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Tourism startups going places

Released at: 20:13, 01/04/2018

Tourism startups going places

Photo: Viet Tuan

Tourism is proving to be fertile ground for Vietnam's ambitious startup community.

by Ngoc Lan

Tourism has joined information technology as an attractive sector in which to start a business by many young people in Asia in general and Vietnam in particular. In the context of Industry 4.0, enterprises in the tourism sector have been encouraged to use digital platforms as the use of smartphones and laptops increases. Tourism startup projects are therefore appearing in Vietnam in larger numbers with innovative solutions that diversify tourism products. 

Different strategies

I Love Hue Tours has offered women-driven motorbike tours in Hue since 2014 while also supporting projects in disadvantaged communities. It expanded in 2017 to Hanoi, Hoi An, and Ho Chi Minh City, becoming I Love Vietnam Tours, with 75 women riders, and receives 150 bookings each month. “I Love Vietnam Tours was the dream of I Love Hue Tours, where from a small city we could help people know about female motorbike tours around Vietnam,” Ms. Nguyen Thi Huong Lien, CEO of I Love Vietnam Tours, told VET.

With initial capital of a mere $100, I Love Vietnam Tours has become a great success given that traveling by motorbike is the best and most unique way to see the country and that traveling with women riders is also considered by women travelers to be safer.

The startup made its way to the final round and then won the WISE Woman’s Leadership Award at the Mekong Innovative Startup Tourism (MIST)’s Startup Accelerator, a program aimed at promoting tourism growth in Cambodia, Laos, Myanmar, and Vietnam. “This is not only about earning profit but also about supporting local businesses, contributing to the community, and empowering women, and the more places we conduct tours in the more people that receive assistance,” Ms. Lien said. “I am continuing to develop the model to become I Love Asia Tours this year, and Laos is the first country we will expand to.” 

Among other Vietnamese startups in the final round of MIST, Dichung.vn uses technology to promote low-impact rideshare transport options, giving drivers the chance to trade free seats in their vehicles and work with taxi companies to develop van pools. Established in 2013 as a connection service, Dichung.vn offers services at 20 airports in most tourist destinations around the country. It has conducted over 660,000 trips and saved customers about VND17 billion ($755,000) in fares while cutting 1.6 million kg of waste gas in the environment. 

Dichung.vn has also built a price comparison system so that customers can compare carriers when they need to travel. “We started with the idea of building technology products to help people share space,” Mr. Nguyen Thanh Nam, CEO of Dichung.vn, told VET. “In the tourism value chain, airplane ticket bookings and hotels have encouraged online bookings among tourists but land transport has not. This is our strength.” 

It will expand its coverage this year at international airports where many Vietnamese travel, such as Russia, the US, France, and ASEAN and East Asian countries, develop new market segments at destinations in addition to airport pickups, and develop new products such as self-driving services for motor cars and bicycles in tourist areas.

It’s clear to see that Vietnam has many successful startups in the tourism sector. Together with I Love Vietnam Tours and Dichung.vn, three other startups made the final round of MIST: Bayo.vn, Chameleon City, and Morning Rooms. In the domestic online travel agent (OTA) segment, Vntrip.vn is competitive with foreign OTAs such as Booking.com and Traveloka. In addition to hotel bookings, it also finds favor among customers by offering services such as free airport pick-ups. It raised up to $10 million in capital from international investors in 2017, and on the Alexa rankings has already reached the Top 115 websites in Vietnam.

The success seen expresses the strong development of Vietnamese startups in tourism. Mr. Dominic Mellor, Head of the Mekong Business Initiative (MBI), told local media that in smaller countries like Laos there may not be many tourism tech startups but in Vietnam there are many interesting endeavors. 

Tackling difficulties

The tourism sector now holds an important position in Vietnam’s economic structure, with the modern and professional development of products and services. Vietnam has set a target of welcoming 17 to 20 million international tourist arrivals by 2020 and hosting 82 million domestic tourists, contributing 10 per cent of the country’s GDP and earning $35 billion in revenue.
Minister of Culture, Sports, and Tourism Nguyen Ngoc Thien said that Vietnam will be able to catch up with leading travel destinations in Asia such as Thailand, Malaysia, and Singapore in the near future. By 2030, tourism, as a spearhead economic sector, will drive the development of other sectors and Vietnam will be one of the leading Southeast Asian countries with strong tourism growth.

The United Nations World Tourism Organization (UNWTO) has revealed the world’s Top 10 fastest-growing tourist destinations in 2017, where Vietnam found a place. The potential of tourism in the country has also attracted the attention of the international community. For example, Destination Mekong and the Mekong Business Initiative have announced that applications are now open for their 2018 MIST business support programs, calling for participants in Vietnam. The 15 to 20 startups to be selected will attend an all-expenses paid intensive boot camp where they will compete for six months of advanced mentorship, in-kind acceleration support valued at $20,000, prize money of up to $10,000, and customized business matching with potential investors and partners.

Mr. Jason Lusk, Program Lead of MIST, told VET that Vietnam is experiencing a confluence of two long-term trends: impressive tourism growth and a boom in information and communications technology (ICT), with high mobile and internet penetration rates. “As a result of these two long term trends, Vietnamese entrepreneurs can find fertile opportunities in traditional tourism, travel tech, and hospitality,” he said. “MIST helps Vietnam’s highest-potential tourism, travel tech, and hospitality startups to grow and scale.”

Vietnam has the potential to be one of the world’s most dynamic and exciting tourism destinations, he went on, due to its stunning natural environment, unique culture and cuisine, and fascinating history, and it is easily accessed from leading outbound tourism markets, especially China. “Wealth has also grown faster in Vietnam than anywhere else in the world over the last decade, and its wealthy are increasingly interested in startup investments,” he added.

The development of technology allows young people to start a business, as people are increasingly using smartphones and iPads for bookings through social media. Ms. Lien built her business entirely through the Facebook and Messenger platforms. “I believe in the technology and the opportunities it brings to Vietnamese youth, especially women,” she said. Similarly, Mr. Lam encouraged startups to understand their customers more deeply by adopting technologies such as Big Data to build better products and services.

Although Vietnam’s tourism sector has undeniable potential there are also many challenges for each startup to address. Mr. Nam said his startup encountered a host of difficulties relating to consumer culture in Vietnam in particular and Asia in general, where people are generally wary of strangers. “Rideshare solutions are not really thriving in Asia, even in Japan, South Korea, and China,” he said. “Being a startup with limited resources and trying to create new consumer habits is a huge challenge for us.”

Few tourism companies and hotels supported I Love Hue Tours in the early days because they thought Ms. Lien was too young to offer a special tourism product after meeting her in person. “I had to learn to set up a website to introduce and promote the project online,” she explained. 

Tourism startups face the common challenges all startups in Vietnam must tackle when getting underway, of which the largest is calling for investment capital. Startups need to be able to prove to investors that they have the potential to develop in the future. “In order to fund the tours in the early days I worked at restaurants, a British tourism company, and non-government projects to earn income and improve my products,” Ms. Lien said. “Young people should accept the challenges and work hard to overcome them.”

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