Evaluations of tourism enterprices on investment attracting and developing acitivities of Phu Tho government

277 EVALUATIONS OF TOURISM ENTERPRICES ON INVESTMENT ATTRACTING AND DEVELOPING ACITIVITIES OF PHU THO GOVERNMENT PhD Nguyen Hoai Long longnguyenhoai@gmail.com* MBA. Pham Thi Kim Thanh* MBA. Dinh Van Oanh* PhD. Ho Chi Dung** PhD. Nguyen Ngoc Quang* * Faculty of Marketing, National Economics University, Hanoi, Vietnam ** Business school of Economics college, National University, Hanoi, Vietnam Abstract Local business firms have proved their roles in place development by no means less important than the FDI sector, hence they are key target customer of local government in place development. From place marketing approach, this study explores the effectiveness of active local government involvement in tourism development by determining how 76 local tourism firms assess the planning initiative of local government, their policy framework in developing tourism, the implementation of such policy and operation program and some other forms of government involvement. In-depth interviews with local authorities and local tourism firms show that Keywords: Local government involvement, place marketing, local tourism firm, Phu Tho 1. Introduction In an effort to find a new way to grow, numbers of region, nation, as well as city have applied a marketing approach to planning to enhance their competitive capacity and to boost their local economies. This approach is called ―place marketing‖. The place marketing approach implies that the place follows a marketing philosophy in forming development strategies and adapts marketing tools and techniques to determine its target markets, and then to create the market offerings, which the place believes may satisfy the target market‘s needs in a better manner than other places can do, to the target markets (Kotler et al. 2002). The target markets of a place can be tourists, conventioneers, corporate headquarters, export markets, manufacturers, investors, and entrepreneurs-local and international (Kotler, Haider, and Rein 1993). Business customer is considered a key target for every place, especially in developing economies like Vietnam. Many studies have been carried out to explore attributes that a place should develop to create the crowd-in effect of foreign direct investment (FDI) as well as to create a high level of investor satisfaction, especially in the developing world (e.g., Nguyen and Haughton 2002; Mmieh and Owusu-Frimpong 2004; Fung et al. 2005, Pham 2010). 278 Regarding local business firms, although their roles in place development are by no means less important than the FDI sector, their concerns have been largely ignored (Nguyen, 2009). Small firms sector in developing countries including Vietnam, is steadily growing and more and more dynamic in regional tourism industries (Ateljevic and Doorne 2003). Small firm development is being promoted as the path for enhancing local economies and offering more relevant development to marginal and/or peripheral physical, social, and cultural environments (2003). In place marketing literature, the local business firms, similar to FDI firms, provide jobs and incomes for place citizens and revenues for the government (Kotler, Haider, and Rein 1993). Hence, our concern is how local government has been doing to attract and satisfy the target segment of local small firms, particularly local tourism firms? The role of government is in political, social, as well as economic life of countries for a long time. The government is required to involve at a higher level as the private sector is less developed and less innovative in many developing countries so as to fulfil material objectives (Jenkins and Henry 1982). Particularly in tourism, as it is highly fragmented and may involve many stakeholders in the delivery of combined diverse activities and services in forming a tourism product, the active role of the government is required in facilitating and promoting the tourism development (Jenkins and Henry 1982; Gunn 1988; Hughes 1994, Akama 1997, 2002). The government roles in tourism development take place at different levels: national, regional and local governmental levels (Treuren and Lane 2003; Cooper and Abubakar 2004). From the place marketing approach, our question is how the local tourism firms assess the active involvement of local government in tourism development? These firms‘ assessment is the antecedent of their satisfaction which is the core concept for place marketers - the local government, in building long-term relationship with the target customer - local firms. The active role of the government is categorized into managerial and developmental, which involves not only in establishing policies and legislative frameworks, in managing the tourism sector, but also in the public investment relating to tourism (Jenkins and Henry 1982). From managerial active involvement aspect, the local government sets the objectives, develops a specific development plan, and introduces needed organizational and legislative support as well as engages officers at all level in local government system in order to attain the objectives. However, a big gap between the planning efforts for tourism development and its actual implementation does exist (Brokaj 2014). As the result, determining how the tourism firms assess the tourism management of local government from policy framework to the implementation as well as the involvement of local authority personnel would help revealing the reasons why this gap exists and the suggestion for proper solutions. Developmental involvement of the government is their operational role or that of its agencies in the tourist sector (Jenkins and Henry 1982). In most of developing countries, it requires public investment in tourism activities for the reason of the lack of robust tourism- experienced private sector. Literature on the effects of public investment in the context of developing countries shows that it positively affects, but it either negatively or crowds out 279 