Vietnam the next Disney land? Don't hold your breath

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  The entrance to West Lake Water Park in Hanoi. Vietnam's theme parks are not doing good business, but some people want a Disneyland here.

Nguyen Minh Hieu would love to take his family to a theme park on par with Disneyland or Universal Studios in his native Vietnam, but for now, upper middle-class Vietnamese families will have to travel to Hong Kong or Singapore to enjoy the unique experience of a full-blown American-style theme park.

While Vietnam has a plethora of tourist destinations, attractive to locals and foreigners alike, despite the country's rapid development, there remains a dearth of options for grandiose recreation for the growing upper middle class.

"Vietnam does not have big recreational places. We don't know where to go in the country for holidays," said Hieu, a 32-year-old architect from Hanoi. "Main relaxation activities for families here are to take children to restaurants, cinemas or supermarkets only."

Like Hieu's, many affluent Vietnamese families are spending more money on overseas trips, while foreign visitors are shortening their travel time in Vietnam. Tourism companies are blaming this, in part, on the lack of modern theme parks.

Vietnam does have theme parks, but they are only in a few major cities. West Lake Water Park and Bao Son Paradise Park in Hanoi, and Suoi Tien and Dam Sen parks in Ho Chi Minh City were all once quite popular, but the Vietnamese consumer has begun to crave the gravity-defying roller coasters and intricate narratives that Disneyland offers.

So far, developing recreational properties has not been attractive to investors, who have determined that the Vietnamese market cannot yet sustain the type of customer base needed to make such projects profitable.

And with ticket prices of some US$40-50 to enter recreational complexes like Disneyland in Hong Kong, or Universal Studios in Singapore, only the most affluent Vietnamese people would be able to afford to visit such a park, were one built in Vietnam, experts say.

Constructing a major theme park requires a massive amount of capital. Singapore's Universal Studios, for instance, cost approximately $1.4 billion to build, according to KB Creative Advisors, which claims to have designed the theme park.

The number of potential customers in Vietnam pale in comparison to what investors would expect, said Pham Sy Liem, vice chairman of the Vietnam Construction Federation.

Not many businesses are ready to invest in big recreational property projects in Vietnam because, beyond the initial investment, the upkeep for such operations is also extremely expensive, Liem said.

Acquiring enough land for the projects is another roadblock. "It is very hard to obtain large land plots for recreation property projects in big cities like Hanoi and HCMC," he said, adding that such projects would be built far from the heart of major cities.

"Here, it is difficult to seek land lots for recreational complexes," he said.

Nguyen Cong Hoan, vice general director of the travel agency Redtours Hanoi, said "Hanoi and Hai Phong have only a few places for family recreation. Thus, the development of modern recreational complexes to lure visitors to Vietnam is quite necessary, as the demand for relaxing and entertainment is very important to everyone."

"However, we will not woo many foreign visitors if we only invest in small- and medium-scaled recreational areas with unattractive games," he said. "For entertainment purposes, visitors will continue to choose Hong Kong, Singapore and Malaysia," Hoan said.

He said small- and medium-sized recreational centers would likely only attract local visitors and travelers from Laos, Cambodia and China's border provinces.

Major theme parks, like Singapore's Universal Studios and the Resorts World Genting in Malaysia, have accompanying casinos, which rake in huge profits by pairing gambling with family friendly entertainment.

However, the ban on Vietnamese people from gambling would have to be lifted to make such a project feasible in Vietnam, an industry insider said, adding that Vietnam's underdeveloped infrastructure also makes investors wary.

Unprofitable projects

Due to the small volume of customers, Vietnam's existing recreational parks are not doing well.

West Lake Water Park, for example, has suffered losses in each of its first seven years since opening in 2000, local media quoted Tran Thi Bach Yen, general director of the Hanoi Entertainment Service Company, the park's operator, as saying. She said the park sees very few visitors during the winter.

Yen said her company lost a total of VND14.7 billion ($705,000) on the project over the first seven years. To increase its revenue, it now rents out the park for wedding parties and business conferences.

However, profits remain low, standing at only VND15 billion in 2011. The company would have been better off keeping the money invested in the park in the bank, she said.

Ba Ria-Vung Tau Province has recently announced it has withdrawn the investment license for the Wonderful World Theme Park, a recreational complex which had been set to include an accompanying five-star hotel. The US firm Good Choice was the investor for the $1.3 billion project.

In light of these impediments, some experts have suggested Vietnam may not need modern theme parks anyway.

With its array of breathtaking landscapes and UNESCO World Heritage Sites, Vietnam should focus on developing resorts, which offer state of the art services, instead of developing its recreational industry in order to woo visitors, Hoan of Redtours said.

Vietnam welcomed over 3.8 million foreign travelers in the first seven months of this year, an increase of 10.8 percent over the same period last year. The most tourists have come from China, with 773,000 visitors, followed by South Korea with 421,000, and Japan with 329,500, according to the Vietnam National Administration of Tourism.

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