in handling exit - entry procedures, promoting tourism, and selling tickets to tourist sites.

Digital transformation could mark the start of a strong recovery and development period of the entire tourism sector after the COVID-19 pandemic.

Tourism sector pushes digital transformation for future growth

Digital transformation has been essential for the tourism sector in the post-COVID-19 period by optimising operations, cutting expenses, improving efficiency, and attracting more visitors.

From 2015 to 2019, online searches for tourism information surged over 32-fold in Vietnam. Up to 88% of domestic travellers looked up information on the internet, and there were over 5 million searches in Vietnamese for tourism products each month, according to the Vietnam Tourism Association.

However, the effectiveness of digital transformation within Vietnamese travel companies remained modest during that period, with up to 80% of the domestic online tourism market held by foreign online travel agents (OTAs) such as Agoda.com, Booking.com, Traveloka.com, and Expedia.com. Local OTAs like Vinabooking.vn, Chudu24.com, Ivivu.com, VNTrip, Mytour.vn, and Gotadi only made up 20% with a limited number of transactions.

Ngo Minh Duc, founder of Gotadi - a provider of online travel services, said that to gain a firm foothold in the domestic market, businesses should master information technology, which is also why his firm has invested in an OTA platform.

In particular, in the post-pandemic period, when most consumption habits have changed and moved to online platforms, it’s time for travel businesses to enter a fierce competition on cyberspace, from client access to tickets, tours and room bookings.

This new trend also means business efficiency, Chairman of the Vietnam Tourism Association Vu The Binh said, noting that as travellers switch to booking services online and companies do not act accordingly, they will be missing out.

Travelogy Vietnam has undergone this transformation. Thanks to the application of digital technology, each of its employees can now handle 500 bookings per day, instead of 10 employees needed to deal with 100 bookings per day in the past.

Recently, Crystabaya Pte Ltd, an online platform providing tourism services, has applied blockchain to help clients directly monitor the availability of rooms and other services. The application has also reportedly assisted hotel and resort owners to cut down expenses as their data is stored safely using this technology.

Vietnamese economy records remarkable recovery

The nation recorded the highest level of disbursed foreign direct investment (FDI) over the past eight months compared to the same period over the last five years, as well as seeing a growing number of newly-established enterprises and those returning to operation.

According to the General Statistics Office (GSO) under the Ministry of Planning and Investment,  most notably, import and export turnover increased, although keeping the growth rate in the context of international economic fluctuations is widely viewed as a new challenge that needs to be identified and requires greater efforts moving forward.

In the eight-month economic statistics table recently released by the GSO, the industrial production index is of interest to many experts as it continues to increase strongly and is back to the pre-pandemic growth rate of roughly 15%.

This figure also indicates the resilience of the manufacturing, industrial and agricultural sectors in helping to ensure a sustainable and stable supply and contributing to efforts to curb the sudden increase of the consumer price index (CPI).

Export turnover in August was estimated to be US$33.38 billion, bringing the overall export turnover over the past eight months to US$250.8 billion, up more than 17% on-year, mainly in the group of processed industrial products.

Furthermore, import turnover of goods in August stood at an estimated US$30.96 billion, raising the import turnover during the reviewed period to roughly US$246.84 billion, up 13.6% on-year, primarily in the group of production materials.

The trade surplus in August reached US$2.42 billion, while that of the eight-month period was estimated to be at US$3.96 billion.

Dr. Le Duy Binh, director of the Economica Vietnam Center for Economic Research, said that this trade surplus greatly supports the implementation of monetary policies, especially amid the difficult pressures faced by the country in recent times.

One of the other notable indicators is the business registration situation is the whole country having nearly 150,000 enterprises registered as new establishments or returning to operation, an increase of more than 30% compared to the same period last year. On average, every month, 18,700 enterprises are newly established and resume their operations.

However, the number of enterprises withdrawing from the market was 104,300 enterprises, representing an increase of 22%. On average, 13,000 businesses withdraw from the market every month.

Experts believe that, in addition to the positive growth rate in general, it can be viewed as necessary to clearly analyse and take a deep look at this issue. The fact is that many firms were forced to withdraw from the market because they failed to meet the requirements of the economy or were unable to endure the difficulties experienced since the pandemic. This indicates that the recovery pace of growth is not sustainable, especially in the new context.

