growing tourism in vietnam will help fund what

Reimagining tourism: How Vietnam can accelerate travel recovery

This article is part of the ongoing Future of Vietnam series, which explores key topics that will shape the country’s future growth. Separate articles discuss Vietnam's post-COVID-19 economic recovery , its longer-term growth aspirations  and ways for ecosystem players to win in Vietnam .

Download the Vietnamese translation  (PDF – 2.4MB).

For most players in the travel industry , the idea of vacationers lounging on a beach thousands of miles from home or sailing the high seas seems like a distant memory. Globally, countries experienced a decline of 35 to 48 percent in tourism expenditures last year compared with 2019 . Vietnam, with its ten-month international border closure, has not been exempted.

Tourism contributes a significant share to Vietnam’s GDP, and the economy has relied on domestic travel to buoy the sector. Local tourism resumed shortly after the country ended its relatively brief lockdown—just in time for 2020’s summer holiday season. Our analysis shows that demand for domestic travel in Vietnam will continue to grow and will recover relatively fast because of growing domestic spending: vacationers who cannot yet travel abroad are redirecting their money locally, at a higher level than in 2019.

As Vietnam’s travel sector continues to evolve and as prospects of international travel become increasingly feasible with vaccination rollouts, travel and tourism players have to adapt to survive. This article gives an overview of the state of Vietnam’s tourism sector, looks ahead at how the industry is likely to recover, and maps out a way forward for the country’s travel and tourism companies.

The state of travel in Vietnam today: Staying afloat

Vietnam’s tourism sector relies heavily on international travel, which plunged last year. International flights dropped 80 percent in October 2020 from the same time period a year earlier (Exhibit 1). Hotels, in turn, filled only 30 percent of their rooms.

The sharp drop in foreign travelers has had an outsize impact on tourism expenditures—and Vietnam’s overall economy—because they spend significantly more than their local counterparts. In 2019, a year in which the tourism industry accounted for 12 percent of the country’s GDP, 1 “Total revenue from tourists in the period of 2008–2019,” Vietnam’s Ministry of Culture, Sports and Tourism, May 29, 2020, vietnamtourism.gov.vn. international travelers made up only 17 percent of overall tourists in Vietnam, yet accounted for more than half of all tourism spending—averaging $673 per traveler compared with $61 spent on average by domestic travelers (Exhibit 2). The tourism sector created 660,000 jobs between 2014 and 2019, 2 Global Economic Impact & Trends 2020 , World Travel and Tourism Council (WTTC), June 2020, wttc.org. and this sharp expenditure dive has also stunted the country’s food and beverage and retail industries.

As a return to pre-COVID-19 levels of international tourism may be far off, the travel sector’s short-term revival could depend on local tourism. In 2019, Vietnamese tourists spent $15.5 billion, of which $5.9 billion flowed overseas. The majority of tourists are unable to leave the country, so they are looking domestically to scratch their travel itch. Travel companies should therefore rise to the occasion and capture value from this opportunity.

Looking ahead: Vietnam’s tourism industry can recover by 2024 if it implements a zero-case-first approach

Even with favorable tailwinds driven by domestic tourism, Vietnam will be dependent on international markets, which represent around $12 billion in spending. The majority of Vietnam’s international tourists come from Asian countries, with those from China, Japan, South Korea, and Taiwan accounting for around 80 percent of Vietnam’s foreign tourism spending. Vietnam’s strong economic ties with these countries could lead to a relatively fast tourism-industry recovery compared with other key tourist destinations in Europe and North America (Exhibit 3).

To make the most of these ties, Vietnam has been pursuing a zero-case-first strategy  since the start of the pandemic. This strategy is associated with markets in which COVID-19 transmission rates are low and—as a result—traveler confidence, at least on a domestic level, is relatively high.

By implementing the zero-case-first approach and taking into account Vietnam’s currently resilient local economy and proactive government campaigns, Vietnam’s tourism sector could recover to precrisis levels in 2024 (Exhibit 4).

Under this scenario, three paradigms are changing the way travel companies plan for Vietnam’s recovery:

• Shifts in tourism behavior could result in high-end domestic trips. With borders remaining closed for outbound travel, an increase in domestic luxury trips could occur as travelers reallocate their budgets. Of course, as noted above, the spending power of domestic tourists is weaker than that of foreign tourists, so this type of travel cannot completely fill the gap created by the lack of international travelers.
• Price cuts could be used to stimulate demand but aren’t sustainable for the long term. Many travel companies offered discounts in the immediate aftermath of the crisis in order to compete for business and stimulate demand. This may result in price dilution, especially for hotels across the country, and thus may not be a sustainable strategy for the long term.
• International travel bubbles have to be explored with caution. Currently, Vietnam has strict travel restrictions in place and allows only a select number of weekly international flights for travel by experts and diplomats, who are subject to mandatory quarantine on arrival. Vietnam needs to protect the status quo of having near-zero rates of COVID-19 cases and cannot risk opening its borders freely until herd immunity is reached, most likely through mass vaccinations. Thus, it could take some time before inbound foreign tourism returns at scale. In the meantime, there might be some opportunity to pursue more gradual and less risky measures. For instance, there have been discussions about establishing travel bubbles to allow travel between other countries with zero or near-zero transmissions, such as Australia, China, and Singapore. Travel companies should be prepared for two scenarios: one in which travel bubbles open up for inflows of international tourists, and the other in which domestic tourism remains the main driver of value.

Six actions to jump-start Vietnam’s tourism recovery

As travel companies reimagine their pathways to recovery, it is important to address the risks and anxieties related to COVID-19, while also solving for the pain points and trends that existed before the crisis. Below are six steps that Vietnam, and other countries operating in a zero-case-first market approach, can take as they embark on this road to recovery.

Focus on domestic travelers

Local demand can be revitalized by focusing on emerging destinations with the joint cooperation of local governments, online travel agencies, attractions, hotels, and airlines. Outdoor tourism that involves sunshine, beaches, mountains, and nature were among the top choices for Vietnamese travelers after the lockdown was lifted in mid-May last year, and airports at the two big travel hubs of Ho Chi Minh City and Hanoi were busy. To further tap into the domestic opportunity, operators will have to focus on affordability while striving to maintain high-quality products and experience.

Consider new pricing models to rebuild demand

Rebuilding demand and propelling volume, through discounts and presales, are key tactics during the early stages of recovery, especially for high-end operators that will not be able to tap into international demand for some time. However, the crisis has also forced operators to set aside their existing commercial playbooks. Historical booking patterns and trends normally used as key reference points for price optimization and yield management may no longer be as relevant. In this context of depleted demand, the paradox is that while price cuts are necessary, they could also be dangerous. In this light, companies can also explore opportunities to bundle products—which can offer upselling and cross-selling opportunities—as well as diversify their revenue stream and enhance premium product and pricing.

Five-star hotels in Hanoi and Ho Chi Minh City, for example, can provide full “staycation” packages for families, complete with home pickup by luxury car, a suite, and discounts on food and drinks. Tourism companies and hotels could work together to provide end-to-end travel packages that include flights, train tickets, limousine and bus services, and accommodations. Other companies could capitalize on booming demand for luxury and outdoor activities, such as yacht tours or farm stays.

As demand grows and confidence increases, operators will naturally be inclined to revert to a more dynamic pricing model, based on indicators such as hotel occupancy and domestic-air-travel passenger numbers—and how they grow toward achieving prepandemic levels. That will then give companies an opportunity to refine optimal pricing mechanisms, especially around key domestic holidays such as Tet (the Vietnamese New Year). This is not something that all countries are getting right. Many hotels in Germany , for example, missed pricing or revenue-management opportunities when demand for summer travel reemerged last year.

In the future, dynamic pricing models and the revenue-management function will need to be revisited, based on three new axioms: traveler segments will not be the same for a long period of time and will be a stronger and more diverse domestic mix; demand elasticities will be different, with health concerns playing a more influential role in decision making; and demand will remain very volatile, as observed in Vietnam during the Tet holiday this year, when a small spike in COVID-19 cases led to a big drop in bookings and travel demand throughout the country.

The time for digital (really) is now

Even before the pandemic, consumer reliance on digital for travel-related bookings had been growing. In 2018, online travel activity made up 19 percent of the total tours and activity market size. The pandemic has made the adoption of mobile and digital tools even more essential. Strategic collaborations—such as online travel agencies providing ticket-booking services via instant messaging and social-media platforms—could offer an opportunity for increased market penetration.

At the same time, travel companies should revamp their online touchpoints and experiences to improve customer experience. This is already starting to happen: the website of the Vietnam National Administration of Tourism (VNAT) has virtual tours for its most popular destinations, and some tour guides have organized real-time online tours for international customers. In addition, a commercial titled, “Why not Vietnam” aired on CNN in October 2020 to drive international traffic to the website, and on the domestic level, a reality show with the same name offered up weekly online travel photo contests to engage viewers.

Furthermore, companies could also think about placing digital tools in new places within the customer journey. They must recognize that factors promoting customer loyalty may have changed; near-term uncertainty may mean, for example, that the ability to cancel a reservation matters more than brand choice or price. Taking this into account, companies could empower customers to build their own itineraries using connected digital tools that make it easier for them to modify or cancel their plans. Solutions and policies that provide choice and control will help build the long-term trust and confidence necessary to get travelers back on the road and in the air.

Lay the groundwork for inbound demand

To capture early outbound demand, travel players could benefit from tracking the development of travel bubbles. This is especially relevant for Vietnam, as the majority of tourists to Vietnam are from nearby regions with strong economic ties and relatively low transmission rates. As stated earlier in this article, our analysis finds that nearby countries such as China, Malaysia, and Thailand could provide inbound expenditure growth of at least the CAGR between 2020 and 2025 (Exhibit 3).

In this context, travel companies will need to be flexible and nimble to capture early international-travel demand—and should be prepared to implement strict health and safety protocols that fulfill the stipulations of both domestic and destination security policies. That said, betting on travel bubbles cannot in itself be a strategy in the short term, as international arrivals are expected to remain low in 2021, and foreign demand will not return to 2019 levels before 2025.

Reinvent the traveler’s experience beyond accommodation—and ‘redistribute’ tourism investments toward unconventional and more diverse destinations

Globally, travelers are personalizing their trips through destination adventures. Tourism spending is shifting away from accommodation to activities—a trend that holds true for Vietnam. According to a report released by the General Statistics Office of Vietnam, Vietnamese travelers have allocated smaller budgets for accommodation in the past few years, accounting for approximately 15 percent of travel expenditures in 2019, down from 23 percent in 2011.

Instead of spending on luxury accommodations, travelers are saving money for destination experiences. Many tourists are booking activities before they travel, which suggests the in-destination experience has a bigger impact in the overall tourist decision-making process. Many adventure activities, such as cave discovery, highland hiking, isolated island stays, water sports, and food festivals have become the main reason for travelers to visit a destination in the first place.

In Vietnam, examples of efforts aimed at developing a distinct experience—rather than specific infrastructures—have emerged recently, such as the development of Ho Chi Minh City’s “night economy,” and diversified marketing from the Binh Duong province to spotlight its festivals as main attractions. VNAT is also participating in this effort, specifically making farm stays in mountainous areas an axis for the development of more indigenous experiences. Meanwhile, other regions are also marketing unique experiences: Dalat is promoting its hiking and camping attractions, Mui Ne its golf and water sports, and Ninh Binh and Phong Nha-Ke Bang their nature activities.

