Case3 - NinhVanBay

JITE: DISCUSSION CASES

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[DRAFT:] 01/09/2014

NARUMON SRIRATANAVIRIYAKUL, MATHEWS NKHOMA, HUNG XUAN VO

NINH VAN BAY HOLIDAY CLUB: A TIMESHARE BUSINESS IN VIETNAM1

As an initiator to a totally new venture, Ninh Van Bay Holiday Club was opened to potential advantages to exploit the market. However, success did not come without any obstacles.

Being an initiator in timeshare business in Vietnam, Ninh Van Bay Holiday Club was established in 2010 by Ninh Van Bay Travel Real Estate Joint Stock Company as its subsidiary with the core business of managing its four luxury resorts in Vietnam and selling vacation ownership packages to customers who wanted to experience first-class vacation services. In order to start successfully a totally new business venture in Vietnamese market, Ninh Van Bay collaborated with many professional tourism services providers such as Six Senses and took advantage of their experiences and reputations to attract new customers and increase the awareness about Ninh Van Bay brand. Therefore, despite unfavorable economic conditions in recent years, Ninh Van Bay Holiday Club grew impressively with considerable increase in its customer base. The goal of the company was to develop a chain of luxury resorts and become the leading company in the high-end tourism segment. In the near future, Ninh Van Bay was going to introduce more resorts in tourist attractive destinations in Vietnam such as Nha Trang, Hoi An, Ho Chi Minh City and Phu Quoc.

In spite of its significant growth, current customer base of around 2,000 members was still far from the expectation of the management team and they sought for more serious growth in the sales of membership packages so that adequate funds could be raised for the development of new projects. However, according to Hoang Le Viet General Director of Ninh Van Bay Holiday Club, the company was facing many problems regarding creating the demand for their products, low rate of occupancy and ineffective management of customer behaviors. Recently, Hoang and the companys Sales Manager Hang Minh Tan, came up with the idea to establish a portal for their company so that members information and bookings could be conducted and managed online. This portal was expected to improve the management effectiveness, provide members some degrees of control over their booking activities and increase the interaction between them and the company. However, they were still at the process of choosing an appropriate method of implementing the portal.

1 Copyright 2012, Informing Science Institute. This case was prepared for the purpose of class discussion, and not

to illustrate the effective or ineffective handling of an administrative situation. Names and some information have been disguised. Permission is granted to copy and distribute this case for non-commercial purposes, in both printed and electronic formats.


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Tourism Industry Soaring to become one of the fastest growing economic sectors globally in recent decades, tourism has developed and diversified continually with the emergence of number of new destinations. The contribution of tourism industry to the world economy had been so essential that it became a key driver for socio-economic progress and surpassed many major industries such as oil exports, food products and automobiles in term of business volume (see Exhibit 1). Moreover, according to Blanke, Chiesa and Crotti (2013), Travel and Tourism not only took a significant share of world employment, which was greater than the combination of the shares of both automotive manufacturing and chemicals manufacturing industries, but was also estimated to have more positive prospect in job growth than the forecast for total global jobs. On the national scale, tourism industry represented one of the main income sources for many developing countries and therefore, drew intensive attention from policymakers.

In recent years, despite of the gloomy global economic conditions, Travel and Tourism industry in overall was not so affected with the growth of international tourist arrivals of 4 percent for the period from January to August 2012 (World Tourism Organization - UNWTO). Total expenditure on tourism also increased with major contributions from not only travelers from developing countries such as Brazil, China and Indonesia but those from advanced economies whose economic prospects in recent years were unfavorable. However, there is a change in the structure of travelling where international trips, which kept increasing in term of amount, turned out to be shorter in frequency, distance and length.

In its development course, tourism industry was affected by many factors and in recent years, the competition between countries for international visitors became more rigorous. Many countries with developed tourism industries suffered from economic shocks, political instability and natural disasters; which inversely impacted their tourism industries. In addition, global tourism landscape also faced long-term change factors in tourism demand, travel distribution and demographic drifts. In order to evaluate the competitiveness of the tourism industry of each country, the Travel & Tourism Competitiveness Index (TTCI) was introduced under the context of the World Economic Forums Industry Partnership Programme for the Aviation, Travel & Tourism sector (see Exhibit 2). The derivation of the TTCI took into account three sub-indexes: the Travel & Tourism regulatory framework; the Travel & Tourism business environment and infrastructure; and the Travel & Tourism human, cultural and natural resources. Each of these sub-indexes was in turn calculated based on many factors, which include (Blanke, Chiesa, & Crotti, 2013):

