One-Day Resort in Vietnam: Entry Strategy, Target Population, and Product Description

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Why Vietnam

One of the fastest growing tourism destinations in the world, Vietnam is known for its long coastline, old French colonial architecture, and vibrant, modern cities. Tourism has become an essential part of Vietnam’s economic growth as it moved from heavy reliance on agriculture to a service economy in recent years. The number of international tourists arriving in the country in 2019 was one of the highest in the Asia Pacific region, and the country’s tourism receipts are set to increase every year until 2020. Most international tourists in Vietnam come from East Asian countries. In particular, China is not only the largest outbound travel market in East Asia, but it is the largest outbound travel market in the world (Yang, 2019). Vietnam is the third most popular international destination for Chinese travelers, making it a prime spot for the location of One-Day Resort (Yang, 2019). Vietnam’s unique culture and natural environment make it a particularly enticing location for Chinese travelers. 54% of Chinese outbound tourists stated the reason for their last trip as “see natural, cultural, historical attractions” (Bing et. al, 2016).

In the meantime, domestic tourist arrivals are increasing rapidly, although inbound tourism receipts continue to surpass domestic ones. Especially in the wake of the COVID-19 pandemic, it is important to ensure that our market will not disappear if international travel is suspended. Since the domestic tourism market in Vietnam is still growing, One-Day Resort can make gradual efforts to capitalize on that market while still keeping most of the current focus on inbound tourists.

Targeting Market

We will be primarily targeting the market of Chinese international travelers, since they make up the largest global travel market (Yang, 2019). We will have a secondary focus on the domestic tourism market in Vietnam. Chinese outbound tourists tend to be younger, with 72% in the 25-44 years old age range and 90% in the 18-44 years old age range (Bing et. al, 2016). Two-thirds of Chinese outbound tourists opt for escorted group tours which can help bridge the gap between tourists and unfamiliar cultures. However, independent travel is on the rise and is most popular amongst the youngest, wealthiest, and most experienced travelers (Bing et. al, 2016). Therefore, One-Day Resort should seek to target both of these groups.

As stated previously, the most popular reason given by Chinese outbound tourists for their choice to travel abroad is “see natural, cultural, historical attractions”. A close second at 53% is “get away, take a break, relax” (Bing et al, 2016). One-Day Resort can attract tourists for both of these reasons due to its location in the culturally, historically, and naturally significant Vietnam and through its offerings within the resort. In terms of lodging, 3-star (or mid-tier) lodging options are most popular with Chinese tourists. The features that Chinese tourists find most important in their choice of lodging are security, cleanliness, value for money, convenient location/proximity to key attractions, and free WiFi. Chinese-speaking staff is lower on the list, at 20%, but it is still an important feature to consider (Bing et. al, 2016).

Chinese international tourists increasingly use online sources to gather information and make decisions on travel destinations. According to a 2019 Oliver Wyman survey, 80% of Chinese travelers share their experiences on WeChat, a social media and instant messaging app (Wyman, 2019). Additionally, Chinese social media site Weibo has around 573 million monthly users, making it the most popular social media platform in China (Thomala, 2021).

The Vietnamese domestic tourism market is much smaller than the Chinese international tourism market. However, it is rapidly growing, particularly during the period of economic growth pre-pandemic and in non-lockdown periods of the pandemic. A 2011 survey of Vietnamese travelers found that “a sense of family togetherness” and a need for relaxation were key motivators for travel. Additionally, employer sponsored travel and corporate travel were top incentives for domestic travel (Bui and Lee, 2011). These are areas which can be focused on in domestic promotion.

Situational Analysis

Economic Environment and Financial Environment

First we must state that Vietnam’s key source of income is tourism. This means that the organization will be able to enter the market, gaining a foothold in the quality implementation of business goals. In addition, the question is a developing one, where prices for rent or goods differ from European or American ones for the better. At the same time, a large number of tourists come to the territory of the state every year, bringing financial flows. This means that One Day Resort will be a profitable and efficient business in Vietnam. It is also worth emphasizing that there are a large number of attractions located in different locations in the country, therefore the main competitive advantage of the corporation will be the ability to stay just for one night, in order to continue the journey later.

