Business Beat
Although HCM City authorities have not reached a final decision on new land prices, the real estate market in the city is already responding to the two price lists under consideration.The existing list, used for calculating the value of land for compensation in case of eviction, is so out of step with market prices that it hampers the rate of project development, as no one agrees to move and return land promised to project owners.
Prices on the new lists are 3.5 and 2.9 times higher and could reach as high as VND50 million per square metre in some areas. This means a shop house downtown might get as much as US$1 million – and people say market prices are higher still.
While awaiting the new price list, there has been a rush to finalise the purchases of State-owned houses, as tenants believe that a delay might mean they have to pay a much higher price and miss out on enjoying lower taxes based on lower land prices.
once the new prices are announced, real estate dealers say land and housing taxes will be raised accordingly. They forecast that houses will be more expensive to accommodate the higher taxes. Some say the new price list will make acquiring land easier as evicted people will be more willing to relocate due to higher compensation. on the other hand, the costs to build will be higher and, therefore, housing blocks may not sell as easily if buyers are reluctant to shell out more money.
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one of the biggest hurdles the private sector has to face is a lack of credit, especially for start-ups: banks have proved just unwilling to give loans without collateral.
It was revealed recently that private banks are required by law to lend only to those who can pledge mortgaged guarantees. This has bound the hands of joint-stock banks that want to lend to viable project owners, especially those in the private sector.
Bankers say that if this legal provision is abolished, they will compete among themselves to choose the best projects to lend to, forcing them to improve their ability to evaluate project viability, to keep tabs on implementation and to be more responsible in recovering loans.
They say an improvement in the banking law is also necessary to make easier for banks to open local offices or branches. The current procedures are too complicated and discourage banks from opening in small cities where the potential is not worth the effort.
In a related issue, State Bank governor Le Duc Thuy confirmed that software cannot be used as collateral for loans. Software companies that need capital to develop programmes for export complained that they could not get bank loans using the strength of their developing software as collateral. The governor explained that local software is likely to be pirated and its value could be wiped out overnight. That’s a stark reality no one can dispute, but if banks are willing to lend to this developing sector, there should be other ways to support software developers.
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Organisers of the Miss World pageant have come up with a smart marketing trick. Teaming up with two marketing agencies, they invited mobile phone users world-wide to vote for their favourite contestants by sending a text message to a number in England. The promotional website says: "This is your chance to vote for your favourite Miss World 2002 contestant. Remember you can vote as many times as you wish – the more times you vote for your favourite the more chance they have of winning!"
Votes by mobile phone messages, received until December 6, will count for half of the final result, with the judging panel’s votes making up remaining 50 per cent. Well, one wonders just how much revenue this will bring the telecommunications carriers. Millions of messages sent at US$0.20-$0.40 per message makes for a lot of money. It’s not clear how organisers share this revenue, but one thing is certain: mobile phone users who send votes will receive promotional items until they demand to stop.
Hence, these marketing agencies are saying their campaign could reach 2 billion people in 130 countries. Those nations without GSM systems are out of the game because only messages sent by GSM systems will be processed. The beauty pageant, already marred by boycotts and riots, will certainly receive protests against countries such as Japan and South Korea because their contestants will be at an advantage over countries where sending mobile messages is not such a widespread hobby. The move of venue to London because of violent riots in Nigeria will certainly make the marketing campaign more aggressive and might be copied in future wireless marketing gimmicks.
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Room occupancy rates for downtown HCM City hotels have soared in the past few weeks, reaching as high as 91 per cent at Saigontourist-owned hotels. Despite a 20 per cent hike in room rates, it is now impossible to book a room at these hotels until after the New Year holidays. Tourist agencies say international guest arrivals have increased 20 per cent compared with the same period last year. Unstable situations and terrorist threats elsewhere in Asia have made Viet Nam an attractive choice for tourists. Many visitors also want to avoid the cold weather in other parts of the world at this time of the year.
Furthermore, a series of international seminars and conferences held in HCM City recently contributed to the increase of travellers.
The lack of rooms is not so acute at cheaper hotels or those located outside the downtown area. The situation represents a twist of fate in the relationship between travel agents and hotel operators. In the old days, hotels had to curry favour from agents so that they would book rooms for their guests. Now agents have to beg hotels to accommodate their clients.
The good results should also be attributed to the marketing efforts of the Viet Nam Authority of Tourism and the co-ordination of tourist offices throughout the country. They have worked together to offer improved tour routes. It is hoped that everybody involved in the tourist sector will not become complacent and stop striving to improve their service quality.
VNS