Policy rules and regulations Environmental sustainability Safety and security Health and hygiene Prioritization of Travel & Tourism Air transport infrastructure Ground transport infrastructure Tourism infrastructure ICT infrastructure Price competitiveness in the Travel & Tourism industry Human Resources Affinity for Travel & Tourism


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Natural resources Cultural resources

Global Tourism Industry In 2012, the Travel & Tourism industry showed better performance than the global economy with faster growth than manufacturing, retail, financial services and communications sectors. According to the World Travel & Tourism Council (WTTC), the contribution of Travel & Tourism industry (taking into account all of its direct, indirect and induced impacts) was US$ 6.6 trillion in GDP, US$ 765 billion in investment and US$ 1.2 trillion in exports (2012 prices). In addition, 260 million new jobs (10% growth) were offered by Travel & Tourism industry in 2012 and for the first time, one out of each eleven jobs in the world was contributed by tourism industry.

Both tourism receipts and international tourist arrivals, which were two key indicators of international tourism, experienced relatively same growth rates in 2013 indicating a strong correlation between these indicators. The 2013 global tourism receipts; which are the earnings made by destination countries from the expenditures on food and drinks, accommodation, local transport, entertainment, shopping and other goods and services of travelers; increased by 5.3 percent in real term from US$ 1,078 billion in 2012 to US$ 1,159 billion. The growth in tourism receipts in developed economy destinations, which was 6 percent, was 2 percent higher than that in developing economy destinations. Tourism receipts were taken into account as export expenditures for the receiving country. Meanwhile, international tourist arrivals rose by 5 percent in 2013 to reach 1,087 million worldwide. In overall, these growth rates were higher than the long-term average and the fastest since 2010 (see Exhibit 3).

Accounted for 42 percent of all international tourism receipts, Europe experienced highest growth among all regions in absolute term with an increase by US$ 35 billion to reach US$ 489 billion in 2013. Asia and the Pacific, with the tourism receipts increasing by US$ 30 billion to be valued at US$ 359 billion, took up the second largest share of 31 percent. In the Americas, the receipts rose by US$ 16 billion to amount at US$ 229 billion and contributed 20 percent to the global total value. The shares of Middle East and Africa of international tourism receipts were respectively 4 percent and 3 percent (see Exhibit 4).

On the national scale, in term of international arrivals, France was ranked first with 83 million arrivals in 2012, followed by the US and Spain with 70 million and 61 million arrivals respectively. Among the top-ten list, the most significant change was the taking over of Thailand of the 10th position, which was brought about by the growth of 23 percent to reach 27 million arrivals. In term of tourism receipts, the United States was still heading with US$ 140 billion, followed by Spain with US$ 60 billion. Regarding tourism expenditure, China, Russia and Brazil together accounted for half of the increase in global tourism expenditure with US$ 40 billion while major developed countries such as France, the United States, Germany, the United Kingdom and Canada only experienced steady growth in tourism expenditures at the rates between 2 percent and 4 percent.

International tourist arrivals in the first two months of 2014 were estimated to be 5 percent growth in comparison to the same period figure in the previous year. Regionally, with a rise of 7 percent, Asia and the Pacific showed the strongest growth, followed by the Americas and Europe with 6 percent in early 2014 (World Tourism Organization, 2014).

Vietnams Tourism Industry Located on the eastern Indochina Peninsula of South East Asia, one of the fastest growing regions in the


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world and with a coastline of 3,444 kilometers long, Vietnam had great potential to develop its tourism industry. Despite being a young sector, Vietnamese tourism experienced considerable growth and thrived to become one of the main contributors to the countrys GDP thanks to its various tourism destinations ranging from rural eco and wildlife parks, metropolitan cities, historical tourism attractions, beautiful beaches to number of UNESCO World Heritage sites (see Exhibit 5).

