Sun Group and Phú Quốc: Building a Resort Island from Scratch

Phú Quốc is the clearest example in Vietnam of a tourism destination created by government decision and private capital rather than by organic demand. The state decided in the early 2000s that the island would become an international resort, built an airport, waived visas and offered land on generous terms; two conglomerates, Vingroup in the north and Sun Group in the south, then did the building. The result is a destination that grew from a few hundred thousand visitors to several million in a decade, with all the strains that implies. This article follows Sun Group’s part of the story: who the company is, what it built on the island, how the model works and where it is fragile. It is part of the Vietnam Company Stories hub.

Why did the government decide to turn Phú Quốc into a resort island?

Because it had a large, underused island close to Thailand, Cambodia and Singapore, and wanted a destination that could compete with Phuket and Bali for regional tourists. Prime ministerial decisions in 2004 and 2010 designated Phú Quốc a special tourism and economic zone, approved a master plan for up to several million visitors and committed the state to building the infrastructure that private developers would not.

The island had almost none of it. In 2010 Phú Quốc, then part of Kiên Giang province in the far south-west of the Mekong Delta, had a small airport that could take turboprops, unreliable electricity brought by generator, a single paved ring road and an economy based on fishing, pepper farming and the fish sauce for which the island was famous. It was closer to Cambodia’s coast than to the Vietnamese mainland, and it had been a prison island during the war. What it also had was more than 150 kilometres of coastline, much of it beach, and a dry season that aligned with the northern-hemisphere winter.

The state’s contribution came in three pieces. Phú Quốc International Airport, built by the state airport operator ACV at a cost of roughly VND 16 trillion, opened in December 2012 with a runway that could handle widebodies and a design capacity later expanded to around 4 million passengers a year. An undersea power cable from the mainland, energised in 2014, ended the generator era. And from March 2014 foreign visitors were allowed to enter Phú Quốc without a visa for up to 30 days, a concession that applied nowhere else in Vietnam and that made the island the easiest point of entry for Russian, Korean and later Chinese package tourists.

The land policy was the fourth piece, and the most consequential. Kiên Giang province allocated large coastal tracts to developers under long-term leases, with tax incentives and fast approvals, on condition that they built quickly. Vingroup took Bãi Dài in the north from 2014, building the Vinpearl resort complex, a safari park, an amusement park and a casino. Sun Group took the south around An Thới and the offshore islands. The state, in effect, chose its developers and let them compete for the tourists.

How does Sun Group make money from cable cars and theme parks?

By obtaining long concessions on spectacular but inaccessible sites, building the transport that makes them reachable, and then capturing the property and hospitality value that the access creates. The cable car or theme park is the anchor and often the loss leader; the villas, shophouses, hotels and entertainment around it are where the return comes from.

The company was founded in 2007 by Lê Viết Lam, who had studied in the Soviet Union, run the Technocom instant-noodle business in Kharkiv with Phạm Nhật Vượng, and returned to Vietnam with capital and a taste for large projects. Where Vượng went into urban property and eventually cars, as described in the profile of Phạm Nhật Vượng and Vingroup, Lam specialised in tourism infrastructure. Sun Group’s first big project was Bà Nà Hills above Đà Nẵng, a colonial-era hill station reached by a record-setting cable car in 2009 and later made globally famous by the Golden Bridge, the walkway held up by giant stone hands that opened in 2018 and became one of the most photographed structures in Asia.

The Bà Nà model was repeated in the north at Fansipan, where a cable car to the summit of Vietnam’s highest mountain opened in 2016 and turned a two-day trek into a fifteen-minute ride, and in Quảng Ninh, where Sun Group built the Vân Đồn international airport, opened in December 2018 as the country’s first privately built and operated airport, alongside a cable car and resort complex at Hạ Long. In each case the company obtained the concession from a provincial government eager for a landmark, financed construction largely with domestic bank loans and sales of property around the site, and operated the attraction under a long lease.

The economics are those of a developer, not an operator. Cable car ticket revenue is meaningful, running to millions of visitors a year at Bà Nà and Fansipan, but the margins are in the land. A provincial government grants Sun Group a large site at a price reflecting its inaccessibility; the company builds the cable car; the site becomes accessible and its value rises; the company sells villas and shophouses on it at prices reflecting the new access. The public benefit is real, since the province gets an attraction and jobs; so is the private one.

What exactly did Sun Group build on the southern tip of Phú Quốc?

