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Destination Marketing: Positioning of Ho Chi Minh City as a MICE Destination.
By Dietmar Kielnhofer Ph.D
Thursday, 5th April 2012
 
The following document outlines in broad terms a tourism policy to complement Ho Chi Min City's existing tourism strategy; additionally, to engender a dynamic, sustainable brand associated with vibrancy, cultural diversity, colonial history and excellent public service management.

This paper has a twofold purpose: (a) it is intended to assist the authorities of Vietnam and in particular Ho Chi Minh City, to attract more international visitors thereby creating more revenue for every stakeholder in the city and, (b), to position

HCMC as a leading MICE destination in South East Asia. HCMC provides an excellent tourism infrastructure; it is a cosmopolitan and lively city that characterizes the multi facets that appeal to international travelers.

The opening of the Saigon Exhibition & Convention Center in 2008, heralds a new area in Convention Management. One of Vietnam's biggest draw is its political stability, economic progress, its cultural charm, the perception of public safety and an ever improving infrastructure coupled with an abundance of (inexpensive) labor and excellent international hotels.

By capitalizing on its strength vis--vis its neighbors (political instability for instance), HCMC can position itself as an attractive alternative to Bangkok's thriving MICE industry.

Sustainable competitive advantage and a well thought out national tourism strategy cannot be created overnight. It is a combination of policy making, collaborative effort of engaging the private sector and public service management and a vision to create something truly special and lasting that results in prosperity and wealth for its citizen.

Vietnam has the right combination of tourist assets, cultural endowments, a vibrant and liberal art scene, a colorful heritage and the political and economical desire to join its south-east Asian neighbors on the international stage.

Branding and positioning of HCMC as an attractive MICE destination

Asia is overwhelmed with attractive tourist destinations promising relaxation, cultural diversity, sophisticated entertainment or adrenalin bumping adventure.

From a consumer's standpoint, given the choice to spend leisure time on the beach in Bali, Phuket or Koh Samui can be very daunting indeed. If one does not seek the beach, alternative options such as cultural excursions that broadens one's intellectual horizon (anthropologists love to go to Bali, Laos or Papua New Guinea to search for lost hill tribes) or adventure trips and trekking through the impenetrable jungles of Malaysia or Borneo.

Whether it is observing the Komodo dragons in their natural habitat on Komodo Island or searching for fearless headhunters in Iran Jaya these all provide feasible alternatives. The choice of destination for the intrepid traveler is almost infinite.

Vietnam made a successful attempt in the last five years to carve out a niche for itself in the burgeoning tourist industry in South East Asia. So what differentiates Vietnam, or what is Vietnam's competitive advantage vis--vis over other destination with a very similar geographic composition?

The pros and con's can be argued for a long time. What cannot be argued is that Vietnam after 30 years of warfare, stagnant economic growth and state controlled monetary policies awakened a decade ago and became a force to be reckoned with in the international tourist arena.

The Worldwide Tourism Industry: A Social Phenomenon

For decades nations have feuded to increase their share of the lucrative tourist market - an industry that generates billions of dollars in emerging countries, notwithstanding providing employment opportunities for millions of people very often disfranchised people who live a life on the fringes of society.

For many of these poor people, tourism is the main source of income. Competition for destinations and wealthy tourists with top dollars to spend will only intensify as new tourist destinations emerge.

Ho Chi Minh City is not only Vietnam's largest city with 7.5 million inhabitants; it is the most important economic center in Vietnam as it accounts for a high proportion of Vietnam's economy. South Vietnam in general, accounts for over 30 percent of the economic output of Vietnam.

Developing and Differentiating the Brand Ho Chi Minh City

Aside from international five star hotels that can compete with the best of Asia, excellent restaurants and cafes coupled with entertainment programs, a reliable public transportation system and cultural offerings having fully function infrastructure in place, is a prerequisite. Vietnam made good headway in this regard over the last three years.

Transporting meeting delegates to and fro from one venue to another is not luxury but precondition taken from granted. State management on tourism is serious and hotel school graduates have no problem securing employment in this coveted industry.

Hotels in HCMC are compelled to provide "on the job training" to increase human resource proficiency and coping with increasing demand in this sector. There is no reason why HCMC cannot successfully compete with the big MICE destinations in the Asia-Pacific region. What makes Sydney a world class MICE destination?

What are the key drivers that differentiate Sydney from, let's say Jakarta! Is it the Harbor Bridge, spanning Darling Harbor, overlooking the Sydney Opera House, Bondi Beach or access to world class hotel facilities and an excellent infastrucutre? Or is it the quality of air people breathe?

