VIETNAM HUMAN RESOURCES DEVELOPMENT IN TOURISM PROJECT VIETNAM NATIONAL ADMINISTRATION OF TOURISM IN PARTNERSHIP WITH THE EUROPEAN COMMISSION

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1 VIETNAM HUMAN RESOURCES DEVELOPMENT IN TOURISM PROJECT VIETNAM NATIONAL ADMINISTRATION OF TOURISM IN PARTNERSHIP WITH THE EUROPEAN COMMISSION

2 THE NORDIC COUNTRIES: A PROFILE 1 THE NORDIC COUNTRIES: A PROFILE 1.1 POPULATION The "Nordic Countries" is a collective term for the five countries of Northern Europe: Denmark, Sweden, Norway, Finland and Iceland, with their dependent and semiautonomous territories. (The term Scandinavia, which is the geographic designation of the peninsula comprising Norway and Sweden, was mistakenly applied to all the Nordic countries in the past, but is no longer in use, to avoid confusion.) The Nordic Countries have close political and historical ties and, with the exception of Finland, common ethnic and linguistic roots (the Finns are descendants of an Asian tribes that invaded the land in prehistoric times), yet they also have a history of wars and conflicts. They are closely linked today, for example by a customs union, yet only three of the five countries are members of NATO (one of them [Iceland] having no armed forces of its own), and three are members of the European Union (EU), with only one of them (Finland) having joined the European Economic and Monetary Union (EEMU). As a whole, the Nordic Countries (without their dependencies) cover 1.26 million square kilometres, but with a total population of only 24 million, (average density: 19 inhabitants per km2), and the urban centres are few and far between. 28 percent of the total population lives in 25 cities with a population over 100,000 (see table below). The greatest population density can be found in Denmark and Southern Sweden up to the area around the Norwegian capital, as well as around Stockholm and Helsinki. This means that most of the population of the Nordic Countries lives within a square measuring about 1,000 km on each side, and within no more than 1,500 km distance from Frankfurt/Main, Germany. The low population density is offset however by an inverse density in access to state-of-theart communication facilities such as television, Internet access and usage of cellular phones, all of which being equalled only by the North Americans and Japanese. 3

3 COUNTRY50 CITY POPULATION OTHER POPULATION Denmark København (Copenhagen) 1,379,413 3,415,547 Århus 215,587 Odense 145,296 Ålborg 119,157 Finland Helsinki / Helsingfors 546,317 3,737,183 Espoo / Esbo 204,962 Tampere / Tammerfors 191,254 Vantaa / Vandaa 173,860 Turku / Åbo 170,931 Oulu / Uleåborg 115,493 Norway Oslo 499,693 3,425,232 Bergen 225,439 Trondheim 145,778 Stavanger 106,858 Sweden Stockholm 736,113 6,477,070 Göteborg (Gothenburg) 459,593 Malmö 254,904 Uppsala 187,302 Linköping 131,948 Västerås 124,780 Örebro 122,641 Norrköping 122,415 Helsingborg 116,337 Jönköping 115, HISTORY The Danes probably settled Jutland by c.10,000 B.C., but little is known of Danish history before the 9th to 11th cent. A.D., when the Danes had an important role in the Viking raids on Western Europe. Beginning in the 1st century A.D., Finland was settled by nomadic hunters and fishermen, who forced the small number of Lapps living in the central and southern regions to move to the far north, where they live today. Iceland was settled (c ) by the Norse. A general assembly, the Althing, was established in 930, making it the world's oldest functioning parliamentary body, and Christianity was introduced c Norwegian rule was imposed after 1261, and in 1380, Iceland, with Norway, passed to the Danish crown, inaugurating a national decline that lasted until Sweden conquered Finland in the 13th century but allowed the Finns considerable independence, raising Finland to the rank of grand duchy in In 1397, the Kalmar Union united Norway (including Iceland), Denmark, and Sweden. The Danes dominated the union, however, and in 1523, stirred to resistance by a massacre (1520) of Swedish nobles at Stockholm, the Swedes rose against the Danes and established a separate state, but Norway was ruled by Danish governors until During the Napoleonic Wars, Finland was invaded by Russia, which annexed it in Participation in the Thirty Years War and the wars of Frederick III with Sweden caused Denmark to lose prestige. Under the Treaty of Kiel (1814), Denmark lost Norway to Sweden, and following its defeat (1864) by Prussia and Austria, it was deprived of Schleswig-Holstein. The 19th century brought a rebirth of national culture in Iceland and a strong independence movement. A constitution and limited home rule were granted in 1874, and Iceland became a sovereign state in personal union with Denmark in Icelanders voted in 1944 to end the union with Denmark, and an independent republic was proclaimed. Finnish nationalism became a strong force early in the 19th century; an elected parliament was established in 1906, and Finnish independence was proclaimed in Norwegian nationalism also emerged as a potent force; in 1905, the union with Sweden was dissolved and Norway became an independent constitutional monarchy. 4 5