private investment (Bende-Nabende and Slater 2003; Nawaz and Hassan 2016). Particularly in tourism, it is argued that the high risk of investment in tourism enhances public and private sector collaboration in order to ensure the security of private investors (Petrescu 2011). It is the public sector to create favorable political and socio-economic environment, establish and provide transport infrastructure, communication and promotion network, and develop and preserve other attractiveness of the place for the private investment to attain a sustainable development in the tourism industry (Akama 2002). Public investment in tourism such as investment in infrastructure, in preservation and development of heritage, in supporting tourism community like traditional villages and households, would influence directly the private input (2002). Other public investment such as in promoting local tourism products, building tourism brand image for the province, engages in generating demands for local tourism (Nawaz and Hassan 2016). These public investments are assumed to affect private input indirectly by reducing the spending in promotion and advertising for instance, hence positively affect private output. Accordingly, this study aims to determine the effects of both two aspects of active involvement of local government in attracting private investment in tourism and tourism development through testing how small tourism firms assess the local planning initiative, policy framework, policy and operation program implementation, local government officials involvement and the public investment in tourism. Better understanding of the local firms assessments is expected to be good measures for local government in tourism management applying place marketing approach. 2. Method The research process is carried out according to the stages as demonstrated below: Research process Official quantitative research • Survey: business/household • Analysis of survey data: • Descriptive statistics RESULT REPORT Desk study • Overview of the theory of government involvement and private investment in tourism. • Evaluation of activities to attract investment and tourism development of Phu Tho province authorities. Qualitative research • Group interview: leaders of hotels, restaurants, tour operators, destination business management (4 groups)) • Determine the research framework • Determine specific research questions • Design a qualitative interview guide • Questionaire design Additional qualification research: • Qualitative research: in-depth interview with business leaders (12 enterprises) 280 The desk research method is used to gather the information on: - Local government involvement and private investment in tourism actual situation - Attracting investment and tourism developing of Phu Tho province authorities activity This stage helped us identify the research framework and select the model of studying the influence of local government involvement on investment intentions in tourism of small firms. The qualitative interview guidelines were designed accordingly. Focus group interview method is used in stage 2 of quanlitative research with the sample of 4 groups of tourism firm leaders. The content of the group discussion focused on policy issues and policy implementation; local officers managing the operations of enterprises of the tourism industry; public investment, and the influences of these factors on the investment intention of these enterprises. The questionnaire for the preliminary quantitative research was developed accordingly. In official quantitative research, the data collection was conducted using interviewer-administered survey in December, 2017. The interviewees are firms and business households registered to serve tourists at Phu Tho Department of Culture, Sports and Tourism in the field of travel business. A stratified sampling technique was used to generate a sample based on types of business. The specific survey structure is as follows: Source: Survey data of the research team, 2017 Data processing: SPSS software is used for descriptive statistic Finally, we conducted in-depth interviews with 12 tourism firm leaders to discuss issues related to the quantitative research results to have insights into the small firms‘ investment intention and explanation of the research findings. We also looked for suggestion of proper solutions to leverage the local goverment involvement in investment intention of small firms in tourism industry. 3. Results 3.1 Qualitative research results With specific characteristics in Phu Tho, its local tourism businesses can be divided into two groups: enterprises/cooperatives and individual business households. Hence, 281 survey results of business owners on investment attraction and tourism development in Phu Tho province were presented through the assessment of average value of all respondents and the two groups including individual business households and enterprises/cooperatives. The calculation of the mean (average value) show that all activities which aimed at attracting investment and developing tourism of Phu Tho provincial government as assessed by the business owners, are only at the average or fair level. In most items, enterprises/cooperatives are more likely to make a positive assessment than individual business households Items have means in 3.4 to 4.2 - more than average values Factor Item Mean All Family business Enterprise/ c-operative Tourism planning initiative The suitability of the provincial tourism development strategy with Phu Tho resources and tourism resources. 3.73 3.55 3.86 The suitability of the tourism development strategy of the province with the needs of visitors. 3.64 3.55 3.75 The support of the public in the province for Phu Tho tourism development strategy. 3.41 3.22 3.55 Policy framework supporting to tourism sector The policy to preserve and develop the provincial tourism products. 3.64 3.63 3.66 The implementa tion of policy and operation programs The compliance of state management agencies for the tourism development policy in the province. 