Any overview of tourism in the Greater Mekong Sub-region (GMS) would have to begin by citing the total arrivals figure of 50 million annual visitors, and then point out that Thailand accounts for half of these, and Vietnam a healthy chunk of the remainder. That leaves Cambodia, Laos, Myanmar, Yunnan and Guangxi with 3-4 million visitors each. Daniel Voellm, Managing Director of HVS Asia Pacific, did exactly that at the Mekong Tourism Forum 2015, but pronounced the situation generally healthy, with a couple of mild caveats.
On the downside, some parts of the region would like to welcome a larger allocation of those numbers, while Daniel believed “the biggest challenge is the strong seasonality, particularly in destinations impacted by rainfall.” Myanmar is a perfect example, with very strong quarters followed by periods of low visitor numbers. That makes it hard for investors to commit because the year-round demand simply isn’t there yet.
Looking on the bright side, however, the source markets for GMS tourism are quite diverse, with 18% from China, 20% from within the region, and a further 20% from other Asian countries.
Daniel then turned his attention to the potential for growth in the GMS, highlighting culture, nature and food, but in particular noting that “there is a rich cultural heritage in the region that’s already established and has proved popular.” There are many UNESCO World Heritage sites and the best opportunities may lie in creating itineraries between these sites – many of which will encompass two or more countries. One lesson from other parts of the world is that NGOs can play a role in forming cooperative networks to establish working relationships with tour operators, local government and local communities to promote particular cultural routes.
According to Daniel, the priority must be to develop the infrastructure along these cultural routes, which means upgrading roads and providing facilities for rest stops. Airports are also vital in order to provide access at different points along the route so itineraries can be customized. At present, many itineraries set out from Phnom Penh or Hanoi, but then take travelers off the beaten track, “allowing them to pick up experiences that are less well-known” but finishing up “at the end of the road.”
Daniel then explained another key to success. “If you have one type of traveler who visits one route for one purpose, you have all your eggs in one basket and that’s a very risky proposition.” It’s therefore important to have multiple layers that appeal to a broad spectrum. For example, “religious itineraries might appeal local travelers from the GMS and might not stay in luxury accommodation.” Another option is “something that hits the world heritage sites, combined with the natural resources or food.”
Multiple layers of itineraries result in demand for multiple levels of hotels. Much of the GMS is relatively undeveloped, with homestays and guesthouses playing a major role. As traffic increases, especially near the major heritage sites, there are opportunities for star-rated hotels, and at the higher end of the market there is potential for cross-border investment. This will require a positive investment climate from the legal perspective, with tax breaks seen as one means of attracting investors.
Once an accessible cultural route has been established, with developed infrastructure to integrate with heritage sites and reliable demand levels throughout the year, the next problem is human resources development. “In regions where there have not been any tourists previously, most of the people have been living off farming. A certain set of skills is required, and there needs to be education around that – so there is an opportunity in developing human capital,” explained Daniel.
The big picture is thus one of optimism, though investors may still be wary given that Daniel’s proposals are far from risk-free. However, as Daniel pointed out, established destinations such as Samui or Phuket began in much the same way those out-of-the-way cultural spots in Laos or Myanmar are doing today, with guesthouses and backpackers eventually giving way to mass tourism and foreign investment. Given time, the wilder outposts of the GMS will probably follow suit.