In recognizing the importance of tourism industry, Vietnamese government paid special attention and put great efforts in stimulating the industry in recent years. In the period 2001 2010, VND 5,606 billion (US$ 267 million) of national investments was spent on tourism industry, mostly for making accessibility available to tourism resorts and attractions. In addition, creating promising and stable environment for private and foreign investments in the tourism industry was another focus of the government. According to HITT (2010), about 625 foreign invested projects with a total registered capital of US$ 12.258 billion were being carried out in Vietnam. Until June 2013, around 1,200 licensed tour operators were allowed to deal with international travels and 14,000 tourist accommodation facilities for a total of 290,000 rooms were in place. Among of these included 61 five-star hotels with 14,600 rooms, 154 four-star hotels with 19,300 rooms and 365 three-star hotels with more than 25,500 rooms (Vietnam Briefing, 2013).

In 2013, the tourism industry provided a total of about 1,480,000 jobs. Among of these are 480,000 direct jobs, 43 percent of which are trained or educated in tourism. However, only 3.1 percent of the total workforce were at the university or higher education levels of tourism. In 2013, Vietnams tourism industry welcomed 34 million domestic visitors and 7.5 million foreigners, which generated a total of VND 195 trillion (or US$ 9.17 billion) in term of revenue (NhandanOnline, 2014). In the first five months of 2014, the number of international arrivals in Vietnam rose by 26.07 percent compared to the same period in the previous year to reach 3,748,109. China was the country which contributed largest number of visitors with 998,152, followed by South Korea with 354,984 and Japan with 273,198 (see Exhibit 6).

According to High Impact Tourism Training (HITT) Initiatives (2010), tourism in Vietnam could be divided into sub-segments based on the purpose for tourists to travel such as: mass tourism/class tour, beach/resorts holidays, MICE, short break, religious tourism, corridor and cross border, international backpackers and Vietnamese backpacker (or Phuot). In these categories, beach/resorts holidays have drawn much attention as well as investments from foreign investors.

In the Strategy on Vietnams tourism development until 2012, vision 2030 approved by Prime Minister Nguyen Tan Dung, tourism was planned to become a key economic sector by 2020 and by 2030, Vietnam should have a developed tourism sector. Specifically, the growth rate of the tourism industry from 2011-2020 was expected to be 11.5 12 percent per year. By 2015, the number of international tourist arrivals should be from 7 to 7.5 million and domestic tourists should be 36-37 million. The expected figures for 2020 were from 10 to 10.5 million international visitors and 47 to 48 million domestic tourists (Government Portal, 2011). http://www.chinhphu.vn/portal/page/portal/English/strategies/strategiesdetails?categoryId=30&articleId=10051267

Timeshare Business Timeshare referred to a kind of tourism that involved the vacationers owning or having the right to use a property which was typically in the form of resort condominium units. The right to use the property was shared between multiple parties called the sharers, who were allocated a certain period of time in a year to


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use the property for a fixed number of years (or can be perpetual). Timeshare model arose based on the idea that it would be much less costly for a frequent vacationer, who wanted to buy a vacation home that would be used for only a few weeks during a year, to share the ownership, and in turn the purchase as well as maintenance costs, of the property with other vacationers than for himself to be the sole owner of the property. This concept was also known as intervals, fractional or vacation ownership.

Emerging almost at the same time in various parts of the world, timeshare became a very popular and significant part of the tourism industry. In the early 1960's, vacation home sharing first appeared in Great Britain when a vacation cottage was bought jointly by four families, each of which held an exclusive right to use the property for one of the four seasons interchangeably each year. At the same period, two companies in France and Switzerland simultaneously began their timeshare businesses. While The Societe des Grands Travaux de Marseille, a French development company, sold their ski resort SuperDevoluy in the French Alp with the first ever timeshare slogan 'No need to rent the room; buy the hotel, its cheaper!'; a company named Hapimag in Baar, Switzerland headed the service allowing its members to choose among various resort properties in Italy, Spain and Switzerland. In America, timeshare business started in 1965 with the Hilton Hale Kaanapali hotel on the island of Maui, Hawaii and until 1969, Kaua'i Kailani, the first non-hotel timeshare in the US, became the first to introduce leasehold timeshare basis as well as point system to diversify the choices of timeshare owners. In 2014, there were around 5,400 resorts in over 100 countries operating in vacation ownership industry and nearly 5,000,000 timeshare owners globally. Timeshare has become a multi-billion dollar industry (Canadian Resort Development Association).

