A strategy of striking at niche segments in the tourism and hospitality industry to become the leader in each turned the $2,000 Buffalo Tours into the hundred-million dollar Thien Minh Group.
On a Saturday morning, just like any other morning, on the ninth floor of an office building in Hanoi’s central Hoan Kiem district a middle-aged man with a touch of grey hair and a weather-beaten appearance works passionately. His office is full of light, with a panoramic view to his front and a crowded bookshelf to his back. He may not notice it himself, but the layout of his office says a lot about his success. Its glass walls not only allow him to see his staff but also allows them to see him. He is open and transparent to every employee, which are key characteristics in becoming a successful entrepreneur.
He is Mr Tran Trong Kien, CEO of the Thien Minh Group (TMG); a hundred-million dollar business and one of the leaders in Vietnam’s tourism and hospitality industry.
Best in segment
Incredibly, Mr Kien began the business at the age of 21 with a modest $2,000. That was in 1994 and at the time he had not even finished his studies at the Hanoi Medical University - something totally unrelated to doing business in tourism and hospitality. In the very first days of the start-up the company’s assets amounted to little more than a desk and a telephone that hardly ever rang. They were arduous and challenging times.
Explaining why he took the path to the travel business instead of following the medical profession, Mr Kien explained that he was born to an ordinary Vietnamese family with financial difficulties. “I don’t want to see my kids grow up lacking things, like I did,” he said. Financial difficulties, a passion for adventure travel and the bonanza of starting the business at the very moment the travel market opened up lie at the heart of the achievements of TMG over the last 20 years. But that’s only part of the story.
Entering the market with his modest $2,000 in hand and facing experienced competitors who had successfully created firm footholds, “being different” became the only way for Mr Kien’s Buffalo Tours (now within the TMG portfolio) to survive back then. While most other tour operators simply provided sightseeing tours, Buffalo Tours became a pioneer by introducing adventure tourism and quickly attracted a healthy number of foreign customers. “I wasn’t selling a tour,” Mr Kien remembers, “I was selling an experience.”
Choosing adventure tourism along with cultural exchange and community tours, Buffalo Tours productively put Vietnam’s natural history and culture to good use. In the early 2000s many may have mistaken Buffalo Tours for a foreign tour operator because of its eye-catching appearance and professional services. After some time settling down and gaining stability, the company had a clear orientation: targeting foreigners with money to spend.
While other tour operators were offering similar products to customers from all over the world, Buffalo Tours carried out extremely detailed research and came up with a range of new product lines. According to Mr Kien, the concept of adventure tour varies. American tourists are willing to pay $500 to $800 for a tour, seeing it as a high-class service. Australians, meanwhile, are willing to pay no more than $100, as they consider such tours as being fun yet affordable. The company’s tours were then designed based on the particular psychology of each customer segment.
With relentless effort, Buffalo Tours is now present in a number of countries and most of its agencies are experiencing solid growth. It’s recognised as the leading adventure tour company in Vietnam and in Southeast Asia, with steady growth of 20 to 40 per cent annually. “TMG may not be the biggest but it must be the best in each segment and each niche market that it competes in,” was the company credo back in the early days and it still holds true today.
M&A the way
Besides operating tours, the hotel business is a key part of TMG’s portfolio. In 2011 it implemented a $45 million acquisit