Flying High in the Land of the Blue Dragon
In the far south of Vietnam, on a resort island named Phú Quốc that is located closer to Cambodia’s shores than Vietnam’s, a 300,000-square-foot building shaped like a giant turtle is under construction. Not far from the soon-to-be-opened aquarium is a new theme park with a huge castle and lagoon show. Guests who travel to the middle of Vietnam will find a 150-meter-long golden pedestrian bridge that appears to be supported by two massive hands of God, which has attracted millions of visitors since opening just two years ago.
An attractions boom—one with some uniquely Vietnamese characteristics—is underway in the Land of the Blue Dragon, and it’s giving some industry veterans a sense of déjà vu of China’s explosive growth seen in the last decade.
Much like China a decade ago, Vietnam’s middle class continues to grow, spending power is on the rise, the government is investing in infrastructure, the property market is hot, and new attractions projects are aplenty.
“Vietnam is one of the fastest growing markets in Southeast Asia for entertainment,” says Chris Yoshii, global director for AECOM, whose company is conducting feasibility, design, and master planning work for clients in the country.
“The opportunity is huge,” agrees Brad Loxley, chief operating officer of Sun World, who notes his parks have experienced double-digit annual growth in attendance and revenue. Loxley moved to Vietnam from Australia about a year and a half ago as Sun World began to hire more international talent.
Rising Middle Class
Sun World is a major attractions company in Vietnam. The company operates five resorts throughout the country. Similar is Vinpearl, which has built four resorts. Both companies have largely focused their efforts on tourist destinations, like UNESCO World Heritage gem Ha Long Bay in the north and Phú Quốc in the south, rather than major cities.
AECOM estimates that nearly 15.6 million people visited Vietnamese theme parks last year, up threefold from 2000. Attendance rates have jumped more than 80% in just the past four years.
The sector’s growth is taking place against the backdrop of favorable demographics and a fast-growing economy. According to the World Bank Group, “an emerging middle class, currently accounting for 13% of the population, is expected to reach 26% by 2026.” Vietnam was projecting GDP growth of 6.9% this year (though concerns surrounding COVID-19 could knock that down). Around 70% of Vietnam’s citizens are under the age of 35.
“Incomes are rising relatively fast,” says Jodie Lock, a design, planning and economics associate in AECOM’s Hong Kong office, adding that more and more Vietnamese can afford to buy a theme park ticket. “The resident market will be an engine of growth going forward for the next five to 10 years.”
Theme park operators are also banking on rising tourism, both domestic and international. An increasing number of tourists—particularly from neighboring China, South Korea, and Russia—are visiting Vietnam. Visas are easier to obtain, and budget air carriers are introducing more direct flights to destinations like Dalat, Danang, and Phú Quốc.
Family Entertainment Centers
The boom is not limited to theme parks. The N Kid Group, which runs the country’s largest group of family entertainment centers (FECs), has doubled its outlets over the past four years. The N Kid Group now operates 60 tiNiWorld edutainment playgrounds and tiNiPark indoor recreational sports parks across the country, welcoming 12 million visitors a year.
Founded 11 years ago, N Kid Group has raised $80 million through two rounds of equity financing over the past four years, the first in 2016 with Standard Chartered Private Equity (now Affirma Capital), and then again in 2018 with the Crescent Point Group.
“Consumers are increasingly willing to pay for more interesting experiences, particularly as it relates to attractions for kids and their enrichment and education,” says N Kid Group co-founder and CEO Thomas Ngo. “But what we’ve learned is that it’s not getting them there, it’s the repeatability that’s really challenging, because you have so many new things coming up all the time.”
Location-based entertainment options, aside from cinemas and arcades, have traditionally been limited in Vietnam, but the country’s hot weather and urban air pollution are driving many people indoors. Other FEC players include Australia’s Timezone, which recently re-entered the market, and local trampoline operator Jump Arena. Both companies have about half a dozen locations.
Ngo estimates that Vietnamese consumers will pay US$20-30 per person for “a really good attractions experience.” To put this in perspective, a combo ticket to Sun World’s Hon Thom Nature Park and new Aquatopia water park in Phú Quốc costs about US$16, while entrance to a tiNiWorld FEC ranges from US$3 to US$5.
While the country has some roller coasters, Vietnamese in general are not yet fans of adrenaline-pumping thrills. Even family rides, like a swing ride, have been known to scare first-time visitors.
“The way Vietnamese consume entertainment in the parks is certainly very different from Western parks and from China, too,” Loxley observes. “Even the teenage market is generally not used to big, scary rides. They’re more drawn to family-oriented, story-driven attractions.”
More than most markets, he adds, Vietnamese are big fans of social media photography. For many people, decked out in their best attire, their sole purpose while visiting an attraction is to take photos with friends and family.
That fast pace at which new players are entering the attractions scene, and the focus on property development, has introduced some challenges.
“In terms of large developments, every real estate developer is jumping into the game with attractions and entertainment,” says Ripley Entertainment’s Asia-Pacific Director for Operations and Development Victor Danau, who moved to Vietnam five years ago.
“There’s no shortage of money and there’s no shortage of concepts either,” says Ngo, who warns that not every new project may succeed. Developers looking to invest in Vietnam need to have a good understanding of the market and of the nation’s rapidly changing consumer preferences.
“Some attractions are valuing the hardware more than the software. They put millions into the rides, theming, and land, but do not invest in their people,” Danau says, adding proper “operations and service training for their staff” is just as important.
Yet, there are operators setting a positive example. Sun World’s new Aquatopia Water Park in Phú Quốc and Typhoon Water Park in Ha Long Bay are some of the first in the country where lifeguards have received international certification. Technischer Überwachungsverein (TUV) also inspects all its rides and slides.
As the taste of Vietnamese guests continues to evolve and becomes more sophisticated, attractions will meet the demand, creating safe and entertaining facilities that generate repeat visitation.