At present, the hotel industry in any state is actively developing, which applies to Vietnam. In addition to other challenges, the areas must take into account the specificity of Chinese tourism in other countries in order to remain competitive. Due to overpopulation, as well as the fashion factor for places, tourist flows to Vietnam are changing in proportion, and Chinese citizens take the lead. At the same time, the tourist flow from Europe and America has sharply decreased (Majeed et al., 2018). The leader among Asian tour exporters to Vietnam is China, so it is necessary to take a closer look at the features and subtleties of this aspect. It is necessary to understand how exactly the hotel management should regulate cultural differences and domestic preferences in a way that is beneficial.

After the transition from a traditional economy to a market economy, many hotels began to apply the tradition of European service. However, in real conditions, due to the growth of Chinese tourist flow, it would be the best solution for One Day Resort to adopt a dual standard business model, one of which will comply with the standards of the PRC (Majeed et al., 2018). Thus, China is significantly ahead of other countries in terms of tourist flow to Vietnam and Asian tourist countries in general. This dynamic will only increase every year. So, in 2018, compared to 2017, 14% more Chinese tourists visited numerous places in the tourist part of Vietnam, where One Day Resort will be located (Kang and Du, 2020, p. 78). This is the largest figure compared to other countries, since, in turn, the number of tourists from Finland and Poland has decreased.

Cultural Environment

The cultural environment of Vietnam is authentic, distinguished by food and the mentality of the local population. However, many foreigners prefer to combine new experiences with habits, so this area offers potential benefits. However, the addition of foreign elements to the interior and cuisine of One Day Resort may be of interest to the local population, who will stay overnight at the establishment. Thus, it is realistic to unite the interests of foreigners and Vietnamese, having recommended the corporation in the local market. However, it is important to take into account religious and cultural influences in such a way as not to create a potential conflict on this basis. Like any Asian country, Vietnam belongs to the philosophical type of society, so there is an institution of the face. In other words, creating a misunderstanding or conflict can completely destroy the entire corporation in such a way that it will be rejected by society without the right to rehabilitation. As a result, for the implementation of the project it is necessary to involve specialists in cultural studies.

Mostly Chinese tourists come in groups, this is confirmed by statistics published on the official websites of many hotels. Since 2016, the gap in the number of Chinese groups and individual tourists has remained significant (Majeed et al., 2018). Therefore, when studying the characteristics of a Chinese tourist, it is important to understand that they prefer to travel in groups. This trend is unlikely to change in the near future, as there are many benefits for both the tourist side and the hotels.

First of all, it is necessary to study the social portrait and cultural characteristics of the Chinese. The main consumers of the Vietnamese tourism product are people over 35 years of age with a high income, mostly the average age is 50 years (Kang and Du, 2020, p. 47). When traveling to Vietnam, they are mainly interested in sightseeing (73%), local cuisine (64%) and shopping (56%) (Kang and Du, 2020, p. 134). An important driver of Chinese tourist flow is family: 54% travel with a spouse and children, and 46% with a relative (Kang and Du, 2020, p. 137). Therefore, One Day Resort should focus on providing family rooms.

As for cultural differences: firstly, the Chinese population has a more pronounced language barrier; secondly, the need for Chinese cuisine, TV channels, information services in Chinese, and the observance of their traditions. Finally, thirdly, the culture of behavior and the basic understanding of tourism (Majeed et al., 2018). The Chinese have a different way of thinking, imperial, it is characteristic of many ancient Asian civilizations (Kang and Du, 2020, p. 77). They have peculiar tastes, upbringing, and habits in everyday life, a completely different culture and a different mentality. For example, wiping hands on a tablecloth is quite normal and acceptable in Chinese society, as it is a sign of gratitude based on tradition (Majeed et al., 2018). In addition, tourists have very special ideas about history, culture and religion. Given all these features, One Day Resort, if it decides to massively accept Chinese tourists, needs to adapt its services to their needs. First of all, the hotel should have information in an accessible language. Since most tourists do not speak English well, and do not study Vietnamese at all, it is better to have information materials in Chinese.

Political and Legal Environment

The political situation in Vietnam is quite stable, despite the fact that certain sections of the population express their dissatisfaction. The main problem of the country is high poverty and COVID-19, so it is necessary to take sufficient measures to prevent these areas from spreading to business. In the first case, it is necessary to set average prices in order for the organization to be accessible to the majority. In the second, it is necessary to observe the necessary precautions regarding the virus, then the Vietnamese government will not have claims. It should be emphasized that the business niche under consideration is tourism, which is apolitical in nature and is not connected with the legal situation, therefore, with proper planning, any contradictions can be avoided.