Timeshare could be divided into two major categories based on the types of ownership, including deeded property ownership and the right of use. Known as fee simple, deeded property ownership was similar to a normal home ownership in that a vacation owner of a week in a particular property would hold a title to that week and his ownership was registered with the land court or relevant authorities, which allowed the buyer a perpetual right to sell, assign, exchange or rent the unit. On the other hand, the right of use ownership contained an expiration period within which the buyers had the right to use the property (or a unit in a property) and a renewal option. There were two main options a purchaser of the right to use contract can choose from:

Point credit or point: property developers set a unit system based on weekly basis or point with equivalent value and would sell these units to vacationers. The vacationers then could use the points to exchange for a particular property under the possession of the developer, with the amount of points required for each property depending on the size of the property and the length of stay. In addition, these points could also be used for booking air flights and hotel accommodation, or other activities.

Another option for right to use contract buyers was to lease, license or acquire membership in a resort chain, which allowed the purchasers to occupy a unit in any hotel or condominium property of the chain for a specific period over a determined number of years without having to actually own the real estate. However, the vacation owners were still payable for the annual maintenance fees.

Besides these two major options, there were also variants of timeshare business such as fixed or floating time, biennial ownership, banked usage, lock off or lockout, fractional ownership/private residence clubs and destination clubs/points which would be discussed below.


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Fixed or floating time: the difference between fixed and floating time lied in the flexibility of the vacation owner in choosing certain week of the year to utilize a certain property or unit. While fixed time option only allowed the vacation owner to occupy a property for a designated week every year, floating time option gave the owner the ability to choose a week from any time of the year to use the same property.

Biennial ownership: an option that helped reduce the purchase price as well as maintenance fees payable by the vacation owner by offering the right to use the unit or any unit of similar size for a week every other year.

Banked usage: an option allowing the owner to postpone his vacation week to the following year and have a longer vacation. However, this option was usually limited to only three years.

Lock off or lockout: with this option, the vacation owner would have more choices to adjust the vacation up to his needs. For example, if an owner who had bought a two-bedroom suite did not need to use it in full; he could offer one bedroom for rent or exchange and got to use the single bedroom for two weeks instead of one week with the two bedrooms.

Fractional ownership/private residence clubs: designed to serve the high-income customers who demanded more luxurious facilities and services and long vacation time, these types of timeshares usually offered three to five bedrooms and provided the owner the ability to choose from any time during the year. In addition, the purchased time could be exchanged for a stay at different resorts or for points that allow the owner to trade for custom-made vacations.

Destination clubs/points: with this option, the vacation owners were offered a variety of luxurious properties owned or managed by the Club Company and of the network in which the club was a member.

One of the most interesting and attractive features of timeshare business was that it provided an opportunity for a vacation owner to enjoy his vacation in resorts or properties in the possession of other owners through the exchange programmes. In these programmes, an exchange company would function as a broker to facilitate the arrangement between vacation owners and charge membership fees for their services. Moreover, most well-known timeshare developers had built up connection with major exchange companies such as the Resort Condominiums International (RCI) and Interval International (II) to provide the memberships for their customers immediately after the contracts are formed. Another noticeable feature of timeshare business was that secondary market for deeded property arrangement had also arisen giving the timeshare owners the ability to list their properties with a resale agency and resell them (Powanga & Powanga, 2008).

Ninh Van Bay Travel Real Estate Joint Stock Company Specializing in developing and managing high quality travel real estate resorts in Vietnam and the region, Ninh Van Bay Travel Real Estate Joint Stock Company (or Ninh Van Bay JSC) positioned itself in international standard luxury hospitality products with unique Vietnamese style by inheriting and enhancing Vietnamese various regional cultures and nature. Ninh Van Bay SJC was benefitted from its Board of Management, the members of which possessed more than 20 years of experience in real estate development sector and more than 14 years of experience in luxury tourism and vacation properties, to develop a well-known brand as well as highly appreciated real-estate products in upscale segment of


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hospitality services.