3.53 3.38 3.67 The flexibility of the state management agencies in the implementation of Phu Tho tourism development policy. 3.56 3.52 3.58 The development of the provincial action plan to implement the tourism development policies. 3.70 3.41 3.91 The suitability of the tourism development action plan with the context of the province. 3.43 3.27 3.51 282 Factor Item Mean All Family business Enterprise/ c-operative The activities of state management agencies in propagating strategies and policies for Phu Tho tourism development. 3.49 3.39 3.60 Local government officer The awareness of civil servants about the policies to encourage the provincial tourism development. 3.52 3.56 3.48 Professional capacity of civil servant in the province. 3.49 3.53 3.45 Public investment that directly influences private input Investment of the province to ensure the tourism landscape and environment. 3.64 3.56 3.74 Investment of the province for the tourism business community. 3.74 3.69 3.79 Provincial investment in tourism preservation and resource development. 3.64 3.59 3.70 Public investment in generating demands Provincial investment in infrastructure development. 3.63 3.72 3.56 Provincial investment to develop entertainment areas. 4.05 3.97 4.12 Source: survey results of group authors (Dec 2017) Rated as fair, there are some items including three out of six items in the "Tourism planning initiative" factor; one out of five items in the "Policy framework supporting to tourism sector" factor; all five items in "The implementation of policy and operation programs" factor; two out of five items in "Local government officer" factor; all three items in "Public investment that directly influences private input" factor and two out four items in "Public investment in generating demands" factor. This apparently shows that business owners highly appreciate the efforts toward policy implementation and action programs to attract investment and develop tourism of Phu Tho province. Public investment that directly influenced private input is well acknowledged which denotes that the owners of business establishments fairly evaluate the investment efforts in providing direct support to enterprises and business households. 283 Items have means in average value Factor Item Mean All Family business Enterprise/ co-operative Tourism planning initiative The support of state management agencies in the province for Phu Tho tourism development strategy. 3.39 3.38 3.40 The support of investors to the tourism development strategy in the province. 3.06 3.00 3.11 The suitability between the provincial tourism development strategy with the national tourism development strategy 3.38 3.28 3.41 Policy framework supporting to tourism sector The consistency between tourism development policies and the provincial strategies 3.30 3.34 3.30 The policy to encourage and support tourism firms to operate in the province. 3.33 3.25 3.42 The policy to manage tourism business activities 3.27 3.06 3.41 The policy to attract and develop human resources in tourism of the province. 3.30 3.03 3.50 Local government officer The trust of civil servants in the provincial tourism development encouraging policies. 3.17 3.22 3.11 The compliance of the provincial tourism development encourages policies of civil servants. 3.12 3.06 3.16 Effort of civil servants to develop tourism in the province. 3.29 3.28 3.33 Public investment in generating demands Provincial investment in promoting tourism products. 3.14 3.22 3.09 Provincial investment in tourism branding development. 3.39 3.44 3.34 Source: survey results of group authors (Dec 2017 Although the implementation of the policy is greatly welcomed, the policy framework supporting to tourism sector has not lived up to the business owners‘ expectation which indicates that they are not satisfied with the policies of attracting investment and developing local tourism. What is more, the "Local government officer" factor also has three out of five items rated as average, implying that more efforts should 284 be made by the local government officials. Investment activities to attract more visitors also need further improvement to ensure the objectives in local tourism development. In general, not many differences exists between the assessment of business owners/cooperatives and that of business households in the activities of local authorities to attract investment and develop tourism in Phu Tho. Also, the survey results reveal that business owners/cooperatives are more aware and appreciative of the actions on investment attraction and tourism development of Phu Tho province since there are many items rated at a higher level by business owners compared to individual business households. 3.2 Results of in-depth interviews with business owners and individual business households Tourism planning initiative The enterprises think that the provincial tourism development strategy is suitable with Phu Tho and tourism resources because (1) goverment develops tourism depending on existed resources: destinations, cultures, transportation state and so on; (2) Government provides all of information about marketing programs to enterprises with clear instructions and follow them when they implement these programs to support if they need so governemnt can understand exactly the tourism and Phu Tho resources. Moreover, the tourism develoment strategy of the province also focuses on visitors‘ needs because of 2 main reasones: firstly, depending on the visitor perception about Phu Tho as a historical and cultural destination - they come to Phu Tho to go to Hung Temple - the government plans to develop intangible and cultural heritage of humanity such as Xoan singing, Mẫu Temple, Secondly, government also focuses on developing some entertainment services such as hotel, park, hot spring and so on that helps the customer satisfy most when go to Phu Tho. That is the reason why enterprices highly appriciated the governement‘s policy in preserve and develop the provincial tourism products. In general, all of the