Vice Chairman, Vietnam Tourism Advisory Board. In the aftermath of the pandemic, Vietnam’s tourism sector shows promising signs of rebound, with 2023 numbers nearing pre-pandemic levels. However, challenges persist. Ken Atkinson OBE outlines actionable strategies, including visa policy reforms and targeted promotions, to bolster growth and maintain competitiveness against regional rivals.
In 2019, prior to Covid, the tourism sector was a key driver of economic growth, accounting for approximately 10% of GDP, and a major employer of labor. Domestic tourists numbered more than 85 million and international tourist arrivals reached a record level of 18 million. Together, tourism contributed over US $32 billion to the economy. As we know, and in common with all countries, the tourism sector was devastated because of COVID-19 travel restrictions and closed borders. Vietnam took a brave decision and was the first country in ASEAN to open its borders to international travelers in March 2022, with no quarantine requirements. Unfortunately, Vietnam has been slow to change its visa policies, allowing our surrounding neighbors and competitors in the travel and tourism space to gain an advantage. They have introduced more flexible visa policies and travel incentives, such as retirement visas (seen in Thailand, Malaysia, and Indonesia) and increased the number of visa exemptions targeting markets like China – a major outbound market.
In 2023, Vietnam received 12.6 million foreign visitors—over 50% higher than the projected numbers from VNAT (Vietnam National Administration of Tourism) and MCST (Ministry of Culture Sports and Tourism)—at the beginning of the year. However, the truly bright spot was the number of domestic tourists, which numbered 108 million. This surge significantly contributed to tourism revenues reaching US$27 billion, only US$5 billion less than the figures recorded in 2019. Over the last three months, foreign visitor arrivals have averaged 1.5 million per month. It’s plausible to anticipate achieving numbers that are similar to 2019 and potentially even surpassing them. Especially with the hopes that the market for inbound Chinese tourism will recover, particularly in the FIT (Fully Independent Travelers) segment.
Evolving Inbound Tourism Market
South Korea was the largest inbound market in 2023, with 3.6 million visitors compared to 4.2 million in 2019, whilst China had fallen to 30% of pre-Covid numbers with 1.7 million compared to 5.8 million in 2019.
Indian arrivals benefited from increased focus from national airlines, with the addition of new routes on Vietjet and Vietnam Airlines. Arrivals reached 392,000 in 2023—up 231% from 2019 levels. One of the major segments for Indian visitors was (and will continue to be) the wedding tourism segment, as there has been a lot of recent publicity about important weddings in Da Nang and Phu Quoc, with whole hotels being booked out for five to seven days. India is now a prime target market for inbound tourism.
The UK, France, and America were also good contributors to arrivals from outside of Asia.
What to expect in 2024 In the first two months of 2024, Vietnam received 3 million foreign tourists, similar to the corresponding period in 2019, but the mix of visitors has changed. South Korea has become the largest inbound market, taking over from China in 2019. In 2019, China and South Korea accounted for 55% of Vietnam’s inbound market, compared to 45% in the first 2 months of 2024. The number of inbound tourists from India is also 35% higher than in 2023.
Another significant development, starting in late 2023, were additional flights to Australia with direct flights to Brisbane and Perth as well as those to Sydney and Melbourne. Arrivals from Australia in 2023 topped 390,000 higher than 2019 by about 10k and this growth continued over the first two months of 2024 with a 28% increase over 2023 levels, at 97,000.
Outside of Asia, the UK, France, and America showed an average 25% growth over 2023 levels for the corresponding period.
We can see the tourism sector is set to return to pre-Covid levels, so what challenges might hinder surpassing or reaching the heights of 2019? In addition, what can the authorities do to increase these numbers and keep pace with our main regional competitors?
Actionable Objectives
➤ First and foremost, we need to expand the number of countries with Visa exemptions. In comparison to our regional competitors, we have the fewest unilateral visa exempt countries. The obvious countries for immediate exemption are all countries with Comprehensive Strategic Partnerships with Vietnam, European countries that are not already exempt, and New Zealand and Canada
➤ The Vietnam Tourism website Vietnam Travel needs to be updated urgently. It also requires regular reviews, which it does not seem to be getting under VNAT.
➤ Overseas tourism promotion offices needed to be fostered. There is a tourism development fund, but at the moment it seems difficult to access these funds. There is a strong case for offices in the UK, Australia, North America.
➤ There is growing potential for MICE travel, but Vietnam loses out because there isn’t a central point for people and companies looking to organize events. In addition, in contrast to Singapore, there is no support and incentives offered in Vietnam.
➤ Specialized sectors, such as golf and medical tourism, offer good opportunities, but again it is a question of promotion and facilitation.
The above are easy wins and not difficult to introduce. There are also longer-term initiatives that will take time to study; two proposals that are currently on the agenda of the Tourism Advisory Board are retirement travel (1-year Visas) and retirement visas (5-10 years). These will also help with the recovery of tourism and the housing market, especially in the coastal areas.
In conclusion, the tourism sector demonstrates resilience in its trajectory towards pre-Covid levels, with challenges and opportunities apparent. By strategically addressing visa policies, enhancing promotional efforts, and tapping into emerging markets, authorities can sustain momentum and remain competitive regionally.