Local operators, who often lag behind big travel companies in terms of resources but are more agile in organizing personalized activities, can leverage increasingly popular online players to connect directly with customers and provide these options. International online travel agencies such as TripAdvisor, as well as closer-to-home players such as Traveloka  and Triip.me, have been building dedicated “experience” platforms to inspire users and allow them to choose the most suitable tours by providing a range of attractive options for destination adventures. Tourism companies could shift their efforts away from building resorts and selling sightseeing tickets to designing exceptional activities and leverage these platforms to take advantage of travel-experience trends.

Reimagine government’s role in tourism

In most countries, reinventing the tourism industry will involve industry professionals working in concert with industry groups and governments . Vietnamese tourism administrators have an exciting opportunity to reimagine their roles and lead the sector through recovery and beyond—first, by boosting domestic demand to make up for lost income from international travelers, and second, by promoting Vietnam’s image as a country that has managed the pandemic fairly well. To do this, three things should occur:

• In the short term, government and industry associations need to ensure the survival of operators. The government can experiment with new and sustainable financing options such as hotel revenue pooling, in which a subset of hotels operating at higher occupancy rates share revenue with others. This would allow hotels to optimize variable costs and reduce the need for government stimulus plans.
• In the midterm, government-backed digital and analytic transformation is necessary, especially to level the playing field for small and medium-sized enterprises, which made up more than 50 percent of travel suppliers in 2018. Encouraging and helping local operators adjust to the demand for online travel services is critical to help them stay competitive. Government can play a vital role as a matchmaker, connecting suppliers to distributors and intermediaries to create packages attractive to a specific segment of tourists, and then use tourist engagement to provide further analytical insights to travel intermediaries. This ability allows online travel agents to diversify their offerings by providing more experiences off the beaten track. The Singapore Tourism Analytics Network (STAN) and the Tourism Exchange Australia (TXA) platforms are examples of how this mechanism can work at scale.
• Finally, Vietnam has a solid opportunity to boost its stature as an adventure destination. Governments and industry associations can leverage the overall momentum of the country, as well as the expected return of international travel, to boost demand. Our analysis finds that in the Asia–Pacific region, adventure remains the leading travel trend searched by travelers, so Vietnam is well positioned to leverage this trend. Similarly, investments are also expected to shift away from mega development projects, such as Phu Quoc and Nha Trang, toward small- and medium-scale projects and cities that offer specialized offerings like sports tourism, medical tourism, and even agricultural tourism.

Travel players in Vietnam can seek to accelerate the industry’s recovery by capturing emerging growth opportunities domestically as they gradually rebuild international travelers’ confidence. Our six steps should set the stakeholders in Vietnam’s travel industry in the right direction and help them thrive in the tourism economy of the future .

Margaux Constantin is a partner in McKinsey’s Dubai office; Matthieu Francois is an associate partner in the Ho Chi Minh City office, where Thao Le is a consultant.

The authors wish to thank Celine Birkl, Bruce Delteil, and Alex Le for their contributions to the article.

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Vietnam tourism industry sees huge growth for 2023

The tourism sector plans to welcome 110 million tourist arrivals this year, including 8 million foreigners, for 650 trillion VND (27.39 billion USD).

Impressive post-pandemic growth

According to Nguyen Trung Khanh, General Director of the Vietnam National Administration of Tourism (VNAT), given the slow tourism recovery worldwide last year, domestic agencies took a series of measures which subsequently proved effective in contributing to the country’s overall development after the COVID-19 pandemic.

Since March 15 last year, tourism activities have resumed, and the sector has so far recorded encouraging results toward its targets.

Last year, about 3.66 million foreigners visited Vietnam, exceeding the yearly target by over 70%. The number of domestic travelers stood at 101.3 million, much higher than the 85 million arrivals posted in 2019, the year before the pandemic. As a result, the sector earned approximately 496 trillion VND (nearly 21 billion USD), down 34% from 2019.

The spectacular growth of the domestic market was a silver lining of the cloud, affirming its role in the development of the industry given difficulties facing international travel on a global scale.

With its tourism reopening, among the earliest in the region, Vietnam is rated by the World Tourism Organization (UNWTO) as one of the countries boasting the most open-door policy in the world.

According to the World Economic Forum’s 2022 report, the development capacity index of Vietnam’s tourism in 2021 ranked 52nd, up eight places compared to 2019, making the nation one of the three with the best growth in the world.

At the World Travel Awards 2022, Vietnam won 16 award categories in the world and 48 in Asia.

In the last five years, the country was honored as the world’s leading heritage destination three times, Asia’s leading destination four times, and Asia’s best golf tourism destination sixth time.

Immediately after its resumption of tourism activities, the Southeast Asian nation focused on promoting a communication programme, themed “Live fully in Vietnam”, to attract international visitors.

When Vietnam hosted the 31st Southeast Asian Games (SEA Games), the industry took advantage of the opportunity to strongly promote the image of a safe, friendly, and attractive destination to sports delegations and international tourists.

Expectations of breakthrough developments

Apart from such a “spectacular” comeback after being heavily affected by the pandemic, the industry still faces a number of difficulties and challenges.

World tourism is recovering but has yet to return to the level of 2019. Domestic tourism continues to grow but it is expected to slow in the coming months. In addition, many of Vietnam’s main tourist markets have not fully opened so far.

The sector has set a goal to host 110 million tourists this year, including 8 million foreigners, for 650 trillion VND.

It will focus on key tasks of announcing the planning of Vietnam’s tourism for 2021-2030 with a vision to 2045 after it is approved; as well as implementing the Vietnam tourism marketing strategy to 2030 and pending projects on developing smart and community-based tourism.

It also plans participation in a slew of international tourism promotion events such as the ASEAN Tourism Forum 2023 in Indonesia, the ITB Berlin tourism trade fair in Germany, and the World Travel Market London in the UK. Vietnam’s tourism will continue to be advertised on CNN and a number of other major international communication channels; and be introduced to its key markets like ASEAN, Northeast Asia, Australia, Europe, and North America via Vietnamese agencies, localities, and businesses. Meanwhile, with over 200 special events to be held, the Visit Vietnam Year 2023, themed “Binh Thuan – Green Convergence”, is a highlight of the year and a chance for the south-central province and other localities nationwide to promote tourism recovery and development./.

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Explained: The Slow Recovery of Vietnam’s Tourism Industry

While Vietnam’s regional tourism peers have rebounded to around 25 percent of their pre-pandemic tourist trade in 2022, Vietnam has fallen behind. This article explores the reasons why, what could happen next, and how foreign companies could potentially benefit.

As soon as it became clear that COVID-19 wasn’t just another cold but rather the makings of a devastating pandemic, Vietnam closed its borders. In fact, it was one of the first countries to make the move but was quickly followed by many others.

This was succeeded by a snap lockdown. Flights were grounded, restaurants were shut, and tourist hotspots like Hanoi’s Turtle Lake and Ho Chi Minh City’s Beer Street were closed for business.

But whereas that first initial lockdown was only brief for most businesses – in some places just a few weeks – for the tourism sector it was the start of a long period of layoffs, bankruptcies, and financial pain that has still not come to an end.

So what happened? How did it happen? What’s next? And where are the opportunities for foreign firms?

There was a pivot to domestic tourism

When the cities opened up again after that first, brief initial lockdown, the tourism landscape had changed considerably. With foreign tourists out of the equation, Vietnam’s tourism enterprises swiftly shifted their focus to domestic travelers.

But the Vietnamese do not travel like their foreign counterparts. Most notably, they have an average spend of about US$49 a day whereas foreign tourists typically spend more than double that – at an estimated US$117/day.

Furthermore, not only do Vietnamese tourists spend less, they also speak the native language and have an in-depth understanding of the locations they visit. This means that cultural traditions and practices that are a novelty for foreign tourists are just a normal part of everyday life.

As a result, the tourism sector had to pivot.

Specifically, with international arrivals more or less gone, foreign language skills, which had been a huge selling point for Vietnam’s tourism workers, were no longer needed.

This was, however, somewhat serendipitous. While tourism was in decline, cross-border digital services were on the way up. Technology companies in Vietnam were making bank selling video games, mobile phone applications, and a broad range of software online to people in lockdown all around the world. And, as their operations scaled up, so too did their customer service teams – and this meant hiring vast numbers of workers with foreign language skills.

At the time, this was somewhat fortuitous as it meant employers could avoid laying off workers, and workers were not out of work for too long. However, as the pandemic persisted and many tourism workers found new career paths, there was a risk of losing a generation of workers along with a huge volume of institutional memory.

Changes in immigration policy

But as the tourism sector was shrinking, another challenge was emerging.

An overhaul of Vietnam’s immigration policy was taking place and a number of key changes were being made affecting access and mobility.

Before COVID, most tourists passed through immigration either visa-free if they were from one of 25 countries that were permitted to do so, or with an e-visa valid for 30 to 90 days that they could get online.

During COVID-19, however, 90-day tourist visas were effectively done away with (except for people on package tours). Moving forward, tourists would need to apply to extend their visa if they wanted to stay for longer than the prescribed 30 days.

It is not exactly clear what the motivating factor was behind this change; ostensibly, it was a move to get foreigners in Vietnam onto the correct visas – before the pandemic it had been common for foreign workers to stay in the country on 90-day tourist visas, which they would renew by completing day-trips to Bangkok every three months.

With borders closed, however, it was difficult to ascertain the impact these changes would have. As a result, when they came into force in July of 2020, they passed by mostly unnoticed, hidden behind Vietnam’s border restrictions.

Attempts to open up in 2021

Early on in 2021, COVID-19, which had been remarkably contained for over a year, finally got its hooks into Vietnam, ravaging Vietnam’s cities, and sounding the death knell for many tourism businesses.

By the end of 2021, an estimated 90-95 percent of tourism businesses had closed their doors for good or had changed their core operations – the tourism sector was bleeding out.

But there was hope. Vaccinations rates were rising and a pilot program ‘travel bubble’ had been approved for the island of Phu Quoc off the south coast of Vietnam. In November, 209 Korean tourists would arrive at the island for a four-day, three-night package holiday – complete with COVID-19 safeguards.

But this was just a drop in the ocean when it came to the US$32 billion dollar tourism revenue hole created by the pandemic.

For the sector to be revived, travel restrictions would need to be done away with in their entirety.

That said, at the beginning of 2022, the dark clouds started to part for Vietnam’s tourism industry when on February 14, the decision was made to reopen Vietnam to tourism a month later, on March 15. The sigh of relief from the tourism industry was almost audible.

This optimism, however, was to be short-lived when just 10 days later Russia invaded Ukraine.

Russian sanctions hit Vietnam’s tourism industry

Vietnam’s tourism sector is heavily reliant on a few key locations, which are often frequented by specific nationalities. As a result, the absence of Russian travelers was expected to have a concentrated impact, rather than a significant one.

In coastal towns like Nha Trang, most signage, including menus and price lists, is written in Russian followed by English. Russian tourists have been a significant source of revenue for Vietnam’s coastal tourist towns, especially during the winter months when they seek warmer climates. There are also long standing ties from Russia’s Soviet days.

However, due to the global banking system’s exclusion of Russia and the country’s struggling economy under sanctions, holidaying abroad was becoming increasingly difficult and costly for Russians. Flights between Vietnam and Russia were also suspended, forcing Russian tourists to transit through third countries, making travel to Vietnam more expensive.