The first and also the most successful portfolio of the company, The Six Senses Ninh Van Bay which had been the destination of more than 150,000 vacationers, was awarded 14 prizes from the World's best travel organizations, World Travel Award, the Guide Magazine, Conde' Nast Traveler and tourism journals such as Tatler. Besides this portfolio, Ninh Van Bay JSC also owned and managed three other resorts and hotels namely Evason Ana Mandara Nha Trang, Emeralda Ninh Binh Resort & Spa and Ana Mandara Villas DaLat Resort & Spa, which were all very popular to Vietnamese and foreign travelers (see Exhibit). In the medium to long term strategy, the company was planning to develop and brought into use a chain of luxury and upscale resorts in Hoi An with Emeralda Hoi An, Nha Trang with Lac Viet Marina, Ho Chi Minh City with Six Senses Saigon River and Phu Quoc with Six Senses Phu Quoc. For the efficient and effective management and operation of these resorts, Ninh Van Bay JSC currently owned four subsidiaries including Ninh Van Bay Holiday Club, Tan Phu Tourism JSC, Hong Hai Tourism JSC and Hai Dung Co. Ltd as well as had invested in various associate companies such as Con Bap Ecological Tourism Co. Ltd, Danh Viet Trading & Service JSC and Hotel Collection Indochina to get access to other potential projects (See Exhibit 7 for Company Structure). Apart from that, the company also developed strategic relationships with domestic and international famous brands, which are Six Senses, Khanh Hoa Trading and Investment Company, Savills Vietnam Ltd and Resort Condominium International (RCI) Group, to take advantage of their reputations, experiences and connections in the tourism industry. With these advantages, Ninh Van Bay JSC was able to offer various hospitality related products and services ranging from vacation ownership, community resorts to property management training and consulting services.

With its successful steps in the past years, Ninh Van Bay was aiming to become a leading travel real estate company in Vietnam and the region with international standard resorts with designs inspired by Vietnamese cultural values. Specifically, the company was projected to occupy the largest market share in Vietnamese luxury and upscale travel and tourism segment with 200,000 guests by 2015. Financially, Ninh Van Bay JSC planned to become a public company with total market capitalization of more than 2,000 billion VND by the end of 2015.

Ninh Van Bay Holiday Club Established in 2010 by Ninh Van Bay JSC for the purpose of a way to obtain funds for future projects, Ninh Van Bay Holiday Club One Member Company Ltd was the managing company of Ninh Van Bay Holiday Club, which was the pioneer in offering vacation ownership program in Vietnam. At the beginning, the company used to apply the traditional timeshare business which divided the ownership into weekly units, where customers would buy a certain week in a year for some fixed number of years to stay at a resort of Ninh Van Bay JSC. However, because this type of unit division was only suitable for customers with very high-income level and also because of the need of expanding its business to wider range of customers, Ninh Van Bay Holiday Club decided to change its unit division into point and charge fee based on these points. Thanks to this change, the company experienced significant growth with the number of members increasing from 200 in 2011 to approximately 1,100 in 2014 and the company employed around 60 employees.

At the present, Ninh Van Bay Holiday Club was offering four types of membership cards with the price ranging from USD 4,000 and USD 15,000 equivalent to four different time periods:


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Silver Card: purchasers of this type of card will be granted a membership of five years for a total of 3,000 points, which means 600 points for each year. One limitation of this type of card, however, is that its holder cannot buy points in advance like higher-levels card holders.

Gold Card: this type of card offers ten-year membership with 600 points each year (6,000 points in total). Holder of this card will have two chances of purchasing points in advance.

Titanium Card: fifteen-year membership with a total of 9,000 points (600 points per year) is provided to holder of this card, who is also allowed four advance point purchases.

Diamond Card: being the most prestigious card level, diamond card is offered to vacationers with twenty-year membership and 800 points each year for a total of 16,000 points. Holder of this card is also granted six advance point purchases and many other exclusive rights and incentives.

With the implementation of point system, holders of Ninh Van Bay membership cards were not only able to choose resorts owned by Ninh Van Bay JSC but were provided with much larger options from Ninh Van Bay's partner resorts. Each resort had its own point allocation for its rooms and members of Ninh Van Bay Holiday Club would use the points to pay for fees such as accommodation, meals and airport shuttle service. The price of accommodation and services varied from resort to resort depending on the type of unit a member chose to stay in (see Exhibit 8 for details). Apart from the fixed points allocated to each type of membership cards, holders of them could also buy more points (but less than 10 percent of the initial total points) in case they wanted to have more or longer vacations. If a member did not use all the points allocated for one year, he could accumulate those points for usage in the following year.

Regarding the costs, members of Ninh Van Bay Holiday Club were also charged annual fee, which is fixed for each five-year period, besides the fees when purchasing their cards. However, Ninh Van Bay Holiday Club committed the annual fee be adjusted for no more than 10 percent every five-year. Besides vacation holidays, Ninh Van Bay Vacation Club also offered its customers with other services such as setting up conferences or any special events required by the customers and guaranteed the best prices to customers. However, these types of services depended on the room availability in each season. In case there were inadequate rooms in peak season, the company could still help out by contacting its partner resorts to arrange these special events with competitive prices. Additionally, the company held many events every year such as family day and member care program to increase the interaction between the company and its customers.