The simple answer is a combination of all and a value proposition that is unique and impossible to imitate.As the breadth and scope of this topic is very wide let us concentrate only on the commercially attractive MICE segment for Ho Chi Minh City.

Competing for International Market Share

The opening of the Saigon Exhibition & Convention Center (SECC) in 2008 was a major milestone in creating a competitive MICE product on par with Bangkok, Singapore, Hong Kong, Sydney and Shanghai. This purpose build, state-of-the-art Convention Hall of world class standards comprises of four indoor exhibition halls totaling 40,000 sqm; the largest hall can accommodate 8,000 people.

But it is not enough to have a competitive product that meets the requirements of national and international convention organizers, trade exhibitors or corporate meetings or specialized events. One of the key hurdles to Vietnam's development is its current inability to tap into the international market of conventions and destination marketing.

Whilst other more mature destinations invest millions of Government dollars in innovative marketing campaigns to place their destination squarely on tourist's radar screens, Vietnam continues to lack a clear-cut strategy to identify its target market. The SECC will lie largely underutilized by the international market as it cannot attract these events without the supporting infrastructure and a coherent, well executed national tourism campaign.

And like so many other emerging destinations faced with similar Governmental hurdles, it will be well attended by local companies and organizations, but it will not at least in the foreseeable future, benefit from the financial and knowledge download international events can offer.

The international convention market is fiercely contested with collaborative, well funded cities such as Singapore, Hong Kong, Bangkok, Shanghai and Beijing (and I am not talking about other destinations such as Dubai, New York, Las Vegas, London and Macao that strives lately very hard to get a piece of the growing MICE market) having the luxury of purpose built, purpose designed marketing campaigns and organizations and resources to carry it out.

These organizations, known as Convention Bureau's, fill their city hotels and convention centers with international events drawn by effective marketing and well funded offers. Without the existence of a Convention Bureau or even as a first step a "globally-ready" tourism identity, Vietnam will continue to have little impact on the international event market; which is a shame in a destination that has so much to offer and so much to benefit.

HCM City has a good functioning infrastructure coupled with world class accommodation (multiple award winning hotels with cutting-edge technology) and function space and international gourmet restaurants. Another interesting element this city has to offer are the unique characteristics of its people, friendly, open-minded and hardworking; embracing the winds of economic and social change that blows their way.

What is still in its infancy is a dedicated Convention Bureau (CB) that combines the individual marketing activities and efforts of the private sector i.e. hotels, tour operators and to a certain degree the national Airline, with those of a government driven, national marketing campaign promoting Vietnam as a viable alternative to Thailand, Hong Kong and Singapore the key competitors. This systematic interconnectedness and unified approach of hotel operators, wholesale agents and venue providers form the foundation of a business venture whose mission it to channel bookings to the city.

The HCMC Convention Bureau needs to arrange familiarization trips and invite professional travel writers along with a dozen other prolific freelance writers who blog on subjects relevant to HCMC's touristic appeal.

The government needs to expand on the below recommendations and effectively compete with the heavyweights in the MICE market industry in Asia. Priority has to be creating (more) awareness for HCMC, as an attractive destination and secondly the SECC. This requires strong1 public relation efforts and media / internet savvyness.

With distribution channels getting more complex and diverse every year the questions arises who is managing this platform! A multiple pronged strategy in its overseas key feeder market is required by adopting the following steps:
  • Capitalize on the Hidden Charm campaign and leverage HCMC exceptional colonial position; create a brand (like Uniquely Singapore or Amazing Thailand or Incredible India).
  • Form an official tourist body comprising of hotels (like the Bali Hotel Association or the Hong Kong Hotel association etc.), tour agents, transportation companies (SASCO) and airline representatives. The objective is to discuss issues that affect everybody.
  • Establish a dedicated Convention Bureau (CB) whose sole mission is to engage in destination marketing promoting Ho Chi Minh City. Work with the private and public sector together irrespective of brand allegiance and preferences; no political infighting.
  • The marketing objective must be to promote the destination first and foremost and then the individual hotels and function venues.
  • Identify key segments and feeder markets and engage in destination marketing leveraging HCMC's unique position and heritage. Have a sales presence in all key target markets.
  • Highlight unparalleled value for money and outstanding product and service offering and stressing on the cultural uniqueness of HCM City. This can be further leveraged by arranging familiarization trips for incentive buyers.
  • Setting up Visitor Bureau and allocate sufficient marketing funds concentrating on promoting HCMC as a standalone destination steeped in rich history, with flair and substance reflecting Asia's colorful colonial legacy. Emphasizing on colonial architecture, selling the soul and character of HCMC compared to other soulless destinations in Asia that are punctuated by anonymous, characterless glass and concrete towers that more reflect Manhattan than the true Asia.
  • Form a strategic alliance between the Convention Bureau and Vietnam Airlines of a similar scope of what Emirate Airlines did with Dubai a decade ago, forming a symbiotic relationship that benefits parties, the airline and HCMC as the end destination a classical win-win scenario.
  • Removing cumbersome travel barriers such a Visa requirements prior to arriving at the destination. Visas must be given upon arrival. Lessons in this regard can be adopted form Bali, Malaysia, Singapore and Thailand who grant a visitor visa for 30 days.
Competing for Strategic Advantage