China maintains COVID-zero policy for most of 2022

But while the missing Russian tourists undoubtedly had an impact, it was the absence of Chinese tourists that would really hold Vietnam’s tourism sector back.

For most of 2022, Vietnam’s neighbor to the north stubbornly refused to reopen its borders, cutting off Vietnam’s biggest source of foreign tourists – in 2019, Chinese visitors accounted for more than a quarter of Vietnam’s international arrivals.

As a result, when borders finally reopened on March 15, the festivities were somewhat muted – Vietnam’s tourism sector was not out of the woods yet and would continue to struggle for some time to come.

One year later…

The response to Vietnam’s reopening from the international traveling community was lackluster at best. Despite heavy discounts on accommodation and flights, the rising dragon struggled to breathe life back into its tourism industry.

In 2022, Vietnam welcomed just 3.6 million tourists, around 18 percent of its pre-pandemic 19 million. For contrast, Thailand received 10 million tourists, 25 percent of its 2019 traffic (which was 40 million), and Indonesia counted 4.6 million guests, just over 28 percent of the 16 million arrivals it received in 2019.

Visa reform has been touted as one way to give the sector a much-needed boost. This has been acknowledged by the authorities. The Vietnamese government, last week, announced it would submit to the National Assembly a draft law that would extend visa-free periods to 30 days and bring back three-month tourist visas. The logic being that the longer tourists stay in Vietnam, the more money they spend.

China has also reopened its borders to select countries and Vietnam has made the list.

Russia, however, is another kettle of fish. Vietnam welcomed less than 40,000 Russian tourists in 2022 well below the pre-pandemic 650,000 it received in 2019. When these numbers will return to normal will depend on external factors well beyond Vietnam’s control.

That said, Vietnam will still have to deal with internal factors, including deep-seeded sustainability issues, in order to future proof its tourism sector.

In 2021, Euromonitor International ranked the Southeast Asian nation 96th out of 99 on its tourism sustainability index . Litter on Vietnam’s beaches and water pollution are becoming increasingly off-putting to foreign visitors.

This may be partly why its rate of return among tourists is relatively low. Just 5 percent of tourists return to Vietnam ; by comparison, in Thailand, that figure is around 50 percent. This will need to be addressed in the future to ensure the long-term survival of the sector.

For now, however, an air of optimism has returned once more, with the aforementioned visa changes and China’s reopening expected to give the sector the sorely needed leg-up it’s crying out for.

Opportunities for foreign investors

The economic cost of prolonged border closures is still weighing heavily on the tourism sector. The local media is filled with stories of hotels up for sale as owners struggle to make ends meet .

Famously, Vietnam’s ‘Gold Hotel’ (the Dolce by Wyndham) is up for grabs. Though it’s hoped that the hotel in Hanoi will bring its owners the hefty price of US$200 million, this is on the more expensive side and there are much lower priced options out there.

In coastal cities like Danang, almost finished construction projects stand dormant with developers out of money. Existing businesses are also cash starved and keen to restructure into joint-ventures. This may be a good opportunity for foreign hoteliers to enter the market at a discount.

Hospitality, restaurants, and bars have also gone in many places amid the dwindling demand. Investors who have the resources to wait could consider entering the market now and ride the wave of recovery when it inevitably comes.

Foreign tour operators might also consider this the ideal opportunity to try running tours to the Southeast Asian nation. With excess capacity in hotels and tourist services, heavy discounts may be on offer. They may also find the pre-COVID crowds vastly diminished offering visitors a somewhat calmer and more unique experience.

On that note, firms that wish to find out more about or gain access to these opportunities should contact industry advisors at Dezan Shira and Associates .

The future of Vietnam’s tourism sector

Vietnam’s tourism industry saw 2.69 million tourists in the first quarter of 2023, representing 33 percent of its targeted 8 million international arrivals by the end of the year. This has contributed around US$6.85 billion in revenue from accommodation and catering services.

While these numbers are still below pre-pandemic levels, the country is off to a promising start. The tourism sector appears to be responding well to global economic challenges, although it is starting from a relatively low point.

Moving forward, it is essential for the industry to continue its sustainable and resilient recovery. This will not only benefit the economy, but also ensure that foreign visitors can enjoy Vietnam’s tourist attractions for years to come.

Vietnam Briefing is published by  Asia Briefing , a subsidiary of  Dezan Shira & Associates . We produce material for foreign investors throughout Eurasia, including  ASEAN ,  China ,  India ,  Indonesia ,  Russia  & the  Silk Road . For editorial matters please contact us  here  and for a complimentary subscription to our products, please click  here .

Dezan Shira & Associates  provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at  [email protected]  or visit us at  www.dezshira.com

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Vietnam tourism is continuously among the highest growth group in the world

From the beginning of 2022 until now, Vietnam has continuously been in the group of destinations with the highest growth in the world, with a growth rate of 50%-75%.

Information from the General Department of Tourism (Ministry of Culture, Sports and Tourism) on August 1 said that in the 7 months of 2022, our country welcomed 954,000 international visitors, an increase of nearly 9 times over the same period last year. 2021. With this result, the average monthly growth rate in the past 7 months will reach 62%/month.

Of the top 10 sending markets of Vietnam, 9 are from Asia and the Pacific region, the rest are from China. In which, Korea is the leading market for sending customers, followed by the US market.

In 10 markets, Southeast Asia has up to 4 markets: Cambodia, Singapore, Thailand and Malaysia. Markets from Europe, although the number of visitors is not large, but the growth rate is very high, led by the UK, followed by France and Germany.

According to the Vietnam National Administration of Tourism, the tourism business is “warming up” following the recovery momentum.

Specifically, in the first half of 2022, the Vietnam National Administration of Tourism has appraised and granted 312 new licenses to international travel businesses (an increase of 286 compared to 2021), 65 licenses changed, and 38 licenses revoked.

By the end of June 2022, there were 2,415 international  travel businesses  nationwide. Currently, there are 1,060 domestic travel businesses that have been licensed by localities.

The country currently has about 33,330 tourist accommodation establishments with 667,000 rooms, of which there are 215 5-star hotels with 72,000 rooms, 334 4-star hotels with 45,000 rooms…

The prospect of business recovery in the tourism sector is also clearer when the number of businesses returning to operation increases. The reopening of tourism has created jobs for workers.

According to the Vietnam National Administration of Tourism, from the beginning of 2022 until now, Vietnam has continuously been in the group of destinations with the highest growth in the world, with a growth rate of 50%-75%.

Search volume for tourist accommodation establishments in Vietnam in July 2022 reached 100 points, 5.9 times higher than at the beginning of March 2022 (17 points).

Compared to the same period in 2021, the number of searches from international markets about Vietnam’s tourism in July 2022 increased by more than 1,200%.

The top 10 most searched countries for  tourism in Vietnam  are the US, Australia, Singapore, India, Japan, Korea, UK, Malaysia, Germany and Thailand, respectively.

Meanwhile, the number of Vietnamese people searching for foreign travel in July 2022 is still high at 780% compared to the same period last year and will continue to increase when international tourism activities globally are increasing. recovery trend.

This shows that close destinations are a priority trend of Vietnamese tourists in the context of post-pandemic recovery.

The Vietnam National Administration of Tourism and the Tourism Development Support Fund coordinate with businesses, airlines and destinations to plan promotions to quickly recover the international tourist market to Vietnam. focusing on markets near Northeast Asia, Southeast Asia and Europe.

Specifically, Vietnamese tourism will participate in the JATA International Tourism Expo (JATA Tourism Expo) in Japan from September 22-25. This is the leading international tourism fair in the region, focusing on attracting Japanese tourists, one of the leading markets of Vietnam’s tourism.

Next is the World Travel Market (WTM) in the UK from November 7-9. This is also the world’s leading major international travel fair, gathering major partners from all over the world.

Besides, there are festivals and programs to introduce Vietnam tourism in key markets (Korea, Japan, Taiwan, Europe, North America, Australia…).

Domestically, Vietnam’s tourism will be introduced at the ITE HCMC International Travel Expo (International Travel Expo) in Ho Chi Minh City from September 8-10. This is one of the two largest annual international tourism fairs in Vietnam.

After that, the Greater Mekong Subregion tourism promotion program within the framework of the Mekong Tourism Forum (MTF) took place in Hoi An, Quang Nam from October 9-14. This is considered the largest tourism promotion event in the framework of cooperation in the Greater Mekong Sub-region…/.

Source: Vietnamnet.vn

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The Impact of Tourism on the Economy of Vietnam

Vietnam has emerged as a thriving tourist destination in recent years, a bustling country known for its breathtaking landscapes, rich cultural heritage, and warm hospitality. With each passing year, the number of visitors flocking to this Southeast Asian gem continues to rise, contributing significantly to the country’s economic prosperity. In fact, tourism has become a driving force behind Vietnam’s growth and development, fueling job creation, foreign exchange earnings, and infrastructure development. As we delve into the impact of tourism on the economy of Vietnam, it becomes evident that this industry plays a crucial role in shaping the nation’s economic landscape and supporting a multitude of sectors. From enchanting beach resorts to bustling cities and serene rural landscapes, Vietnam’s allure has captivated the hearts of travellers worldwide, propelling the country towards new horizons of economic success.

Overview of Vietnam’s Tourism Industry

A. historical background of tourism in vietnam.

Vietnam’s journey as a sought-after tourist destination can be traced back to its post-war era in the late 1980s when the country opened its doors to international visitors. Since then, Vietnam has experienced a remarkable transformation, evolving from a war-torn nation into a captivating and vibrant tourist hotspot. The government’s strategic focus on tourism development, combined with the country’s natural beauty, cultural heritage, and friendly locals, has played a pivotal role in attracting tourists from all corners of the globe.

B. Current state and growth of the tourism industry

Vietnam’s tourism industry has witnessed exponential growth in recent years, firmly establishing itself as a prominent player in the global tourism market. The number of international arrivals has soared, with record-breaking figures year after year. From pristine beaches and breathtaking mountains to bustling cities and UNESCO World Heritage sites, Vietnam offers various attractions catering to various travellers’ interests.

C. Statistics on tourist arrivals, revenue, and job creation

The statistics surrounding Vietnam’s tourism industry paint a compelling picture of its significance. According to the  Vietnam National Administration of Tourism  (VNAT), the country welcomed a record-breaking 18 million international visitors in 2019, marking a substantial increase compared to previous years. This influx of tourists has resulted in a significant boost to the economy, contributing to the overall revenue generated by the sector. Additionally, the growth of tourism has created a multitude of employment opportunities, directly and indirectly benefiting various sectors such as hospitality, transportation, retail, and local businesses.

Economic Benefits of Tourism in Vietnam

A. contribution to gdp, analysis of tourism’s direct and indirect contribution to gdp.

The tourism industry in Vietnam plays a vital role in driving economic growth and making substantial contributions to the country’s GDP. Let’s examine the specific areas where tourism has a direct and indirect impact on the economy:

Accommodation Sector

The hospitality industry, including hotels, resorts, and guesthouses, is a significant contributor to GDP. In 2019, the accommodation sector alone generated VND 211.7 trillion (approximately USD 9.2 billion), accounting for 4.1% of Vietnam’s GDP [1]. The construction and ongoing operation of accommodation facilities further stimulate economic activity, providing employment opportunities and fostering the development of related sectors.

