VIETNAM

Market Profile $0.5bn

In 2012, Vietnam was Australia’s 25th largest inbound market for visitor arrivals and 17th for total expenditure and visitor nights.

total spend

Total spend from Vietnam in 2012 (up 9 per cent on 2011)2

37,400

arrivals

Vietnamese visitor arrivals in 2012 (up 11 per cent on 2011)3

4.1m

Key airlines and share of passengers in 20121

total nights

Vietnamese visitor nights spent in Australia in 2012 (up 19 per cent on 2011)2

Vietnam Airlines

13%

Singapore Airlines

0.9m

3% 4% 4%

Jetstar

dispersed nights4

AirAsia X

Vietnamese visitor nights spent outside gateway cities in 2012 (up 66 per cent on 2011)2

13%

Other

67%

Australia ranks

Note: Table includes direct and indirect capacity

6th

among all out of region outbound destinations for Vietnamese travellers5

Visitor profile in 2012 61% repeat visitors2 57% of total arrivals are for leisure3 45-59 years largest demographic3 $13,360 average spend2 116 nights average stay2 Jul-Nov peak booking period Nov-Jan peak travel period

In this Market Profile • Market Performance • Aviation Landscape • Distribution • Find More Information

Note: International Visitor Survey data for Vietnam should be used with caution as sample errors are larger than the weighted IVS markets. Sources: 1. Department of Immigration and Citizenship (Aviation) 2. International Visitor Survey (Tourism Research Australia) 3. Australian Bureau of Statistics, Overseas Arrivals & Departures

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VIETNAM Market Profile July 2013

4. D  ispersed nights refer to nights spent outside gateway cities of Sydney, Melbourne, Brisbane and Perth 5. Tourism Economics, Tourism Decision Metrics

VIETNAM

Market Performance 1.1 Arrivals trends

History of Visitors from Vietnam into Australia Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

45,000

Total Arrivals per Year

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Dec80

Dec84

Dec88

Dec92

Dec96

Dec00

Dec04

>> In 2012, Vietnam was Australia’s 25th largest inbound market for visitor arrivals. >> Arrivals from Vietnam have seen a compound annual growth rate of 15 per cent between 2002 and 2012. >> Arrivals to Australia from Vietnam saw declines following the after effects of the Global Financial Crisis.

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VIETNAM Market Profile July 2013

Dec08

Dec12

VIETNAM

Market Performance 1.2 Australia’s market share6 Australia’s market share of Vietnamese outbound travel >> Outbound travel from Vietnam increased to 1.68 million trips in 2012, up from 1.56 million trips in 2011. >> Australia’s share of total outbound travel from Vietnam has decreased from 2.6 per cent in 2002 to 2 per cent in 2012.

Vietnam: Total Outbound & Australia's Market Share Source: Tourism Economics (Tourism Decision Metrics)

271 3.14%

322 2.62%

320 2.70%

487 2.19%

618 2.14%

798 2.19%

809 3.00%

1,063 2.86%

1,108 2.89%

1,371 2.49%

1,556 1.97%

1,680 2.03%

1,000

2.0%

0

0.0% 2001

2002

2003

2004

2005

2006

2007

Total Outbound (000s)

2008

2009

2010

2011

Australia's Share of Total Outbound (%) Note: 2012 is a forecast value

Top five outbound destinations from Vietnam >> In 2012, the top five outbound destinations from Vietnam were Cambodia, Thailand, Laos, China and Singapore. >> Australia ranked 12th among all outbound destinations in 2012, moving up a place from 2011. Trend of Top 5 Outbound Destinations from Vietnam Source: Tourism Economics (Tourism Decision Metrics)

700

Outbound Travellers (000s)

600

500

400

300

200

100

0 Cambodia

Laos

Thailand 2001

China 2012

Note: 2012 is a forecast value

6. Figures for 2012 in this section are based on forecast data, last updated 14 February 2013

3

4.0%

VIETNAM Market Profile July 2013

Singapore

Australia

2012 (f)

Market Share (%)

Outbound Travellers (000s)

2,000

VIETNAM

Market Performance Australia’s market share of out of region travel >> Out of region travel from Vietnam excludes travel to South and South East Asia and China. >> Out of region travel from Vietnam increased from 154,000 trips in 2002 to 448,000 trips in 2012. >> Australia’s share of Vietnam’s total out of region outbound travel has increased from 5.5 per cent in 2002 to 7.6 per cent in 2012.

