The Revolution Express and Tourism Development in Central Vietnam

Over the past decades since the Vietnam reopened to the world, Central Vietnam has been the country’s, and one of the world’s, fastest-growing tourist destinations. The trend looks set to continue. Driven by the growing number of international visitors along with the even faster-growing number of domestic tourists as Vietnam’s vibrant economy continues to create millions of more middle-class families each year.

Central Vietnam has always been the prime domestic destination for Vietnamese tourism as its balmy weather is much warmer than chilly Hanoi and the north and cooler than sweltering Saigon and the Mekong basin in the south.

The Vietnamese government is actively encouraging investment in both hotels and tourist attractions in the region. They support such development with tax incentives and beneficial property deals and have been spending vast sums on upgrading the region’s transportation infrastructure, airports, highways, trains, and telecoms. They have also more recently started visa-free entry at the local airports, are developing a new international cruise ship port in Lang Co, and have issued a license for the biggest and international quality casino also in Lang Co.

Fast Growing International Tourist Numbers

In 2019 Vietnam received 18M international tourists, over 8 million of them arrived directly into the newly renovated Da Nang International airport in 2019 (a +55% y.o.y increase over 2018). In 2020, before their Covid 19 national shutdown, international visitor numbers were still growing. More recently, despite the temporary shutdown, Google named Da Nang as its top trending holiday search destination in 2020, so the international tourists are hankering to visit or return.

Hue airport, which in 2018 was upgraded to become a full international airport received 2.8 million international arrivals last year, but the airport's official website states they expect this number to grow to 7 million arrivals annually by 2025.

Due to their proximity - being less than 1.5 hours drive apart, there are no direct flights between Da Nang and Hue, the two main cities of central Vietnam, so tourists and travelers must travel between them by road and rail. The Revolution Express has been issued its permits by the ministry of transport to allow an iconic, educational, and fun new option for the millions of expected future travelers between these two main cities and transportation centers in the region.

Many more foreign tourists also arrived by train, road, or cruise ship. It is estimated that around 12 million foreign tourists visited central Vietnam in 2019. And this figure continues to grow fast. For example, seven years ago, when IRC first started work on creating the Revolution Express project there were less than two million foreign tourists visiting central Vietnam each year.

Source: World Bank Group/Wikipedia

Foreign Tourism Arrivals in Vietnam 2009-2019

And tourists both foreign and domestic are spending more each year according to the Vietnamese government figures annual tourism revenues in Vietnam have grown by 600% over the last decade, from USD 5.1 billion in 2010 to USD 31 billion in 2019.

It is not unreasonable to imagine a similar rate of growth continuing over the coming decades given the relentless economic growth both in Vietnam and the surrounding Asian region. Also, compared to neighbouring Malaysia, Thailand Hong Kong, China, Singapore, etc, the Vietnamese market is still substantially cheaper, smaller, newer, and less explored. Tourism in beautiful central Vietnam represents a massive new growth market. Now is the time to invest.

In 2019, 78% of all international arrivals to Da Nang in 2019 were from Asia, mainly Korea, Japan, China, and Thailand, this trend looks set to continue. Asians don’t like to just sit on the beach all day so they need suitable family tours and attractions to pass their days. However, due to the recent rapid growth in central Vietnam, there is still a relatively limited number of such tours or attractions available. This is why the local and national governments plus most the local hoteliers support the Revolution Express and the planned side tours and excursions, as not only will it help to attract more tourists to the region but should encourage them to stay a day or so longer.

IRC state that all the tour group operators which they have spoken to love the Revolution Express concept and several have indicated they would put most of their tour groups to central Vietnam on it. The clients of just three of the larger inbound tour groups IRC have spoken with could alone fill the whole train. But all the tour operators, both domestic and international are also looking to contract in new family attractions to help market their tours. They know steam train trips, with a theatre attached, are very popular attractions for Asians and foreigners all over the world, from India to the USA, South Africa to Switzerland.

Domestic Tourism is the Real Growth Story

Despite the rapid growth of international tourism in Vietnam, IRC envisages that it is the growing juggernaut of domestic tourism that will comprise its main market in the future.

Domestic tourism in Vietnam is growing even faster than international tourism, and already constitutes a far bigger total spend.

The “Vietnam Insider” newspaper recently reported that last year in 2019 “Tourism raised USD 31 Billion last year, and… …barely 17 percent of the 103 million travelers in Vietnam were foreigners, who spent only slightly more per head than their domestic counterparts.”

It is estimated that around 24 million domestic tourists visited central Vietnam last year, double the 12 million or so foreign tourists.

GDP per capita in Vietnam has been growing around 6-7% per year over the last decade and Domestic tourism has been growing at around 10% per year at the same time, as has the Vietnamese spend on holidays.

For example, Just five years ago only 4% of all USD 200 per night and above resort hotel rooms were taken by Vietnamese. despite the fast growth in rooms, last year, (2019 pre-Ccovid) this figure rose to 38%.

In 2019 Da Nang Airport received an average of 432 international flights per week as well as 590 domestic flights weekly.

The number of Vietnamese tourists and their spend per head will inexorably grow in the coming decade as Vietnam’s economy continues to grow rapidly and the 97 million Vietnamese, with an average age of just 30, grow richer, just like all their neighboring Asian Tiger economies have done over the past decades… and continue to do today.

Moreover, the Vietnamese love to take family holidays more than most people. In 2018, according to Agoda family travel trends, 33% of Vietnamese families took over five holidays a year. That’s much more than in the UK, Australia, Singapore, USA, or China.

Source: Agoda Family Travel Trends 2018

Revolution Express is Perfectly Poised to
Catch this Coming Tidal Wave of Domestic Tourism

The Vietnamese love to travel in extended family groups and to show off to their relatives by out-spending one another on food, drinks, and gifts. Therefore the Revolution Express tickets are affordably priced to get these Vietnamese families aboard so they can enhance their F&B and gift takings.

The Vietnamese are justifiably extremely proud of their history and heritage. The Revolution Express locomotives are the last Vietnamese-built, famous “Tu Duc” locomotives in the country. (These are North Vietnamese built copies of the French Mikado 121). These locomotives were the workhorses of the Vietnamese independence revolution and were attacked, strafed, and bombed while running goods up and down to the Ho Chi Minh trail in their national fight for independence. Vietnamese are very proud of these legendary, tough locomotives. They are like national heroes.

A Fun Family Experience

The Revolution Express experience is not only a scenic and fun train ride but also tells a theatre-like story showcasing and celebrating Vietnam’s history, revolution, and independence. This is of strong relevance to all Vietnamese. Older Vietnamese love to visit memorials to their past with their families. And given that 40% of citizens are under the age of 24 we will also provide a fun educational and Instagrammable activity for the younger generations.

The Revolution Express train ticket price is only USD20 more than the normal national aircon train ticket price from Da Nang to Hue, which carries thousands of passengers per day between the two cities. Therefore IRC expects to get a lot of domestic travelers from that already existing market if just a few Vietnamese try this alternative fun trip experience just once - for just $20 more.

Just like all the other surrounding Asian tiger economies, Vietnam’s GDP, with its hyper entrepreneurial people will continue to grow very rapidly, as will their spend on domestic holidays. The Revolution Express, which intends to create a brand with both an image and cost that will target upwardly-mobile and middle-class Vietnamese families, is perfectly designed to profit from this inexorable growth of domestic tourism in Vietnam into the foreseeable future.