Transportation Sector

The transportation industry is closely linked to tourism, as it facilitates the movement of tourists within the country. In 2019, the total contribution of the transportation sector to Vietnam’s GDP was VND 161.8 trillion (approximately USD 7 billion), accounting for 3.1% of GDP [1]. This includes revenue generated from domestic and international air travel, road transport, and other transportation services.

Food and Beverage Sector

Dining and culinary experiences are an integral part of the tourism experience. In 2019, the food and beverage sector contributed VND 101.8 trillion (approximately USD 4.4 billion) to Vietnam’s GDP, representing 2% of the total GDP [1]. This includes revenue from restaurants, cafes, street food vendors, and other dining establishments catering to both domestic and international tourists.

Entertainment and Recreation Sector

Tourism stimulates demand for entertainment and recreation activities. In 2019, the entertainment and recreation sector contributed VND 84.4 trillion (approximately USD 3.7 billion) to Vietnam’s GDP, accounting for 1.6% of the total GDP [1]. This includes revenue generated from attractions, cultural performances, adventure sports, and other recreational activities.

Beyond the direct contributions, tourism has a significant multiplier effect on various other sectors of the economy. For example:

• Retail Sector: Tourism stimulates demand for souvenirs, local products, and handicrafts. The retail sector benefited from VND 25.1 trillion (approximately USD 1.1 billion) in revenue generated by tourists in 2019, contributing to the overall GDP [1].
• Banking and Financial Services: Tourists require banking and financial services such as foreign currency exchange and financial transactions. These activities generated revenue for the banking and financial sector, contributing to the overall GDP.
• Cultural Heritage Preservation: Tourism contributes to the preservation and maintenance of cultural heritage sites. Investments in restoration, conservation, and cultural management activities support related industries and contribute to GDP.

Statistics on tourism’s share of GDP and its growth over the years

Tourism’s share of Vietnam’s GDP has consistently increased, reflecting the industry’s growing importance. In 2019, the direct contribution of travel and tourism to GDP was 6.6%, amounting to VND 338.2 trillion (approximately USD 14.7 billion) [2]. When considering the indirect contributions and the broader impact on the economy, tourism’s  total contribution to GDP reached 9.2% , equivalent to VND 886.6 trillion (approximately USD 38.6 billion) [2].

These figures demonstrate the substantial impact of tourism on Vietnam’s economy, from the direct revenue generated by tourism-related sectors to the indirect effects on other industries. As the tourism industry continues to grow and attract more visitors, its contribution to GDP is expected to increase, further driving economic development and prosperity in Vietnam.

B. Employment and Job Creation

Examination of tourism-related employment opportunities.

The tourism industry in Vietnam is a significant source of employment, offering diverse job opportunities for the local workforce. From hotel staff and tour guides to restaurant workers and artisans, tourism-related businesses create a wide range of jobs that cater to various skill levels and interests. This sector has the potential to absorb a significant portion of the labour force, including those in rural and remote areas, thereby reducing unemployment and improving livelihoods.

Discussion of the sectors benefiting from tourism (hospitality, transportation, retail, etc.)

Beyond direct employment in the tourism industry, various sectors benefit from the ripple effect of tourism. The hospitality sector experiences growth, necessitating the development of hotels, resorts, and accommodations to cater to the increasing demand. Similarly, transportation services, including airlines, taxi services, and tour operators, witness expansion due to the rising number of travellers. Additionally, the retail sector experiences a surge in demand for locally-made products and souvenirs, leading to economic opportunities for artisans and small businesses.

C. Foreign Exchange Earnings

Explanation of how tourism generates foreign currency for vietnam.

Tourism serves as a significant source of foreign exchange earnings for Vietnam. International visitors spend money on accommodation, dining, shopping, and various tourist activities, resulting in the inflow of foreign currencies into the country. These expenditures help generate foreign exchange reserves, contributing to the stability of Vietnam’s economy and its ability to finance imports, repay external debts, and maintain a favourable balance of payments.

Analysis of the Role of international tourists in boosting foreign exchange reserves

International tourists play a crucial role in boosting Vietnam’s foreign exchange reserves. Their spending power contributes directly to the country’s balance of payments and supports the stability of the Vietnamese currency. The continuous growth in international arrivals and their expenditure patterns reinforce Vietnam’s position as an attractive destination for global travellers, strengthening its economic standing on the international stage.

With a solid understanding of the overview of Vietnam’s tourism industry and the economic benefits it brings, we can now delve deeper into the multifaceted impact of tourism on the country’s economy. In the following sections, we will explore the specific contributions to GDP, employment generation, and foreign exchange earnings, shedding light on the remarkable influence this industry has on Vietnam’s economic landscape.

Investment and Infrastructure Development

A. overview of investment in the tourism sector.

Investment in Vietnam’s tourism sector has played a pivotal role in its development and growth. Both domestic and foreign investors have recognized the immense potential of Vietnam as a tourist destination and have made significant investments to capitalize on the opportunities it presents. These investments encompass a wide range of areas, including accommodation, transportation, attractions, and tourism-related services, contributing to the expansion and enhancement of the overall tourism infrastructure.

B. Major infrastructure projects supporting tourism (airports, hotels, transportation networks)

Vietnam has undertaken major infrastructure projects to support and accommodate the growing tourism industry. The development of modern airports, such as Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City, has improved international connectivity and facilitated the inflow of tourists. Additionally, the construction of hotels and resorts, ranging from boutique establishments to world-class luxury properties, has catered to the diverse needs and preferences of visitors. Furthermore, transportation networks, including highways, railways, and domestic flight routes, have been expanded and upgraded to enhance accessibility and connectivity within the country.

C. Impact on local businesses and entrepreneurial opportunities

The thriving tourism industry in Vietnam has created significant opportunities for local businesses and entrepreneurs. Small and medium-sized enterprises (SMEs) have flourished, providing a wide range of goods and services to meet the demands of tourists. Local artisans, craftsmen, and farmers have also found new markets for their products, showcasing Vietnam’s rich cultural heritage and traditional craftsmanship. The growth of tourism has spurred entrepreneurial initiatives, empowering individuals and communities to showcase their talents, preserve their cultural identities, and create sustainable livelihoods.

Rural and Community Development

A. discussion of the role of tourism in promoting rural and community development.

Tourism plays a crucial role in promoting rural and community development in Vietnam. Beyond the bustling cities, travellers are increasingly seeking authentic and immersive experiences in rural areas. This trend has opened up opportunities for rural communities to actively participate in tourism by offering homestay accommodations, traditional handicraft workshops, cultural performances, and guided tours. Tourism has helped to diversify income sources, reduce rural-urban migration, and revitalize local economies.

B. Case studies highlighting successful community-based tourism initiatives

Several successful community-based tourism initiatives have emerged in Vietnam, demonstrating the positive impact of tourism on rural communities. Examples include the traditional craft villages in Hoi An, where visitors can engage in hands-on activities and support local artisans, and the ethnic minority homestays in Sapa, where tourists can experience the unique traditions and lifestyles of minority groups. These initiatives have not only generated income for the communities but also fostered cultural preservation, pride, and a sense of identity.

C. Socio-economic benefits for local communities (employment, income generation, cultural preservation)

The socio-economic benefits of tourism extend to local communities in various ways. Tourism-related activities create employment opportunities for community members, especially in rural and remote areas where alternative job prospects may be limited. Income generation through tourism helps to alleviate poverty, improve living standards, and enhance access to education and healthcare. Additionally, tourism acts as a catalyst for cultural preservation, as communities strive to showcase their traditional customs, rituals, music, and cuisine to visitors, fostering a sense of pride and continuity in their heritage.

Challenges and Potential Risks

A. over-tourism and its impact on local communities and natural resources.

The rapid growth of tourism in certain popular destinations has led to concerns of over-tourism, resulting in overcrowding, strain on infrastructure, environmental degradation, and cultural commodification. It is crucial to strike a balance between tourism growth and the preservation of local communities, their way of life, and the natural resources that attract visitors. Sustainable tourism practices, destination management strategies, and visitor dispersal efforts are vital to mitigate the negative impacts of over-tourism.

B. Environmental sustainability and responsible tourism practices

As Vietnam experiences a surge in tourism, environmental sustainability becomes a pressing concern. Sustainable tourism practices are essential to protect and preserve the country’s diverse ecosystems, natural attractions, and biodiversity. Measures such as waste management, energy conservation, promoting eco-friendly transportation options, and supporting responsible wildlife encounters contribute to maintaining the ecological integrity of tourist destinations.

C. Vulnerability to external factors (natural disasters, global crises)

The tourism industry is vulnerable to external factors, including natural disasters and global crises. Vietnam, being susceptible to typhoons, floods, and other climatic events, must develop robust disaster preparedness and response plans to ensure the safety and security of tourists. Moreover, global crises such as pandemics, economic downturns, or political instability can significantly impact tourist arrivals and revenue. Diversification of tourism products, proactive risk management, and the implementation of crisis management strategies are crucial in mitigating potential risks.

Policies and Initiatives

A. overview of the strategies and policies supporting tourism.

These initiatives include improving infrastructure, enhancing visitor experiences, streamlining visa procedures, and promoting investment in the tourism sector. The government’s commitment to creating a favourable business environment and facilitating public-private partnerships has been instrumental in attracting investments and fostering tourism development.

B. Discussion of initiatives to promote sustainable tourism practices

Sustainable tourism practices are at the forefront of the government’s agenda. Initiatives aimed at promoting responsible tourism and sustainable development include campaigns to raise awareness among tourists and industry stakeholders about environmental conservation, cultural preservation, and community engagement. Certification programs and guidelines for sustainable tourism have been introduced to encourage industry players to adopt environmentally and socially responsible practices.

C. Public-private partnerships and collaboration for tourism development

Collaboration between the public and private sectors is vital for the sustainable development of the tourism industry. Public-private partnerships play a significant role in infrastructure development, marketing and promotion, skills training, and destination management. By leveraging the expertise, resources, and knowledge of both sectors, these partnerships can drive innovation, improve service quality, and ensure the long-term viability of Vietnam’s tourism industry.

In conclusion, the impact of tourism on the economy of Vietnam cannot be overstated. The thriving tourism industry has brought about substantial economic benefits, contributing to the country’s GDP, creating employment opportunities, and boosting foreign exchange earnings. The investments in tourism infrastructure have enhanced accessibility and visitor experiences, while local businesses and entrepreneurs have flourished, capitalizing on the growing demand for goods and services.

Tourism has also played a crucial role in promoting rural and community development, empowering local communities, and  preserving cultural heritage . Through community-based tourism initiatives, rural areas have experienced economic diversification, reduced poverty, and cultural revitalization. However, challenges such as over-tourism, environmental sustainability, and vulnerability to external factors require careful management and strategic planning to ensure the long-term sustainability of the industry.

With the commitment to responsible tourism and the implementation of practical measures, Vietnam is well-positioned to harness the potential of tourism while preserving its natural and cultural treasures.

As Vietnam continues to evolve as a premier tourist destination, it is essential to strike a balance between economic growth and sustainable development. By prioritizing responsible tourism practices, preserving the environment, and respecting local communities, Vietnam can secure a prosperous future for its tourism industry and ensure that the economic benefits are enjoyed by all stakeholders.

Through strategic planning, collaboration, and a commitment to sustainable tourism, Vietnam can continue to enchant visitors with its beauty, culture, and warm hospitality while reaping the rewards of a thriving tourism economy well into the future.

