Vietnam tourism projects stall as cash runs out
Many resort and hotel projects in Vietnam have stalled in recent months due to a credit shortage and reluctance of investors to provide necessary funding in the wake of both the global financial slowdown and Vietnam’s sluggish economy, resulting in many licenses being revoked by Vietnamese authorities, Thanh Nien newspaper reported.
Among the major projects facing these problems is ‘Asia Pearl’ on Phu Quoc island, a $2.7 billion development which received a license six years ago and was slated to be finished by 2010, but works haven’t even started yet.
Delays of projects have been reported also from tourism hot spots such as Hai Phong, Da Nang, Nha Trang, Phu Yen and Cam Ranh, as well as from Hanoi and Ho Chi Minh City, the paper said.
Critics argue that apart from insufficient funding, many projects were poorly thought out and the quality of feasibility studies had to be questioned as they failed to attract investors or lenders. Furthermore, in many cases the licensing authorities did not have the knowledge to properly evaluate the commercial and financial viability of large projects, and there was also ‘self-interest’ involved.
However, some projects are moving forward, for example the country’s first casino project, MGM Grand Ho Tram Strip in the southern province of Vung Tau, 2.5 hours drive from Ho Chi Minh City, which is a major tourism and business hub for Russians. The Las Vegas-style project at around $4.2 billion is expected to see the opening of its first resort in July, even though co-investor MGM Resorts recently has walked away from its contract to manage the facility citing repeated delays and cost overruns.
Qatar in August 2012 announced to invest up to $4 billion in tourism projects in Vietnam. Of the projects – funded by Qatari Diar Real Estate – a number is already under preparation in joint ventures with local companies, according to the Vietnamese Ministry of Culture, Sports and Tourism, which did not give any further details on the developments.
[caption id="attachment_10449" align="alignleft" width="300"] Grant Ho Tram Strip in Vung Tau: One of the few mega projects in Vietnam that are going ahead[/caption] Many resort and hotel projects in Vietnam have stalled in recent months due to a credit shortage and reluctance of investors to provide necessary funding in the wake of both the global financial slowdown and Vietnam's sluggish economy, resulting in many licenses being revoked by Vietnamese authorities, Thanh Nien newspaper reported. Among the major projects facing these problems is 'Asia Pearl' on Phu Quoc island, a $2.7 billion development which received a license six years ago and...
Many resort and hotel projects in Vietnam have stalled in recent months due to a credit shortage and reluctance of investors to provide necessary funding in the wake of both the global financial slowdown and Vietnam’s sluggish economy, resulting in many licenses being revoked by Vietnamese authorities, Thanh Nien newspaper reported.
Among the major projects facing these problems is ‘Asia Pearl’ on Phu Quoc island, a $2.7 billion development which received a license six years ago and was slated to be finished by 2010, but works haven’t even started yet.
Delays of projects have been reported also from tourism hot spots such as Hai Phong, Da Nang, Nha Trang, Phu Yen and Cam Ranh, as well as from Hanoi and Ho Chi Minh City, the paper said.
Critics argue that apart from insufficient funding, many projects were poorly thought out and the quality of feasibility studies had to be questioned as they failed to attract investors or lenders. Furthermore, in many cases the licensing authorities did not have the knowledge to properly evaluate the commercial and financial viability of large projects, and there was also ‘self-interest’ involved.
However, some projects are moving forward, for example the country’s first casino project, MGM Grand Ho Tram Strip in the southern province of Vung Tau, 2.5 hours drive from Ho Chi Minh City, which is a major tourism and business hub for Russians. The Las Vegas-style project at around $4.2 billion is expected to see the opening of its first resort in July, even though co-investor MGM Resorts recently has walked away from its contract to manage the facility citing repeated delays and cost overruns.
Qatar in August 2012 announced to invest up to $4 billion in tourism projects in Vietnam. Of the projects – funded by Qatari Diar Real Estate – a number is already under preparation in joint ventures with local companies, according to the Vietnamese Ministry of Culture, Sports and Tourism, which did not give any further details on the developments.