4 1. 3 SOCIO-ECONOMIC CONTEXT Politically and socially, the Nordic region should continue to enjoy stability in 2007/2008. After more than 50 years of socialist democracy by governance, the main socio-political challenge within the Nordic Countries in 2007 and beyond will arise from the balance between the maintenance of a revered welfare system and the high socioeconomic costs of such maintenance. There is a new government in Sweden since October 2006, when the democrats took power. The two last years (2005 and 2006) have been very challenging and an economical balance is now in place. There was a holdback for long-haul travel on a global basis, however interior home design/decor increased with +30% while longhaul travel decreased with %. The question of joining the monetary union in Europe will arise with greater urgency in Sweden in Denmark is very likely to vote in favour of the Euro currency during As for Sweden, although public opposition to monetary union continues to hold sway, the importance of the Euro currency market to the Swedish external economy and Denmark s likely acceptance of the single currency may yet turn the tide for Euro proponents there (in 2008). Consumer optimism and increased private expenditure/consumers will be a strong feature across the Nordic nations in 2007/2008. In particular, consumer confidence in economic and social terms is asserted through rising sales in cars, electronics and other consumer durables, as well as housing investments. All four Nordic countries are doing extremely well both economically as well as socially. The new government in Sweden has now been in power for a year and we can see major changes taking place, such as lower tax for companies recruiting young people as well as lower tax for companies just starting up. Owners of real estate also enjoy lower taxes and the old fortune tax has been trimmed substantially; indications for the economic future appear to be positive. Inflation remained subdued in 2006, and is forecast to accelerate only gradually in Inflation is expected to stabilise at around 2% over the second half of the forecast period. The current-account balance is projected to remain strongly in surplus. 1.4 COUNTRY BACKGROUND SWEDEN Demographics: 83.4% urban; life expectancy: 74.6 M / 80.3 F; population increase rate: 3.3 per 1,000 Climate: Typically continental with a moderate to large range in temperatures between summer and winter; Most of Norrland has a long winter (7 months) and a short, hot summer, while Skåne in the south has a cold winter (2 months) and a summer of more than 4 months. Landscape: The two main geographical regions are the mountainous north, including part of Lapland, and the low-lying south, where most of the population lives. Rivers and over 100,000 lakes make up nearly one third of the area, and much of the land is forested. Economy: Sweden is a highly industrialized nation with one of the highest living standards in the world. Aided by peace and neutrality for the whole 20th century, Swede has achieved this standard under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labour force. It is a producer of iron and other metal ores. Industries include highgrade steel, metal goods, machinery, transport equipment, forest products, and ships, much of which is exported. Farming produces dairy products, grain, sugar beet, potatoes, livestock and poultry. The fur industry is also important. In recent years, the extraordinarily favourable picture of the Swedish economy has been somewhat clouded by budgetary difficulties, high unemployment, and a gradual loss of competitiveness in international markets. NORWAY Demographics: 75.0% urban; life expectancy: 74.0 M / 80.1 F; population increase rate: 3.6 per 1,000 Climate: Temperate climate with mild winters and cold summers along the coast, and cold winters and hot summers in the interior; strong winds with snow or severe frost in the interior highlands; frequent and heavy rainfall on the west coast. Landscape: Norway is a rugged, mountainous country. Its 2,740-km coastline is fringed with islands and deeply indented by fjords; from the coast, the land rises precipitously to high plateaux, reaching 2,468 m in the Jotunheimen range and including Jostedalsbreen, the largest glacier field in Europe. Economy: The Norwegian economy is a prosperous bastion of welfare capitalism, featuring a combination of free market activity and government intervention. Norway s economy was transformed in the late 1960s by the discovery of large oil and gas reserves in the North Sea; reserves have also been found in the Norwegian Sea. Petroleum and gas account for over 40% of export earnings. Manufacturing, food processing, shipbuilding, forestry, fishing, the shipping and trading carried on by Norway's great merchant fleet, and the production of aluminium, pulp and paper, and electrochemicals are also important. Less than 4% of the land is cultivated; cattle, sheep, and reindeer are raised on the mountain pastures. The many rapid rivers furnish hydroelectric power, allowing most of the petroleum to be exported. The government, which controls key areas of the economy, is moving ahead with privatization. Despite their high per-capita income and generous welfare benefits, Norwegians worry about the time when oil and gas begin to run out. Norway has been saving its oil-boosted budget surpluses in a Government Petroleum Fund, which is invested abroad and is now valued at more than Ä43 billion. DENMARK Demographics: 86.4% urban; life expectancy: 71.8 M / 77.7 F; population increase rate: 0.5 per 1,000 Climate: Temperate maritime with generally cold and cloudy winters, and warm and sunny summers; snow between January and March, heaviest rainfall from August to October. Landscape: The southernmost of the Scandinavian countries, Denmark includes most of the Jutland (Jylland) peninsula as well as more than 450 islands. The Færøerne (Føroyar) and Kalaallit Nunaat (Greenland), which are semiautonomous, lie to the northwest. Economy: Denmark, which is almost entirely low-lying, has traditionally been an agricultural country; after 1945, however, it greatly expanded its industrial base. The main commodities raised are livestock and poultry, root crops and cereals. The leading industries include food products, chemicals, machinery, metals, and electrical and electronic equipment. Fishing, shipping, and tourism are also important. The thoroughly modern market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, and high dependence on foreign trade. The centre-left government has reduced the formerly high unemployment rate, attained a high budget surplus, and maintained low inflation and a stable currency. The coalition has also lowered marginal income taxes and raised environmental taxes. Although the Danish voters rejected participation in the EMU, the Danish currency is pegged to the Euro. 6 7