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How to tackle overtourism in vietnam.

• 13 Mar 2020

Proudly contributed by  Ton

This article is contributed by  Discova , a global destination management specialist in line with 2020 PATA’s theme  ‘Partnerships for Tomorrow’  Please visit this  link  for more information about the initiative.

How to Tackle Overtourism in Vietnam

After a decade of booming tourism, Vietnam finds itself at a crossroads where it has to decide on how to deal with the increasing side effects brought by exponential growth in the industry. Bach, Discova’s Regional Manager for Vietnam, China and Hong Kong, takes a deep dive into overtourism in Vietnam and shares his expert insights on how to manage the issue sustainably.

Sprinting versus Marathon Running

In the last decade, tourism in Vietnam has skyrocketed, catapulting the country among the top destinations to visit in the region and making tourism a key player in the Southeast Asian country’s economic development. In numbers this signifies a growth of more than 11 million foreign visitors (jumping from four to 15 million) in only ten years. Equally, trips taken by domestic travellers have increased fourfold in that same period, averaging around 80 million per year as stated in a 2019  World Bank report  on Vietnam’s Tourism Development.

The changes are palpable. Over the last decade, Vietnam has been attracting millions of visitors from short-haul markets with lower spending power. We’ve seen massive growth in boutique and international hotels whilst new highways and better roads have helped cut down travelling time and make remote places more accessible. Weekend night markets have quickly become popular attractions in key tourist cities and, with hotel and tourism jobs in high demand, there’s been a significant increase of young people enrolling into English language and hospitality courses at universities.

Generally speaking, I believe that tourism has had many positive effects on Vietnam: job creation, poverty reduction, improved infrastructure as well as an increased awareness of and investment in sustainable development, to name a few. But, as an avid runner, I’m aware of the massive difference between sprinting and long-distance running. Despite the numerous beneficial developments tourism has brought in such a short time, I feel like it’s time to rethink and, instead of focussing on maximising speed, start working on techniques to stay in the game for the long run.

The Flip Side

If you try run a marathon at full speed, your energy levels will be quickly used up; this same theory applies to tourism development. After a decade of sprinting ahead, it comes as no surprise that Vietnam’s muscles become increasingly strained and its ligaments torn. In fact, in their recent report, World Bank placed Vietnam at a tipping point “where continued growth, if not well managed, could have adverse economic, environmental, and social impacts.”

So, what injuries are we looking at?

One of the more visible challenges of overtourism in Vietnam is its toll on the environment. Coupled with poor waste management, many destinations in Vietnam are suffering from air and land pollution, water shortage, deforestation and damage to wildlife. Case in point is the famous Ha Long Bay where an excess of tourist boats – which receives 6 million visitors per year – has damaged its marine wildlife. Similarly, on Phu Quoc Island, an increasingly popular beach destination, waste management infrastructure is not able to keep up with the growing number of visitors and pollution is not an uncommon sight in some parts of the island.

Equally, overtourism in Vietnam can put some pressure on the local communities. Rising prices force people to leave; cultural heritage sites become tourist attractions; historical buildings make way for new hotels; rural villages now fight with traffic congestion; once-curious locals become less welcoming. Take Sapa in Northern Vietnam as an example. With new hotels, restaurants and shops cropping up at a fast pace, the tourist hub slowly overshadows the harmonious ethnic minority cultures and communities.

In turn, all of this negatively affects the traveller’s experience. Overcrowded destinations, poor customer service and pollution tarnish a holiday, contributing to low rate of repeat visits and deterring first-time visitors due to negative word-of-mouth.

Steps towards a More Sustainable Future

Tourism is an important driver of Vietnam’s economy, so putting a stop to it or even limiting it is not a solution. Rather, it’s about looking at the various symptoms and trying to find ways to manage them in a more sustainable way, allowing for long-term growth. In general, Vietnamese people are very welcoming towards foreigners, they love to interact and introduce travellers to our unique culture, and we want this exchange to continue and prosper.

One cause of overtourism in Vietnam is a lack of product and visitor source market diversity. What we as destination management companies can do to balance this out is to help develop ‘secondary’ tourist attractions whilst addressing a greater spectrum of travellers at the same time. However, to succeed all stakeholders need to pull on the same end of the rope. Without authorities investing into necessary infrastructure it’s challenging to incorporate new destinations into the portfolio. Another focus should be improving visitor flow management which could help entice travellers to travel off-season or choose alternative destinations – an aspect where the backing of travel agents is crucial. A great example is Pu Luong Nature Reserve, a stunning area in Northern Vietnam and a fantastic alternative to the nearby, increasingly touristy, Mai Chau Valley. Outdoor adventurers find a variety of accommodation, ranging from basic homestays to boutique lodges, and available activities include hiking, cycling and rafting.

To manage the growing demand effectively requires a skilled local tourism workforce. In the last few years, however, Vietnam’s number of qualified tourism professionals hasn’t been able to keep up; authorities and tour operators can help alleviate this issue by providing training and internship opportunities to tourism workers.

As already highlighted, tourism brings plenty of positive development including ‘the multiplier effect’ which indicates the indirect benefits of other sectors linked to tourism. In their report, World Bank revealed that “the multiplier effect of tourism spending on the total economy, however, is lower in Vietnam compared to regional and global averages.” To maximise the secondary effects on Vietnam’s economy and development, we need to strengthen the local value chain by, for instance, partnering with local communities to create long-term projects. At Discova, our range of local life tours encourage travellers to engage with the community, support local businesses and enjoy meaningful experiences with the local culture and people.

To make a lasting change, we need our authorities to strengthen, enforce and invest in policies that target land use, building codes, waste management, as well as the protection of environmental and cultural heritage. Tour operators and agents can work with suppliers who comply with strict regulations whilst travellers can make a difference by choosing sustainable operators as well as incorporating green practices – refillable water bottles, public transport – into their travels.

When training for a marathon, runners need to commit, train regularly, increase incrementally, eat well, sleep enough and take time to recharge their energy. With tourism development, it’s not so different. To ensure long-term growth and a healthy future, a holistic and sustainable approach is necessary.

Source:  https://www.pata.org/how-to-tackle-overtourism-in-vietnam/?utm_source=PATAeNews&utm_campaign=92e591d52f-EMAIL_CAMPAIGN_2018_11_13_06_01_COPY_01&utm_medium=email&utm_term=0_cb0a475a64-92e591d52f-241595185#sthash.rBrShNIu.dpuf

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As Vietnam reopens, villagers seek more sustainable tourism

Villagers in remote Dien Bien Phu are looking to traditional homestays to encourage tourism without overdevelopment.

Dien Bien Phu, Vietnam – A remote, mountainous province in northwest Vietnam, Dien Bien Phu is famed for the climactic eponymous battle of 1954 in which the Viet Minh resistance army defeated superior French forces to help bring an end to a century of colonial rule.

Today, the province is known for something far less glorious: grinding poverty. Though Vietnam’s economy has grown by an average 6.17 percent annually over the past two decades, 45 percent of Dien Bien Phu’s population remains mired in poverty, according to the General Statistics Office of Vietnam, making it the country’s second-poorest province.

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For ethnic minorities, poverty rates are even higher, a symptom of the province’s rugged landscape and cyclical flooding combined with poor access to education, transportation, finance and health care.

Tourism has long been viewed as a way to alleviate poverty in Vietnam. In 2019 alone, the country welcomed 18 million visitors, accounting for 9.2 percent of gross domestic product. But tourism has also been blamed for straining infrastructure and precipitating environmental and cultural decay.

Sapa in neighbouring Lao Cai province is a textbook example. Surrounded by photogenic rice terraces and jagged mountain tops, the town first gained global attention as a trekking destination in the 1990s. Then investors swooped in and built increasingly large and more generic hotels, turning Sapa into a perpetual construction site ensconced in dust.

“Sapa was so, so beautiful the first time I went there in 1995,” Tuan Nguyen, the director of Hanoi-based motorcycle tour company Moto Tours Asia, told Al Jazeera.

“Now it’s awful. I don’t take my customers there any more. Instead, we go to villages in Dien Bien Phu where traditional culture and architecture of minority hill tribes have been preserved.”

Now, as Vietnam welcomes back foreigners after two years of pandemic-related border closures, Nguyen and his partners are spearheading an initiative to promote eco-tourism, fight poverty and preserve Indigenous culture in Dien Bien Phu: a network of village homestays set in traditional stilt houses where 100 percent of the profits will go to locals who own and operate them.

The initiative was inspired by Phuan Doc Homestay, a property with 40 beds in Che Can, a Hmong ethnic minority village half an hour northeast of Dien Bien Phu City.

With dreamy rice terraces and misty mountain views, ambling creeks and winding country roads, a nearby lake teeming with birdlife and every structure in the village adhering to traditional designs, Che Can appears cut straight out of an oil painting.

Adding to the colour, the locals still wear traditional Hmong dress: colourful skirts, blouses and leg wraps made from natural fibres like silk and hemp, shirts with batik designs and elaborate headdresses.

“Besides being super beautiful, Che Can is just a really unique experience [that involves] being able to live with the Hmong and see their way of life,” Catherine Ryba, a traditional healer from the United States who lives in Hanoi, told Al Jazeera. “It gives you a different view of Vietnam and lets you get out of the tourist bubble.”

Phuan Doc Homestay, one of the two in the village, was established in 2018 by Lovan Duc with assistance from the Center for Community Development (CCD), a local subsidiary of the charity Care International.

“At the beginning, I didn’t know anything about tourism,” Duc told Al Jazeera. “But CCD educated me about foreigners and took me to see many different homestays. That gave me some ideas and with the $13,000 they gave me in loans and grants, I was able to build a guesthouse of my own.”

Before the pandemic, Duc and his family hosted about 300 guests per month, a third of whom were foreigners. Today they accommodate only half that, all domestic tourists. They charge people $5 a night and another $12 for meals – feasts of spring rolls, barbecued chicken, fish stew, roast duck, rice, dipping sauces, tropical fruits and rice wine that everyone eats together.

They also rent out bicycles for $3 and offer guided tours to the nearby former underground hideout of Vo Nguyen Giap, aka Red Napoleon, the ingenious Vietnamese general who masterminded the victory over the French at Dien Bien Phu.

“The income is much better than working in a rice field,” Duc said. “We now have enough money to pay for our children to go to high school and even go to university if they get good enough grades.”

Nguyen’s plan is to select eight to 10 picturesque villages and direct capital from the provincial government and NGOs to build two or three traditional homestays in each.

He also plans to provide training to locals on how to work with tourists and curate nature-based activities like trekking, bicycle riding, kayaking and tours of historical sites, and bring in volunteers from overseas to tutor locals in English. Once the network is established, he envisages that tourists will stay for two or three nights in each village, and spend an average of 10 days in Dien Bien Phu, immersed in village life.

“We don’t see this as a way to make a profit,” Nguyen said. “It is a five-year plan to empower local communities with jobs and long-term economic opportunities that will help preserve ethnic culture and architecture instead of wiping it out.”

“We want the local people to benefit instead of rich people from Ho Chi Minh City or Hanoi turning up to build big hotels like what happened in Sapa,” he added. “I have a friend there who sold her family’s land 10 years ago to an investor for $20,000. Now it’s worth $1m and she really regrets selling it. The money’s all gone now and she has nothing to show for it.”

What’s to stop a landowner in a scenic area like Che Can, once it makes a mark on the tourist trail, from doing the same?

