Setting clear goals is crucial to revitalizing Vietnam’s tourism industry

This year, the tourism industry aims to receive 17-18 million tourists and eagerly awaits the return of Chinese tourists. However, Vietnam is not the only country doing this. Many countries around the world are actively competing to attract Chinese tourists.

Ambitious goal to welcome Chinese tourists

As Vietnam’s tourism industry gradually recovers, the top priority is to set steady goals, implement effective policies, and formulate feasible plans to attract Chinese tourists back to Vietnam.

At the end of 2023, Vietnam enthusiastically received 12.6 million international tourists, exceeding the initial target of 8 million set at the beginning of the year and exceeding expectations. Encouraged by this success, the industry is now setting its sights on an even more ambitious goal: hosting 17-18 million international visitors this year, a number reminiscent of pre-pandemic levels.

Discussing the feasibility of this goal, Mr. Đặng Mạnh Phước, CEO of The Outbox Company, a leading market research and data analysis company specializing in hospitality tourism, is confident that this goal can be achieved. He noted that as domestic tourism grows this year, Vietnam is poised to take advantage of an expected surge in Chinese outbound travelers, a key demographic that made up a large part of Vietnam’s pre-pandemic tourist influx. Mr Phước expects them to return to the forefront in 2024, stressing the importance of strategic planning and execution in order to compete effectively with other Southeast Asian destinations for the attention of Chinese tourists.

Indeed, Vietnam finds itself in the midst of fierce competition, with neighbors such as Thailand, Singapore and Malaysia stepping up efforts to regain a share of the lucrative Chinese tourism market. As these countries unveil their own goals and strategies to attract tourists back, Vietnam must take a proactive stance and enhance its appeal through innovative initiatives, tailored experiences and seamless infrastructure to ensure it remains a top destination for Chinese tourists status of land.

While neighboring countries such as Thailand and Malaysia are setting ambitious goals and implementing strategic policies to welcome back Chinese tourists, Vietnam appears to be lagging behind in this regard. For example, Thailand aims to attract 3.6-38 million international tourists, with a focus on Chinese tourists, while Malaysia plans to receive 8 million Chinese tourists out of a total target of 26 million international tourists this year.

Thailand has further launched a visa-free policy specifically for Chinese tourists. The temporary visa exemption during the peak season and the subsequent implementation of permanent visa exemption show the proactive measures taken by Thailand to attract Chinese tourists back to the country.

In comparison, Vietnam seems to lack clear and specific goals for the Chinese tourism market. Although recent data from the Vietnam National Tourism Administration shows a significant recovery in the number of Chinese tourists, with the number soaring to 7.5 times the same period last year, Vietnam’s tourism strategy seems to lack direction.

In addition, Vietnam’s status as the preferred destination for Chinese tourists is obvious, with data from online travel platform Agoda showing a significant increase in interest from Chinese tourists. During the recent Lunar New Year period alone, 95% of Chinese tourists expressed interest in traveling to Vietnam, marking a good trend for the country’s tourism industry.

However, despite these positive indicators, Vietnam’s tourism industry appears to be missing the mark in terms of setting concrete targets and implementing strong policies and action plans to capitalize on the booming Chinese tourism market. As competition among tourist destinations in Southeast Asia intensifies, Vietnam must prioritize strategic planning and take proactive measures to regain China’s tourism market share and ensure the sustainable growth of Vietnam’s tourism industry.

Challenges and Opportunities

As travel trends evolve, there has been a significant shift in the focus of attracting South Korean tourists that has attracted widespread attention in recent days. South Korea ranks among the world’s largest outbound consumer markets and has become Vietnam’s largest tourism market. However, despite the increase in Korean tourists, Vietnamese tourism companies have yet to see corresponding growth in revenue. This is mainly due to the widespread provision of retail services rather than comprehensive services, resulting in a large part of profits flowing back to the countries where foreign travel agencies are located, thus hindering the growth of Vietnam’s tourism industry.

However, surveys by accommodation agencies show that 80% of guests still come from the Korean market. This highlights a general trend in the post-Covid-19 travel industry, in which personal travel dominates. Therefore, there is an urgent need for tourism companies to adapt their strategies and business models to effectively capitalize on the changing tourist flows. While catering to high-spending markets such as Korean customers provides opportunities to increase the value of each customer, it also poses significant challenges that require proactive steps by every business entity in the industry.

In fact, improving the value proposition for every international tourist visiting Vietnam remains an ongoing challenge for the tourism industry. Before 2020, statistics from the International Tourism Consumption Yearbook show that per capita consumption in Vietnam’s major tourism markets was relatively low. For example, the average expenditure in Japan is US$972.5, Malaysia is US$900.7, China is US$884.3, Thailand is US$846.6, South Korea is US$838.4, and Cambodia is US$734.9.

With travel trends currently shifting in favor of individual exploration, businesses and the travel industry as a whole must recalibrate their strategies accordingly. While maximizing the added value of each tourist is crucial, attracting tourists back home also highlights the effectiveness of Vietnam’s tourism efforts. It is worth noting that Vietnamese tourists tend to revisit destinations such as Thailand or Singapore multiple times, while many visitors to Vietnam only make one trip. Factors such as Vietnam’s strict visa policies and lackluster tourism promotions exacerbate this disparity, with the country particularly lacking adequate tourism promotion offices overseas.

There is an urgent need to attract foreign tourists in collaboration with regional counterparts. Ignoring Thailand’s extremely flexible visa policy or Singapore’s huge promotional budget, Vietnam risks falling behind Indonesia and slipping out of Southeast Asia’s top four tourist destinations if it doesn’t adjust its strategy. To remain competitive, Vietnam must proactively address these challenges, improve promotional strategies, and explore innovative measures to enhance the overall visitor experience, thereby solidifying its position as the region’s premier destination.

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