Tourism firms focus on local segment as niche market

The domestic market segment rather than inbound activities has been proven a highly-potential niche market for tourism companies, with most reporting double-digit growth in 2010.
The inbound tourism segment was hit hard in 2008 when the global economic downturn unfolded, forcing many travel firms to turn to the domestic market. Meanwhile, local economic growth has enabled many local people to travel, richly rewarding those tour operators who know how to dig deep.
At Fiditourist, the inbound tourism segment contributed just a quarter of total revenue last year, while the revenue for the most parts came from local guests who bought outbound and domestic tours along with hotel, transportation and other services.
“We’ve seen good growth in local customers in recent years. The domestic market is playing a very important role for our business. Local travelers are the main guests for us this year,” said Nguyen Viet Hung, general director of Fiditourist.
The company is expanding its sale networks from big cities like Hanoi and HCMC to other cities nationwide like Danang and Can Tho to woo customers.
According to the Vietnam National Administration of Tourism, around 28 million local people traveled last year, up three million compared to 2009, while the number of Vietnamese who bought outbound tours also strongly increased.
Duong Thanh Thuy, chairwoman of Trung Thuy Group Corporation, also attaches greater importance to the local segment. The businesswoman has plans to increase the number of local customers at her company’s rest stations and shopping centers to 50% this year compared to just 25% last year.
“The local market will become the core market of our company. We are building new accommodations, and will establish a unit to research the consumption trend of the guests when buying souvenir products,” she said. Thuy explained that in the past the company just established a unit to research the foreign guests only.
At Saigontourist Travel Service Co., the number of local guests buying domestic and outbound tours reached 210,000 out of the total of 320,000 guests last year. The company still develops services for both local and foreign markets, but said that the local side has much potential to develop further.
Saigontourist has divided the local market into segments and asked its departments to further develop such segments to complete their business targets in the new year.
“We can offer all products and services like incentive, budget and high-end tours along with airline, hotel, and other services to the local market,” said Doan Thi Thanh Tra, marketing manager of Saigontourist.
The company has a wide sale network in HCMC, Hanoi, Danang, Can Tho and Quang Ninh to serve the increasing demand of local travelers.