5 NORDIC TRAVEL MARKETS 2 NORDIC TRAVEL MARKETS: OUTBOUND TOURISM AND POTENTIAL FOR VIETNAM FINLAND Demographics: 61.1% urban; life expectancy: 70.8 M / 78.9 F; population increase rate: 3.1 per 1,000 Climate: Temperate with cold spells in winter and heat waves in summer; westerly winds bring warm air currents in summer; precipitation all year round, in the north mostly as snow. Landscape: There are three main geographical zones: a low-lying coastal strip in the south and west that includes most of the major cities; a vast forested interior plateau, dotted with some 60,000 lakes; and a thinly wooded or barren region north of the Arctic Circle, part of Lapland. Economy: Since World War II, manufacturing has replaced agriculture as the principal sector of the economy. Chief industries are forest products (about 70% of Finland is forested), iron, steel, petroleum products, machinery, chemicals, processed food, and mobiletelecommunications equipment (Nokia, Ericsson). Finland is also known for its design of glass, ceramics and stainless-steel cutlery. Financial and other services are also important. Because of the climate, agricultural development is limited to maintaining selfsufficiency in basic products. Finland has a highly industrialized, largely free-market economy, with per-capita output roughly that of the UK, France, Germany and Italy. Two key demographic patterns in development in the Nordic region should be highlighted here: A greying population. Currently, residents aged 65 and above account for an average of 15.5% across the Nordics. This proportion is projected to rise to 19.7% by 2010, with the trend being most prevalent in Finland where the 65+ population is expected to grow by 50% over the next 10 years. A small household size. Two-thirds of all Nordic households have 2 or less inhabitants per household, ranging from Norway s 60% to 70% in Denmark, Sweden and Finland. With an independent lifestyle choice likely to remain pervasive, small households are projected to rise to 70% across the Nordic region over the next 5 years. 2.1 TOURISM TRENDS WHO IS TRAVELLING? Long renowned for their passion for travel and adventure, the Scandinavians now consider overseas travel as an important lifestyle choice. The combined size of the Nordic outbound travel market, scheduled and charter services inclusive, is expected to exceed 16 million consumers in There have been major changes within the travel industry over the last 4 years, the charter concept is a technical term only and more and more are headed for FIT operations with a platform of flexibility. The national carrier, SAS, has for many years (45) controlled/monopolised the sectors from the Nordic countries to gateways in Europe. This has lead to high pricing and complicated yield systems for the onward carriers. The monopoly by SAS has been lifted and low-cost airlines as well as international carriers are now operating en masse into the Nordic countries. These include Malaysian Airlines 3 times a week Stockholm-Kuala Lumpur as well as Cubana and Continental (daily), to mention only a few. Given a combined population of almost 24 million, the propensity to travel is evidently quite high. On average, the above statistics equate to ¾ of the entire Nordic population making one outbound journey per year. Scheduled flights account for between 75-82% of the total outbound market, with this proportion being the highest in Denmark and Finland. In Denmark, Sweden and Finland, scheduled flight departures grew faster than charter departures in 2006, while the reverse trend was evident in Norway. WHERE ARE THEY TRAVELLING TO? Intra-Nordic travel accounted for 40% of the total outbound market in Destination choice for the Nordic states is however not uniform; Denmark is the top destination for the Swedes, Norway for Danish market, and Sweden for the Finns and Norwegians. Intra-Nordic travel aside, sun and beach destinations feature prominently among the most popular overseas holiday destinations for Nordic travellers. Chartered/inclusive holidays account for 20% of all outbound travel and continue to dominate Nordic holiday patterns. Hence it is not surprising that the Canary Islands and Mediterranean resorts in Greece, Cyprus and Turkey remained the most popular holiday destinations across the Nordic nations. The Northern African destinations of Tunisia, Egypt and Morocco have also emerged to compete quite well in the inclusive holiday market in recent years. 8 9

