The tourism dilemma in Vietnam

The mass influx of tourists to several tourist destinations has given rise to controversies about whether Vietnam’s tourism has reached the saturation point and needs to take a time out for reinforcement. 

Otherwise, it would soon become overloaded.

The tourism dilemma in Vietnam
The pressure on infrastructure capacity is also considerable. The rapid increase in the number of visitors along with the supply of tourist accommodation facilities has posed a risk of overload to service and tourism infrastructure – PHOTO: MINH DUY

Twelve years ago, Anh Lan (whose name has been changed), director of a travel firm in HCMC, started sending international visitors to Nha Trang. Four years later, having a new partner and a larger number of customers, the company found that many tourists were fond of Nha Trang. Anh Lan began to shift her focus to this city instead of operating tours to several coastal destinations.

“Nine years ago, nearly all the streets [in Nha Trang] were empty,” said Anh Lan. “The hotels had only a few thousand rooms available. There was a severe lack of services but few people complained because they knew that they couldn’t expect the better in a place like this.”

Anh Lan then considered its long coastline with charming white sandy beaches and warm weather as a prominent competitive advantage of Nha Trang, helping this city win the hearts of foreign visitors, with the number of tourist arrivals steadily growing.

However, after just a decade, many places in the coastal city of Nha Trang are now crowded with tourists. Hotels spring up like mushrooms after the rain. The problem is the accompanying infrastructure and accompanied services fail to keep up with the growing number of tourist turnout, a fact that bothers many tourists.

Jam-packed tourist spots

Anh Lan said the above problems are not exclusive to Nha Trang. Many other destinations across the country are also full of visitors and lacking services.

Such overcrowding can be seen in the numbers of tourist arrivals in the first half of 2019 as reported by some localities. HCMC alone welcomed 4.25 million international visitors, exclusive of domestic tourists which are many times as many. Hanoi attracted nearly 14.4 million domestic and foreign visitors, while Quang Ninh, Khanh Hoa, Ba Ria-Vung Tau and Kien Giang drew more than 8.5 million, nearly 3.4 million, some 8.46 million and over 4.29 million, respectively.

In its annual report with a special theme on tourism development in Vietnam, the World Bank (WB) states that Vietnam experienced a boom in the number of domestic and international tourists in the past decade.

The domestic travel market has witnessed a very strong increase in the number of tourists, from 20.5 million in 2008 to 80 million last year, thanks to the expansion of the local middle class.

Meanwhile, the number of international visitors has almost quadrupled in the past 10 years, from 4.2 million in 2008 to 15.5 million last year. Notably, the growth in the number of foreign tourists in recent three years was 25%, much higher than the average of about 9% per year during 2008-2015. So far, Vietnam has caught up with Indonesia when it comes to international arrivals and is closing the gap with the top countries in the region, Malaysia and Thailand.

However, despite the rise in the number of international visitors, the profit gained from them has been quite humble. The WB believes the number of tourists has grown rapidly but the rate of profit has gone down, building up the overloading pressure.

The WB cites a survey by the General Statistics Office on tourist spending which says since peaking at US$106 in 2011, the average daily spending of international visitors in Vietnam has gradually decreased and moved sideways at US$96. Such reduction mainly indicates a change in the proportion of Chinese visitors in the total number of foreign tourists. Albeit a surge in their number, Chinese tourists spend less. Domestic tourists, meanwhile, has higher average daily spending at current prices, which however has moved sideways if the inflation-adjusted price is in use.

 

In addition, the surge in visitor turnout has led to problems of overload, traffic congestion, and pollution, especially in urban destinations whose population is already huge, such as Hanoi, Danang and HCMC.

Has the threshold been reached?

Challenges to the sustainable development of Vietnam’s hospitality industry relates to the compliance with tourism planning, pressure on infrastructure, scarcity of human resources and low labor productivity in the tourism industry, said the WB.

Among them, the compliance with tourism planning often spells trouble, adversely affecting the accomplishment of objectives and the sustainability of development.

The pressure on infrastructure capacity is also considerable. The rapid increase in the number of visitors along with the supply of tourist accommodation facilities has posed a risk of overload to service and tourism infrastructure. The majority of investments in tourism infrastructure in recent years has been focused on expanding the supply of accommodation facilities to catch up with the growth in visitors. During the past three years, the number of rooms across the country has grown 20.1%, the highest rate in 15 years. Each additional hotel room boosts the demand for electricity, water, waste management and other basic services increases. Consequently, improvements in the capacity to provide other essential services and infrastructure have failed to keep pace with.

Another salient point involves little change of tourists’ travel purposes and tourist destinations during the past decade. Over two-thirds of international visitors still mainly come to Vietnam for relaxation and entertainment. The group of visitors who arrive for business purposes or meetings, incentives, conferences and exhibitions (MICE) does not seem to grow in scale. More importantly, international visitors remain attached to familiar locations.

This suggests the growth in the number of visitors to Vietnam relates mostly to a mass market in nature. Also, it seems the strategy for high-quality product development and attraction of wealthy tourists who spend longer staying time has failed to meet expectations.

Vo Anh Tai, deputy general director of Saigontourist, said he agrees with the WB’s viewpoint. The tourism industry needs strategic thinking which focuses on market segments with a competitive advantage and favors quality instead of quantity, Tai said.

“Aside from investors’ pressure, the main reason for the boom in tourists is the fact that localities and the country as a whole take the number of visitors as the sole target and yardstick for tourism growth,” he added.

Environmental and infrastructural problems, such as the lack of waste treatment systems on Phu Quoc, Con Dao and Ly Son, waste from resorts in Phan Thiet and Danang, and terrible traffic in Dalat and Nha Trang need effective management solutions to minimize the negative impact of tourism boom, Tai said.

Nevertheless, before asserting whether a destination is overloaded, one should pay attention to the fact that the overcrowding at some localities may be seasonal or phenomenal. Some destinations like Hanoi and HCMC are overloaded largely due to overpopulation, poor urban planning, not only due to tourism growth. Therefore, it is difficult to formulate practical policies if visitor turnout, accommodation systems and the ratio of tourists to population are used as the only indicators to assess actual situation and shape policies.

Other tour operators cite another issue that should be addressed. That is the statistics of tourist arrivals do not faithfully mirror the actual situation. In many cases, international arrivals are only registered accurately at aviation border gates, while those coming by sea and by road as well as domestic visitors are not properly kept track of. Some cities and provinces have inflated numbers of visitors. SGT

Dao Loan

 
 
 
 
 
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