Student ID: 8122384

Degree Title: International Hospitality and Tourism

Management

Level: 7

Module Title: Operations Management in Travel and Tourism

Module Code: M046LON

Seminar Lecturer: Alison Maton

Assignment Title: Individual case study assessment

Word Count: 2500

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I, 8122384 confirm that this submission is my own work and I accept all
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Date of Submission: 04 November 2017

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 VINPEARL NHA TRANG
RESORT:
An example of succeeded resort in modern competitive
tourism industry

2
Contents
Executive summary 4
Introduction 5
Organisation performance 5
PESTLE analysis 6
Political factors 6
Economic factors 6
Socio-cultural factors 7
Legal factors 9
Environmental factors 9
Risk and challenges 9
Strategy plans leading to success 11
Conclusion 13
Reference 14

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Executive summary:
This case examines the external environment of Vietnam’s tourism industry
based on Vinpearl resort located in Nha Trang. Vinpearl resort is known as a
tourist paradise and was listed in the Top 10 Five-Star Resorts. Vinpearl is a
part of the huge Vincom company, which provides high quality of service and
products. The case study external environment, which identify and analyse
opportunities and threats of PESTLE: political, economic, socio-cultural, legal
and technological factors. Rapid growth of tourism industry in Vietnam put
resort in many risk and challenges. To stay as a market-leading hospitality
and tourism brand, resort in Nha Trang needs to constantly improve services
and products and understand customer needs. A good strategy is a key to
achieve competitive advantage and success for resort.

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Introduction:
Vinpearl resort, which is a part of a Vingroup company was founded in 2003
by billionaire Pham Nhat Vuong. He turned undeveloped island into resort,
which became famous tourist destination. The resort in Nha Trang is located
in Hon Tre Island, which was previously used as a jail. Resort is known as
Vietnam’s tourist paradise, where attracts domestic and international tourists.
Vingroup slogan is ‘Preserving the start-up mindset’. It is about human
resource management, innovation and creativity (Vingroup 2016 :5) 1. The
resort has 500 luxurious rooms, 147 villas, 8 restaurants and bars, a world
class golf course. Moreover, the most thing that attract tourist is a 3,320
meters lenght over-water cable car, which connects Hon Tre Island with the
main land. Amusement park Vinpearl Land offers huge variety of
entertainment like conservation parks and family entertainment attractions
(Vingroup 2014)2.

Organisation performance
Vinpear Nha Trang resort was listed in the Top 10 Five-Star Resorts by
Vietnam National Administration of Tourism. In 2016 more than 1,600,000
tourist stayed at Vinpearl hotels and 4,100,000 visited Vinpearl Land
(Vingroup 2016). The number of tourist is increasing and bring potential
income for economy of the country (BMI Research 2017). Vietnam became a
popular tourist destination from all around the world. According to Vietnam
Tourist Report (BMI Research 2017) in the recent years there were a
significant growth in Vietnam’s tourism industry. BMI (estimated/forecast)
expects 9 million foreigners will visit Vietnam in 2018. Number of international
tourist are increasing from 2013 (7,6 million) to 2020 (9,5 million).

1
The title for this citation is Preserving The Start-Up Mindset
2
Vinpear Premium Nha Trang Bay
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The opportunities and threats show external environmental factors of the
company. The elements of external environment are focused on PESTLE
analysis, which include political, economic, socio-cultural and technological
environments factors.

POLITICAL FACTORS
Conflicts and wars could have a negative impact on Vietnam’s tourist industry.
For example conflict between China and Vietnam about The Paracel Islands,
called Hoang Sa Islands in Vietnamese worsened relations between the two
countries. The battle caused reluctance of two nations to each other (BBC
News 2014).
Countries like United Kingdom, Germany or Spain got extended visa for
travelling to Vietnam. This let more people from other countries visit Vietnam.
Changing visa requirements effects on increasing local economy and
customer expenditure (BMI Research 2017). According to Vingroup Annual
Report (2016) more than 10 million foreigners visit Vietnam in 2016, which
was more than 26% than previous year. Domestic tourists travel around the
country were 62 million, which was more than 9% in the year 2015. Over the
years number of visitors are remarkably increasing.