6 For FIT outbound, the travel pattern of Nordic travel is dominated by the UK, France and Italy who combined for 15% of the total outbound market. Again, destination preferences are not uniform; the UK is tops for the Swedish, Norwegian and Finnish markets, while France is best selling in Denmark. Why this trend has developed is much due to historical and socio-economic factors. Anglo- Swedish co-operation has always been close, while Denmark is widely regarded as being more Continental than Scandinavian. The remainder of Mainland Europe and Eastern Europe account for 15% of total Nordic outbound, although this market share is skewed towards the use of transit points such as Amsterdam and Frankfurt for onward travel. The remaining 10% of the Nordic market is split between the US, Africa, Asia- Pacific and the rest of the world. Asia-Pacific accounted for approximately 5% of the total Nordic outbound market in A summary of how Vietnam s main competitors in the Asia-Pacific region fared in 2006 is as follows: Thailand 620,000 Singapore 134,000 Australia 62,000 Hong Kong 54,200 Japan 46,000 Dubai 55,000 New Zealand 22,000 Nordic visitors (approx) Thailand is indisputably the most popular destination for Nordic outbound travel in the Asia-Pacific region, accounting for more than half of all Nordic visitors. In fact, such is Thailand s popularity in the Nordic markets that between , Nordic visitors to Thailand tripled from 171,000 to 620,000. Thailand s positioning as the epitome of sunand-sea resort paradise has equal appeal among both FIT and charter operators, and has had the leading position in the Nordic markets. Going back to 1970, SAS (our national carrier) needed a hub in Asia. SAS entered into partnership with Thai Airways at that time and Bangkok became the hub in Asia. Flight capacity has grown over the years and both Stockholm and Copenhagen today enjoy daily flights that are likely to increase to 10 flights a week in Nordic FIT tour operators have highlighted Vietnam, Malaysia, South Africa, Mauritius, Maldives, Seychelles and the USA as potential emerging markets in Also the Middle East, particularly Dubai and Oman, is now a regular feature of most tour operators programmes in the Nordic markets. The geographic composition is more or less proportionate to the economic size of each country. Given Sweden s position as the largest economy in the Nordic nations and its demographic dominance of 9 million people (or 40% of the total Nordic population), it is not surprising to see Swedes constitute the largest source of Nordic visitors. However, the absence of direct services between Stockholm and the rest of the world has been the most direct impediment towards tapping the full potential of the market. Denmark, despite being the smallest country demographically, has benefited from the direct services from Copenhagen to Asia, as well as from its economic strength. This traffic was created by SAS back in the fifties to reap the benefit as a travel hub, as SAS was thus set to enjoy all feeder traffic between the other Nordic cities and Copenhagen. Finland, however, may represent better potential in the longer term compared to Denmark or Norway. Daily direct services to Asia by Finnair, an economy which looks very promising for 2008, and a market wherein there are no serious competitors for outbound to the Asia-Pacific region; these are the main reasons to support Finland s long-term potential. Over the next 2 years, the breakdown of Nordic visitors to Asia/Africa is likely to see Sweden at 50%, with Denmark, Norway and Finland contributing equally each to the other 50%. PROFILE OF NORDIC VISITORS The majority of Nordic visitors arrive via air to Asia (82%). Almost two-thirds of them are male (64%), although female visitors have gained slightly in proportion in The demographic profile of the Nordic market can be summarised as follows: Age 14 & Under 6.4% % % % 55 & above 17.0% Proportion of Nordic visitors long-haul The above table would suggest that the segments which offer the best potential for cultivation lie within the 15-19, and 55 & above age clusters. Three distinct demographic trends are in evident here: A younger profile of Nordic travellers will take on increased significance in terms of potential visits to Asia. The seniors market segment will offer a steady growth prospect in tandem with a greying population across the Nordics (30% of the population). The middle-aged family (with children) segment may also offer as strong a growth prospect. Holiday travel remained the main purpose of visit for Nordic visitors to Asia, with 75% of them travelling to Asia as holidaymakers. Other main categories were business travellers (15%) and in-transit visitors (10%). The pattern of Nordic visitors to Asia is decidedly FIT-dominant or non-group based, with less than 15% travelling to Asia on a group arrangement. Average length of stay of the Nordic visitor is 10 days on long-haul

7 2.2 INDUSTRY DEVELOPMENTS LEISURE MARKET Although charter holidays remain big business in the Nordic nations, their popularity has waned in recent years as consumer demand for tailor-made or FIT travel increase. In addition, prices from the scheduled carriers for midand long-haul travel have dropped to the extent that the competitive price advantage of charter packages has been narrowed. In fact, some of the charter operators are now offering consumers greater flexibility in their travel arrangements, e.g. use of a scheduled carrier, extensions, accommodation upgrades, to adapt to new consumer demand. Growth in long-haul leisure travel is expected to continue for the next 5 years with the prevailing economic improvements in the Nordic countries. Prospects for the Far East look especially good, with most tour operators citing excellent value for money, consumer demand for new holiday destinations and an increased exposure of the region as the main contributory factors. Strong competition should be expected however from the Middle East, North Africa and USA regions. CRUISE MARKET The fly-cruise market in the Nordic nations remains dominated by the Mediterranean and Caribbean. Fly-cruises in the Far East constitute only a small proportion of the overall cruise market. The main attraction of travel to the Far East remains with the climate, beach and cultural attributes, hence the reluctance by Nordic consumers to consider the Far East for its fly-cruise possibilities. 