The below graph illustrates the working relationship with vital partners who have all vital stakes in a healthy tourism infrastructure in HCMC. Strategic oversight of this "Tourism Task Force" rests with the Ministry of Culture and Tourism that coordinates promoting activities between government and the private sector.

4Hoteliers Image LibraryThe Convention Bureau has strong interest promoting the SECC and generates awareness of HCMC as a MICE destination thus everybody is engaged. Saigontourist, the largest semi government organization has multiple interests promoting HCMC and Vietnam.

Saigontourist is the largest hotel owner and operators of four and five star hotels (it owns and manages such luxury hotel as The Majestic, the Rex and Continental, landmarks in their own rights in HCMC). History was made in some of these hotels. Saigontourist is also an equity partner in major international five star hotels and a majority shareholder of the SECC.

The challenge is to sustain the momentum that was built over the last five years and capitalize on the interest that has been formed. Awareness creation is not a one off undertaking and then left to languish. Designing an unforgettable marketing campaign takes time and is expensive.

But it is more expensive to do nothing and have a laissez-faire approach hoping for the best. An appropriate analogy would be a comparison to the product life cycle of a consumer product. The life cycle can be extended by constantly reinventing a product and designing an advertising campaign that meets the ever changing demands of the end consumer in this case the tourist.

HCM City has to strive for a level playing field where the odds are staked equally fair for all parties. This may not have been the case in the past for a variety of reasons such as budget constraints, erroneous fund allocation, lack of infrastructure, capacity constraints and inadequate resource allocation.

But there has never been a better time to promote HCMC than now. Marketing is not an inert undertaking, the variables keep on changing. Strategic marketing management is a continuous self-correcting process that consistently considers where a nation is heading, where it wants to be heading, and how best to get there.

A nation's culture, language, music and other national idiosyncrasies are all part of what makes people and their behavior unique and that uniqueness has to be preserved. Essentially, incentive groups want to have an educational (or cultural) experience that appeals to their intrinsic desire to see and learn new things.

Branding and positioning a destination or an individual property is a mind game - a race to one's ideal position. It is as much about creating value and uniqueness as it is arousing interests in a novel destination and delivering exceptional service and creating lasting memories. Brand management or in this case, destination marketing, is not a static activity, it requires a long-term commitment from the city authorities - and the pertinent Convention Bureau.

Destination marketing is an evolutionary process that needs to be constantly revitalized and refreshed in order to remain competitive. The fight for international conference destinations is only getting more aggressive as nations mature and enter this lucrative but contested market for prime position.

Ho Chi Minh City needs to "carve out a niche" in the lucrative incentive market to make the destination appealing and attractive to buyers in this case meeting organizers. Sustainable success in this industry depends on excellent public relations / media communications, generating excitement and creating a positive image of Vietnam.

In summary it can be said that managing a state driven marketing campaign is like running a business and, as such, can benefit from adopting a strategic marketing management approach.

This is not to ignore the much greater cultural and political complexity of running a nation it is complimentary. Nor is this the same as saying that a nation should run itself as a planned economy. There has to be an element of flexibility build in as economic and social parameters can and will change.

1 - Public Relations in a wider context means in principle - but not limited in the age of the internet: Print media and TV campaigns. In addition to that it needs a dedicated person who monitors websites traffic, manages the social websites such as LinkedIn, Facebook and MySpace. Who manages tripadvisor? This meaningful engagement creates an atmosphere of interconnectness with future target markets. Who blogs regularly and directs web traffic to official sites? Either to the official website of HCMC, the SECC, hotels or the Convention Bureau. Are destinations or SECC specific Google alerts set up? Who is researching which websites and blogs are a great match for HCMC's visitor demographics?

About the author:

The author of this article lives in HCM City and works as a General Manager for a multi national company headquartered in New York whose stock is listed on the New York Stock Exchange. He has worked in international companies in senior management positions in Africa, the Middle East, Europe and South East Asia and can be contacted under kielnhofer@yahoo.com or Dietmarkielnhofer@hotmail.com.

The thoughts expressed in this article are those of the author only.
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