A resort district built in sequence over roughly a decade. It began with the JW Marriott Phu Quoc Emerald Bay, designed by Bill Bensley as a fictional French colonial university and opened in 2017; continued with the Hòn Thơm cable car, the world’s longest three-rope sea-crossing cable car at just under 8 kilometres, opened in February 2018; and culminated in Sunset Town, a Mediterranean-styled entertainment district on the An Thới waterfront, completed in stages from 2021 to 2023.

The JW Marriott set the tone. Bensley, an American architect based in Bangkok who designs the most extravagant resorts in Asia, was given a beach at Bãi Khem and a brief to make something international guests would fly to see. The resort won every design award available and established Phú Quốc as a place where a luxury brand could charge Phuket prices. It was followed by the Premier Village and Premier Residences properties, New World Phu Quoc, a resort made up of villas on the same bay, and later hotels under Accor and other international flags.

The cable car was the piece of infrastructure that unlocked the rest. It runs from An Thới over the sea to Hòn Thơm, an island that Sun Group turned into a water park and beach resort under the Sun World brand. The line cost on the order of VND 10 trillion, carries several thousand passengers an hour and, by connecting the mainland town to the offshore park, turned the southern tip into a single destination rather than a scatter of beaches. The Kiss Bridge, a pair of curved walkways reaching toward each other across the water and designed by Marco Casamonti, and the nightly Kiss of the Sea multimedia show, were added to give visitors a reason to stay into the evening and spend.

Sunset Town is where the property model is most visible. Thousands of shophouses in pastel Italianate style line streets leading to a clock tower and a waterfront, sold off-plan to Vietnamese investors as combined retail-and-residence units on the promise of tourist footfall. Some are occupied by restaurants and boutiques; many were empty for long stretches after the pandemic. The town is, in effect, a theme park in which the rides are real estate, and its fortunes track the island’s visitor numbers directly.

How did the Vingroup and Sun Group division of the island work?

Informally but clearly. Vingroup took the north-west coast around Bãi Dài, where it built the Vinpearl resort cluster, Vinpearl Safari, the VinWonders amusement park, a golf course, hospitals and the Corona casino, the first in Vietnam allowed to admit Vietnamese citizens under a pilot scheme from 2019. Sun Group took the south around An Thới and Bãi Khem. The centre of the island, including the main town of Dương Đông and the beach at Long Beach, went to smaller developers and independent hotels.

The two groups compete for the same visitors but rarely for the same sites, and each has built a self-contained resort economy with its own hotels, attractions, transport and retail. A Korean package tourist can spend a week at Vinpearl without leaving Vingroup property; a Russian family at Sunset Town can do the same with Sun Group. This is efficient for the developers and profitable for the tour operators who bundle flights, hotels and park tickets, and it explains why Phú Quốc’s visitor numbers are so sensitive to a handful of charter markets.

The relationship between the founders shaped the division. Lam and Vượng had been partners in Ukraine, and though their companies are independent they have avoided direct confrontation. Vingroup later concentrated on cars, described in the piece on VinFast’s electric-vehicle bet, and sold or spun off parts of its hospitality business, while Sun Group doubled down on tourism. On Phú Quốc, the effect is that the island’s two anchor investors are complementary rather than fighting a price war.

The state’s role in the division was to grant the land and approve the plans, and it has continued to shape the island since. Phú Quốc became Vietnam’s first island city in January 2021, and when the country merged its provinces in mid-2025, folding Kiên Giang into An Giang, the island was designated a special administrative zone, with a governance structure intended to give it more autonomy over investment decisions. The provincial merger and the reorganisation of local government are part of the wider administrative reform that is also reshaping how industrial parks and provinces compete for investment.

What went wrong on Phú Quốc after 2019?

Three things at once: the pandemic removed every international visitor for two years, the condotel model that had financed much of the construction broke down, and the island’s infrastructure, from water and waste to the airport, fell behind the number of people using it. Visitor arrivals collapsed from about 5 million in 2019 to a few hundred thousand in 2021, and the recovery, while fast in aggregate, has been uneven by market.

The condotel problem was structural. Developers across the island, including the big two but also dozens of smaller ones, had sold hotel rooms and villas to Vietnamese investors with guaranteed rental returns of 8 to 12 percent a year for five to ten years. Those guarantees assumed high occupancy and rising room rates. When the visitors stopped coming, several developers defaulted on the guarantees, most visibly the Cocobay project in Đà Nẵng in 2019 and then a series of Phú Quốc schemes, and buyers discovered that condotels had no clear legal status as residential property. Sales stalled, unfinished projects were abandoned along the Long Beach strip and Sunset Town’s shophouses stood empty.