2.3 FUTURE TRENDS DOMINANCE OF FIT TRAVEL & TAILOR-MADE HOLIDAYS Demographic development within the Nordic nations points to a population that is increasingly independent rather than communal in lifestyle. In tandem with this, the pattern of outbound travel will be decidedly more FIT. An increasing proportion of potential Nordic travellers will feel that holiday plans should be made on their own terms, not dictated to them. Any FIT mode of travel arrangement (air + accommodation only) will be the preference, although the Nordic consumers will also have their holidays tailormade, based upon their personal interests. The Nordic population is especially adept at seeking out travel information independently. As such, their holiday destinations will in likelihood be driven more by the information they gather through the media or other independent sources than through the travel trade. Packaged holidays may yet remain sustainable in the market place due to pricing demands, but the travel trend is decidedly heading towards FIT and tailor-made holidays. PROLIFERATION OF SHORTER AND MORE FREQUENT HOLIDAYS The Nordic tradition of one long annual holiday is continually challenged by new work and leisure demands. A high level of physical and spiritual stress resultant from a fast-paced work environment will invariably increase the demand for more holiday breaks, albeit shorter ones, by Nordic residents. With increased consumer confidence, the trend towards integration of travel and holidays within one s lifestyle sphere is reinforced. Moreover, with this lifestyle integration, the desire for more shorter and holidays is perpetuated. Currently, residents in the four Nordic countries enjoy 5 weeks of annual holidays (Seniors 6 weeks). While the tradition had been to take one long summer vacation, the growing trend has been to break down one s vacation plans into 2 or 3 shorter holidays each year. Hence, shorter breaks of 1 to 2 weeks, albeit 2 or 3 times annually, are very much a true reflection of the modern Nordic lifestyle. Destination choices, however, are not limited to the short-haul. Week-long sojourns to long-haul destinations in the Indian Ocean, Caribbean, Africa, and the Far East have become as popular as shorter trips around Europe. Among the current best-selling destinations for short breaks outside Europe are: Dubai, New York, Florida and soon also Kuala Lumpur/Bangkok/Singapore/Hong Kong. Invariably, the airlines and tour operators in the Nordic countries have to continually meet this rising demand for short breaks by introducing new destinations and products. DIFFERENTIATION THROUGH NICHE MARKETING Given the Nordic markets penchant for FIT and tailor-made holidays, niche marketing will assume utmost importance. Destinations that are best able to offer tourism products tailored to selected niche markets will emerge strongest. For example, where previously beach holidays were sold en masse, there are now tailored beach holidays for niche segments such as families, honeymooners, youths etc. Aligned to the development of niche-based product, marketing management will follow similar trends. Use of specialist media for advertising or publicity, dedicated direct mailers, agents training, web marketing and product pricing have increasingly been geared towards segment marketing. ENLARGED ROLE OF THE TRAVEL AGENCY With niche marketing gathering momentum in the Nordic markets, the definitive role of tour operators and travel agencies has become clouded. In addition, the pattern of mergers and acquisitions among tour operators and travel agencies will ensure a more level playing field in the Nordic nations. With niche marketing, travel agencies in the Nordic countries are able to assume an enlarged role of product packaging and distribution, with the support of their airline partners. NON-TRADITIONAL MARKETING PLATFORM The most exciting changes to emerge from the Nordic markets will come from the use of nontraditional media for sales and promotion of travel products. The Internet is the most widely cited example, but is by no means the only source. Touted as the most wired region in the world, the use of the Internet as an integral marketing tool is not new in the Nordic region. What has been exciting with regard to Internet marketing in the Nordic countries is the prevalence of new features such as digital communities, relationship management and WAP-based technologies, which make for a versatile marketing platform. Increasingly, travel products are also marketed by travel agencies through tactical promotions with department stores, supermarkets, petrol stations, food chains and financial services companies. As the trend of widespread consumerism will pervade in the Nordic markets, the exploration of these nontraditional point-of-sales platforms will be quite meaningful

8 2.4 MARKET SEGMENTATION YOUNG INDEPENDENT PROFESSIONALS (UP TO 35 YEARS OLD) Accounting for a quarter of the Nordic population, the Young Professionals, by virtue of their youthful and trendy disposition invariably offer the best segmental potential among Nordic travellers. With little family responsibilities, and well-disposed in employment and income terms, the Young Independent Professionals are arguably the most attractive segment to target. YIPs, for short, regard holidays as an emblem of a fulfilling lifestyle, a right rather than a luxury. Destinations deemed to offer a rich sense of fun are most attractive to these YIPs. Welleducated and travelled, YIPs enjoy the experience of local cultures and lifestyles, beaches and resorts, with a good dose of entertainment options. DINKS (UP TO 55 YEARS OLD) Nordic society has among the highest proportion of cohabitants in the world, with an estimated 60% of