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Hotel Ownership and Distribution Channels in Vietnam

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Hotel Ownership and Distribution Channels in Vietnam TOURISM DISTRIBUTION IN A TRANSITIONAL ECONOMY: HOTEL OWNERSHIP AND DISTRIBUTION CHANNELS IN VIETNAM BY TUAN NGOC LE A thesis submitted to the Victoria University of Wellington in fulfilment of the requirements for the degree of Doctor of Philosophy in Tourism Management Victoria University of Wellington 2016 ABSTRACT This thesis investigates how the different up-market hotel ownership modes establish distribution channels to reach domestic and international tourism markets in the context of Vietnam’s transitional economy, which has been transforming from a centrally planned to a socialist market oriented economy since 1986. It seeks to understand the current distribution channel structures of various hotel ownership modes; to explore the ways in which a number of factors influence distribution structures; and to examine the implications of these structures and factors for hotel and tourism development in Vietnam and in other economies with similar socio-political characteristics. A conceptual framework for hotel distribution channels is developed from a combination of the predominantly Western literature and the fragmented literature on hotel distribution in transition economies. The conceptual framework enables the researcher to investigate the linkages and relationships among the components that constitute the current Vietnamese hotel distribution systems. A qualitative approach is applied to address the supply-side issues of hotel distribution with data collected in the three largest urban cities located in the Northern, Central and Southern parts of Vietnam. The data collection methods were in-depth semi-structured interviews and document compilation. Different groups of participants from the Vietnam tourism industry including senior staff of sales and marketing of the four- and five-star hotels, international tour operators, high-ranking government officials of central and provincial authorities of tourism, key officers of trade organisations and academics from these cities were interviewed. The research presents the current distribution channel structures employed by four hotel ownership modes to reach domestic and international travellers. The findings also reveal that international joint venture and wholly foreign-owned hotels have effectively established their distribution channels to reach the international market. The entry of these international ownership modes as a result of Vietnam’s economic reform has forced state- and domestic privately-owned hotels to also build market-driven distribution structures. Economic restructuring in the context of Vietnam’s international integration has been the key element in creating the legal system, economic ii development, international tourist demand, technological advances, patterns of demand, hotel ownership and management modes that have driven the development of distribution. The research concludes that different hotel ownership and management modes and the distribution channel structures of up-market hotels are the products of Vietnam’s economic restructuring. The research suggests further economic renovation to meet the country’s commitments to international organisations, and to generate an equal tourism and hotel business environment in Vietnam. iii ACKNOWLEDGEMENTS First and foremost, I would like to express my sincere gratitude to my supervisors, Professor Douglas G. Pearce and Professor Karen A. Smith, who provided me with the opportunity to start this journey and went along with me to an end of my PhD road. With timely guidance, valuable suggestions, patience, understanding and support from my supervisors, this thesis was successfully completed. Your characters and working manners have influenced and formulated a part of my future academic and normal life. I also send big thanks to all lecturers within the Tourism Management Group, and staff in School of Management, Victoria Business School, for their advice, encouragement and support throughout my study. Without your kind assistance, this thesis would not have been written. Many thanks to my boss at the Vietnam National Administration of Tourism who allowed me to leave my job to study in Wellington. I am also grateful to my colleagues at the Vietnam National Administration of Tourism who shared my job duties over last four years. A big thank to the Joint Scholarship Programmes between the Vietnamese Ministry of Education and the Victoria University of Wellington that granted me this scholarship. Without the four years of funds, it would have been challenging and difficult for me to come to the end of my journey. I am so grateful to all my family members for their moral support, particularly my beloved wife and little son who are always on the same journey with me. I deeply understand that you had to overcome a lot of difficulties to adapt yourselves to a new living environment far away from home. Big thanks to my parents for their unconditional love and support. Thanks to my younger brothers and a sister-in-law for taking good care of our parents when I was away. This study is also for my grandmother who passed away when I was based in Wellington, I have never forgotten your face when I last saw you in this world before I returned to New Zealand from a field-trip in 2013. Last but not the least, I would like to thank all my research participants for their valuable cooperation and materials. Thanks to all my friends and PhD candidates I know in Wellington. Without your friendship and suggestions, my journey would have been less enjoyable and applicable. Thank you all for being a part of this research. iv TABLE OF CONTENTS CHAPTER 1. INTRODUCTION ................................................................................. 1 1.1. Preamble of the study .................................................................................. 1 1.2. Vietnam as the research context ................................................................... 4 1.2.1. An overview of Vietnam as a transitional economy ..................................... 5 1.2.1.1. Historical development ....................................................................... 6 1.2.1.2. Political system .................................................................................. 7 1.2.1.3. Economic development ...................................................................... 7 1.2.2. Vietnam tourism ....................................................................................... 10 1.2.3. Vietnamese hotel and hotel ownership modes ........................................... 12 1.3. Research questions .................................................................................... 15 1.4. Structure of the thesis ................................................................................ 16 1.5. Conclusion................................................................................................. 18 CHAPTER 2. LITERATURE REVIEW ..................................................................... 19 2.1. Introduction ..................................................................................................... 19 2.2. Essential characteristics of transition economies ............................................... 20 2.3. Ownership, business operations and distribution in transition economies .......... 23 2.4. Tourism and hotels in transition economies ...................................................... 28 2.5. Tourism and hotel distribution channels ........................................................... 31 2.5.1. Tourism and hotel distribution in the Western literature ............................ 31 2.5.2. Hotel distribution channels in transition economies ................................... 34 2.6. Research on tourism and hotel distribution channels in Vietnam ...................... 36 2.6.1. The development of Vietnamese hotels and distribution ............................ 36 2.6.2. Studies on hotel ownership and distribution channels in Vietnam.............. 39 2.7. Conceptual framework for hotel distribution channels in Vietnam .................... 41 2.8. Conclusion ....................................................................................................... 44 CHAPTER 3. RESEARCH METHODOLOGY ......................................................... 45 3.1. Introduction ..................................................................................................... 45 3.2. Research design and methodology .................................................................... 45 3.2.1. Research questions and research paradigm ................................................ 45 3.2.2. Research context and research sites ........................................................... 49 3.2.2.1. Research context .............................................................................. 49 3.2.2.2. Research sites ................................................................................... 51 3.2.3. Research design ........................................................................................ 55 3.2.4. Methods .................................................................................................... 57 v 3.2.4.1. Data collection types ........................................................................ 57 3.2.4.2. Research participants ........................................................................ 60 3.2.5. Data collection .......................................................................................... 66 3.2.6. Data analysis ...........................................................................................
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