Duc said that while he had never previously considered the downsides of tourism, he was confident his village would not suffer the same fate as Sapa.

“Everyone in my village has signed a contract stating that they are only allowed to build traditional wooden houses and that they can only be two stories high,” he said. “The community in our village is very strong. People cannot just decide what to do on their own.

Duc said he was also not worried about competition from his neighbours and supported Nguyen’s efforts to build on his village’s success.

“I want them to experience the success that my family has had so they can have better incomes and better lives.”

Travel, Tourism & Hospitality

Tourism industry in Vietnam - statistics & facts

Vietnam as an emerging tourist destination, how does the vietnamese government promote tourism, key insights.

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• Premium Statistic Number of ITAs in Vietnam 2023, by means of transport
• Premium Statistic Number of international tourist arrivals (ITA) in Vietnam 2023, by country
• Premium Statistic Number of domestic tourist arrivals in Vietnam 2010-2023
• Premium Statistic Number of Vietnamese traveling abroad 2010-2022

Number of international visitor arrivals in Vietnam from 2016 to 2023 (in millions)

Number of ITAs in Vietnam 2023, by means of transport

Number of international tourist arrivals (ITA) in Vietnam in 2023, by means of transportation (in 1,000s)

Number of international tourist arrivals (ITA) in Vietnam 2023, by country

Number of international tourist arrivals (ITA) in Vietnam in 2023, by country and territory (in 1,000s)

Number of domestic tourist arrivals in Vietnam from 2010 to 2023 (in millions)

Number of Vietnamese traveling abroad 2010-2022

Number of people traveling abroad in Vietnam from 2010 to 2022 (in 1,000s)

Accommodations

• Premium Statistic Number of tourist accommodations in Vietnam 2019-2023
• Premium Statistic Number of 5-star tourist accommodations in Vietnam 2018-2023
• Premium Statistic Number of 4-star tourist accommodations in Vietnam 2018-2023
• Premium Statistic Number of rooms in tourist accommodations in Vietnam 2019-2023
• Premium Statistic Number of rooms in 4-star tourist accommodations in Vietnam 2018-2023
• Premium Statistic Number of rooms in 5-star tourist accommodations in Vietnam 2018-2023
• Premium Statistic Number of visitors serviced by accommodation establishments Vietnam 2018-2022
• Premium Statistic Revenue of accommodation establishments Vietnam 2017-2022

Number of tourist accommodations in Vietnam 2019-2023

Number of tourist accommodation establishments in Vietnam from 2019 to 2023 (in 1,000s)

Number of 5-star tourist accommodations in Vietnam 2018-2023

Number of five-star tourist accommodations in Vietnam from 2018 to 2023

Number of 4-star tourist accommodations in Vietnam 2018-2023

Number of four-star tourist accommodations in Vietnam from 2018 to 2023

Number of rooms in tourist accommodations in Vietnam 2019-2023

Number of rooms in tourist accommodations in Vietnam from 2019 to 2023 (in 1,000s)

Number of rooms in 4-star tourist accommodations in Vietnam 2018-2023

Number of rooms in four-star tourist accommodations in Vietnam from 2018 to 2023 (in 1,000s)

Number of rooms in 5-star tourist accommodations in Vietnam 2018-2023

Number of rooms in five-star tourist accommodations in Vietnam from 2018 to 2023 (in 1,000s)

Number of visitors serviced by accommodation establishments Vietnam 2018-2022

Number of visitors serviced by accommodation establishments in Vietnam from 2018 to 2022 (in millions)

Revenue of accommodation establishments Vietnam 2017-2022

Total revenue of accommodation establishments in Vietnam from 2017 to 2022 (in trillion Vietnamese dong)

Travel agencies

• Premium Statistic Number of international travel agencies Vietnam 2019-2023
• Premium Statistic Number of domestic visitors serviced by travel agencies Vietnam 2015-2022
• Premium Statistic Number of foreign visitors serviced by travel agencies Vietnam 2015-2022
• Premium Statistic Revenue of travel agencies Vietnam 2015-2022

Number of international travel agencies Vietnam 2019-2023

Number of international travel agencies in Vietnam from 2019 to 2023

Number of domestic visitors serviced by travel agencies Vietnam 2015-2022

Number of domestic visitors serviced by travel agencies in Vietnam from 2015 to 2022 (in millions)

Number of foreign visitors serviced by travel agencies Vietnam 2015-2022

Number of international visitors serviced by travel agencies in Vietnam from 2015 to 2022 (in millions)

Revenue of travel agencies Vietnam 2015-2022

Total revenue of travel agencies in Vietnam from 2015 to 2022 (in trillion Vietnamese dong)

Online travel

• Premium Statistic Online revenue share of the travel & tourism market in Vietnam 2019-2028
• Premium Statistic Online travel agency usage Vietnam 2023, by age group
• Premium Statistic Most used online travel agencies Vietnam 2023
• Premium Statistic Reasons for using an online travel agency Vietnam 2023

Online revenue share of the travel & tourism market in Vietnam 2019-2028

Online revenue share of the travel & tourism market in Vietnam from 2019 to 2028

Online travel agency usage Vietnam 2023, by age group

Online travel agency usage in Vietnam as of June 2023, by age group

Most used online travel agencies Vietnam 2023

Leading online travel agencies in Vietnam as of June 2023

Reasons for using an online travel agency Vietnam 2023

Reasons for using an online travel agency in Vietnam as of June 2023

Consumer perspectives

• Premium Statistic Leading reasons to travel Vietnam 2023
• Premium Statistic Favorite travel places and activities Vietnam 2023
• Premium Statistic Preferred domestic accommodation budget per night Vietnam 2023
• Premium Statistic Preferred Asian travel destinations Vietnam 2023
• Premium Statistic Common issue about traveling Vietnam 2023

Leading reasons to travel Vietnam 2023

Leading reasons for travelling among consumers in Vietnam as of April 2023

Favorite travel places and activities Vietnam 2023

Preferred travel places and activities among consumers in Vietnam as of April 2023

Preferred domestic accommodation budget per night Vietnam 2023

Preferred budget for domestic accommodation per night among consumers in Vietnam as of April 2023 (in Vietnamese dong)

Preferred Asian travel destinations Vietnam 2023

Most popular Asian travel destinations among consumers in Vietnam as of January 2023

Common issue about traveling Vietnam 2023

Most common concerns about traveling among tourists in Vietnam as of January 2023

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Vietnam's tourism development strategy until 2030 creates momentum for sustainable development

With the goal that by 2025, Vietnam will become an attractive destination, striving to be in the group of three leading countries in tourism development in Southeast Asia and 50 countries with the world's leading tourism competitiveness. , in which all 14 criteria of tourism competitiveness increased, in line with the requirements of sustainable development. Specifically, total revenue from tourists: reaching 1.700 - 1.800 trillion VND, equivalent to 77 - 80 billion USD, an average growth of 13 - 14% per year; Direct contribution to GDP is 12-14%.

Thereby creating about 5,5-6 million jobs, of which there are about 2 million direct jobs, an average growth of 12-14%/year. Regarding tourists: Striving to welcome at least 35 million international visitors and 120 million domestic visitors, maintaining the average growth rate of international visitors from 12-14%/year and domestic tourists from 6 - 7%/year.

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Striving to 2030 tourism is really a spearhead economic sector and sustainable development. Vietnam has become a particularly attractive destination, belonging to the group of 30 countries with the world's leading tourism competitiveness, fully meeting the requirements and goals of sustainable development. Total revenue from tourists: Reaching 3.100 - 3.200 trillion VND, equivalent to 130 - 135 billion USD, growing on average 11 - 12%/year; direct contribution to GDP reached 15-17%. Create about 8,5 million jobs, including about 3 million direct jobs, average growth of 8-9%/year.

Regarding tourists, strive to receive at least 50 million international arrivals and 160 million domestic arrivals; maintaining the average growth rate of international visitors from 8-10%/year and domestic visitors from 5-6%/year.

From the perspective of tourism development, tourism will really become a spearhead economic sector, creating a driving force to promote the development of other industries and fields, making an important contribution to the formation of the modern economic structure. Sustainable and inclusive tourism development, on the basis of green growth, maximizing tourism's contribution to the United Nations' sustainable development goals; effectively manage and use natural resources, protect the environment and biodiversity, actively adapt to climate change, and ensure national defense and security. To attach importance to the development of cultural tourism, to associate tourism development with conservation and promotion of heritage values ​​and national cultural identity.

To develop tourism in the direction of professionalism, quality and efficiency; promote the application of achievements of the 4.0 industrial revolution and focus on developing high-quality human resources.

Simultaneous development of international tourism and domestic tourism; promote local exports through tourism; strengthen linkages in order to bring into play the advantages of natural and cultural resources; develop diversified tourism products, expand the market and improve the competitiveness of Vietnam's tourism.

In particular, developing and implementing a number of key tasks such as tourism development planning in accordance with the law on planning and tourism and the target program of tourism infrastructure development in line with the investment plan. medium term 5 years.

Thematic tourism development programs and projects on markets, products, human resources, promotion and advertising, focus on mobilizing resources to implement a number of breakthrough tasks. Regarding infrastructure development: Speeding up the progress of new investment in Long Thanh and Chu Lai airports...; upgrading and expanding airports in key and potential areas, first of all at airports such as Noi Bai, Da Nang, Tan Son Nhat, Cam Ranh, Phu Quoc, Phu Bai, Van Don...; invest in building a number of international tourist seaports and road routes connecting with national tourist areas. About creating convenience for tourists.

Creating the most favorable conditions for visa procedures for international visitors, applying the electronic visa policy to all international visitor markets; drastically improve the process of controlling entry, exit and customs procedures at the border gates by air, by road and by sea, ensuring the fastest and most convenient way for international visitors to Vietnam. Invest in the formation of a number of synchronous, quality, large-scale and world-class tourism clusters. Smart tourism development.

Accelerate the application of digital technology to connect to support and increase the experience for tourists; building a smart tourism ecosystem to connect tourism service infrastructure; strengthen the application of green and clean technology in service business establishments and tourist accommodation establishments. Community-based tourism development: Having policies to support resources for people to participate in community-based tourism development; associate cultural tourism development with community life experiences to improve economic and cultural life, contribute to poverty reduction for people, especially in remote, border and island areas ./.

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THE VOICE OF VIETNAM - VOV World

Vietnam’s tourism set for full recovery in 2024.

Data released by the Vietnam Tourism Association (VITA) showed that last year the sector served 105 million domestic tourists, 12-13 million foreign visitors, and 5 million outbound Vietnamese tourists.

Local tourism associations have established cooperation connections and linked tourist destinations to potential markets.

Trieu Thi Tinh, Deputy Director of Ha Giang province’s Department of Culture, Sports and Tourism, said that last year Ha Giang achieved breakthrough growth, welcoming more than 3 million tourists, received several international awards, including "Asia's Leading Emerging Tourism Destination 2023", and was ranked the 25 th in the New York Times list of 52 best places to travel in 2023.

Tinh attributed the results last year to increasing connections with localities, associations, and tourism businesses, and integrated promotion and advertising activities into events held locally, nationally, and internationally.

“Nationwide tourism promotion activities introduced the public to Ha Giang tourism. Last year, we attracted 14 international travel agents to operate in Ha Giang,” Tinh noted.

