International tourism still slack in Vietnam

Vietnam was unable to meet its goal of welcoming five million international tourists in 2022.
International tourism still slack in Vietnam ảnh 1

This was because Chinese tourists have not yet begun outbound tours. In 2023, the tourism industry aims to welcome eight million international visitors as it is expecting that Chinese tourists will begin travelling in the coming months. However, when China announced a list of 20 countries in early February for outbound tours, Vietnam was not on the list. In the domestic sector, the goal of reaching 102 million visitors this year may also be challenging.

Travelers confused

In 2022, international tourism was almost nil compared to domestic tourism, even though Vietnam was among the countries that opened its doors to tourists soon after the Covid-19 pandemic ended. The reasons for this shortfall are many. One reason is clearly attributed to zero Chinese tourists coming to Vietnam, and who normally account for one-third of the total number of international visitors to Vietnam. This is a huge void that no other country can fill.

In 2023, the tourism industry aims to welcome eight million international tourists, based on expectations that Chinese travelers will come to Vietnam in 2023. Even experts at HSBC say that tourism in Vietnam will make a strong recovery of upto 80% with the return of Chinese tourists.

When China named 20 countries on its list for outbound tours, Vietnam was not on that list. Mr. Phan Dinh Hue, Director of Viet Circle Tourism Company, said that without Chinese tourists the tourism industry in Vietnam will continue to face many challenges, especially in localities that rely heavily on Chinese travelers for their main revenue source such as Khanh Hoa, Quang Ninh, and Da Nang regions. These areas depend on Chinese tourists to keep their tourism afloat and now with no Chinese outbound tours, this region faces serious disappointment.

Looking back at the foreign tourist market in the years before the Covid-19 pandemic, it can be seen that the high-end and high-spending segment did not often prioritize Vietnam as a destination and Chinese visitors are not in the high-end category.

Therefore, the Chinese tourist market looks easy to attract again although it still seems to be a mystery why the lack of Chinese tourists is affecting the tourism industry in Vietnam. Mr. Phan Dình Hue said that Vietnam has advantages to offer when exploiting tourists in markets such as India, Japan, South Korea, and Indonesia. But so far, attracting visitors from densely populated markets like India has not been very effective. Even tourists from ASEAN countries have not been exploited well by Vietnam.

Mr. Hue emphasized that it is necessary to conduct specific market studies, develop appropriate promotions and at the same time prepare tourism infrastructure to meet the needs of target groups. Attracting Indian tourists has been talked about since last year, but so far, no plan is in place. It is true that this highly populous market is quite fond of Vietnam, but they have their own cultural requirements with one main feature being Indian foods, and not many provinces and cities in Vietnam have Indian restaurants.

We are always proud when Vietnam tourism wins international awards, but when we have an award in hand, we do not know how to turn it into a strength to attract more international tourists.

Decline in revenue

In 2022, domestic tourism was the bright spot that saved the entire tourism industry when the number of visitors for the whole year reached 101.3 million, an increase of 1.5 times compared to the target of 60 million visitors and also surpassing the peak year of 2019 before the Covid-19 pandemic. From this growth momentum, the tourism industry aims to welcome 102 million domestic visitors in 2023.

At first glance, the target of domestic tourist growth in 2023 compared to 2022 is not large, but many people think that this goal is not easy to achieve. Looking at the six days of the Lunar New Year, the tourism industry served nearly 9 million visitors, an increase of nearly 50% over the same period last year, but revenue fell sharply. Total revenue from tourism is estimated at VND 17,500 bln, down by 30% over the same period.

According to Mr. Nguyen Trung Khanh, General Director of Vietnam National Administration of Tourism, one of the reasons is due to the influence of the global economic recession and socio-economic fluctuation in the country, with low purchasing power as customers have limited their spending for medium and high-end services.

A large number of domestic tourists who can afford to spend a lot choose outbound tours to countries such as Thailand, South Korea, Singapore, and Malaysia. The difficult economy will be a factor that makes tourists reconsider spending on travel, but when domestic tourists are no longer interested in visiting destinations within the country then it is a matter of grave concern and needs reviewing of all tourism products.

Many destinations continue to provide the same boring and monotonous products and offer visitors what they have already and not what they actually need. Major tourist destinations across the country last year launched new products but still did not offer products that would be attractive to outside visitors. This summer too there does not seem much effort being made in creating products that will lure visitors to a destination again and again.