Evidence adds up for quality advantages within EVFTA

Just two years in entry into force, the EU-Vietnam Free Trade Agreement (EVFTA) has brought large benefits to both the Southeast Asian market and the bloc of nearly 450 million people.

The General Department of Vietnam Customs last week reported that in the first seven months of this year, despite geopolitical tensions and declined demand in the EU, total export-import turnover between the two reached $36.77 billion, up from $32.1 billion recorded in the same period last year which increased 17.42 per cent on-year.

In the first seven months of this year, Vietnam’s export turnover hit $27.69 billion, up 21.4 per cent on-year and holding 12.7 per cent of the country’s total export value, while the nation’s import turnover sat at $9.08 billion, down 5.7 per cent on-year and accounting for 4.2 per cent of its total import value.

Both sides’ trade turnover was $56.45 billion in 2019 (including Vietnam’s exports and imports of $41.5 billion and $14.95 billion, respectively). However, in 2020, the pandemic inevitably affected ties, with trade reduced to $50 billion, including Vietnam’s exports and imports of $35.1 billion and $14.9 billion, respectively.

The situation became brighter last year, when the bilateral trade turnover last year hit $63.6 billion, with Vietnam’s exports worth $45.8 billion, up 14.2 per cent on-year, and the country’s imports were valued at $17.9 billion, up 16.5 per cent on-year.

According to the Ministry of Industry and Trade, in 2021, Vietnam’s exports to the EU using the certificate of origin under the EUR.1 form reached $7.8 billion, meaning many businesses in Vietnam took advantage of tariff cuts and reductions within the EVFTA.

The Ministry of Agriculture and Rural Development also reported that the agro-forestry-fishery trade turnover in the first seven months of this year between Vietnam and the EU increased strongly from $4.3 billion in 2015 to $5.2 billion last year. The figure stood at $2.66 billion in the first five months of this year.

Vo Tan Thanh, vice chairman of the Vietnam Chamber of Commerce and Industry, told last week’s conference on the EVFTA’s impacts on Vietnam’s economy that the agreement has become big leverage for Vietnam and the EU to further elevate their trade and investment ties.

Textile and garment groups feeling global squeeze

A lack of orders is throwing a wrench into the works of textile and footwear enterprises that are already struggling with increasingly higher production costs than the competition in other markets.

The rapid increase in the US consumer inflation to 9.1 per cent in June, a level not seen in more than four decades, has dragged down textile demand in the market during this half of the year. Inflation in the Euro area in July also set a new record at 8.9 per cent, a sign that people are reducing shopping.

Meanwhile, analysts at VNDIRECT reported on August 19 that the outlook for textile and garments would depend on controlling inflation in major export markets such as the United States and EU. Currently, 85 per cent of the revenue of textile companies comes from exports, of which the US and EU account for 61 per cent.

Large enterprises, such as Thanh Cong Textile and Garment JSC, Century Yarn JSC, and Damsan JSC have had enough orders for the third quarter of 2022, but some buyers have cancelled orders due to fears of high inventories in the fourth quarter of 2022 and concerns about inflation.

VNDIRECT believes that reduced demand and exchange rate risks will slow down the net profit growth momentum of garment companies in the final months of 2022.

The net profits of TNG Investment and Trading JSC and Song Hong Garment JSC decreased by 5-10 per cent in the second half of 2022 compared to the first six months of 2022 due to exchange rate losses alone.

Along with garment businesses, VNDIRECT believes that the gross profit margin of cotton yarn enterprises will decrease by 1-1.5 percentage points in the second half of 2022.

The company forecasts that demand for high-end clothing items such as shirts and T-shirts made from recycled fibres and cotton yarns will slow down in the second half of 2022.

Furthermore, yarn prices and fabric would cool down in the fourth quarter, following prices of other materials. In the third quarter, cotton prices have fallen 40 per cent from their peak in March after oil prices cooled down.

Longer-than-expected inflation in Europe and the US also led to a decrease in export orders from Vietnamese leather and footwear companies. As they do have not had many new orders for months, Taekwang Vina Industrial JSC, a fully South Korean-owned company, has informed all employees at branches in Dong Nai, My Tho, and Dak Lak provinces to arrange leave for the rest of 2022.

