Mekong subregion shapes up for tourism influx
Infrastructure and services demand seen rising sharply
PETER JANSSEN, Contributing writer
LUANG PRABANG, Laos -- Hundreds of cars from Yunnan, southern China, packed Luang Prabang's streets during China's "Golden Week" holiday earlier this year, as tourists flooded the city's 5,000 hotel and guesthouse rooms. Yet, there is not a single traffic light in Luang Prabang, the laid-back former royal capital of Laos, which was declared a UNESCO World Heritage Site in 1995.
"It was very dangerous," said Seng Tong, a Luang Prabang mini-bus driver. "The Chinese don't drive like we do. They drive crazy."
Laos, a land-locked country of 6.8 million people, has opened up to cross-border travel from its three much larger neighbors: China, Thailand and Vietnam. Tourists from these countries can drive their own vehicles on Lao highways. The land access helps explain why Chinese tourists were the largest single market for Luang Prabang last year. They accounted for 13.5% of the 469,586 international travelers that visited the city, with many of them traveling by car from Yunnan province through the border crossing at Boten, Luang Namtha province, in Laos.
In five years, a 414 km high-speed train track, currently under construction, will link Boten, Luang Prabang and Vientiane, the Lao capital.
"Luang Prabang, beautiful as it is, if in five years' time, we have a daily train from Kunming [capital of Yunnan, China] and 1,000 people arriving, if they stay three nights, that's 3,000 extra people in town from the train," said Luzi Matzig, chairman of Asian Trails travel company and a veteran of Southeast Asia's tourism industry. "There will be overcrowding. They will have to plan limiting the number of people visiting this place."
Matzig was speaking at the Mekong Tourism Forum 2017, held June 6-9 in Luang Prabang. The annual forum, which drew delegates and private sector representatives from the Greater Mekong Subregion (Cambodia, China's Yunnan and Guangxi provinces, Laos, Myanmar, Thailand and Vietnam) is a public-private sector platform that promotes tourism to a region once plagued by war.
The area is now one of the world's most tourist-friendly places, with open borders, relaxed visa policies and a range of airlines serving the main cities.
"GMS tourism is one of the world's success stories," said Steven Schipani, a regional tourism sector specialist at the Asian Development Bank. The ADB launched its second tourism strategy plan for the region for 2016-2025 in early June after spending a year assessing the results of the first plan, which spanned 2005-2015.
Tourism has made huge contributions to the subregion's economy over the past decade. In 2015, some 57.9 milllion international tourists visited the subregion, up 174% from 2005. Tourist expenditure reached $66.8 billion in 2015, when the sector directly employed an estimated 10.4 million people. But some countries have benefitted more than others.
Thailand, with its superior infrastructure, logistics and strategic location, accounted for 29.9 million tourists in 2015, or 51% of the total. This translated into $47.9 billion in tourist spending, or 71.7% of the regional take. Average expenditure per tourist in Thailand that year was $1,605, compared with $1,204 in Vietnam, $628 in Yunnan, $631 in Cambodia, $449 in Guangxi, $453 in Myanmar and $156 in Laos.
Smaller economies, such as Laos, benefit less from tourist spending because most of its consumer items are imported from neighboring China and Thailand.
"When you come to Laos, for every dollar you spend, about 30 to 40 cents go toward purchasing things that serve the tourist industry," Schipani said. "Cambodia, Laos and Myanmar have maybe 30-40% economic leakage, Vietnam maybe 20-30% and China and Thailand only 5%."
Level playing field
Mekong Tourism Strategy 2016-2025 aims to spread the benefits of tourism more fairly among regional economies. It is also aimed at promoting sustainable, inclusive growth for the industry.
A key target is to boost tourist arrivals to 95 million, with 42% going to Cambodia, Laos, Myanmar and Vietnam, compared with 38% in 2015. By 2025, tourist expenditures are targetted to roughly double to $130 billion from $67 billion in 2015 and it is hoped the sector will employ 15 million people then.
There will also be greater emphasis on promoting secondary city destinations, away from the region's capitals, by improving infrastructure. Out of the total estimated budget of $58.8 billion for spending in the region over 2016-2025, some $58.1 billion has been allocated for infrastructure.
Of that, some $28.8 billion is set for railway projects. Key railway projects include building and improving sections of the 5,000km Singapore-Kunming Rail Link Project, developing the Boten to Vientiane link and a 64km railway line between Thailand and Dawei, Myanmar.
Other big-ticket items include the expansion of Vietnam's Noi Bai International Airport and Tan Son Nhat International Airport, developing Myanmar's Hanthawaddy International Airport and upgrades of Thailand's four main international airports -- Suvarnabhumi, Don Mueang, Chiang Mai and Hat Yai. Much of the remaining infrastructure budget is for upgrading roads and urban facilities such as waste water treatment plants in secondary destinations.
But industry insiders say that the governments also face challenges in sustainable tourism development, better destination management, environmental protection and enforcement of laws and regulations.
"Past strategies on tourism have been well written for many years, but implementation and enforcement is not there, so I would really like to see more money spent on enforcement," said Inthy Deuansavan, CEO of Green Discovery & Inthira Hotels, Laos. "More money should be spent on education, not only of the people but also for the people in our own government and community leaders."
The 10-year plan allocates just $164 million for human resource development, hardly anything compared with the $58.1 billion infrastructure price tag.
Laos, for one, could use some funds to help it promote "wildlife tourism." It is struggling to do this because so many of its native species have been hunted to extinction. They still remain unprotected, despite laws against animal trafficking and the hunting of endangered species.
"Tourism involves many sectors. Not just the Ministry of Tourism but the Ministry of Forestry and of Defence," Inthy told last week's conference. "We need to understand each other and talk the same language."
There also remains much to be done in terms of intra-regional coooperation. Ironically, the Mekong River, which lends its name to the subregion and binds it together as a brand, remains a major source of contention.
China has already built several dams on the upper Mekong and Laos has gone ahead with the controversial Xayaburi hydro-electric dam on the mainstream part of the river. This is despite objections from downstream countries such as Cambodia and Vietnam, which worry that upstream meddling will impact their fisheries and irrigation flows.
The ongoing dam construction has already impacted tourism in Vietnam. "In the past we used the Delta to promote Vietnam but now these products, such as wet forests, don't exist, because the environment has changed," said Le Tuan Anh, deputy director general of the International Cooperation Department at Vietnam's Ministry of Culture, Sports and Tourism.
The Mekong River Commission, set up in 1995 to ensure sustainable and equitable development of the common resource, has proven powerless to prevent the building of dams such as the Xayaburi.
Over the next decade, better intra-regional understanding and cooperation in the tourism sector will become even more vital as future growth looks to come from the region itself, led by China. In 2015, more than 65% of international arrivals to the region came from Asia, with the highest number from China, followed by Malaysia accounting for 6.9%, South Korea 5.4%, Vietnam 4.9%, Thailand 4.8% and Japan 4.1%, according to ADB figures. Europe accounted for only 16% of total arrivals and the Americas only 5%.
With the influx of Chinese tourists set to increase further, experts are calling for better preparation and training in the region. "My answer is learn Chinese," said ADB's Schipani. "The Chinese need to consume much. They need meals, they need to rest, they want to come do some shopping and be treated nicely just like you and I do, so get ready guys."