Target Customers With a chain of luxurious resorts in Vietnam, the target customers of Ninh Van Bay Holiday Club were individuals and families with monthly income of 3,000 USD and above, those who loved travelling and sought for new experiences in natural friendly and deluxe resorts. In early 2014, according to Hoang - General Director of Ninh Van Bay Holiday Club, the club had approximately 2,000 members and he expected this number would increase to 3,000 at the year end.


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In recent years, despite the economic downturn and decreased customers demand, especially for luxurious products and services, Ninh Van Bay Holiday Club were still able to experience impressive growth of 240 percent and 200 percent in 2012 and 2013 respectively. Among the four membership types, silver package was the most popular one, which occupied for 50 percent of the companys customer base. This was followed by gold package with 30 percent, titanium package with 5 percent and diamond package with 15 percent.

Promises and Commitments of Ninh Van Bay to its Members In becoming member of Ninh Van Bay Holiday Club, vacationers were guaranteed by the club in two commitments: (1) point system would be stable within a year and yearly change in point price will not exceed five percent; and (2) members would be offered with the best price at the four resorts of Ninh Van Bay at any time of the year during membership period. The best price meant that the most competitive price in the market at the time of booking for a particular unit, compared to which any lower price found by the customers for similar offers at other booking service providers were entitled to compensation for the price difference. Due to these commitments, members of Ninh Van Bay Club could avoid significant price increase in high inflationary periods and seasonal price fluctuations. According to Mr. Hang Minh Tan - Sales Manager at Ninh Van Bay Holiday Club, the point price had been stable for two years since 2012.

In addition, members of the club also had many advantages over normal vacationers in that they were offered with a variety of priorities in Ninh Van Bay's resort system such as 20 percent discount for restaurants and spa and 10 percent discount for shopping, as well as incentives at Ninh Van Bay's partner resorts. Furthermore, members could use their membership cards to book rooms for their friends, partners or acquaintances with relatively competitive price than normal bookings or they transfer, lease or use as gift the membership cards. During their vacations, membership card holders could ask for private secretaries appointed by the club to ensure customers' satisfaction and enjoyment. For Diamond card, holders would receive two more privileges: free airport shuttle service when taking vacation at any of the four resorts of Ninh Van Bay resort system and twice-a-year playing golf for free at golf courses of Ninh Van Bays partners such as Royal Golf Club Ninh Binh, Montgomerie Links Vietnam and Vinpearl Golf Club Nha Trang ect.

To diversify its offerings to customers, Ninh Van Bay Holiday Club sought partnership with Resort Condominium International (RCI) Group, which allowed the clubs members to have access to more than 5,000 resorts all over the world by using a system of point transfer.

Dilemma for Future Development after Re-Positioning Despite the remarkable growth in recent years, the sales revenues generated from the holiday vacation business were still much lower than the expectations from the management team of Ninh Van Bay Holiday Club. Given the huge amount of funds invested in existing resorts and the need for capital accumulation for future projects, Ninh Van Bay Holiday Club was looking for measures to boost the sales of membership packages. However, it was recognized by the management team that this task was uneasy because of many issues and hindrances.

Even though timeshare was not a new type of tourism in the world, it only appeared in Vietnam in 2010 with the initiation of Ninh Van Bay Holiday Club. At that time, Ninh Van Bay only targeted high income individuals and families, which occupied a tiny fraction of Vietnamese population. However, according to


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Hoang, This is a failure of the company because price is not the major concern of these rich people and it is very difficult to ask them for long-term commitments. Additionally, in the last few years, as the middle income class in Vietnam grew considerably, more and more people could afford the offers of the company. Therefore, the management team of Ninh Van Bay Holiday Club decided to shift its target to this segment. However, persuading potential customers to spend a large portion of their incomes in its products was a challenge because they were unfamiliar to this new type of tourism while the companys current marketing strategies, which were telemarketing and its own website, turned out to be ineffective. In addition, there was at this time no formal exchange system for Ninh Van Bay Holiday Clubs members to resell or transfer their memberships to a third party. As a result, even though members had the option to resell their memberships, finding an appropriate buyer would be uneasy because of the high costs and unpopularity of these products.