According to the firm’s chairman Dinh Sy Phuc, if employees have to use up all their leave in 2022, they will be able to choose between advancing the leave of 2023 or taking unpaid leave.

In Vietnam, leather and footwear exports are almost completely in the hands of foreign-invested enterprises (FIEs). According to updated and verified data by market intelligence platform Houselink, in 2021, FIEs accounted for more than 70 per cent of Vietnam’s total footwear import and export turnover, with the situation persisting for many years.

Seminar seeks sustainable export in context of FTAs implementation

A seminar has been recently held in Hanoi to discuss developing sustainable export in the context of free trade agreements (FTAs) implementation.

Speaking at the event, Deputy Director of the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency Le Hoang Tai said under the impact of the COVID-19 pandemic over the past two years, the agency has actively used modern technology and launched digital transformation in trade promotion activities.

In order to help firms penetrate markets effectively, the agency and the Vietnamese trade offices abroad held over 60 sessions to offer consultancy to them, especially those related to capacity and technological transfer, he added.

Vuong Duc Anh, Chief of the Office of the Vietnam National Textile and Garment Group (Vinatex)’s Board of Directors, said in 2020 when COVID-19 broke out, Vietnam surpassed Bangladesh to become the second biggest exporter of apparel, only behind China.

Though its exports hit 40 billion USD in 2021 and profit reached a record of nearly 1.5 trillion VND, the sector has yet to make the best use of FTAs due to rules of origin and self-sufficiency of materials.

Between now and 2025, Vinatex targets becoming a one-stop supplier of yarn, fabric and end-products for knitwear, especially green products to meet demand of big retailers.

Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association Phan Thi Thanh Xuan said the rate of domestically made products in the sector now reaches 55%. The figure is expected to increase to 70-80% in the near future.

Economist Le Quoc Phong said the State should issue policies to improve export in terms of quality and added value, raise the rate of domestically-made items, use technological advances, and enhance the competitiveness of exporters.

Tai called for attention to human resources training, not only in production but also in trade to achieve sustainable and more effective exports.

Localities accelerate digital transformation in tourism

Localities nationwide are accelerating digital transformation to create breakthroughs in the tourism sector.

Businesses in the northern province of Ninh Binh are providing tourism information via websites and the portal of the provincial Tourism Department, the provincial information centre for tourism promotion, and social media platforms such as Facebook, Tiktok, Youtube and Zalo.

Director of the provincial department Bui Van Manh said difficulties in digital transformation in tourism remain ahead and measures to ease them are needed.

In order to turn tourism into a pillar economy and Ninh Binh into a major tourism hub of the country, the province will digitalise the statistical indicator system of the sector on the back of big data while connecting the local reporting system with the inter-provincial and national ones.

Manh suggested several solutions, including raising awareness of State officials and business owners about digital transformation, linking database with localities, improving the quality of infrastructure and service quality, offering specific guidelines to localities, and training workforce as a breakthrough to solve the problems.

According to him, linking State management agencies on tourism from the local to the central level and travel companies is necessary to develop smart tourism ecosystem concertedly.

Industry insiders need to understand that digital transformation is not only about technology, but also in management, approaches and marketing, he said.

Deputy Director of the Ho Chi Minh City Tourism Department Le Truong Hien Hoa said the department is embarking on the 2020-2030 smart tourism project. Most recently, the city has also applied digital technology in management.

Under the project, the department built a database of tourism services and improving experiences for tourists and residents.

Hoa added it also launched a smart tourism app on Android and iOS, upgraded its portal, and operated the website popularising the city’s tourism at www.visithcmc.vn.

The updates on tourism activities have been regularly posted on social media such as Facebook, Youtube, Instagram. Tours are also offered on e-commerce floors like Shopee and Traveloka.

Vietjet resumes Ho Chi Minh City – Chiang Mai route

Vietjet on September 1 resumed the direct service between Vietnam's southern metropolis Ho Chi Minh City and Thailand’s northern largest city Chiang Mai.

The thrice weekly service between the two destinations now operates every Tuesday, Thursday and Sunday with a flight time of two hours.

