• 19 September 2018
The Greater Mekong Sub-Region: What’s There For Investors/Developers?

The Greater Mekong Sub-Region: What’s There For Investors/Developers?

Year after year, the Greater Mekong Sub-Region, or GMS, is attracting more travelers, and 2017 was no exception with a record 61.2 million international arrivals registered, and those figures don’t include the Chinese provinces of Guangxi and Yunnan. This represented a jump of 11.7% over 2016, when visitor numbers first surpassed the 50-million mark to reach 54.76 million.

Thailand continues to have the largest market share of all international arrivals in the region, while Vietnam is consolidating its position as the second largest inbound GMS destination for international tourists. Cambodia is now the third largest inbound market in the GMS with over 5.6 million international visitors in 2017, representing annual growth of almost 12%.

The promotion of Visit Laos Year 2018 should ensure that Laos sees more visitors during the coming year. Vientiane and Luang Prabang are increasingly accessible by air, and by 2022 the country’s first high speed trains will be connecting Vientiane to Kunming via Luang Prabang, bringing yet more arrivals, especially from China.
The upgrading of airports serving Bagan and Inle Lake will open these destinations to more regional flights, while simplified visa formalities with the introduction of an e-visa for tourists will have a positive effect for Myanmar.

To find out more about the prospects for the GMS, Hotelintel.co talked to Jens Thraenhart, who has been Executive Director of the Mekong Tourism Coordinating Office (MTCO) since 2014.

What’s happening in the GMS?

One trend that we are clearly seeing is ASEAN and GMS intra-regional traffic that is expected to grow considerably in the coming years on the back of rising wealth in ASEAN countries. This will drive shorter travel compared to long-haul trips from overseas, and also requires different product and experience development. Connected with this trend we see a big opportunity for Muslim travel, especially from some of the ASEAN countries, calling for more halal-friendly operations in GMS countries.

What’s unique about this region?

Cambodia, Laos, Myanmar, Thailand, Vietnam, along with Yunnan Province and Guangxi Zhuang Autonomous Region in China make up the GMS – so you have six countries connected by the majestic Mekong River. It’s a region steeped in history and rich in culture, and it’s also one of the last travel frontiers with stunning natural beauty and incredible cultural diversity. You can see ancient monuments, royal capitals, and UNESCO World Heritage Sites like Angkor Wat in Cambodia and Luang Prabang in Laos, which give fascinating insights into an illustrious past dating back thousands of years. The experiences are unique and memorable, whether it’s cruising down the Mekong, visiting mystical temples, strolling through bustling markets, tasting exotic street food, connecting with friendly local people, trekking through the jungle, or simply appreciating the serenity of a perfect pagoda. What makes the Mekong region special is the way travelers can immerse themselves in the culture and heritage of the region.

In order to better promote these unique aspects of the region, we created www.MekongMoments.com where visitors are encouraged to share their own experiences on social media by tagging #MekongMoments. It’s a collaborative marketing project involving travelers as well as large and small businesses of all different kinds. The idea behind Mekong Moments is to build the tourism brand of the region through shared experiences from the various destinations.

What’s your advice for hotel developers and investors if they want to come into this region?

I believe that the biggest opportunities for hotel developers are secondary destinations. The Tourism Authority of Thailand alone has identified 45 new destinations which are actively being promoted. Vietnam is a growing destination with lots of new air connectivity which drives demand and opens up opportunities for hotel developers. Then in Laos there are destinations beyond Luang Prabang that are on the rise, such as Southern Laos with its beautiful nature and adventure travel offerings.

Talent remains a challenge for hotels to execute on their brand promise, especially in the luxury segment. This is where bigger brands have an advantage in being able to rotate trained employees to new properties, which also leads to retention.

For overseas hotel developers, entering the region has become much easier, especially due to better investment laws. Cambodia has just developed a new investment division in its Ministry of Tourism and is hosting its first Tourism Investment Conference on September 17-18 of this year in Siem Reap, and registration is free. (More information at: https://www.mekongtourism.org/events/first-cambodia-tourism-investment-forum/ )

The biggest issues are still the cultural and regulatory differences, which can make investing more of a challenge compared to more traditional markets. However, the regional economy is one of the fastest growing in the world, which should compensate for the risk.

One tool that should assist hotel and tourism developers and operators immensely is our GMS Tourism Strategic Framework, consisting of the 2015-2020 Experience Mekong Tourism Marketing Strategy and the 2016-2025 GMS Tourism Sector Strategy. It’s been developed by the six national tourism ministries with support from the Asian Development Bank.

What’s the hottest destination in this region right now, and why?

Of all the GMS countries with significant growth, we would point out Vietnam as the “hottest destination” with double-digit growth thanks to a simplified visa system to enter the country and new air connections to secondary destinations, such as Phu Quoc, Haiphong, Dalat, Nha Trang, and when it opens by the end of the year, Halong Bay International Airport. In addition, there is a sea connection between Phu Quoc and Kampot in Cambodia. The Cambodians recently broke ground on their new seaport in Kampot which will further enhance opportunities in the Southern Tourism Corridor.

Secondary destinations are generally in, as governments in the region are pushing for their development. Our recent Mekong Trends Snapshot Report on GMS Aviation highlights this trend. The report is available at www.MekongTrends.com and gives some excellent hints on where to invest and what the latest up and coming destinations may be.

What’s your biggest challenge as an Executive Director / CEO of the MTCO? What’s your plan to promote this region?

The main challenge we have is getting engagement from the private sector. While we’ve seen a steep increase in website visitors on MekongTourism.org, and increased participation at our annual Mekong Tourism Forum (www.MekongTourismForum.org) – with over 500 registrations this year – getting engagement isn’t easy. Our programs and initiatives are gaining some great traction though, and as our role is in developing tourism in a responsible way to drive inclusive growth, our e-library has been very successful, now with over 450 documents available for free download at: https://www.mekongtourism.org/e-library/.

We do appreciate the continuous support from the six member governments, and from the Ministry of Tourism and Sports of Thailand in hosting the MTCO office. However, budgets are very tight, and barely cover day-to-day operations. Even with technical assistance by the Asian Development Bank, the office has limited funding for any development programs or marketing initiatives, and relies on additional private and public sector support.

One of our key focus areas is to support small businesses in the GMS. Last year, we launched the Experience Mekong Collection & Showcase, which curates responsible travel experiences in categories including Stay, Taste, Shop, Do, and Cruise/Tour. With now over 150 businesses at www.ExperienceMekong.com, the collection is a tool for capacity building in helping other businesses learn from best practices, and for travelers to discover and support these small businesses, which in many cases are social enterprises (https://www.mekongmoments.com/experience-mekong-collection). I think that these small businesses provide the fabric of memorable experiences on what’s unique in this region, creating moments that turn into memories long to be cherished.

learn more about Mekong sub-region visit http://mekongtourismforum.org

About Author

Wimintra Jangnin

Wimintra Jangnin

Wimintra Jangnin is the founder and Editor in Chief of Hotelintel.co, A Political Science graduate, who falls in love with hotels. When she isn't writing, she is speaking at industry events.
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