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Phu Quoc ideal for tourism investment

Released at: 17:09, 09/01/2016

Phu Quoc ideal for tourism investment

Savills report notes the potential for tourism development and investment Phu Quoc Island possesses.

by Hoang Thu

Phu Quoc Island is emerging as an ideal destination for hospitality investment, with major advantages from its natural conditions, strategic location, and the support and investment from the local government and enterprises.

Its attractions come from ten stunning beaches along a 150 km coastline, an unspoiled ecosystem and rich biodiversity, a safari park - the second largest in the world, and casino developments being given approval, according to analysis in the latest Savills Vietnam report.

International visitors accounted for 15 per cent of the total in 2014 and are estimated to account for 35-40 per cent by 2020, according the Kien Giang Department of Statistics and the Kien Giang Department of Culture, Sports, and Tourism.

Under its revised general master plan to 2030, Phu Quoc Island will have three urban areas, 15 eco-tourism areas, two tourism complexes, and five golf courses. By 2020 it will be a Special Economic Zone (SEZ).

Investment drivers

Many key infrastructure projects such as Phu Quoc International Airport, the An Thoi International Seaport, and south-north axis road have been completed or upgraded. The Ha Tien - Phu Quoc underground electric cable was completed in 2014.

Many large-scale projects are in the first stages of construction, the report noted, including an international seaport in Duong Dong town, a cable car between An Thoi Island and Hon Thom Island, and a deep water seaport.

Phu Quoc’s strategic location puts it within a 1-2 hour flight of key tourism markets in Southeast Asia.

Tourism growth has been supported by the opening of Phu Quoc International Airport in 2012 and the introduction of visa exemptions for periods of 30 days.

In the last three years turnover in the tourism sector has increased 38 per cent each year and visitor numbers by 61 per cent each year.

The revised Law on Housing also created favorable conditions for overseas Vietnamese and foreigners to own real estate in Vietnam.

Hotel and residential performance

In the hotel sector, local developers such as M.I.K Corporation, BIM Group, CEO Group, and Sun Group dominate the market, with a total market share of 92 per cent.

Limited International Operators

Source: Savills Research Consultancy

Average annual occupancy in hotels was 72 per cent in 2010 but fell to 64 per cent in 2015 due to strong growth in supply.

Strong Increase in Hotel Supply

Source: Savills Research Consultancy

Duong Dong town has 67 per cent of all hotels and 48 per cent of all rooms on the island.

In the residential segment, the majority of projects are beach front with great ocean views.

Residential projects have beach front locations with great ocean views

Source: Savills Research Consultancy

There were a total of 2,500 units launched on the island in 2015, according to Savills Research Consultancy, including apartments, land plots, and villas.

Among the local developers on Phu Quoc Island, Vingroup leads the villa market with a 76 per cent market share.

Eighty per cent of buyers in Phu Quoc’s residential market come from Hanoi and 15 per cent from Ho Chi Minh City.

There are three major factors that Phu Quoc’s residential purchasers pay most attention to: developer reputation, rental pool programs, and high rental yield commitments.

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