Vietnam: Out of Region Outbound & Australia's Out of Region Market Share Source: Tourism Economics (Tourism Decision Metrics)

98 8.70%

154 5.50%

154 5.62%

225 4.76%

237 5.59%

248 7.03%

299 8.12%

411 7.38%

340 9.40%

383 8.89%

366 8.39%

448 7.61%

500

12.0%

6.0%

0

Market Share (%)

Outbound Out of Region Travellers (000s)

1,000

0.0% 2001

2002

2003

2004

2005

2006

Total Outbound (000s)

2007

2008

2009

2010

2011

2012 (f)

Australia's Share of Total Outbound (%) Note: 2012 is a forecast value

Australia’s competitor destinations from Vietnam >> In 2012, the top five destinations for Vietnamese travellers outside of South and South East Asia and China were Korea, France, Russia, Japan and the USA. >> Australia’s ranking among out of region destinations remained unchanged at 6th. Trend of Top 5 Out of Region Outbound Destinations from Vietnam Source: Tourism Economics (Tourism Decision Metrics)

Outbound Out of Region Travellers (000s)

200 180 160 140 120 100 80 60 40 20 0 Korea

2012

2001 Note: 2012 is a forecast value

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VIETNAM Market Profile July 2013

Japan

Russia

France

United States

Australia

VIETNAM

Market Performance 1.3 Visitor arrivals by age and purpose of visit Analysis of visitors from Vietnam in 2012 >> In 2012, the majority of arrivals from Vietnam visited Australia for Leisure purposes, with Visiting Friends and Relatives (VFR) representing 37 per cent of total arrivals, and Holiday representing 20 per cent. >> The largest age demographic was 45 to 59 years, representing 32 per cent of total visitors.

Visitors from Vietnam by Age and Purpose of Visit for 2012 Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

Holiday 7,560 (20%)

Visit Friend/ Relatives 13,860 (37%)

Business 4,610 (12%)

Education 7,140 (19%)

Employment 1,190 (3%)

Other 2,920 (8%)

14,000

Total Vietnam 37,280 (100%) 12,000

+ -

Total Number of Visitors

10,000

8,000

6,000

4,000

2,000

0 Under 15yrs 2,310 (6%)

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VIETNAM Market Profile July 2013

15 to 29yrs 10,040 (27%)

30 to 44yrs 8,880 (24%)

45 to 59yrs 11,800 (32%)

60yrs & over 4,250 (11%)

VIETNAM

Market Performance Age demographic of visitors from Vietnam for 2002-2012 >> In 2012, the 45 to 59 year old demographic became the largest visitor segment out of Vietnam, achieving an annual compound growth rate of 17 per cent for the past decade. >> Following declines in 2011, the 15 to 29 years segment and the 30 to 44 years segment experienced growth in 2012. Vietnam: Visitor Arrivals by Age for 2002-2012 Source: Australian Bureau of Statistics, Overseas Arrivals and Departures

14,000

Under 15 yrs

Total number of visitors

12,000 15 to 29 yrs 10,000 30 to 44 yrs

8,000 6,000

45 to 59 yrs

4,000

60 yrs & over

2,000 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Visitor segments from Vietnam for 2002-2012 >> The VFR segment has remained the largest visitor segment out of Vietnam over the past decade, despite declines between 2007 and 2011. The VFR segment has achieved annual compound growth of 17 per cent between 2002 and 2012. >> The Holiday segment, which has seen fluctuations over recent years, experienced growth in 2012.

Vietnam: Visitor Arrivals by Purpose of Visit for 2002-2012 Source: Australian Bureau of Statistics, Overseas Arrivals and Departures

16,000 Holiday

Total number of visitors

14,000 Visit Friends/Relatives

12,000 10,000

Business

8,000 Education

6,000 4,000

Employment

2,000 Others

2002

6

2003

2004

VIETNAM Market Profile July 2013

2005

2006

2007

2008

2009

2010

2011

2012

VIETNAM

Market Performance 1.4 Spend by age and purpose of visit Breakdown of spend by visitors from Vietnam for 2008-2012 >> On average from 2008 to 2012, the largest spending segment was Education visitors, representing 62 per cent of total spend. >> The largest spending age group was 15 to 29 year olds, representing 65 per cent of total spend by Vietnamese visitors.