Phu Tho tourism strategy follow the nation tourism devepment strategy. Besides, the support of state management agencies in the province for Phu Tho tourism development strategy is not clear. They have encouraged to develop toursim strategy however they had not have clear instruction or strategic orientation. Because of limited resources to develop tourism by themselves so government is welcome projects investing in Phu Tho. There is no barrier for invester in tourism development such as adminstration procedure, special tax and so on. Howerver, investor should be proactive to call the support when they need. In fact, the investors set priority for their business after that they help developing the provincial tourism. There are some big investors in hotels and entertainment sectors, however, they can not create a real tourism atmosphere for vistiors, they are just for officers from other provinces come to Phu Tho for business purpose or for providing services for daily use of Phu Tho residents. Additionally, there are some projects uncompleted over the years, so it prevents to attrach more investors. 285 Policy framework supporting to tourism sector In general, government encourage to develop and make good condtions for the province, howerver, government‘s financial resource is litmited so they can not release finance support policy for the enterprises. About policy to manage tourism business activities, enterprises required to obey general business laws/ regulations. Howerver the province has not release tourism business regulations so unfair competion has still existed. In the policy to develop tourism of Phu tho province, government always focus on preserve the and develop provincial tourism product. In the plan to develop the toursism sector, government focuses on improving material and immaterial cultures such as temples, traditional trade villages and Xoan singing (Hung, Hung Lo, Lai Len temples, ). Human resources have important roles to quality of tourism services, however, this factors have not focused because some reasons: (1) scales of enterprises are still small; (2) the number of vistiors are limited and it‘s in high season on Hung temple festival only ; (3) Enterprises and government do not realized the relationship between the service quality and human resources ability. The implementation of policy and operation programs Enterprises are highly appricated the compliance and flexibility of the state management agencies in the implementation of Phu Tho tourism development policy. State management agencies follow the implementation process to support for the enterprises, whenever enterprices have problems, they always have enough and clear information and instruction to solve with out any difficulties caused by officers and processes. Government‘s policies and programs are consistent. However, in some cases, because of controlling ability, there are unfair competiton between enterprises but the government have no solutions to solve as mentioned above. Moreover, to develop tourism, provinces also develop suitable action programs to implementation on policies. Phu Tho have invested in developing transportation connecting heritage destinations such as Lãi Lèn shirn with Hùng Lô, An Thái, Kim Đới temple; Viet Tri, Tan Son and Thanh Thuy. With their effort, Xoan singing is recognized as Unesco world heritage. And Province always try to design action plans to fullfil their strategy however strategy implementation has not clear results, there are some projects have uncompleted over the time and it prevents other investments. Local government officer Almost of government officers are determined to Phu Tho tourism development, they are aware of the role of tourism development in improving the standard life in Phu Tho province. They consider to develop Phu Tho tourism to attrach visitors during the year (not just in Hung temple festival), they try to develop tourism product that helps visitors having best expericences. Besides their effort, their capacity is still limited in building the trust with enterprises. Although government‗s policies and implementation are appriciated, enterprises are not reasurred whether they can get the support from government‘s policies to their investment in long term. They have just invested circumspectly in their controlling ability. That is the reason why the Phu Tho‘s tourisim development are in low speed. 286 Public investment that driectly influences private input Up to now, almost tourism destinations and services in Phu Tho are public investment to create tourism products for province such as tourism preservation (Hung, Hung Lo temple, Xoan singing) and develop traditional trade villages (traditional hat, weaving, chưng cake and so on) (exept some project invested by private enterprises but uncompleted). They also have project to protect province‘s landscape and environment suchs as Văn Lang park, Xuân Sơn forest and so on. Tourism enterprises depends on these to design tours and develop their businesses. Public investment in generating demands With tourism development strategy, besides investment in Hung Temple, government also focus on develop other interesting destinations as mentioned above to attrach visitors during year such as entertainment destinations such as spring hot water in Thanh Thuy, Xuan Son national forest and so on. Moreover, to advertise their brand, they has it own website and material to introduce about their destinations and follow national commnunication programs. 4. Discussion and Conclusion Throgh investigation with questionare and in - depth interview with enterprises having business on tourism and tourism service, this research evaluated the actual situation of attracting and developing tourisim activites of Phu Tho government. In general, government activities that focuses on attracting investment and developing tourism in Phu Tho evaluated in more than average. This research also showed factors that evaluated at average and more than average value. 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