ECONOMIC FACTORS
Economic recessions of other countries have a significant influence on
Vietnamese market. The majority of Vietnam tourist are from China, South
Korea and Japan (BMI Research 2017). In 2016 there was an economic drop
in China. Due to economic crisis Chinese tourist decreased demand on travel
and cause reduce of spending expenditure (Vietnamnet 2016). It is necessary
to counteract this threat, because it may lead to defeat of many organizations
in hospitality industry. Research on other countries economy is necessary to
know who is the biggest source of the market and target the group, who
potentially will bring income to the industry.

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The exchange rate is also an important factor for tourists, because it will effect
on their expenditure in visited country. Currency in China has devaluated in
2016, so the rate of exchange between Vietnamese dong and Chinese
renminbi had impact on willingness of travelling to Vietnam. On the other hand
visitors from Europe, for example in Germany the exchange rate of the euro
against VND is at the low point, making Vietnam destination cheaper for them
(Tribe 2016).
Low cost airline are opportunity for tourist to choose further destinations,
especially from Europe to Asia. Growing competition between domestic
airlines in Vietnam contribute to lowering costs of flights, which let more
people afford to travel (BMI Research 2017).

Unemployment is a big issue in Vietnam’s population (BMI Research). It is

very hard to find a profitable work without connections or money. However,
this can be an opportunity for Vinpearl resort. A company could hire local
people after thorough interview and get them proper training. Local people
can bring many benefits to resort, because they have better knowledge about
environment and local culture.

SOCIO-CULTURAL FACTORS
Friendliness of local people is one of the social factor that has big influence on
development of resort. Vietnamese people are known for hospitality and
courtesy (Curry, Nguyen 1997). There are a lot of events and festivals which
are organized in Nha Trang, for example Nha Trang Sea Festival. The
purpose of this is to attract more tourist to visit the city, which is full of
attractions, beautiful landscapes. Additionally in Nha Trang people can try
extreme sea sports like watercraft, tandem paragliding, jet skiing and
kayaking. It is a great opportunity for Vinpearl resort, because it is located in
the city, which is one of the most popular tourist destination in Vietnam
(Vietnamtourism 2017). Those attractions and activities makes people want to
visit Nha Trang and choose to stay at resorts or hotels.

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Rich Vietnamese culture, tradition, hot weather and beautiful nature make
tourist attracted to visit Vietnam. Every region has different lifestyle, which
make it more interesting for tourist. Those factors are huge strengths for
Vietnam country compared to neighbours (BMI Research 2017). Nha Trang
offers fresh food, which is made in many different ways. This is an opportunity
for resort, because in many countries there are no fresh seafood, so people
want to visit places where fresh food is available.
However, food quality in many places is very low, especially food that is sold
on the streets. Food safety and hygiene regulations are not strictly respected
in Vietnam, which can lead to food poisoning or diseases. This kind of
situations discourage many tourist to visit Vietnam and could have negative
impact on country reputation (Samapundo et al. 2016).
Foreigners travelling to different country can face cultural difference. For
example in Vietnam there are body whitening services whereas Europeans
prefer sun-bathing so they travel to tropical countries to get tanned. Moreover,
there are differences in spending free time. Vietnamese people like to go to
karaoke whereas European prefer discos. Differences in culture can put resort
in bad position, so it is necessary to identify and take into consideration those
kind of problems (Tribe 2016). Massive amount of tourists bring many benefits
to economy of the country. However, it is not necessary positive for local
people. Different culture and traditions may lead to many problems and
misunderstanding between host and foreigners (Wall, Mathieson 2006).

TECHNOLOGY FACTORS:
In modern world Internet gives access to enormous amount of information.
Mobile technology and social media are factors, which contribute to increase
development of tourist organisations (Tribe 2016). Convenient access and
fast reservation system make it easy for customers to find information’s about
destination, book an accommodation and find attractions and activities.
Internet provide tourists to give positive or negative opinion about resort.
Many people chose their destination relying on media like Facebook or
Twitter. Technological analysis would be a proper tool for Vinpearl to analyse
development of technology and improve services (Tribe 2016).

