Is Vietnam Done as Chinese Destination?

Riots in several Vietnam cities targeting Chinese nationals and businesses may spell the end of plans to target Mainland VIPs as customers for junket operators, severely impacting the business plans of prospective Vietnamese casinos and integrated resorts. The situation may affect the Philippines, as well.

The ugly riots that broke out last week in Vietnam after an oil rig owned by a Chinese company was moved into disputed waters in the South China Sea may be death knell for plans to build integrated casino resorts in the country. The riots began after the Chinese state energy company deployed a billion oil rig about 150 miles off the Vietnamese coast in an area both countries claim as their own.

Riots spread across Vietnam to all major cities resulting in at least six deaths and dozens of serious injuries. China sent planes and ships to evacuate Chinese nationals and issued a warning to its citizens to avoid Vietnam. Although the Vietnamese government sent police out in force to quell the riots, the damage has been done. Even Taiwanese citizens and companies were targeting by rioters.

The situation had a severe impact on tourism in Vietnam, particularly to the country’s foreigners-only casinos. Reports from the Grand Ho Tram indicate that few Chinese remained after the first day of riots and gaming revenue tumbled to virtually nothing.

Since the territorial dispute has just gotten under way and there is little indication of a swift resolution, the question has been raised about the long-term impact. An estimated 1.8 million Chinese tourists visited Vietnam last year, up almost 35 percent from the previous year. In addition to Ho Tram, several developers have plans for large-scale integrated resorts in areas such as in Da Nang, Lang Song, Vung Tau, and Phu Yen.

Nguyen Van Tuan, Vietnam’s tourism minister, pleaded with the government to prevent “aggressive, discriminative and unfair actions from happening to Chinese tourists.”

But it may be too late. Some sources indicated that China planned to continue to discourage tourism to Vietnam in order to punish the country for the riots, as well as to push their claim to the disputed waters.

The dispute may have an impact on the Philippines as well. Although the disputed territory does not involve the Philippines, there are other areas of the South China Sea that are claimed by both China and the Philippines. And Vietnam’s prime minister announced on Wednesday that the country was teaming up with the Philippines to oppose China’s “illegal” actions, which may turn China’s tourism ire on both countries.