Aviation sector tourism sector

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GoFirst, the budget airline previously known as GoAir, plans to launch its delayed initial public offering to raise Rs 3,600 crore in the second quarter of this financial year following a revival in market sentiment over aviation stocks.

“Over 27 investors have shown positive interest. The company will make a fresh presentation soon,” a person aware of the airline’s plans said.

Another person said GoFirst is optimistic about its IPO as domestic and overseas air travel opens up with no expectations of another Covid-19 wave.

“Domestic air traffic rising to above the pre-Covid-19 levels, coupled with a recovery in the stocks of aviation companies, has once again increased the appetite of bankers,” another person said.

Shares of InterGlobe Aviation, the operator of IndiGo, the country’s biggest airline, have jumped 8.1 percent over the past three days, while stocks of SpiceJet have rallied 7 percent in the same period.

India’s aviation sector has been recovering as people resume leisure and official travel after over two years of pandemic-related restrictions. However, the price of aviation fuel, the biggest cost component for airlines, has risen sharply, and competition is set to intensify as two additional carriers take to the skies.

Like other airlines, GoFirst is betting on rising demand for leisure travel during the summer vacation to combat rising fuel prices, people aware of the matter said. The carrier expects the government to lift fare caps and include aviation turbine fuel in the goods and services tax regime to help the aviation sector.

Jet fuel

Aviation turbine fuel prices have shot up almost 90 percent since May 2021. Jet fuel prices were increased by 5.3 percent on May 16 – for the 10th straight time – and now costs Rs 1,23,039.71 per kilolitre in New Delhi.

GoFirst plans to use Rs 2,200 crore to be raised from the IPO to reduce debt and repay lessors. The remaining Rs 1,600 crore will be deployed to increase the airline’s operations in India and internationally, including adding flights to Indonesia, Malaysia, Singapore, Sri Lanka, and Nepal.

The airline expects domestic passenger traffic to surpass pre-Covid levels by 5-10 percent by the second quarter of 2022-23 in the absence of a new wave of Covid-19.

The airline plans to convert its entire fleet of Airbus A320 Neos and Airbus A320 Ceos to Airbus A321 Neos. The airline currently has 52 A320 Neos and 6 A320 Ceos in its fleet. GoFirst plans to take deliveries of 10 aircraft per year until 2023-24 and another 72 aircraft will be delivered between 2023-24 and 2026-27.

The airline had delayed its IPO plans in August 2021 after the Securities and Exchange Board of India called the promoters, the Wadias, for a pending inquiry. In December 2021, GoFirst further delayed the offering due to the outbreak of the Omicron wave and then the Russia-Ukraine war that started in February.

Meanwhile, competition is set to intensify in the aviation sector as one new airline and another grounded carrier start flying later this year. Rakesh Jhunjhunwala-backed Akasa Air is set to start commercial operations in July, CNBC-TV18 reported on May 6. The airline expects to receive its first aircraft by early June. Jet Airways, under its new owners, may start flying this year.

The IPO markets have slowed this year after record funds were raised in FY22. Indian companies sold shares worth $995 million in the January-March quarter of 2022 compared to $2.57 billion during Q1 of 2021, according to EY Global IPO Trends. That was a decline of 60 percent in proceeds raised.

The mega Rs 21,000 crore IPO of Life Insurance Corporation of India made a tepid debut on the stock exchanges earlier this week and listed at a discount to the issue price.

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HÀ NỘI — The tourism sector must apply digital transformation to secure sustainable development, according to dozens of participants at a forum on the topic held in Hà Nội on May 18.

Titled “Green Light for Tourism to Take Off Part 2: Digital Transformation: Diving Force for Sustainable Development”, the forum gathered dozens of experts from State management agencies, tourism authorities, localities, and IT.

The first part of the forum held in March focused on opening doors to international tourists.

Hoàng Quang Phòng, deputy chairman of the Vietnam Chamber of Commerce Industry, said at the end of 2018, the Prime Minister issued Decision No 1671/QĐ-TTg approving the “Master plan on applying informatics technology in the tourism field for 2018-2020, with orientation to 2025.”