Flights depart from HCM City at 11:25 and arrive in Chiang Mai at 13:30. Return flights take off at 14:30 in Chiang Mai and land in Ho Chi Minh City at 16:35. Tickets for the Ho Chi Minh City – Chiang Mai flights are now available from just 6 USD at www.vietjetair.com or Vietjet Air mobile app. 

Seminar seeks sustainable export in context of FTAs implementation

A seminar has been recently held in Hanoi to discuss developing sustainable export in the context of free trade agreements (FTAs) implementation.

Speaking at the event, Deputy Director of the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency Le Hoang Tai said under the impact of the COVID-19 pandemic over the past two years, the agency has actively used modern technology and launched digital transformation in trade promotion activities.

In order to help firms penetrate markets effectively, the agency and the Vietnamese trade offices abroad held over 60 sessions to offer consultancy to them, especially those related to capacity and technological transfer, he added.

Vuong Duc Anh, Chief of the Office of the Vietnam National Textile and Garment Group (Vinatex)’s Board of Directors, said in 2020 when COVID-19 broke out, Vietnam surpassed Bangladesh to become the second biggest exporter of apparel, only behind China.

Though its exports hit 40 billion USD in 2021 and profit reached a record of nearly 1.5 trillion VND, the sector has yet to make the best use of FTAs due to rules of origin and self-sufficiency of materials.

Between now and 2025, Vinatex targets becoming a one-stop supplier of yarn, fabric and end-products for knitwear, especially green products to meet demand of big retailers.

Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association Phan Thi Thanh Xuan said the rate of domestically made products in the sector now reaches 55%. The figure is expected to increase to 70-80% in the near future.

Economist Le Quoc Phong said the State should issue policies to improve export in terms of quality and added value, raise the rate of domestically-made items, use technological advances, and enhance the competitiveness of exporters.

Tai called for attention to human resources training, not only in production but also in trade to achieve sustainable and more effective exports.

Danish investors see large potential of VN agriculture sector

The Vietnamese agricultural sector is on the radar of many Danish investors wishing to implement their fresh initiatives in the Southeast Asian market.

At a seminar nearly two weeks ago to connect Vietnamese businesses with 13 Danish businesses in the agriculture and food sectors, trade counsellor of the Embassy of Denmark Troels Jakobsen said, “Danish companies and experts are very willing to share innovative ideas and technologies with their Vietnamese counterparts as well as look for opportunities to cooperate and make good and sustainable business together.”

Shirley Vincent Ramesh, head of regulatory affairs of Novozymes, the world’s largest provider of enzyme and microbial technologies in the food and agricultural industries, said, “The aim of the collaboration is to discuss how we can work together to improve the regulatory processes such that Vietnamese marketers can also bring their levels up to the international benchmark and how we can contribute to better business between Denmark and Vietnam, as well as helping Vietnam reach a higher level in Southeast Asia.”

Many representatives of Danish food production and processing enterprises admitted that they highly appreciated the development potential of the Vietnamese agricultural market, and set high expectations for cooperation opportunities with Vietnamese businesses.

Bovine products group VikingGenetics, which has a presence in more than 50 countries, decided to choose Vietnam as one of its key markets on the basis of the strong growth rate of Vietnam’s dairy industry during the past 10 years. “We have many distributors all over the world. And we thought that the next step for us is to increase our presence in Asia, why not start by doing that in Vietnam?” said Ahmet Yilmaz, export and key account manager for VikingGenetics.

Vietnam’s milk and dairy products were exported to 48 countries with a revenue of more than $300 million in 2021. Vietnam is also leading in Southeast Asia in terms of industrialisation of the livestock and dairy industry, according to Tong Xuan Chinh, deputy director of the Department of Livestock Production under the Ministry of Agriculture and Rural Development (MARD).

With over 28,000 dairy farms and households with nearly 375,000 milk cows, Vietnam is one of the biggest markets that VikingGenetics is trying to partner with.

The interest of leading Danish agricultural processors in the Vietnamese market can be considered somewhat of a surprise because agriculture is not yet an attractive field in terms of foreign direct investment (FDI).

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment showed that during the first seven months of 2022, agro-forestry-fishery only attracted seven ventures with the total investment capital of $22 million, accounting for less than 1 per cent of new projects and 0.37 per cent of total FDI in Vietnam.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes