The Lao government has relaxed investment regulations in the country ahead of the AEC 2015, creating very favorable conditions for international participation as it invites foreign operators to help grow its tourism industry.
The new open door investment policy allows foreign parties to control a 100% stake in three, four, and five-star hotels, and a 70% stake in travel companies, reports the Nation newspaper.
The new rules on investment are designed to encourage cooperation with foreign businesses and stimulate sustainable development in tourism, and 10 other priority industries.
Sounh Manivong, Director-General of the Tourism Development Department of the Laotian Ministry of Information, Culture and Tourism travelled to Thailand last week where he addresses members of the Association of Thai Travel Agents (ATTA) and outlined tourism prospects and business opportunities in light of the AEC opening.
“The strong point for investing in Laos is that the country is safe and has political stability. It is also rich in natural resources, and its labour cost is still low, with a minimum wage of LAK50,000 (US$6) a day,”he told travel agents.
To support business activities the Lao government is working to enhance connectivity with neighbouring countries through focused infrastructure development, and also plans to promote natural, cultural and eco-tourism, which is a strong proposition to foreign visitors
Tourism already contributes to approximately 9% of Lao GDP and is regarded as key industry in poverty reduction. The small country at the centre of the Mekong region received 2.4 million visitors in the first nine months of 2012, marking a 12% yoy increase. The year total is expected to hit 2.9 million and grow to five million by 2020.
With increasing volumes of tourists crossing it borders, visitor exports are following suit, rising 13% in 2012, and authorities expect per diem expenditure to rise from US$180 to US$250 per day over the next three years.
Growing arrivals and rising expenditure make tourism in Laos an attractive investment opportunity, especially among well-established tourism businesses in Thailand which provided 1.5 million tourists in 2011, more than half total arrivals.