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LEGAL FACTORS:
Vietnam still have old labour laws and company policy. People tend to have
too many working hours (Rennie, McGee 2012). Vinpearl resort has to update
new employment framework in order to achieve good results, because
employees well-being has a huge impact on their effectiveness and efficiency
at work.
In big cities the number of crime is increasing, so there is higher probability of
thefts (Rennie, McGee 2012). This can discourage domestic tourist to visit
place like Nha Trang, so managers department need to secure that customers
will feel safe during their stay in Vinpearl resort.

ENVIRONMENT FACTORS:
According to The Guardian (2006) Nha Trang offer one of the most beautiful
landscapes and breath-taking beaches. Hot weather and great views are the
reason for choosing this city as a place for holiday. Nha Trang offers unique
coral reefs and maricultural activities, which make the city more interesting
(Nguyen et al. 2013). However, Vietnam is one of the countries that are in
danger with climate change. In recent years frequent floods and storms has
been reported. Climate change impact put Vietnam in difficult situation and
can decrease number of international tourists (The Guardian 2017).
Vincom has created an environmental protection plan, which aims to preserve
environment through decreasing greenhouse gas emissions and water
consumption. Company project include building green areas with eco-friendly
environment and create products with “Green Living” idea. Implementing such
a plan creates a positive appearance for resort and influences on the
customers well-being (Vingroup 2016)3.

Risk and challenges

Tourist industry in Vietnam has significant growth in recent years. Many
foreigners invest in Vietnam and build restaurants and hotels with new and
unique idea. Vietnam has plenty underdeveloped places, which now are
invested by foreigners for example Hoi An, Phu Quoc and Da Nang.

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The title for this citation is Preserving The Start-Up Mindset
9
Thailand's ONYX Hospitality Group cooperate with Vietnam to open new
US$1.5-billion in Hoi An (Thanh Nien News 2016). Those places have rich
history, culture and unexplored nature, which attract tourist to choose them as
their holiday destination. Rapid growth of international hotels and resorts are
big competitors for Vinpearl resort in Nha Trang. Additionally, in Nha Trang
there are a lot of international hotels like InterContinental or Sheraton, who
have high reputation among domestic and international tourist and are serious
rivals for Vinpearl (BMI Research 2017).
Vietnam is lacking of experienced managers. Capable employees are usually
going abroad for better perspective. To solve this problem Vinpearl developed
a training programme for young people to become a professional managers
in the future. The project can help people to improve themselves and be able
to work for the company (Vingroup 2016).
Safety, cleanliness, accessibility, quality of the service are the main keys for
customers to choose their place of accommodation. The hotels and
restaurants of the resort must comply with the rules of food hygiene and
safety. Customers satisfaction is very important, because they give
recommendation to other people like their relatives and friends. That way
resort receive good reputation and more customers (Reisinger, Turner 2003).
Increasing number of thefts and pick-pocketing can discourage people to visit
big cities and famous places in Vietnam. A lot of incidents were reported,
especially motorcyclists stealing personal belongings and fake taxi drivers.
Bad experience can lead to dissatisfaction with staying in the city and have
influence on resort reputation (GOV UK n.d.). Vietnam has very high density
of vehicles in big cities, which contribute to air pollution and many accidents.
Crossing street is hazardous because of too many motorbikes on the street.
Quality of roads and public transport are in poor condition (Le et al. 2016).
Taxi drivers from not reliable companies are usually cheating and charging
much higher prices. Those inconvenient situations are influencing on
customers review on their trip (GOV UK n.d.).

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STRATEGY PLAN: LEADING TO SUCCESS
Between 2011-2013 Vietnam’s economy experienced a slowdown. Despite of
this Vinpearl still remained success through those years (Vingroup 2016). In
order to stay in that position company need to has a proper strategy.
Vietnam is a country that seems for tourists as a great destination, because of
reasonably prices, unique history, beautiful nature and tropical climate. This
put Vietnam in better position than competitors, so Vinpearl can take those
factors as an advantage for further development for Nha Trang resort (BMI
Research).

