Challenges Facing the Vietnamese Tourism Industry
27.05.2019

Spectacular Development

Vietnam welcomed 12.9 million international visitors in 2017, an annual increase of 30 per cent compared to 2016. The sector also served 73 million domestic visits and earned more than VND510 trillion (USD23 billion), contributing approximately seven per cent to the general GDP (Statistics from the Sum-up Conference on December 26, 2017 – Vietnam National Administration of Tourism).

The results have not only motivated the service industry’s development but also contributed to improving the position of Vietnamese tourism in the international arena.
The country ranked sixth out of the world’s 10 fastest growing tourist destinations for 2017, based on international arrivals. This is a considerable achievement reflecting the seven per cent increase of worldwide international tourist arrivals, the highest in seven years.

Transport businesses, accommodation units and travel agencies of Vietnam have ramped up positive applauses and feedback from visitors and quality voting events, which instill a better image of Vietnamese tourism. At the World Travel Awards 2017, Vietravel was voted as a “Top full-package travel agency of the world”. Also in this event, the World Travel Awards (WTA) also bestowed the “World’s top airline in Cultural authenticity” to the National Airline of Vietnam – Vietnam Airlines, while InterContinental Danang Sun Peninsula Resort was also voted for the third time as the “World’s Most luxurious resort”.

Boosts In Droves

The notable achievements of Vietnamese tourism in 2017 are not accidental. At the beginning of 2017, the government affirmed its objective to make tourism into a leading economic sector.

After launching the pilot electronic visa system for foreign tourists from 40 countries in early 2017, Vietnam decided to extend visa waivers to the United Kingdom, Germany, France, Italy and Spain, starting July 1st, 2017 and ending June 30th, 2018, for stays less than 15 days. Loosening the visa policy is a popular trend and most of the tourist destinations competing with Vietnam have increasingly administered visa exemption policies. The number of countries and territories whose citizens are exempt from visa policies are as follows: Thailand 61; Malaysia 55; Singapore 158; and Indonesia 169. In June 2017, after six revisions, the Tourism Law was officially passed, creating a simple, clear and transparent legal corridor for the industry.

Policy changes, improved infrastructure and widening flight routes have helped increase demand, boosting tourism property development. In 2017, 106 3-to-5-star lodgings were approved. Total accommodations in 2017 tallied 500,000 rooms.

According to the general director of Vietravel, Nguyen Quoc Ky, one important factor contributing to tourism growth is the technology boom that makes it easier for tourists to share their travelling experiences, as well as quickly access travel information such as accommodation and air ticket prices.

Sleeping Giant To Be Awakened

Although 2017 ended with remarkable tourism industry results, many experts note that Vietnam still misses the train lots of time. They liken the Vietnamese tourism industry to a sleeping giant waiting to be awakened. According to statistics by the General Statistics Office, although the number of tourists has grown dramatically, but total international arrivals are much lower than neighboring countries such as Thailand (40 million) and Malaysia (27 million).

A darker side of the rosy picture is that despite foreign visitors flocking to the country at record high, their spending is in a downward trend. Assoc. Prof. Doc. Pham Trung Luong from the Vietnam Tourist Education Association (VITEA) quoted two results from independent surveys of the General Statistics Office of Vietnam and the Vietnam National Administration of Tourism. The average spending of international tourists dropped from USD1,283 in 2004 to USD1,114 in 2014. In the meantime, in regional countries such as Malaysia or Thailand, spending on shopping and entertainment activities accounts for 40-50 per cent or even 60 per cent of the total travel expense, while in Vietnam the number is just approximately 20 per cent. And 50-60 per cent of the total travel expense is for accommodation and catering only.

One of the more fundamental reasons behind this low spending lies in the structural breakdown of international arrivals. It is estimated that in 2017, nearly one third of 12,9 million international arrivals to Vietnam were Chinese tourists whose average spending is as low as USD638. Among the 10 countries that poses the biggest average tourist spending in Vietnam last year, only South Korea has a large number of tourists coming to Vietnam – 2.4 million. The other countries ­– the U.S., Canada, Japan, Singapore, Australia, Germany, France, Russia and the U.K. – have only 3.5 million tourists coming to Vietnam in total.

Another reason for low tourist spending is that Vietnam has few shopping centers and most are on a small scale. The largest shopping malls in the world (at least 40ha) are mainly concentrated in China (five), Thailand (two), Philippines (three) and Malaysia (one). Vietnam has no shopping malls spanning at least 20ha when it comes to land size. In the league table of nearly 200 largest shopping malls in the world, Vietnam contributes only three names – Vincom Mega Mall (Royal City), AEON Mall Long Bien and AEON Mall Binh Tan, all of which occupy just over 10ha. Other shopping malls are mainly small, super small and medium-sized.

The 2018 goal of the Vietnamese tourism industry is 15-17 million international arrivals which is not out of reach. If in January, Vietnam welcomed 1.43 million international arrivals, this would be an increase of 42 per cent compared to the same period in 2016. But how to increase their spending and contribute a larger value to the Vietnamese tourism industry remains a thorny issue because in the short term structural breakdown of tourists will probably stay the same.

Source: Culture Magazine 

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