Spending by Visitors from Vietnam by Age and Purpose of Visit for 2008-2012 Source: International Visitor Survey (Tourism Research Australia)

Holiday $16,507 (9%)

Visit Friend/ Relatives $33,665 (17%)

Business $15,597 (8%)

Employment $5,303 (3%)

Education $120,051 (62%)

Other $1,822 (1%)

$140,000

$120,000

Total Vietnam $192,944 (100%) + -

Total Spend by Visitors (A$ 000s)

$100,000

$80,000

$60,000

$40,000

$20,000

$0 Under 15yrs Not covered by the IVS

15 to 29yrs $125,264 (65%)

Note: Data in graph refers to an average of 2008-2012

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VIETNAM Market Profile July 2013

30 to 44yrs $32,373 (17%)

45 to 59yrs $31,604 (16%)

60yrs & over $3,704 (2%)

VIETNAM

Market Performance 1.5 Visitor profiles for spend and nights Average visitor

Spend per trip $11,543 Stay 99.3 nights Spend per night $116

Purpose of visit

Holiday

Spend per trip $3,683 Stay 25.3 nights Spend per night $146

Visiting Friends and Relatives

Business

Spend per trip $2,631 Stay 28.8 nights Spend per night $91

Spend per trip $3,348 Stay 14.9 nights Spend per night $225

Other (including education and employment)

Spend per trip $31,794 Stay 275.9 nights Spend per night $115

Age groups

15 to 29 years

30 to 44 years

45 to 59 years

60 years & over

Spend per trip $17,242 Stay 147.4 nights Spend per night $117

Spend per trip $4,273 Stay 40.8 nights Spend per night $105

Spend per trip $3,506 Stay 23.3 nights Spend per night $150

Spend per trip $3,158 Stay 38 nights Spend per night $83

International Visitor Survey (Tourism Research Australia) Note: Data refers to an average of 2008-2012

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VIETNAM Market Profile July 2013

VIETNAM

Aviation Landscape 2.1 Summary >> Direct capacity to Australia declined 4 per cent, following years of strong growth. >> Two thirds of all Vietnamese visitors entering Australia in 2012 travelled on Vietnam Airlines.

Hanoi

Vietnam Ho Chi Minh City

>> Vietnam Airlines increased its stake in Jetstar Pacific in January 2012. Jetstar Pacific announced that it is looking to increase its network (to Singapore and Jakarta) and upgrade its fleet.

Singapore

Sydney Melbourne

Operating Airlines

Flights per week

Route

Vietnam Airlines

7

Hanoi-Ho Chi Minh City-Melbourne

7

Hanoi-Ho Chi Minh City-Sydney

Source: Innovata, Northern Summer Scheduling Season (31 March 2013 to 26 October 2013) Note: Table includes direct services to Australia only

Key airlines and share of passengers

13% 3% 4% 4% 13% 67%

Airline Vietnam Airlines Singapore Airlines Jetstar AirAsia X Other Table includes direct and indirect capacity

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VIETNAM Market Profile July 2013

2008 54% 15% 9% 0% 21%

2009 59% 12% 7% 2% 20%

2010 60% 13% 7% 2% 19%

2011 63% 14% 5% 1% 16%

2012 67% 13% 4% 3% 13%

VIETNAM

Aviation Landscape 2.2 Trends Capacity >> In 2012 capacity from Vietnam to Australia decreased 4 per cent, following strong growth of 14 per cent in 2011. >> The declines were driven by Jetstar whilst Vietnam Airlines added 11 per cent capacity. >> Limited capacity growth of 5 per cent is expected to during 2013.

Capacity from Vietnam to Australia vs competitor destinations Source: Innovata; Department of Infrastructure and Transport Forecasts

l l

South Korea - Up 20.4%

l

Japan - Down 0.9%

l

Hong Kong - Down 12.4%

l

1.0

Australia - Down 3.5%

France - Up 9.8%

l

Seats per year ('000)

1.2

Russian Federation - Up 10.7%

0.8

0.6

l

0.4

l

l

0.2

0.0 Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Note: Chart includes direct capacity only and above percentages reflect change in direct capacity from 2011 to 2012

Average loads >> Load factors or seat utilisation is the ratio of passengers carried to the number of seats available, expressed as a percentage. >> As direct capacity declined in 2012, average load factors increased from 69 per cent in 2011 to 75 per cent in 2012. >> Despite overall loads increasing, the Vietnam market remains highly seasonal. Average loads remain low during March, June and December, and high during January/February and July.