This year, to match pre-COVID growth, the Vietnam Tourism Association will increase linkage and cooperation activities, implement regional and inter-regional coordination mechanisms and action plans, develop products, markets, and services, and promote brand building, said Association President Vu The Binh.

“First, as many countries have not yet recovered, we must work harder to promote tourism. Second, because the current demands of tourists are different from the pre-pandemic demands, the tourism sector must create more suitable products,” said Binh.

He added that reality shows that more than half of the tourism industry's human resources have moved to other industries, so last year the sector worked hard to get them back and this year we must continue to do so.

“Finally, we need to sell more tourism products in foreign markets,” Binh concluded.

This year Vietnam's tourism industry hopes to match its achievements in 2019 and attract 20 million foreign visitors.

Nguyen Cong Hoan, Head of VITA’s Communications Section and CEO of the Flamigo Redtours Company, said that as Vietnam is known as a beautiful, peaceful, safe, and friendly country, this will help attract foreign tourists.

“To reach the goal of 20 million visitors will take a lot of work – product development, promotion, visa incentives, and coordination with the aviation sector. In addition to attracting foreign visitors, we still have to focus on the domestic market,” said Hoan.

In order for Vietnamese tourism to prosper in 2024, VITA, tourism businesses, and local tourism associations plan to create new tours, like "Wood Fish Village" tour, "Touring Luc Ngan rural area", and “Journey in the footsteps of Emperor-Monk Tran Nhan Tong”. Efforts will be intensified to minimize plastic waste and protect the environment for sustainable development.

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Tourism development in Viet Nam: Boom and Bust?

Viet Nam, with its picturesque landscapes and vibrant culture, has emerged as a popular tourist destination in recent years. Between 2015 and 2019, the number of international tourists visiting Viet Nam surged from 7.9 million to 18 million a year 1 . However, the rapid pace of development at some of its iconic sites is raising concerns about the long-term sustainability of the tourism industry.

This article examines the impacts of tourism in two of Viet Nam’s most popular destinations, Phu Quoc and Ha Long Bay. Comparisons are drawn with similar cases in The Philippines and Thailand, where popular tourist destinations had to been closed to allow them to recover.

This “boom and bust” pattern is shown in a model proposed by Professor Richard Butler in 1980. According to this model, destinations go through a series of stages, including exploration, involvement, development, consolidation, stagnation, and decline, as they evolve and mature. In essence, Butler warns that tourist sites have the propensity to self-destruct if not well managed.

Increasing evidence suggests that Phu Quoc, Ha Long Bay, and several other sites in Viet Nam have reached the stagnation stage, with the potential for significant declines in high-paying international visitor arrivals.

Fifteen years ago, Phu Quoc was virtually untouched but has since been transformed by resorts, roads, and one of the world’s longest cable cars.  The problem is not the new infrastructure per se; rather the absence of accompanying environmental regulations and investments.

In line with their own corporate policies, some hotels implement stringent recycling and energy efficiency standards. But these “islands” of high-performance cannot offset poor environmental management elsewhere. There is nothing hotels can do when trash piles up on the beaches overnight to the horror of their guests. According to the Phu Quoc District People’s Committee, on average, the island generates about 180 tons of waste every day 2 . Most of this ends up in a huge landfill in the north of the island. The island plans to get rid of this landfill by burning 200,000 tonnes of waste at a cost of VND55 billion (US$2.3 million) 3 .

As is so often the case, the question isn’t conservation vs. development, it’s high-quality development vs. poor-quality development. And the problem isn’t lack of technology or finance. Tourism in Phu Quoc generates hundreds of millions of dollars a year in tax revenue. The decisions are essentially political. When a manager of a 5-star resort was asked if he should meet with the district government to discuss the existential threat to his business posed by marine plastics, he replied “What’s the point? No one cares.”

But people do care. Nine of the 10 most recent TripAdvisor reviews of Phu Quoc’s Bai Tam Sao beach describe the area as “full of rubbish”, “dirty” and “mismanaged”. This is having an impact on visitation. In May 2023, the Kien Giang Province Department of Tourism announced the suspension of all international flights to Phu Quoc due to low demand 4 . While officials blame this decline on the global economic situation, it is likely that pollution has made things much worse.

Ha Long Bay, a UNESCO World Heritage Site, faces similar problems.

In 2020, it was estimated that Ha Long Bay produces about 28,000 tonnes of plastic waste a year, out of which 5,000 tonnes end up in the sea 5 . The accumulation of plastic waste, untreated sewage discharge, and industrial pollution has triggered an online backlash. TripAdvisor reviews label the bay as “spoiled” with “oil slicks everywhere” and should be “boycotted” 6 . Social media is arguably accelerating the Butler model: increasing visitation during the “development” stage, and having the opposite effect when pollution directly impacts the visitor experience, as is now the case.

Experience from The Philippines and Thailand is instructive. In 2018, Thailand closed Maya Bay in Phi Phi Islands due to damage caused by over-tourism. The Philippine government temporarily shut down Boracay Island for the same reason. These closures have allowed the coastal ecosystems to recover and for large investments in water and solid waste management infrastructure.

Why is Viet Nam struggling to cope with the negative impacts of tourism? One way to understand this is through what political economists call the “collective action problem”. This refers to a situation where individuals or groups face a conflict between their personal interests and the collective interest. It occurs when people hesitate to contribute to a common goal (such as reduced pollution) because they anticipate that others may not do the same, leading to a worse outcome for everyone.

Overcoming the collective action problem requires building strong institutional frameworks, bolstering collaboration between stakeholders, and promoting awareness of the consequences of pollution. In the case of Phuc Quoc and Ha Long Bay, it requires government to ensure that investments in essential solid waste management infrastructure are made and that environmental regulations are consistently enforced.

In Phu Quoc and Ha Long Bay, local authorities could require hotels to install “closed loop” water management systems or ban single-use plastic bags and enforce strict waste separation at source, which would greatly reduce solid waste generation. It may also be necessary to reduce visitor numbers based on an objective assessment of the site’s carrying capacity.

But none of these solutions will happen at scale without government leadership. This is what will determine if these sites follow the Butler trajectories of “rejuvenation” or “decline”. 

1   https://data.worldbank.org/indicator/ST.INT.ARVL?end=2018&locations=VN&start=2015

2   https://vietnamnews.vn/economy/426069/phu-quoc-struggles-to-control-land-speculation.html

3   https://e.vnexpress.net/news/environment/phu-quoc-to-burn-200-000-tons-of-trash-over-two-years-4612863.html

4  https://e.vnexpress.net/news/travel/international-flights-to-phu-quoc-suspended-due-to-low-demand-4600951.html

5   https://vietnamnews.vn/Society/864569/vietnamese-firms-to-tackle-plastic-pollution-in-ha-long-bay.html

6   https://www.tripadvisor.com/ShowUserReviews-g293923-d1968469-r893638049-Halong_Bay-Halong_Bay_Quang_Ninh_Province.html

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How to Tackle Overtourism in Vietnam

• June 4, 2020
• Asia , Overtourism , Responsible Travel , Vietnam

After a decade of booming tourism, Vietnam finds itself at a crossroads where it has to decide on how to deal with the increasing side effects brought by exponential growth in the industry. Bach, Discova’s Regional Manager for Vietnam, China and Hong Kong, takes a deep dive into overtourism in Vietnam and shares his expert insights on how to manage the issue sustainably.

Sprinting versus Marathon Running

In the last decade, tourism in Vietnam has skyrocketed, catapulting the country among the top destinations to visit in the region and making tourism a key player in the Southeast Asian country’s economic development. In numbers this signifies a growth of more than 11 million foreign visitors (jumping from four to 15 million) in only ten years. Equally, trips taken by domestic travellers have increased fourfold in that same period, averaging around 80 million per year as stated in a 2019  World Bank report  on Vietnam’s Tourism Development.

The changes are palpable. Over the last decade, Vietnam has been attracting millions of visitors from short-haul markets with lower spending power. We’ve seen massive growth in boutique and international hotels whilst new highways and better roads have helped cut down travelling time and make remote places more accessible. Weekend night markets have quickly become popular attractions in key tourist cities and, with hotel and tourism jobs in high demand, there’s been a significant increase of young people enrolling into English language and hospitality courses at universities.

Generally speaking, I believe that tourism has had many positive effects on Vietnam: job creation, poverty reduction, improved infrastructure as well as an increased awareness of and investment in sustainable development, to name a few. But, as an avid runner, I’m aware of the massive difference between sprinting and long-distance running. Despite the numerous beneficial developments tourism has brought in such a short time, I feel like it’s time to rethink and, instead of focussing on maximising speed, start working on techniques to stay in the game for the long run.

The Flip Side

If you try run a marathon at full speed, your energy levels will be quickly used up; this same theory applies to tourism development. After a decade of sprinting ahead, it comes as no surprise that Vietnam’s muscles become increasingly strained and its ligaments torn. In fact, in their recent report, World Bank placed Vietnam at a tipping point “where continued growth, if not well managed, could have adverse economic, environmental, and social impacts.”

So, what injuries are we looking at?

One of the more visible challenges of overtourism in Vietnam is its toll on the environment. Coupled with poor waste management, many destinations in Vietnam are suffering from air and land pollution, water shortage, deforestation and damage to wildlife. Case in point is the famous Ha Long Bay where an excess of tourist boats – which receives 6 million visitors per year – has damaged its marine wildlife. Similarly, on Phu Quoc Island, an increasingly popular beach destination, waste management infrastructure is not able to keep up with the growing number of visitors and pollution is not an uncommon sight in some parts of the island.

Equally, overtourism in Vietnam can put some pressure on the local communities. Rising prices force people to leave; cultural heritage sites become tourist attractions; historical buildings make way for new hotels; rural villages now fight with traffic congestion; once-curious locals become less welcoming. Take Sapa in Northern Vietnam as an example. With new hotels, restaurants and shops cropping up at a fast pace, the tourist hub slowly overshadows the harmonious ethnic minority cultures and communities.

In turn, all of this negatively affects the traveller’s experience. Overcrowded destinations, poor customer service and pollution tarnish a holiday, contributing to low rate of repeat visits and deterring first-time visitors due to negative word-of-mouth.

Steps towards a More Sustainable Future

Tourism is an important driver of Vietnam’s economy, so putting a stop to it or even limiting it is not a solution. Rather, it’s about looking at the various symptoms and trying to find ways to manage them in a more sustainable way, allowing for long-term growth. In general, Vietnamese people are very welcoming towards foreigners, they love to interact and introduce travellers to our unique culture, and we want this exchange to continue and prosper.

One cause of overtourism in Vietnam is a lack of product and visitor source market diversity. What we as destination management companies can do to balance this out is to help develop ‘secondary’ tourist attractions whilst addressing a greater spectrum of travellers at the same time. However, to succeed all stakeholders need to pull on the same end of the rope. Without authorities investing into necessary infrastructure it’s challenging to incorporate new destinations into the portfolio. Another focus should be improving visitor flow management which could help entice travellers to travel off-season or choose alternative destinations – an aspect where the backing of travel agents is crucial. A great example is Pu Luong Nature Reserve, a stunning area in Northern Vietnam and a fantastic alternative to the nearby, increasingly touristy, Mai Chau Valley. Outdoor adventurers find a variety of accommodation, ranging from basic homestays to boutique lodges, and available activities include hiking, cycling and rafting.

To manage the growing demand effectively requires a skilled local tourism workforce. In the last few years, however, Vietnam’s number of qualified tourism professionals hasn’t been able to keep up; authorities and tour operators can help alleviate this issue by providing training and internship opportunities to tourism workers.