“Informatics technology has been applied in various tourism companies, especially hotels, resorts and big travel agencies,” Phòng said.

A visitor uses a remote guide app on her mobile at the National Fine Arts Museum. —VNS Photo Lê Hương

However, he said there had been no uniform application in the whole sector.

Phòng noted that the pandemic had seen the biggest ever purge in the field.

“Digital transformation has been proved to be crucial to all the fields if they want to move forward in the Fourth Industry Revolution,” he said.

“The pandemic has pushed all tourism companies and localities to choose: digital transformation or die.”

Digital transformation has helped tourism enterprises flexibly react to the changes in the market, he said. Based on available data, tourism workers could still communicate with customers to understand their psychology, behaviours and demands to introduce suitable products.

Phòng said not only enterprises but also locations needed to go through digital transformation to bring convenient and safe experiences to customers, like remote guide systems, QR codes introducing displayed objects, and automatic facilities to help customers send comments on service quality to managing boards.

“We can see that the tourism sector has been active in digital transformation and the Fourth Industry Revolution, aiming to form a smart tourism ecology linking participants from tourists, service providers to State management agencies, he said.

Nguyễn Lê Phúc, deputy general director of the Vietnam National Administration of Tourism (VNAT), shared the same idea that digital transformation will bring an opportunity for the tourism sector to develop more sustainably.

Phúc said in the past few months, the VNAT has concentrated on establishing a smart tourism ecology to create a “common playground” for localities and enterprises.

The VNAT has built a data system for Vietnamese tourism; established information connections among management agencies, localities and enterprises; applied technology to ensure safe tourism; pushed up the use of apps among management agencies, enterprises and tourists like the apps including “Safe Việt Nam Tourism,” “Việt Nam Travel Guide,” and “COVID-19 Registration & Safety Judgement;” and supported localities and destinations to embrace digital transformation, such as Hà Giang Province and Thanh Hóa Province in 2021.

At the same forum, other experts in IT and tourism admitted that digital transformation was now crucial as tourist habits had changed.

More and more tourists have been booking services online.

Nguyễn Quyết Tâm, director of Vietso, also the founder of TravelMasters, held that to build the foundation for digital transformation, first and foremost, the tourism sector should have a common technical criteria system so that different platforms can share data.

“Data built at localities and enterprises are not following any same standard,” he said.

The VNAT has noted the opinion and will gradually complete the common platform on tourism business management, which is scheduled to be launched in December.

The mobile app Việt Nam Tourism has been introduced at all hotels in the country. —VNS Photo Mạnh Trí

Enterprises need more support

Đỗ Hồng Xoan, chairperson of the Việt Nam Hotels Association, said three-quarters of tourism enterprises are small and medium-sized and need more support in the process.

“Small and medium-sized enterprises have been bogged down with various difficulties as digital transformation should be uniformed across State policies, ministry decisions, VNAT policies, association policies, and locality policies,” she said.

“They need more help from agencies to apply the digital transformation,” she said.

The Selection for National Distinguished Tourism Service Providers 2022 was launched at the same forum to praise enterprises making considerable contributions to tourism market development. All tourists and enterprises throughout the country can cast their votes.

The Diễn đàn Doanh nghiệp magazine, based on judgements of experts in the field, will announce the result and hand the certifications to top selected tourism enterprises later this year. — VNS

Do Chi Cong, member of EuroCham and general director of SB Invest

According to the United Nations World Tourism Organisation (UNWTO), Southeast Asia will become the fourth largest tourist attraction in the world, with Vietnam also developing a green and sustainable pathway over the next ten years. In your opinion, what is the core element of green tourism?

Green tourism advocates for minimal detrimental impacts on the local environment, biodiversity protection, renewable energy, the promotion of natural and cultural heritage, environmentally-friendly products, and the active participation of local communities.

