Alarming Statistics
The Superdong High-Speed Train Joint Stock Company, Kien Giang, a company operating 16 high-speed boats and 2 ferries connecting the mainland to Phú Quốc, Nam Du, Côn Đảo, and Phú Quý, has recently disclosed its third-quarter financial report. The report reveals a 21% decline in net revenue, totaling VND 91.3 billion, and a substantial 42.3% drop in after-tax profits, almost VND 8 billion, in comparison to the same period in the previous year.
The company attributes the decline in third-quarter profits to two primary factors: firstly, reports of Phú Quốc's tourism being perceived as "overpriced" and experiences of high costs have driven customers to alternative destinations with lower expenses; secondly, inclement weather during the third quarter, characterized by continuous rain and storms, particularly during the peak summer season and the September 2nd holiday. This adverse weather forced Superdong to cancel multiple ferry trips, leaving passengers stranded on the island, unable to return, which has fostered traveler reluctance to visit during the stormy season.
During a conference addressing airfare mechanisms and strategies to boost Phú Quốc tourism, organized by the People's Committee of Kien Giang province on October 14, Ms. Lê Thị Hải Châu, the General Secretary of the Phú Quốc Investment and Tourism Development Association, conveyed deep concern over the significant reduction in tourists visiting Phú Quốc since the beginning of the year. Local tourism service businesses have suffered losses, with statistics revealing that even major holidays have not yielded positive results.
During the April 30 and May 1 holidays, Phú Quốc recorded roughly 112,000 visitors, an 11.5% decrease compared to the same period the previous year, with revenue plummeting by 24.3%. The September 2 holiday witnessed further declines, with the total number of visitors shrinking by 40%, totaling 19,000, while room occupancy stood at approximately 27%.
Analyzing the Root Cause
Comparing the number of visitors during significant holidays such as April 30 and September 2 this year with the same periods in the previous year reveals a stark decline in tourists opting to visit Phú Quốc. This suggests that the island is facing a substantial challenge. While many attribute these woes to high airfare and service costs that deter tourists, the reality is more complex.
Concerning airfares, in 2022, airlines offered substantial subsidies that resulted in attractive ticket prices. However, as 2023 unfolds and many domestic and international routes return to normal, airlines can no longer maintain such subsidies. This has led to higher prices for various destinations. Nevertheless, elevated airfare costs can push visitors to opt for alternative transportation methods, such as high-speed trains. Surprisingly, Superdong High-Speed Train Joint Stock Company, Kien Giang, a major player in sea transport, has also reported losses due to the lack of customers heading to Phú Quốc.
Service prices have been a sore point for both tourists and travel companies. Ms. Trang Thu mentioned that the cost of services, including meals and particularly sightseeing fees included in tour packages, has influenced tourists when deciding whether to visit Phú Quốc. This suggests that while destinations offering good value for money are appealing, the charm of more costly places may not be as readily apparent. The previous real estate boom could be a contributing factor to escalating service prices on Phú Quốc, but these high costs represent only the tip of the iceberg.
Mr. Đặng Mạnh Phước, CEO of The Outbox Company, which specializes in market research and data analysis in the tourism and hotel sectors, emphasized that price is only one facet of the problem. Phú Quốc must confront internal issues and develop tourism products. He believes that while Phú Quốc boasts abundant resources and is a resort destination, it has become excessively urbanized. Tourists to Phú Quốc encounter grand architectural structures and Western-style streets, creating an illusion of a miniature Italy on Pearl Island. Yet, the island's unique identity remains elusive.
Reports have emerged since 2020 of Phú Quốc's excessive development and perceived degradation in quality, a common pitfall for rapidly growing destinations. To "rescue" Phú Quốc, a multifaceted and long-term approach emphasizing the preservation of its unique identity and sustainable development appears to be the key.
Understanding the Decline
The decline in Phú Quốc's tourism numbers during major holidays, such as April 30 and September 2 this year, is cause for concern. Many have attributed this downturn to the high cost of airfare and service prices, as well as the perception that tourists are being overcharged. However, the reality is more complex than these explanations suggest.
Regarding airfare, airlines offered substantial subsidies in 2022, resulting in attractive ticket prices. However, as 2023 progresses and domestic and international routes return to normal, airlines can no longer maintain these subsidies, leading to higher prices for various destinations, including Phú Quốc. While elevated airfare can discourage visitors, some may opt for alternative transportation methods, such as high-speed trains. Surprisingly, Superdong High-Speed Train Joint Stock Company, Kien Giang, a major player in sea transport, has also reported losses due to the lack of customers heading to Phú Quốc.
Service prices have been a source of frustration for both tourists and travel companies. These costs, such as meals and sightseeing fees included in tour packages, are also significant considerations for tourists when deciding whether to visit Phú Quốc. As Ms. Trang Thu pointed out, the ticket price is only one part of the equation, and the high service costs associated with Phú Quốc can make tourists think twice about booking their trips. Ms. Trang Thu's observation that "tourist destinations with little money are unattractive, while attractive places have a lot of money" reflects the issue. The previous land development boom could also be a contributing factor to the rise in service prices on Phú Quốc, but these high prices represent only the tip of the iceberg.
Reports since 2020 have highlighted Phú Quốc's excessive development and the perceived degradation in quality. Many analyses indicate that tourist destinations that develop too rapidly can encounter such challenges. To "save" Phú Quốc, a comprehensive and long-term approach, focusing on preserving its unique identity and promoting sustainable development, is crucial.
Seeking Sustainable Solutions
To address the challenges facing Phú Quốc's tourism industry, it is crucial to move beyond short-term solutions such as collaborating with airlines to stabilize ticket prices and adjusting service costs. Instead, a long-term strategy is needed, potentially spanning three to five years, to address the island's internal issues and establish appropriate objectives for each period.
While it may be challenging to dismantle the majestic buildings that have come to define Phú Quốc's skyline, a balanced approach should be sought to preserve the island's pristine features and unique identity. Over the past few years, the island has undergone rapid development, and its current path may not be sustainable.
In response to the decline in domestic tourists, some might consider shifting focus to attract international visitors. However, this approach may be too simplistic. International tourists, especially those from high-spending segments seeking authentic resort experiences, may not see Phú Quốc as their first choice. These travelers often seek destinations with distinct values and identities, and Phú Quốc needs to craft a compelling narrative and unique selling points to cater to their preferences.
Phú Quốc's path to revitalization lies in formulating a long-term strategy that embraces sustainable development, preserves its natural beauty, and nurtures its unique identity. This strategy should prioritize the island's strengths and leverage them to create an enticing and distinctive destination for tourists, both domestic and international.