couples living together not legally married. As such, DINKs in the Nordic markets refer to both legally married and cohabitant couples with no children. DINKs differentiate from YIPs in that the former adopt a more disciplined lifestyle pattern. Hence, while YIPs are more likely to give in to emotional rushes in destination planning, DINKs tend to adopt a more rational and consultative approach. Usually, among DINKs, the female member of the household exerts a greater influence in terms of holiday planning (80%). Not unlike the YIPs, DINKs are an attractive market segment because of their well-disposed incomes and lack of parental responsibilities. That they are more flexible in their vacation timings will lend further credence to Vietnam s appeal as a year-round destination. In addition, the stronger influence of the female voice within the DINK household allows for a targeted communications strategy. DINKs are most keen on destinations that offer rich history and culture, special events and quality entertainment. 14 THE THRIVING GREYS (60 YEARS YOUNG AND ABOVE) OR MAPPIES= MATURE AFFLUENT PIONEERING PEOPLE. They started out once as Hippies, then they become Yuppies now they are called Mappies! The Nordic population boasts one of the highest longevity rates in the world, with life expectancy at an average of 76 years. Combined with the fact that senior citizens over the age of 60 account for 30% of the population, the Nordic markets arguably affords very good potential in cultivating the seniors market. Newly retired, healthy, wealthy (pension income plus savings) with little financial burden and relieved of their children, these Thriving Greys have the necessary disposable income and time to afford long-haul holidays. Unlike in Asia, where senior citizens regard special privileges as a mark of respect, Nordic seniors do not like to be singled out for either special attention or treatment. With the seniors market expected to continue to yield good growth for Asia, special attention has to be paid to the age sensitivity issue in marketing communications. While specialist titles of appeal to the seniors market should be explored, it is important to bear in mind that Nordic seniors remain evergreens, as far as their lively aspirations go. FAMILY MARKET For reasons of proximity and cost, family travel for the Nordic markets continues to be dominated by short and medium-haul destinations. In particular, intra-nordic and the Mediterranean resorts dominate the family market in Scandinavia and Finland. Family travel accounts for approximately only 15% of all Nordic travellers to Asia (refer to age clusters of 14 and under and ). In spite of the smallness of this market segment, the family market still ranks of some importance to Asia and the following should be noted: Family travel decisions are made predominantly by the mother of the household. As such, it makes good sense to leverage on female-biased marketing communications strategies to encourage family travel from the Nordic countries. MARKETING PLAN TO PROMOTE VIETNAM IN THE NORDIC COUNTRIES 3 MARKETING PLAN TO PROMOTE VIETNAM IN THE NORDIC COUNTRIES 3.1 KEY ISSUES AND OBJECTIVES FOR YEARS 2008, 2009 & 2010 MISSION STATEMENT To maximise visitor arrivals from Scandinavia & Finland with a mix of market shares in leisure, MICE and corporate. To influence the tourism industry and media in Scandinavia & Finland to create a revenue of socio-economic contribution to Vietnam. To encourage, influence and convince decision makers within the travel industry to choose Vietnam as a year-round destination. To create a higher consumer demand, especially in highyield segments, to travel to Vietnam. To increase arrivals in calendar years to a level set by the tourism board. To concentrate on the expectations of visitor profiles (YIPPIES, DINKS, SENIORS) and live up to them accordingly. To improve communication with the travel industry sectors and to obtain their solid support of objectives and activities. To target and analyse strategically identification of market segments within the travel industry of those who can afford to travel to Vietnam. To identify new revenue opportunities and revenue realisation. 15 To seek and identify new PR & marketing opportunities with famous brands for joint marketing positioning and to create an even higher consumer demand. To create multi-awareness about Vietnam as a value-for-money experience. 3.2 COMPETITIVE ACTIVITIES FROM OTHER DESTINATIONS (CURRENT AND ANTICIPATED) Thailand has a long relationship with Scandinavia & Finland. Over 620,000 people are expected to visit Thailand from Scandinavia & Finland in 2007, with an additional increase of capacity planned for 2008 and Thailand is indisputably the most popular destination in Asia. However, this tourism does not bring the expected benefits to the country and is a threat to the infrastructure. The Tourism Authority of Thailand (TAT) runs national campaigns and a wealth of articles appear regularly in the region s magazines. These articles do not however focus on aspects such as news, adventure or exploration. The weaknesses of TAT in Stockholm/Sweden are: Outmoded administration and decisions can only be taken in Bangkok. It covers 19 countries from its base in Sweden. It limits promotional initiatives to traditional trade fairs and activities.