Green tourism is the key to responsible and sustainable development and respecting natural elements. Minimising negative environmental impacts and creating a healthy environment are all at its core.

Thus, to be recognised as a green tourism product, all tourism services such as tours, hotels, restaurants, and golf courses must meet the above criteria.

As an expert in the field of tourism and resort real estate, I think that Vietnam still has a lot of potential and room for development to attract foreign investors into the green economy, especially in the high-end resort real estate segment.

After a long period of stagnation, the resort real estate segment is expected to continue to maintain its attractiveness and growth prospects. How do you evaluate the current situation of resort real estate in Vietnam?

Objectively, there are pros and cons.

Tourism has become a spearheading economic sector and the government has issued many supportive policies, which is the biggest advantage.

On January 22, the prime minister issued Decision No.147/QD-TTg approving the strategy for tourism development up to 2030.

Accordingly, by 2025, the average growth is expected to reach 12-14 per cent per year, and a direct contribution to GDP of 12-14 per cent. In 2030, total revenue from tourism should reach 11-12 per cent, contributing 15-17 per cent of the country’s GDP.

The Ministry of Culture, Sports and Tourism has also issued a tourism development action programme for the 2021-2025 period. These are extremely important legal frameworks for the development of the tourism industry in general and tourism real estate in particular.

The second advantage is the rapid growth in the number of accommodation options. According to statistics from the General Department of Tourism, the whole country had only around 2,000 tourist establishments with nearly 95,000 rooms in 2009, but by 2019 the number had increased to 22,000 with about 500,000 rooms.

Thus, after just over 10 years, the figures for tourist establishments and rooms had increased by 11 and 5.2 times respectively. This is spectacular growth for an emerging market like Vietnam.

Statistics as of September from the Vietnam National Real Estate Association revealed that in 15 localities, there were a total of 239 tourism real estate projects with more than 114,000 condotel apartments, 24,000 villas, and 30,000 shophouses. The total value of these three products stands at about $30 billion.

However, the resort real estate market still has legal problems that have not been resolved.

Firstly, the concept of tourism real estate has not been specified in the legal documents for the real estate and construction industries. Therefore, this field still does not have a clear legal foundation for investors to build a stable and sustainable orientation.

Secondly, tourism real estate is currently subject to the general regulation of many different legal systems, mainly related to residential real estate, business investment activities, and management, supervision, and use of projects. The application of legal provisions from different fields leads to a lack of consistency and synchronisation in the application of state and local agencies, causing confusion in the process of addressing work. Therefore, enterprises face many obstacles due to unclear processes and procedures.

In addition, financial institutions face risks with capital financing for tourism real estate investment and dealing with related bad debts.

Can you suggest some solutions so that Vietnam can attract more strategic investors to promote the development of green and sustainable tourism real estate?

Vietnam possesses a lot of potential and advantages for the development of green tourism real estate. We need to create an attractive playground for foreign investors, which means that the government, as well as ministries, sectors and localities, need some wide-reaching solutions.

Firstly, it is necessary to supplement and complete the legal framework for tourism real estate. We need to add specific regulations for the sector in terms of construction, investment, and credit activities. These should include supplementing regulations on granting land use right certificates for tourism real estate, transferring tourism real estate purchase and sale contracts, and capital mobilisation.

At the same time, it is necessary to identify the types of tourism real estate in the Law on Real Estate Business and the Law on Construction and consider providing specific sanctions for investors and related parties when making commitments to investors in the market.

Secondly, there should be a synchronous policy to develop transport infrastructure in all provinces to promote regional connectivity. The government needs to study and develop planning strategies for the development, especially the north-south expressway, airways, and railways, as traffic is the lifeblood of tourism.

The planning between provinces and cities must have a seamless connection so that the cultural heritage sites, coastal urban areas, and key eco-tourism areas are linked into a complete tourism network.

Thirdly, it is necessary to have a key strategy to promote the training and development of high-quality human resources.