Vietnam and China are constantly cooperating. Back in 2000, an agreement was adopted between the Government of Vietnam and the Government of the People’s Republic of China on group tourist trips, according to which tourists can mutually enter according to the lists in groups of 5 to 50 people (Majeed et al., 2018). For Chinese tourists, unique routes have been developed that are aimed at traveling to places of key events in the country. About 30 routes have been developed, including more than 100 objects (Kang and Du, 2020). That is why the issue of studying the characteristics of a Chinese tourist is relevant.

Technological Environment and Competitions

It is necessary to start with the fact that Vietnam is a developing country, therefore European and American technologies can create a noticeable advantage over competitors. For example, the introduction of robotics, fast Wi-Fi and household innovations can attract an additional audience. At the same time, as already indicated above, the corporation plans to set an average price and introduce a mixture of cultural characteristics of different countries. Together with the high technology of equipment in One Day Resort, the company’s competitiveness will be at a high level, but it must be taken into account that the niche in Vietnam is already occupied. This means that in addition to only integrating all schemes, it is necessary to ensure a high level of quality both in the services offered and in the conduct of business. The fact is that entrepreneurs in many states have already founded corporations on the territory of the state, so their weaknesses should be investigated. One of these is the lack of opportunities for a profitable stopover for one day. Therefore, the emphasis should be on this specific aspect of One Day Resort.

One Day Resort needs a website in Chinese, which will increase the recognition of the hotel among tourists from China and lead to an increase in Chinese tourist flow, and, as a result, will bring additional income. An important addition will be signs, information brochures, business cards, guest questionnaires, TV channels (Majeed et al., 2018). One of the hotel staff must speak Chinese or it is important that there is a technical possibility of translating from Chinese into other languages. Now there are different Chinese language courses for hoteliers. To create an incentive for the development of a specialist, this can be interpreted as a way to improve the skills of the hotel industry staff. In turn, this should provide a higher salary for the employee. Finally, another criterion for a hotel to be adapted to Chinese tourists is the availability of a convenient payment method for them.

One Day Resort must have in the list of services:

Free Wi-Fi;
Adapters or electrical sockets conforming to Chinese standards;
Breakfast adapted to Chinese cuisine (Majeed et al., 2018);
Slippers in the room.

Since the Chinese have their own specific cultural characteristics, it is important for the hotel to pay attention to these differences and take into account the mentality of such tourists. For example, a separate block or floor can be allocated for Chinese guests so that there are no noise complaints from other visitors (Kang and Du, 2020, p. 83). Constantly check the numbers of the Chinese and impose fines for damage to property. An important condition is the placement of signs in Chinese warning about the ban on smoking in the rooms. Taking into account all these aspects related to Chinese characteristics will allow One Day Resort to increase its competitiveness. In turn, this will allow the organization to take a leadership position, since the flow of tourists is very large and therefore profitable. Finally, it is important to emphasize that among the other organizations based in Vietnam, there is no Chinese thematic, which means niche freedom.

Marketing Plan

After careful consideration to implement this service One Day Resort, we will equally assess how to market it.

Market Entry Strategy

One-Day Resort plans to enter the market by offering a soft-opening to invited groups/individuals only. These invitations will go out to selected influencers (also part of our promotion strategies) where they can enjoy a stay for free, then share their experience online. Travel agencies will also get the chance to invite their valuable clients to this trip at a discounted rate. We will open up more availability as we make more appearances on social media and TV advertisments.

Product Decision

One-Day Resort is an all-inclusive stay with many more features and amenities other than a place to sleep. As mentioned earlier, 20% of the Chinese travelers find it is essential to have Chinese-speaking staff available and we want to be able to provide this service to them. Not many resorts in Vietnam have this option which is a big inconvenience for non-English or non-Vietnamese speaking travelers. This will offer a smooth check-in process and positive customer service for all visistors.

Karaoke is the most popular entertainment in China, offering 24-hours private and public karaoke rooms can attract more travelers into booking. Karaoke in China is seen as a family-orientated activity where family and friends can gather together and enjoy hours of sessions where they can sing, laugh and eat all at the same time. Besides all the fun in-door activities, we consider a beautiful outdoor space to be valuable to our customers. During the day, it can be used as a space to meet new people, hang out and relax with an outdoor bar and live music performance. At night, it can be transformed into a hip nightclub or swanky lounge for the nightlife-lovers.

