VietNamNet Bridge - Numerous tourism projects have been revoked, making the picture of foreign direct investment (FDI) attraction in Vietnam gloomier.

In the question and answer session before the Congress in late June, Minister of Culture, Sports and Tourism Hoang Tuan Anh said that FDI in the tourism sector, services, hotels and restaurants had reached about $10 billion, accounting for almost 5 percent of total FDI in Vietnam.

Experts also say that FDI has become a major force promoting the tourism industry of Vietnam, when the development process of this industry is associated with the country’s open-door policy to foreign investors since the 90s.

In the famous tourist cities in Vietnam like Ba Ria - Vung Tau, Da Nang, Quang Nam ... there are famous chains of hotels and resorts invested by foreign groups. The coast of Da Nang has been almost covered by resorts and according to statistics, VinaCapital (a foreign investment fund from British Virgins Island) is the largest investor in Da Nang’s resorts. In Ba Ria - Vung Tau, the biggest tourist complex in Vietnam worth $4.2 billion - Ho Tram Strip - is about to open in late July 2013.

An investor in the hotel sector said that the presence of foreign investors in the tourism sector, in addition to capital to build big hotels and resorts, they have brought into Vietnam management technology and attractive services, indispensable needs tourists. Therefore, a lot of strategies to encourage more investment into tourism have been issued to turn tourism into a key economic sector of the country. In 2012, tourism contributed almost 6 percent of the nation’s GDP, up from only 3.2 percent in 1995.

However, after the outbreak period 2008 - 2010 with several billion USD projects, from 2012 the investment licenses of a series of hotel and resort projects have been revoked. Data from the Foreign Investment Department showed that by June 20, 2013, total registered FDI capital in the field of real estate reached more than $48 billion, down $1.7 billion compared to the end of 2012.

Among tourism projects that have been revoked, there are the big names like Asia Pearl worth Eur2 billion in Phu Quoc of the Trustee Suisse Group (Switzerland) and the $1.3 billion theme park in Vung Tau of the Good Choice (USA). Additionally, more than 30 tourism projects in North Cam Ranh peninsula (Khanh Hoa) may be also revoked due to delays in implementation.

An expert said that due to the global economic difficulties, raising capital should not be what they expect so foreign investors cannot afford to implement their projects. However, Dr. Le Dang Doanh - former Director of the Central Institute for Economic Management, said that many investors just wanted to hold land.

At the National Assembly session in June, some congressmen commented that the development of Vietnam tourism is under its potential when Vietnam ranked 80th out of 139 countries for tourism, behind Singapore, Malaysia and Thailand – which have less world natural and cultural than Vietnam.

Minister Hoang Tuan Anh also said the tourism infrastructure in Vietnam is inferior to neighboring countries. "At present, Vietnam has 575 hotels from 3 to 5 stars. Meanwhile, the numbers of high-quality hotels in Thailand, Malaysia, Singapore are more than ours," he said.

Prof. Nguyen Mai - President of the FDI Business Association – said in this context, Vietnam does not need to seek more tourism projects at any cost but it needs to evaluate objectively what Vietnam tourism lacks to attract investment.

"We should not continue to license a lot of projects and then revoke the license. At the same time, we also need to learn from experience in monitoring the financial capability of the parent companies abroad to take timely measures when problems rise," he added.

"There are a lot of things to do with attracting investment in the hospitality and tourism sector because this is one of the critical issues to promote the development of Vietnam tourism," Mai concluded.

Minister Hoang Tuan Anh also spoke to the Congress that "the potential of the tourism sector in Vietnam is very large, but to turn potential into reality requires more efforts."

Tung Nam