Vietnam hotelier lauds state sell-offs
HO CHI MINH CITY- Le Thanh Chon has travelled communist-ruled Vietnam spreading the word about the rewards awaiting
companies that break from state control.
Chon, general manager of the Saigon Hotel here,
became a convert two years ago when he, some 100
employees and other investors bought a 60 percent
stake.
``I help companies by sharing my experience,'' Chon told
Reuters in an interview, saying he had travelled from
southern Vung Tau to Haiphong in the north to talk about
the benefits of buying shares in state-owned enterprises
-- a practice known here as ``equitisation.''
Buying the hotel stake enabled Chon to make decisions
without state approval and has helped the hotel duck a
downturn in tourism which has competitors in Vietnam's
business hub reeling.
The government has said it wants to liquidate, merge or
sell stakes in most of the country's 6,000 state firms.
But only 29 companies, including the Saigon Hotel, have
been partially sold to date. In an apparent attempt to
jump-start the process, Prime Minister Phan Van Khai
recently signed a new decree that allows for a full
sell-off.
Chon said the government earlier this year had sent a
representative to seek his advice. When Khai released
the new equitisation decree, Chon said it contained some
of his proposals.
``Equitisation is the impetus to go forward, to develop
our economy. The equitisation programme is very good
for the country and the people,'' Chon said.
``I have become a campaigner for equitisation because I
want to encourage other companies to equitise.''
Chon said he and the employees held 40 percent of the
Saigon Hotel and other shareholders 20 percent. The
state retained a 40 percent stake but only one seat on the
board of directors.
He said the hotel made a profit in the first six months of
the year, following a healthy 1997, although he requested
that the figures not be published.
Chon said hotel occupancy was above 70 percent, from
more than 90 percent last year.
Some published figures have shown average hotel
occupancy in Ho Chi Minh City, called Saigon before it
was renamed at the end of the Vietnam War in 1975, at
around 34 percent.
``The tourist business is in decline but compared with
other hotels in the city we are seeing growth. The reason
is that we equitised,'' said Chon, who owns 2.5 percent
of the hotel.
``When we were state-run we came under close
supervision from a higher level which might not realise
how the business is run. Because we own the hotel we
can change strategy quickly.''
The Asian financial crisis has hit Vietnam's tourism
industry, with the country expected to struggle to meet
last year's 1.8 million arrivals.
Officials said arrivals in Ho Chi Minh City fell in the first
six months of the year compared with the same period in
1997 although they declined to give details.
Arrivals include tourists and business travellers.
Chon said his employees would rather hold stock in the
hotel than deposit money in the country's banks,
reflecting the lack of trust most Vietnamese have for the
fragile financial sector.
``Buying the shares and owning the hotel is better than
putting money into a bank. The employees get a salary
and also the proceeds from company profits,'' he said.
Chon said the hotel, which has 102 rooms, had lowered
prices to attract guests and was charging $25-$100 a
night for three-star accommodation.
The Saigon Hotel was built in 1967 during the Vietnam
War. It became a state hotel when the war ended and
the victorious communists nationalised all commerce.
By Dean Yates REUTERS - July 29, 1998.
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