If traffic is the lifeblood, human resources are the backbone of the tourism industry. In the last 10 years, although Vietnam has produced people with qualifications equivalent to those in other countries in Southeast Asia in terms of quality, the number is still not high enough to meet the development needs of the industry.

Therefore, the government and local ministries need to formulate high-quality development strategies in the new normal, enhancing the capacity and adaptability of human resources in the future.

At the same time, a methodical and advanced training plan for management personnel and direct workers in the field of tourism real estate is vital. Programmes and certificates need to be standardised in line with those internationally.

Finally, the building of information and databases for the real estate market in general, and tourism real estate in particular, should be strengthened to serve management and promote digital transformation.

This is a clear trend in the world today with the goal of forming a smart and green tourism ecosystem that connects entities including tourists, service providers, and state management agencies. We should all cooperate to build a green tourism environment, facilitating environmental, cultural, economic, and social sustainability.

By Thai An

It’s a moment I’ve been waiting years for: at least weekly – if not almost every day – there’s a new headline about space tourism. Virgin Galactic is shifting their executive team around to get ready for paid passengers. Blue Origin keeps quietly testing in the stratosphere above West Texas. Two new contests – Inspiration4 and #dearMoon – both promise the chance to win your spot on an out-of-this-worth adventure. A new space hotel is announced at least once per year. Oh, and Elon Musk’s SpaceX team keep drawing hundreds of thousands of eyeballs to livestreams documenting the steady march of progress for Starship – the craft that will eventually carry humans to Mars.

Space has never felt so close, yet so far away.

After dedicating myself to the space tourism industry back in 2017, I’ve been patiently waiting for actual space tourism – like so many of you. But it’s not hard to understand if your patience is wearing thin, especially when each new announcement comes with an overly ambitious timeline that will inevitably let us down.

This sentiment is not unique. Christian Davenport, an excellent space journalist from the Washington Post who wrote the book The Space Barons to document the stories of the billionaires funding the private sector in space, tweeted this in response to the announcement of the dearMoon project last week:

When the professionals covering this industry – among its most enthusiastic fans – are subtweeting the seemingly arbitrary timelines that make for thrilling headlines and earn tons of clicks, you know something’s off. (Admittedly, it’s hard to know exactly how long it will take SpaceX to prep for the dearMoon mission since it’s currently planned aboard the Starship).

“The #dearMoon mission is still advertising itself as happening in 2023. This will almost certainly not be the case. Starship is still in development and will need to achieve several successful uncrewed spaceflights before flying humans,” tweeted Laura Seward Forczyk, the founder of Astralytical , which offers space analysis and consulting.

“Companies should try to not overpromise. Hyping up unrealistic plans is a good way to create a cynical customer base,” said Seward Forczyk in a follow-up interview. “Instead, companies should be honest with customers and emphasize their focus on flying when it’s safe.”

There are obviously several benefits to committing to a specific year, increased public interest and media exposure being chief among them. However, publishing overly ambitious – one might even say unrealistic – launch timelines can end up hurting the mission in the long run. Just think back on how many space hotels should have been launched by this point.

This recent editorial by A.J. Mackenzie for The Space Review says it well when discussing the Voyager Space Station, announced a few days ago: “The belief that any company or organization can build the world’s largest space station, able to host hundreds of people, in just six years boggles the mind,” Mackenzie writes. “Far smaller space projects have run into delays and cost overruns, […] there’s no reason to believe this would be any exception.” (That article dives much deeper into the wild ideology and economics of ideas like this “space hotel” and is a worthy read if you’re nodding along.)

Obviously, we all get it: space is hard and you have to do it safely. But it’s a double-edged sword between hype that achieves its goal and which ends up leaving us – the someday potential customer base – disillusioned.

“History has shown us all space tourism date announcements have been overly optimistic. From the grand ambitious of space hotels to the cautious slow-moving Blue Origin, every space tourism timeline has slipped,” concludes Seward Forczyk. “Future predictions should only be trusted if both the space tourism company and the customers are ready.”