Ninh Van Bay was looking for ways to increase the level of service it could offer to its customers in order to enhance its products attractiveness. For instance, members of Ninh Van Bay Club were entitled to 10-25 percent discount for value-added services such as restaurants, spas and souvenirs in the clubs resorts. Besides that, Ninh Van Bay also worked with its various partners such as O HUI Beauty Center, Elite Fitness & Spa and Ming so that their customers could receive incentives from their services. Additionally, maintaining a sales team, who would be available 24/7 for customers inquiries and would contact the customers regularly in order to inform them the newest information about the clubs special events as well as to build close relationships with them, was an attempt from the management team to increase the customers satisfaction. However, these seemed to be inadequate for Ninh Van Bay to differentiate itself and create enough demand for its products and services, especially when compared to the prices it charged its customers. Consequently, in order to develop sustainably in the future, finding out more appropriate value-added services, which could enhance the products value while balancing the costs, was another issue that Viet and his team had to deal with.

Urgent Need for Better Revenue Management Method According to Hang Sales Manager of Ninh Van Bay Holiday Club, even though the number of members of the club increased significantly, all the resorts of the club faced the problem about room occupancy when there were times in low demand seasons, a significant number of their total units were unoccupied. This was mainly caused by the small customer base and the booking habit of Vietnamese as they were not used to booking in advance. Hang said that many members only booked their vacation some days or a week ahead and some cancelled their bookings right before the arrival date. Therefore, it was very difficult for the club to plan for proper room reservations. Moreover, customers booking habit also imposed problem because Ninh Van Bay Holiday Club was unable to deliver its commitments and fulfill customers orders in peak seasons, which were usually in months such as January, February, April, May, August, September and in national holidays; leading to recent complaints and disrepute about the club.

To handle this problem, Ninh Van Bay Holiday Club was planning to develop an online portal where the clubs members could book their holidays as well as manage their points more conveniently. Each member would be provided with an account from which they could buy, grant or sell their points and receive updates about the prices of each unit, the clubs activities as well as receive real-time assistance from the clubs sales team. Moreover, members could also give feedbacks about the products and services of the club, based on which it could increase the customers satisfaction by adjusting its services accordingly.


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The Decisions In order to expand its business and develop sustainably into the future, Ninh Van Bay Holiday Club had to come up with solutions to the various prevailing problems regarding both internal and external matters mentioned earlier. Establishing a portal seemed to be a potential idea from the management team, but in which way the portal should be managed to boost customer retention and customer extension and what factors do Hoang and Hang have to consider when designing this portal.


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References Blanke, J Chiesa, T & Crotti, 2013, The Travel and Tourism Competitiveness Index 2013: Contributing to National Growth and Employment, The Travel & Tourism Competitiveness Report 2013, World Economic Forum, retrieved from http://www3.weforum.org/docs/WEF_TT_Competitiveness_Report_2013.pdf

Canadian Resort Development Association, History of Vacation Ownership, CRDA, retrieved from http://www.crda.com/the_history_of_vacation_ownership.shtml

Government Portal, 2011, Strategy on Vietnams Tourism Development until 2020, Vision to 2030, Government Portal, retrieved from http://www.chinhphu.vn/portal/page/portal/English/strategies/strategiesdetails?categoryId=30&articleId=10051267

HITT, 2013, HITT Inception Analysis: Vietnam, High Impact Tourism Training for the Informal Sector, retrieved from http://www.hitt-initiative.org/wp/wp-content/uploads/2013/03/HITT_Inception_Analysis_VIETNAM_English.pdf

Powanga, L & Powanga, A 2008, An Economic Analysis of a Timeshare Ownership, Journal of Retail and Leisure Property, vol. 7, no. 1, pp. 69-83, retrieved from Proquest Database.

Tien Cuong & Phong Chuong, 2014, 2013 Sees Robust Development of Vietnams Tourism Sector, NhandanOnline, 2 January, retrieved from http://en.nhandan.org.vn/travel/item/2240402-2013-sees-robust-development-of-vietnam%E2%80%99s-tourism-sector.html

Vietnam Briefing, 2013, Vietnam Tourism on The Rise, Vietnam Briefing, 24 July, retrieved from http://www.vietnam-briefing.com/news/vietnam-tourism-on-the-rise.html/

Vietnam National Administration of Tourism, 2014, International Visitors to Vietnam in May and 5 Months of 2014, 26 May, retrieved from http://vietnamtourism.gov.vn/english/index.php/items/7323