As already highlighted, tourism brings plenty of positive development including ‘the multiplier effect’ which indicates the indirect benefits of other sectors linked to tourism. In their report, World Bank revealed that “the multiplier effect of tourism spending on the total economy, however, is lower in Vietnam compared to regional and global averages.” To maximise the secondary effects on Vietnam’s economy and development, we need to strengthen the local value chain by, for instance, partnering with local communities to create long-term projects. At Discova, our range of local life tours encourage travellers to engage with the community, support local businesses and enjoy meaningful experiences with the local culture and people.

To make a lasting change, we need our authorities to strengthen, enforce and invest in policies that target land use, building codes, waste management, as well as the protection of environmental and cultural heritage. Tour operators and agents can work with suppliers who comply with strict regulations whilst travellers can make a difference by choosing sustainable operators as well as incorporating green practices – refillable water bottles, public transport – into their travels.

When training for a marathon, runners need to commit, train regularly, increase incrementally, eat well, sleep enough and take time to recharge their energy. With tourism development, it’s not so different. To ensure long-term growth and a healthy future, a holistic and sustainable approach is necessary.  

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Vietnam Tourism Development Fund launched

Vietnam Tourism Development Fund (VTDF) was officially launched on April 1, within the framework of the 2022 Vietnam International Travel Mart (VITM) in Hanoi.

Along with the Vietnam Tourism Association and Vietnam National Administration of Tourism, the VTDF co-hosted the Vietnam Tourism Forum themed “The recovery of Vietnamese tourism – new orientation, new action” and several activities on the side-line of the VITM.

The VTDF President said it is an off-budget state financial fund that operates under the model of a one-member limited company.

Accordingly, the State holds 100% of its charter capital and the Ministry of Culture, Sports and Tourism is the representative of the owner.

The launching of the VTDF aims to partially address the problem of limited resources for tourism promotion and development, as well as create a more flexible mechanism in line with current trends towards improving the scale, frequency and quality of tourism activities.

The VTDF’s operation is expected to boost the recovery and development of the tourism industry following over two years of being affected by the COVID-19 pandemic.

The fund will also contribute to promoting the State’s role in guiding and promoting tourism development activities, strengthening public-private cooperation and creating more resources for tourism promotion and development.

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[In Pictures] Hanoi’s streets brilliantly decorated for the Liberation of the South and National Reunification Day celebration

Hai Phong: 2024 'Do Son - Destination for Four Seasons' Festival opens

Da Nang ready for peak tourism season

Visiting Da Nang’s commune of Hoa Bac during ripe rice season

Vietnam welcomes over 6 million international visitors in four months

Carnaval Ha Long 2024 kicks off

In pictures: Vietnam’s largest hot-air balloon festival in Tuyen Quang

Vietnam continues to reboot tourism next year - Viet Nam National Authority of Tourism

The Vietnamese tourism sector will embark on the tourism recovery and development scheme under the 2022-2023 socio-economic development programme next year.

Russian tourists holding vaccine passports arrive in Khanh Hoa (Photo: VNA)

It will also strive to complete the 2021-2030 tourism system planning with a vision to 2045 and submit it to the Government for approval, develop smart tourism via digital transformation toward the goal of serving 65 million visitors, including 5 million foreigners, and earning 400 trillion VND (17.39 billion USD) in revenue . Data from the General Statistics Office as of December 29 showed that foreign arrivals in the country rose by 14.2 percent month-on-month in December as Vietnam has been piloting the serving of foreigners since November and international commercial flights have been restored. Due to the COVID-19 pandemic, the number of foreign visitors to Vietnam slumped by 95.9 percent annually to 157,300, most of them were experts and technical workers working for projects in Vietnam. Almost all tour guides became unemployed while the capacity of lodging facilities only reached about 5-10 percent this year. In face of such, the sector worked closely with ministries, agencies and localities to fulfill the dual goals of fighting the pandemic and restoring tourism in the new situation. As a result, tourism activities in several localities, including Hanoi, Da Nang, Lam Dong, Quang Ninh, Ninh Binh and Thanh Hoa, have begun to revive. In November, the first foreign tourists arrived in Quang Nam, Phu Quoc and Khanh Hoa under a pilot programme to welcome them back after a long hiatus. By late December, the country was expected to host 3,000 – 3,500 foreign visitors. A month later, more foreigners from the Republic of Korea, Russia, Uzbekistan, Kazakhstan, Thailand and India will come. In 2021, Vietnam was honoured as the “Leading destination in Asia”, the “Leading sustainable tourism destination in Asia”, the “Best golf destination in Asia and the world”, and the “Best yachting destination in Asia”. Its hotels, resorts, destinations, restaurants, tour agencies and airlines also won a number of awards. The Vietnam National Administration of Tourism also earned the title of Asia's Leading Tourist Board 2021 by the World Travel Awards.

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Can ecotourism offer funding solutions for vietnam’s national parks.

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Cat Tien National Park, Vietnam. Flickr

JEJU, South Korea (24 September, 2012)_Maintaining fragile ecosystems while addressing the development needs of a growing population are often seen as conflicting goals, but booming tourism in one of Vietnam’s national parks could help prove that it is possible to achieve both.

“Cat Tien National Park draws thousands of domestic tourists each year and a smaller but substantial number of international tourists, providing an important source of revenue,” said Luke Preece, a contributing author of Evidence-based Conservation: Lessons from the Lower Mekong and PhD student at Charles Darwin University.

The national park is one of Vietnam’s largest, containing diverse species of flora and fauna, as well as some of the world’s most threatened mammals, including gaur, a species of large bison, and banteng, a type of wild cattle. Cat Tien National Park’s (CTNP) environmental significance was cemented when it joined the Ramsar list of wetlands of international importance and became a UNESCO biosphere reserve , a state-established site aimed at promoting sustainable development through scientific and local community efforts.

The increase in tourism is responsible for an increased accumulation of waste, causing both surface and ground water pollution that is damaging important wetland and grassland areas.

Situated close to Ho Chi Minh City, CNTP has become an increasingly popular destination for city-based eco-tourists, as is evident in the substantial investment given to establish accommodation, restaurants, guides and tours.

Many organisations have been involved in Cat Tien’s ecotourism projects, including the World Wildlife Fund (WWF), which aims to keep local traditions alive by marketing local foods, training tour guides, selling handicraft and setting up homestays.

By providing locals with potential sources of income and incentives to maintain natural habitats, it is argued that tourism is one of the best ways in which conservation can be reconciled with development objectives.

Nevertheless, the authors warn that this growing industry must be carefully monitored and controlled in order not to exacerbate its negative impacts on the park.

“The increase in tourism is responsible for an increased accumulation of waste, causing both surface and ground water pollution that is damaging important wetland and grassland areas,” said Nguyen Huyhn Thuat, an Environmental Education Officer at CTNP and co-author of the book.

As the number of visitors rises annually, so too does the revenue generated by the park. This income, however, is not always spent as initially intended, sometimes ending up compensating for insufficient government funds by paying for routine park maintenance.

“In the Lower Mekong in general, there is a major issue of poor transparency, so funds for conservation are known to be spent ‘informally’,” Preece says.

“Some funds go to the local community to support projects, patrolling of the forest and monitoring. The funds that do go to local communities are relatively small compared to the budget, and the funds only go to a few select villages.”

Such a heavy promotion of ecotourism, however, can have unexpected environmental costs.

Recent confirmation that the last of CTNPs Javan rhinoceros, one of the world’s rarest animals, has been poached into extinction in Vietnam sent shockwaves through the scientific community. Despite CTNP being one of the best funded national parks and protected area systems in the Lower Mekong, CIFOR’s Terry Sunderland, co-editor and contributing author of the book, says a combination of political and economic factors were to blame for the “major conservation failure”.

“Substantial investment was made in park infrastructure for ecotourism, seen as a source of revenue for the long-term financing of the National Park, rather than spent on direct monitoring and protection of the Javan rhino,” he wrote .

Prioritising development goals over conservation ones is also evident in the weak political will to enforce conservation legislation which, in turn, allowed cartels trading in wild animals to continue circumventing international laws and restrictions.

While the importance of striking a balance between conservation and development is evident, Nguyen argues that in order to mitigate possible negative impacts of infrastructure development, CTNPs park authorities must adjust to and tightly control tourist activities.

Without such efforts, rhinos may not be the only thing future visitors to CTNP will miss out on.

Edited by Michelle Kovacevic and Robin McDowell.

This new publication was supported by the MacArthur Foundation.  To get your copy  please  click here .

Further reading

Populations pressure Vietnam’s protected parks

Are conservation projects succeeding in the Lower Mekong Basin?

Integrating conservation and development at the landscape scale in the lower Mekong countries:Vietnam

Where Are the Poor and Where Are the Trees? Targeting of poverty reduction and forest conservation in Vietnam

The context of REDD+ in Vietnam

Poverty Alleviation and Forests in Vietnam

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CIFOR-ICRAF harnesses the power of trees, forests and agroforestry landscapes to address the most pressing global challenges of our time – biodiversity loss, climate change, food security, livelihoods and inequity. CGIAR Research Center , and leads the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) . Our headquarters are in Bogor, Indonesia, with offices in Nairobi, Kenya, Yaounde, Cameroon, and Lima, Peru. -->

• Funding programs

Growing Future Tourism

Growing Future Tourism (GFT) is a $30 million program, which provides financial support to eligible Queensland tourism operators, not-for-profit organisations and local governments to deliver new and enhanced tourism infrastructure or experiences in:

• coastal and marine tourism
• heritage and cultural tourism
• ecotourism and sustainability.

Round 1 supported five projects across various tourism regions in Queensland.

Round 2 is now closed for Expressions of Interest.

Program details

GFT provides funding between $1 million and $4 million (ex GST) on a matched contribution basis for eligible project costs for eligible recipients and projects.

The recipient is responsible for covering any eligible costs above the matched funding amount and all ineligible costs.

Projects should strategically align to government priorities for tourism, for example:

• Towards Tourism 2032 strategy
• Queensland Government’s Ecotourism Plan for Queensland’s Protected Areas 2023 – 2028 strategy (PDF, 1.5MB)
• Tourism and Events Queensland’s Nature-based Tourism Strategy 2021-2024 (PDF, 870KB)
• relevant region’s regional tourism organisation’s Destination Tourism Plan.

Examples of the types of projects that could be supported:

• Marine tourism terminals/pontoons/jetties
• Tourism / resort accommodation
• Tech overlay – online, digital, virtual and augmented reality capability enhancement of a destination, tourism infrastructure product or experience
• Paleo tourism infrastructure product/experience
• First Nations tourism infrastructure product/experience
• Ecotourism infrastructure and products that develop or enhances existing tourism experience
• Nature-based tourism infrastructure or experience
• Agritourism infrastructure product/experience.

This list is not complete and is a guide only.

Application process

The application process is a two-stage process.

After Expressions of Interest are reviewed and assessed, selected applicants may be invited to submit a Full Business Case detailing the project. Applicants will have up to 6 weeks to prepare and submit the Full Business Case application.

Growing Future Tourism Round 1

Growing future tourism round 2, more information.

• Email: [email protected] 
• Growing Future Tourism guidelines - Round 2   (PDF, 556.7KB)
• Example Growing Future Tourism agreement

Last updated: 22 Mar 2024