Loads and seasonality in 2012 Vietnam to Australia 100%

Jan

Feb

Mar

Source: Department of Infrastructure and Transport

Apr

95%

Monthly load factors

90%

Jun

Jul

Aug

Sep

Oct

Nov

Dec Low seat availability

85% 80% 75%

Sustainable seat availability

70% 65% 60% 55% 50%

Note: Chart includes direct capacity only

10

May

VIETNAM Market Profile July 2013

High seat availability

VIETNAM

Distribution 3.1 Distribution system Whilst there are a number of channels available to Vietnamese consumers for planning and booking travel, most consumers book through traditional retail travel agencies. The internet is primarily used as a research tool, with many Vietnamese travellers not yet comfortable with booking online. Language remains a barrier for free independent travel (FIT). Wholesalers/ Large Agents >> Inbound Tour Operators (ITOs) are still responsible for the vast majority of holiday business into Australia, including Business Events bookings. >> Wholesalers have developed their own packages to promote Australia and work closely with airline partners.

Retail Agents >> The travel industry in Vietnam continues to operate under the traditional model, although the larger retail agents often take on the role of wholesalers. These retail agents market their own programs with links to Inbound Tour Operators (ITOs), on-selling to smaller agencies. >> Retail agents also book travel through wholesale agents.

Aussie Specialists >> The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train and develop retail agents to sell Australia. >> As at July 2013, there were 12 qualified Aussie Specialists in Vietnam and a further 5 agents in training. Inbound Tour Operators >> ITOs are still responsible for the vast majority of holiday business into Australia, including Business Events incentive bookings from agents.

Brochures and rates

Brochure Validity

>> Due to price fluctuations throughout the year, agents generally do not publish prices in their annual brochures and only suggested itineraries are featured. The latest prices are published on a new flyer as and when available, and attached to the brochures accordingly.

Brochure Space Policy

>> Generally, agents do not ask for contributions.

Setting Rates

>> January and Christmas holiday peak period.

Standard Rate Validity Periods

>> April to September and October to March. Seasonality of Visitors from Vietnam Source: Australian Bureau of Statistics, Overseas Arrivals & Departures, 2008 to 2012

Variation from Monthly Average Arrivals

140% more than the average

70%

0%

-70% less than the average

-140% Jan

Feb

Mar All Purposes Avg: 14,707

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Leisure

Business

Other

Avg: 8,433

Avg: 1,990

Avg: 4,284

Dec

Seasonality >> The peak booking periods for travel to Australia are leading into Lunar New Year (TET) and Christmas holidays (July to November). >> The peak travel periods for travel to Australia are Lunar New Year (TET) and Christmas holidays (November to January).

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VIETNAM Market Profile July 2013

VIETNAM

Distribution 3.2 Trends

3.3 Planning a visit to market

Distribution >> When buying travel there are a number of distribution channels available to consumers. They may research and book their trip using a combination of traditional distribution partners.

Top tips for sales calls >> The best time for sales calls is March to May and September to November.

Planning and purchasing travel >> Consumers continue to book holidays via traditional retail agencies. >> The market provides a significant proportion of VFR arrivals due to the large Vietnamese community in Australia. These VFR visitors tend to book their flights through travel agents.

>> The key market centre to visit is Ho Chi Minh City. >> For more general information on sales calls and planning a visit to market, please see Tourism Australia’s Planning for Inbound Success at www.tourism.australia.com/inboundsuccess

Where to Find More Information Tourism Australia’s activities in Vietnam are managed from Tourism Australia’s Kuala Lumpur office. For more information visit Tourism Australia’s Corporate website at www.tourism.australia.com There are no Australian State and Territory Tourism Organisations operating in Vietnam. Also see: Vietnam Country Brief published by the Department of Foreign Affairs and Trade.

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VIETNAM Market Profile July 2013