HANOI, VIETNAM - Australian low- cost airline Jetstar and a Canadian luxury resort and casino developer have launched two ambitious projects that aim to revolutionise Vietnam's fast-growing tourism industry.

Jetstar, the budget offshoot of Australian carrier Qantas, teamed up with Vietnam's Pacific Airlines to launch Jetstar Pacific on Friday, setting the stage for a dogfight with state-run Vietnam Airlines.

The following day Canadian developers broke ground on what they say will become Vietnam's premier destination, a US$4.2 billion resort and casino strip near southern Ho Chi Minh City, due to kick off in late 2010. Between them, the two projects push forward a tourism industry that has grown strongly since the communist-ruled country emerged from post-war isolation in the 1990s to accept a trickle of backpackers.

Vietnam now aims to boost its domestic and international tourism industry - which has grown into one of the country's five top economic sectors - to take on South-east Asian neighbours such as Thailand and Malaysia.

Vietnam last year received 4.2 million foreign visitors, 16 per cent more than in 2006. The World Travel and Tourism Council ranks it as No 4 on its list of the world's fastest growing travel destinations.

Jetstar Pacific - at a lavish launch gala here on Friday, featuring Aussie marketing glitz, dance shows and lots of dry ice - promised to shake up Vietnam's aviation sector.

'As Vietnam's first low- cost, value-based airline, Jetstar Pacific will change air travel in Vietnam by making it more affordable for more people to fly,' said Jetstar Pacific chief executive officer Luong Hoai Nam.

International hotels are starting to crowd the 'China Beach' area near Danang, and major resort plans are on the drawing board for the southern island of Phu Quoc, off the Cambodian coast.

Toronto-based Asian Coast Development Ltd (ACDL) hopes to trump them all with the Ho Tram Strip of resorts and 'Las Vegas-style' casinos in Ba Ria-Vung Tau province, 80km southwest of Ho Chi Minh City. -- AFP