To achieve competitive advantage it is necessary to make a research and

understand tourists needs and preferences. Planning and recognizing what
are the indicators that bring benefits and losses for resort (Wall, Mathieson
2006). Vinpearl resort needs to constantly improve the quality of service and
products, provide new facilities and attractions that will meet international
standards in order to stand out from other competitors and raise customer
satisfaction.

Customer satisfaction is one of the most important thing that company should
take into consideration in strategy. The resort has to deliver high standards,
which will meet customer’s expectations. This will increase chances for
customers to come back to resort (Reisinger, Turner 2003). Some people
have very high and unrealistic demands, so personnel have to know how to
deal with those customers. Tourists feedback has a significant influence on
resort’s reputation. A choice of place of residence is mostly chosen by
relatives and friends opinion or by word-of-mouth (Johnston, Clark, Shulver
2012).

Every country has different culture. It means that behaviour and gestures are
interpreted differently. To avoid conflicts and misunderstanding caused by
cultural difference, managers of Vinpearl resort should be aware of cultural
differences (Reisinger, Turner 2003). Vinpearl could offer additional training

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for employees to understand other countries culture and become more
tolerant on diversity.

Vinpearl launched loyalty program, which is VinID card. By the end of the
2016 company achieved 1.9 million cardholders. It was a successful plan, so
the resort need to know how to maintain regular customers. Vinpearl has a
plan to improve domestic market by cooperating with domestic and
international tourist agents (Vingroup 2016). Awareness of new trends in the
market and knowing the age group of tourists, who travel the most allow the
resort stand out on the market and get new customers. People who have a
partner and those in the middle-age are the groups that bring the most
tourism income (Tribe 2016).

Vinpearl to stay in the market-leading hospitality and tourism brand need to

understand the purpose and motivation for visiting Nha Trang. Using those
information’s company could create alternative leisure attractions that will get
tourists attention (Tribe 2016). For example special offers on the Valentine’s
day or anniversary.

Internet give possibility for customers to plan their destination and easily book
an accommodation through computerised reservation system (Vingroup
2016). Most of tourist choose place to stay from websites, so using social
media resort in Nha Trang can use marketing campaign to advertise Vinpearl
as a great destination for leisure and entertainment. In order to increase
number of tourist company needs to bring innovation. Technology is an
inseparable part of everyday life (Tribe 2016). The NFS Mobile Solutions
invented an application to guide foreigners in Da Nang (Tourism Review
News 2014). The same idea could be used for Nha Trang to break language
barrier and help tourist explore the city.

Vinpearl could use a strategic alliance to achieve competitive advantage

(Tribe 2016). Taxi drivers are not reliable in Vietnam, because of bad
reputation. However, if resort agreed to collaborate with taxi company, it
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would bring advantages to both sides. Tourist visiting Nha Trang resort could
get simultaneously a safe transport throughout the city and a tourist guide.
This collaboration would bring great benefits for the resort, reduce level of
unemployment and make it stand out on the market, which is a key to
success.

CONCLUSION
Vinpearl resort stands in high position on the market and is considered as a
successful company. However, the competition in tourism industry in Vietnam
is rapidly growing. Many domestic and international shareholders are
investing in Vietnam’s tourist section. In case to remain good reputation resort
in Nha Trang needs to analyse competitive environment and implement a
proper strategy. Managers of Vinpearl resort in Nha Trang need to know how
to take advantage of strength to overcome weaknesses and use opportunities
to overcome threats.

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Reference:

BBC News (2014) China warns Vietnam over stand-off in South China Sea
[online] available from < http://www.bbc.co.uk/news/world-asia-27332723> [30
October 2017]

BMI Research (2017) Vietnam Tourism Report, Includes 5-year Forecasts to

2020 [online] available from BMI Research [19 October 2017].

Cong, L.C. (2016) ‘A formative model of the relationship between destination

quality, tourist satisfaction and internal loyalty: An empirical test in Vietnam’.
Journal of Hospitality and Tourism Management, 26, 50-62.

Curry, J. E., Nguyen, C.T. (1997) ‘Passport Vietnam: Your Pocket Guide to
Vietnamese Business, Customs and Etiquette’. World Trade Press, 19.