9 PR & MARKETING STRATEGY Despite these shortcomings, it is difficult to blame TAT for carrying on as before, given that tourism from the Nordic countries is flourishing! Thai Airways has announced a 20% increase in airfares due to the demand. Nordic people are now more familiar with Asian culture and wish to explore Vietnam. As in the rest of Europe, they are very curious about exploring Vietnam after the War and have a sizeable Vietnamese community, compared to other Asian cultures. Nordic countries do not have ANY historical links with Asia it is all a matter of marketing! SAS (the national carrier) has also protected the routes to Bangkok, as they needed a hub in Asia. However, now that the monopoly has been lifted, any carrier is free to operate into Scandinavia. As such, Thai Airways has an advantage as they started as the ONLY carrier in the seventies. Flights into Scandinavia are CRUCIAL. The charter operators started back in the early fifties, but charter is now a technical term; most charter operators prefer to take up allocations with scheduled flights, as the financial commitments are lighter and give a better flexibility in days as well as combinations. For a given destination, it is more financially viable, as business can be directed according to the destination needs and infrastructure. It also brings higher yield as it will attract a market mix of leisure/mice and corporate. The planning schedule of Thai Airways is to increase capacity of existing daily flights per week from Stockholm/Sweden and Copenhagen/Denmark to 10 a week in Africa (South Africa & Mauritius) is expected to grow in the next 2 years. Charter operation has been put in place from October 2007 to South Africa and scheduled capacity to Mauritius is being doubled. 16 Qatar Airways will for the first time ever operate 4 times a week Stockholm - Doha with onward connections to MLE (Malé (Maldives)) SEZ (Seychelles) and DXB (Dubai). These are very attractive destinations, but not as adventurous in marketing terms as Vietnam. The US: due to substantial air capacity between Stockholm and New York with both Malaysian Airlines and Continental, they can now offer the market 100,000 seats per year - in addition to existing capacity. Malaysia is expected to double visitor arrivals from Scandinavia & Finland in 2007/2008 due to the extensive demand for Asia. 3.3 TRAVEL INDUSTRY DEVELOPMENTS THAT WILL AFFECT OUTBOUND TRAVEL. We know that the Nordic travel industry is very sophisticated. There is still both vertical as well as horizontal integration with a reduction of independent retail agents. Commissions are being cut as travel is marketed to the consumer in increasingly direct ways. A significant number of holidays are being bought from the larger chains or small independent agents (niche marketing). The Internet is being used increasingly, with over 80-85% access: straightforward tickets are being bought online, as well as charter packages. All companies save the very smallest have a website and the major portals are chasing members. Proportionally, Nordic countries actually boast the highest numbers of Internet and WAP users in the world. The travel industry is developing quality programmes, customer databases, added value programmes and customer profiled services. 4 PR & MARKETING STRATEGY 4.1 PROPOSED STRATEGY TO ACHIEVE STATED OBJECTIVES FOR To maximise revenue, visitor arrivals and length of stay from Scandinavia & Finland to Vietnam. To market Vietnam as a quality and multi-experience destination. To influence the consumers, tourism industry and media in Scandinavia & Finland to select Vietnam as a first choice and as a final destination. To encourage tour operators to put together programs of multi-experience elements offered by the travel industry in Vietnam. To concentrate on specific segments within the travel industry and media that have the ability to package Vietnam as a quality destination and to promote good and high-yield business, also to attract repeat visitors. To educate and update the trade retailers to respond to consumer demand. To promote a positive image and to improve the attitude to and knowledge of Vietnam as a destination for the travel trade. To promote Vietnam as a sophisticated destination with a warm and friendly community. To position the message of Vietnam in all external and internal communication MARKET SEGMENTATIONS To concentrate resources on segments such as: High yield (Expenditure) Visitor arrivals Increase length of stay DEMOGRAPHIC/CONSUMER SEGMENTATIONS YIPPIES and DINKS A, B income groups Senior citizens TARGET MARKET BY TYPE FIT Leisure traveller Silver market/festivals Spouse/Special interest Ad hoc groups Readers holiday Cultural/Festivals Food Sporting Others GEOGRAPHIC SEGMENTATIONS Market performers by ranking for VIETNAM Sweden Finland Norway Denmark

10 PROPOSED PR & MARKETING PLAN ACTIVITIES 5 PROPOSED PR & MARKETING PLAN ACTIVITIES 5.1 IN-HOUSE SEMINARS 5.4 PRESS TRIPS, INDIVIDUAL OR SUPERFAMS Hold in-house seminars to update the trade about Vietnamese tourism products, to be held in each capital city. To create a demand for high-yield business, to enable market shares from other destinations in the region to select Vietnam as a first destination. To be performed twice a year in: Stockholm, Gothenburg, Helsinki, Oslo and Copenhagen. 5.2 SALES CALLS Frequently in conjunction with promotions or training seminars. Target decision makers, tour operators, FITs, MICE, media and special interest. 