Pricing Decision

As mentioned in the targeting market, One-Day Resort wants to be able to offer affordable pricing at a comfortable 3-star environment. Our stays will be offered at a competitive rate with membership holders. By offering one flat rate, visitors will be able to enjoy all the amenities without leaving the resort. Amenities include spa, cafe, restaurants, entertainment, and many more. While cash and credit cards have been the assumed payment method for travelers, global travelers are increasingly embracing alternative payment methods. And same with Chinese travelers. One-Day Resort will introduce the most popular alternative payment method, Alipay to all Chinese travelers booking directly.

Alipay is payments affiliate of China’s Alibaba ecommerce group and China’s leading alternative payment method with an active user base of over 450 million, according to the company—may not be a popular payment method for travelers outside of Asia, but these travelers expect to be able to use it no matter where they are in the world. Worldpay found that 30% of Chinese travelers want the ability to use Alipay for taxis, while 14% want to be able to use it for attraction tickets, even while traveling abroad.

Distribution Decision

We will begin by opening a single One-Day Resort location in Vietnam to test the viability of our service. It will be located in an area outside of a major city with an airport, for ease of the guest’s transportation to the resort. An area in central Vietnam would be ideal for the “one day” concept as it can act as a stopover for tourists who tend to travel from Hanoi to Ho Chi Minh City by air, skipping the middle of the country. For example, an area close to the city of Da Nang would be perfect. Da Nang is one of the biggest cities in Vietnam with a unique culture of its own. It also has immense natural beauty, from pristine white sand beaches to forest-covered mountain ranges. This fulfills the top travel motivators of Chinese international travelers as mentioned previously. If the flagship resort proves to be successful, other locations can be opened in similar areas to Da Nang.

Promotion Decision

Since One-Day Resort is targeting mainly Chinese travelers to Vietnam, we will want to make appearances on the Chinese social media. With the rising use of social media in China, One-Day Resort will be marketing itself on Douyin (Chinese tiktok), doing collaborations with reputable influencers/celebrities, and devloping a loyalty program. In the past couple years, especially during the pandemic, Douyin has become one of the most effective marketing platforms for many starter businesses by utilizing famous influencers to promote goods or services. TikTok’s Chinese original version Douyin has gained a massive popularity in China. As of August 2020, Douyin achieved a total of 600 million daily active users. TikTok was the third most downloaded non-gaming app in the world in 2019. The short-video content format allowing users to share videos with vibrate music and effects immediately distinguishes Douyin from traditional Chinese social media platforms like WeChat and Weibo, in which the content still focuses on text, images, and longer videos.

In order to reach Chinese audiences, creating fun content on Douyin is important by inviting travel bloggers to get a first-hand experience on our resort and share it with their followers. This will help make One-Day Resort a must-go spot when visiting Vietnam.

Conclusion

In conclusion, after careful analysis of the market in Vietnam and popularity of Chinese tourism, the opening of One-Day Resort will create an opportunity offering Chinese travelers a one-stop stay that can fulfill all their needs in vacation. Through creative marketing strategies and special accommodations at the resort, One-Day Resort wants to become the top choice for foreign travelers looking for comfortable, safe, relaxing resort. One-Day Resort has plans to expand its brand to other east-asia countries like Thailand, Japan, and South Korea in the next few years by continuously increasing our market shares and becoming available to more foreign travelers.

Thus, in the context of constantly developing tourism cooperation with China, the adaptation of One Day Resort to the needs of the Chinese consumer is a profitable economic solution for tourist facilities. This requires a competent approach on the part of hotels and joint efforts with government programs aimed at attracting guests from China. It is important to remember that a standard package designed for the average Western tourist will not be able to satisfy the needs of the Chinese tourist. It is necessary to pay attention to the behavior of Chinese tourists and the specifics of their consumption of the tourist product. It is important for individuals to feel at home, watch Chinese TV channels, eat authentic food, speak their own language. All this should be taken into account by hotels that include Chinese tourists in their target audience.

References

Kang, N. & Du, X. (2020). Discovering Chinese culture in traveling. American Academic Press.

Majeed, L., C., Majeed, M., & Shahid, M. N. (2018). Health Resorts and Multi-Textured Perceptions of International Health Tourists. Sustainability (Basel, Switzerland), 10(4), 1063–. Web.

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