Gov UK (n.d.) Foreign travel advice Vietnam [online] available from

<https://www.gov.uk/foreign-travel-advice/vietnam/safety-and-security> [30
October 2017].

Johnston, R., Clark, G., Shulver, M. (2012) Service Operations Management:

Improving Service Delivery. 4th edn. Harlow: Pearson

Le, T.P.L., Trinh, T.A (2016) ‘Encouraging Public Transport Use to Reduce
Traffic Congestion and Air Pollutant: A Case Study of Ho Chi Minh City,
Vietnam’, Procedia Engineering (142), 236 – 243 [online] available from
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October 2017].

Nguyen, A. D., Zhao J., Fengb, Y., Hua, W., Yub, K., Gasparon M., Pham,
T.B., Clark T.R. (2013) ‘Impact of recent coastal development and human
activities on Nha Trang Bay (Vietnam): evidence from a Porites Lutea
geochemical record’. 32(1), 181-193.

Reference:

Reisinger, Y., Turner, L. W. (2003) Cross-Cultural Behaviour in Tourism:

Concepts and Analysis. Oxford: Butterworth-Heinemann, 181-196.

Rennie, A., McGee, R. (2012) International Human Resource Management

London: Chartered Institute of Personnel and Development, 12-19 [online]
available from <https://culcmoodle.coventry.ac.uk/course/view.php?
id=4580&section=5> [31 October 2017]

Samapundo, S., Cam Thanh, T.N., Xhaferi, R., Devlieghere, F. (2016) ‘Food
safety knowledge, attitudes and practices of street food vendors and
consumers in Ho Chi Minh city, Vietnam’. Food Control, 70, 79-89.

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Thanh Nien News (2016) Resort market booms as Vietnam opens up to
foreign investment [online] available from
<http://www.thanhniennews.com/business/resort-market-booms-as-vietnam-
opens-up-to-foreign-investment-60690.html> [30 October 2017]

The Guardian (2006) 20 best deserted beaches [online] available from

<https://www.theguardian.com/travel/2006/may/07/restandrelaxation.observer
escapesection> [31 October 2017].

The Guardian (2017) From heatwaves to hurricanes, floods to famine: seven

climate change hotspots [online] available from
<https://www.theguardian.com/environment/2017/jun/23/from-heatwaves-to-
hurricanes-floods-to-famine-seven-climate-change-hotspots> [30 October
2017]

Tourism Review News (2014) Tourism in Vietnam Fights Poor Infrastructure

[online] available from <https://www.tourism-review.com/travel-tourism-
magazine-vietnam-tourism-industry-faces-a-number-of-issues-article2487>
[30 October 2017].

Tribe, J. (2016) Strategy For Tourism. Second edition. Oxford : Goodfellow

Publishers

Vietnamnet (2016) China’s economic woes affect Vietnam’s financial market

[online] available from
<http://english.vietnamnet.vn/fms/business/150343/china-s-economic-woes-
affect-vietnam-s-financial-market.html > [30 October 2017]

Vietnamtourism (2017) Sea sports complex unveiled in Nha Trang Bay

[online] available from
<http://vietnamtourism.gov.vn/english/index.php/items/11700 > [31 October
2017]

Vingroup (2014) Vinpear Premium Nha Trang Bay [online] available from
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premium-nha-trang-bay-77.aspx > [30 October 2017]

Vingroup (2016) Preserving The Start-Up Mindset, Annual Report [online]

available from <http://vingroup.net/en-us/shareholder-relations/shareholder-
relations-after-the-merger/annual-reports/document.aspx> [29 October 2017]

Vingroup (2016) Vingroup Joint Stock Company: Corporate Presentation

[online] available from <http://vingroup.net/Uploads/0_Information
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%20July_2016_Final.v9.pdf> [29 October 2017], 94

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Vu, T.T., Ranzi, R. (2017) ‘Flood risk assessment and coping capacity of
floods in central Vietnam’. Journal of Hydro-environment Research, 14, 44-60.

Wall, G., Mathieson, A. (2006) Tourism: Change, Impacts and Opportunities.

Harlow : Pearson/ Prentice Hall, 282-284, 316.

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