5.3 PRESS CONFERENCES IN CONJUNCTION WITH TRADE FAIRS Reiseliv in Oslo, once a year MATKA in Helsinki, once a year Ferie in Copenhagen TUR in Gothenburg, once a year Holidays for everyone, Herning once a year WTM in London, once a year (a lot of Scandinavian tops) Vagabond Luxury fair in Copenhagen 2 groups from Sweden/year 10 individuals from Sweden/year 1 groups from Finland/year 8 individuals from Finland/year 1 groups from Norway/year 6 individuals from Norway/year 1 groups from Denmark/year 8 individuals from Denmark/year 5 TV crews JOINT MARKETING WITH TOUR OPS On a joint basis implement promotions activities on equal basis share. With very selective media such as: Lifestyle Special interest magazines Travel trade magazines 5.6 JOINT BRANDING POSITIONING IN CAMPAIGNS: Relationship marketing with initiated contacts: 1. McDonald 2. Viasat 3. TV3 4. TV5 5. Miss Finland 6. Magazine Clubs 7. Aftonbladet.se 8. SATS 9. Club Metro 10. Kodak 11. Gothenburg Bisquit 12. MSN.se 13. Travel Fever Webportal 5.7 PR Relationship marketing and cross promotions will give most mileage in cost-effective TV campaigns as well as MSN and WAP. Press releases: One a month or when relevant Internet: Preferably in the local language, but English will do! PR objectives To create a multi-awareness about Vietnam. Value-for- money destination with quality expectations. New market segments for maximum exposure. To ensure top on mind effect with strategic positioning with media in Scandinavia & Finland. To communicate the values of Vietnamese elements as well as highlights of festival/events and cultural exposure. 5.8 PROJECTS To implement a WOW project allocated to the Swedish market. Bring Vietnam to Stockholm in August 2009, an event that will attract 175,000 consumers and TV

11 ABC TOURS att Lars Norén Hjulhamnsgatan 3, II Malmö Abitur AB att Roger Johansson Box Särö Ace Conference & Event AB att Elisabeth Havstam Lindholmspiren Göteborg Action Travel Stockholm AB att Jacek Grzelak Box Enköping Aeronaut Resebyrå AB att Karl-Axel Benckert Terrassvägen 17A Stocksund Affärsresebyrån Hudiksvall att Carin Engnell Box Hudiksvall Affärsresebyrån i Norr AB att Mats Blomqvist Smedjegatan Luleå Affärsresebyrån i Umeå AB att Kenneth Forsberg Box Umeå Affärsresebyrån Skellefteå att Christina Hägg Skeria Skellefteå Affärsresebyrån Örnsköldsvik att Arne Lundgren Box Örnsköldsvik AffärsResehuset att Torsten Johansson Box Jönköping Affärsresor i Sundbyberg AB att Björn Holmqvist Box Sundbyberg African Safari Company AB att Sujit Shah Rådmansgatan Stockholm Afro-Caribbean Travel att Daniel Goitom S:t Eriksplan Stockholm Airportticket att Dimitrios Vasiliou Strindbergsgatan Stockholm Airtours att Richard Johansson Sveavägen Stockholm Airtours Kungsgatan 10A Göteborg Airtours Grynbodgatan Malmö Airtrips Nordic Holidays AB att Emin Dinler Box Stockholm Airways Net att Gun Wikström Box Stockholm Akademikerresor AB att Bo Larsson Box Stockholm Akasia Travel AB att Leyla Demiray Upplandsgatan Stockholm AKI Resekonsult AB att Magnus Järrenfors Box Borås Akilles TSI Travel att Patricia Baltatzis Bergsgatan Malmö ALEXITO Peruspecialisten att Joakim Bendezú-Berglund Båtbyggargatan Stockholm All-Around Tours AB att Kristina "Kixi" Borgh Drottninggatan Karlshamn Alla Resor Miral AB att Alla Miralieva Lilla Kyrkogatan Göteborg AllResor att Antoine de Leeuw Box Alingsås ALMA TOUR att Janne Schuldt Rådmansgatan Stockholm Alterfors Resor AB att Ilona Alterfors Riddargatan Stockholm American Express Business Travel AB att Jakob Nielsen Box Malmö American Express Business Travel AB att Annicka Wahlström Åsgatan Falun American Express Business Travel AB att Christine Samuelsson Drottninggatan Göteborg American Express Business Travel AB att Ulrika Engquist Drottninggatan Helsingborg American Express Business Travel AB att Mona Grönqvist CampusGräsvik 3B Karlskrona American Express Business Travel AB att Anders Carlsson Box Karlstad American Express Business Travel AB att Bertil Skärblom Box Norrköping

12 American Express Business Travel AB att Eva Lidström Skeppargatan Skellefteå American Express Business Travel AB att Håkan Andersson Box Skövde American Express Business Travel AB att Thomas Larsson Box Stockholm American Express Business Travel AB att Christer Fors Box Örebro American Express Business Travel AB att Niclas Häggström Box Örnsköldsvik American Express Business Travel AB att Rickard Lundström Box Östersund American Express Business Travel AB att Birgitta Tarrant Drottninggatan Göteborg American Express Business Travel AB att Annika Forslund Box Stockholm American Express Business Travel AB att Carina Jönsson Box Malmö American Express Business Travel AB att Lena Cederlid Magnus Ladulåsgatan Stockholm American Express Business Travel AB att Gunilla Hansen Mölndalsv 30B Göteborg American Express Business Travel AB att Ingela Johansson Järnvägsgatan Hus Huskvarna American Express Business Travel AB att BrittMarie Edvinsson Torshamnsgatan Kista American Express Business Travel AB att Gunnar Kindstrand Box Linköping American Express Business Travel AB att Mari Hjältman Storgatan Sundsvall American Express Business Travel AB att Jakob Nielsen CampusGräsvik 3B Karlskrona American Express Business Travel AB att Annika Forslund Dag Hammarskjöldsväg Uppsala American Express Business Travel AB Box Linköping Andalusien DIREKT AB att Carina Dahlgren Box Malmö Andersons African Adventures SV AB att Jörgen Öberg Köpmangatan Stockholm Andersson & Blid Resebyrå AB att Bertil Andersson Box Malmö Ansgar Resor att Staffan Lind Box Göteborg Antello AB att Antonella Cvitan Tingsgatan Helsingborg Apollo Resor Skeppsbrogatan Luleå KUONI/Apollo Resor Sveavägen Stockholm Prod Apollo Resor Gustav Adolfs Torg Malmö Apollo Resor Kungsgatan Växjö Apollo Resor Kungstorget Göteborg Apollo Resor Dragarbrunnsgatan Uppsala Apollo Resor Storgatan Linköping Apollo Resor Nedre Långvikelsgatan Helsingborg Apollo Resor AB att Madeleine Persson Ynglingagatan Stockholm Ark Travel Gävle att Karin Wiman-Thorsson Box Gävle Ark Travel Göteborg att Anna-Leena Meriläinen Box Göteborg Ark Travel Malmö att Catharina Johansson Box Malmö Ark Travel of Sweden AB att Nina Hermansson Box Stockholm Ark Travel Stockholm att Kenth Vahnberg Box Stockholm Ark Travel Stockholm att Lotti Asplund Box Stockholm Ark Travel Sundsvall att Kati Bohlin Box Sundsvall

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