Infrastructure strain was the second issue. The island’s population roughly doubled with construction and service workers, its water supply depended on a single reservoir, its waste treatment could not keep up and its beaches were periodically closed by plastic pollution washed in on the monsoon. The airport, designed for 4 million passengers, handled more than that at the 2019 peak and was overwhelmed by the post-pandemic domestic surge. Reports of high prices, poor service and dirty beaches circulated widely on Vietnamese social media in 2023 and 2024 and domestic arrivals dipped even as international ones recovered.

The third issue was source-market concentration. Before 2020 Phú Quốc depended heavily on Russian and Chinese charter tourists, both of which disappeared and came back slowly, the Russians because of sanctions and the war in Ukraine, the Chinese because of Beijing’s slow reopening. Korean visitors, who could reach the island on direct flights and used the visa waiver, filled part of the gap, and the island has since courted Indian, Taiwanese and Central Asian markets. The lesson, which applies to Vietnamese tourism generally, is that a destination built for charter flights rises and falls with the airlines that fly them.

Why was Phú Quốc chosen for APEC 2027, and what is Sun Group building for it?

Because the government wanted a showcase, the island had the hotel capacity and the developers were willing to build the rest at speed. Vietnam will host the Asia-Pacific Economic Cooperation leaders’ meeting in November 2027, and in 2025 the government designated Phú Quốc as the venue and approved an emergency programme of infrastructure investment, much of it to be delivered by Sun Group under public-private arrangements.

The centrepiece is the airport. Sun Group was assigned in 2025 to expand Phú Quốc International Airport with a second runway, a new terminal and capacity of around 18 to 20 million passengers a year, a scale that would make it the third-largest airport in the country after Tân Sơn Nhất and Nội Bài and comparable to the first phase of Long Thành. The company had already built and operated Vân Đồn airport, which made it the only private entity in Vietnam with the relevant experience. The arrangement is, in effect, a private developer taking over the expansion of a state airport in exchange for the right to operate it, and it was approved on a timetable that would have been impossible under normal procurement.

The second piece is the airline. In late 2025 Sun Group launched Sun PhuQuoc Airways, a carrier based on the island with a small fleet of Airbus narrowbodies and a plan to fly direct from Phú Quốc to regional cities and to bring APEC delegations in without connecting through Hồ Chí Minh City. It is the first Vietnamese airline launched since the Bamboo Airways experiment, and it follows the Sun Group logic exactly: build the transport, then capture the tourists it delivers. Its economics as a standalone airline are unproven, and its sister company’s resorts are its reason to exist.

The third piece is the APEC venue itself: a convention centre, a leaders’ complex and associated hotels on the south of the island, plus roads, a marina and utilities upgrades that the island needed anyway. The programme runs to tens of trillions of dong, will be partly financed by the state and partly by Sun Group in exchange for land and operating rights, and has to be finished by late 2027. Provincial officials have compared it to the transformation of Đà Nẵng before the 2017 APEC summit, which also relied on Sun Group projects.

What should founders, investors and operators learn from Sun Group and Phú Quốc?

The first lesson is that in Vietnam tourism destinations are policy products. Phú Quốc did not become a resort island because tourists discovered it; it became one because the state decided it should, built the airport and the power cable, waived visas and handed land to two developers it trusted to deliver. An operator looking for the next Phú Quốc should read government master plans and provincial investment lists, not travel blogs.

The second lesson is that access is the asset. Sun Group’s entire portfolio is a set of transport projects, cable cars, an airport and now an airline, that make previously unreachable places reachable, with the property and hospitality value flowing from that. It is a model closer to a nineteenth-century railway company than to a hotel chain, and it depends on being first to secure the concession. Late entrants to Phú Quốc, the independent hoteliers along Long Beach, got the demand the big two created but none of the land economics.

The third lesson is about concentration risk. A resort island with a handful of charter markets, two dominant developers, one airport and one water source is fragile in every direction, and Phú Quốc has demonstrated most of the failure modes in the past six years: the pandemic, the condotel defaults, the pollution and price complaints, the dependence on Russian and Chinese arrivals. The APEC programme will add capacity; it will not by itself add diversity.

The last lesson is about what the model asks of the public. Sun Group builds things that provinces want and would not otherwise get, and it captures a large share of the value it creates through land. Whether that is a good bargain for the public depends on the terms of the concessions, which are rarely disclosed in full, and on whether the infrastructure, the airport, the roads and the utilities, actually gets built and maintained. On Phú Quốc, so far, it has. The test of the next decade is whether the island can absorb another doubling of visitors without destroying the beaches that brought them.

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