Vietnam National Administration of Tourism, World Heritage in Vietnam, retrieved from http://www.vietnamtourism.com/disan/en/

World Tourism Organization, 2014, UNWTO World Tourism Barometer, April, vol. 12, retrieved from http://dtxtq4w60xqpw.cloudfront.net/sites/all/files/pdf/unwto_barom14_02_apr_excerpt_0.pdf

World Travel & Tourism Council, 2013, Global Travel & Tourism Industry Defies Economic Uncertainty by Outperforming the Global Economy in 2012 - and predicted to do it again in 2013, retrieved from http://www.wttc.org/news-media/news-archive/2013/global-travel-tourism-industry-defies-economic-uncertainty-outpe/


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Exhibit 1: International Tourism and Other Industries

Figure 1. Reproduced from World Tourism Organization 2014


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Exhibit 2: The Travel & Tourism Competitiveness Index


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Figure 2. Reproduced from World Economic Forum 2013


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Exhibit 3: International Tourism Receipts and International Tourist Arrivals



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Exhibit 4: National Tourism Receipts and Tourist Arrivals




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Exhibit 5: World Heritage Sites in Vietnam

Figure 6. Reproduced from Vietnam National Administration of Tourism


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Exhibit 6: International Visitors to Vietnam in May and 5 Months of 2014 by Countries


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Figure 8. Reproduced from Vietnam National Administration of Tourism


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Exhibit 7: Ninh Van Bay JSC: Company Structure

Figure 9. Reproduced from Ninh Van Bay JSC


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Exhibit 8: Guideline for Using Points at Resorts Owned by Ninh Van Bay Holiday Club (applied from 20/12/2013 31/12/2014)

1. Six Senses Ninh Van Bay

Number Types of Room

Low Demand Season

(points/night)

Ordinary Season (points/night)

Peak Season (points/night)

Tet Holiday (points/night)

1 Hill Top Pool Villa 238 261 277 629 2 Beach Front Villa 261 301 319 673 3 Two bedroom Beach

Front Pool Villa 421 453 467 869

4 Two bedroom Hill Top Pool Villa

475 491 507 1002

5 Water Pool Villa Rock Pool Villa

475 491 507 1002

6 The Rock Retreat 958 974 989 1829

Low demand season:

05/05/2014 15/07/2014

01/11/2014 19/12/2014

Ordinary season:

13/01/2014 30/01/2014

10/02/2014 29/04/2014

16/07/2014 31/10/2014

Peak season:

31/01/2014 09/02/2014

30/04/2014 04/05/2014

29/08/2014 02/09/2014

Tet Holiday:

20/12/2013 31/12/2013

01/01/2014 12/01/2014


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20/12/2014 31/12/2014

2. Evason Ana Mandara Nha Trang


Low Demand Season

(points/night)



Tet Holiday (points/night)

1 Garden View 136 152 183 277 2 Superior Sea View 186 203 233 337 3 Deluxe Sea View 217 233 274 393 4 Deluxe Beach Front 261 277 315 453 5 Beach Front Ana

Mandara Suite 281 295 335 476

Low demand season:

05/05/2014 15/07/2014

01/11/2014 19/12/2014

Ordinary season:

16/01/2014 30/01/2014

10/02/2014 29/04/2014

16/07/2014 31/10/2014

Peak season:

31/01/2014 09/02/2014

30/04/2014 04/05/2014

Tet Holiday:

20/12/2013 31/12/2013

01/01/2014 15/01/2014

20/12/2014 31/12/2014

3. Emeralda Ninh Binh


Low Demand Season

(points/night)



1 Superior 59 66 86


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2 Deluxe 92 102 122 3 Duplex 155 128 149

Peak season:

01 04/01/2014 & 30 31/01/2014

01/02/2014 03/02/2014

30/04/2014 03/05/2014

29/08/2014 02/09/2014

21/12/2014 31/12/2014

4. Ana Mandara Villas Da Lat


Low Demand Season

(points/night)



1 Villa Studio 71 79 95 2 Villa Suite 86 95 111 3 Bellevue Suite 122 135 151 4 La Villa 213 237 253

Peak season:

01 04/01/2014 & 30 31/01/2014

01/02/2014 03/02/2014

30/04/2014 03/05/2014

29/08/2014 02/09/2014

21/12/2014 31/12/2014

Documents

Case3 - NinhVanBay