Following the well-publicized and damaging environmental pollution incident that hit the north-central and central regions last April, many were concerned that Vietnam’s tourism industry would be as gloomy as those regions’ beaches during the remainder of the year.

Surprisingly, though, the opposite proved to be true, with travel agents continuing to see healthy growth over the course of the year. 

“In indicators such as revenue, tourist numbers, and development, the tourism sector recorded spectacular growth in 2016,” according to Mr. Vu The Binh, Vice Chairman of the Vietnam Tourism Association.

In fact, the industry grew at its highest rate for six years. “We hit a record of almost 10 million international tourist arrivals, a 26 per cent increase year-on-year,” Mr. Binh went on. 

“Domestic arrivals totaled over 60 million, with about 30 million staying overnight, which is also a record. Outbound tourist numbers were between 6.2 million and 6.5 million and tourism revenue has been estimated at more than VND 400 trillion ($17.6 billion), up 20 per cent.” 

There was a downtrend in international arrivals during the summer season, however, when Vietnam would expect to attract the most. 

“Last summer the Euro 2016 football tournament was held in France, and many European tourists delayed their travel plans or adjusted them to spend more time watching the football,” said Ms. Lily Nguyen, Director of Lily’s Travel Agency.

Despite such matters, growth of 21 per cent in the first half of the year was enough to trigger concerns at the Tourism Authority of Thailand about the emergence of Vietnam’s tourism sector.

Tourist trends

Stable growth is the common thread when travel agents talk about tour bookings by international tourists.

“Our annual growth is from 10 to 15 per cent,” Ms. Nguyen estimated. Last year and this year, inbound tourists were 5 to 10 per cent higher than expectations, according to Mr. Nguyen Trung Quan, Director of the Vietnam Aviation Tour Co. (Avitour). 

“In 2016 our major customers came from the UK, the US, the Netherlands, Spain, Australia and Canada, accounting for about 80 per cent of our total,” Ms. Nguyen said. 

There is also greater attention towards Vietnam coming from tourists in South America, Israel, Hong Kong and Singapore, she believes.

Both Ms. Nguyen and Mr. Quan agree that more international tourists are keen to explore “new” parts of Vietnam. 

“You can now find Western travel guides talking about motorbike rides from the north to the south to visit different places,” Ms. Nguyen said. 

This new taste in travel has created a new trend in accommodation in Vietnam, she explained, with increasing numbers of homestays appearing in Sapa, Hoi An and Da Lat, as many international tourists wish to get closer to nature. 

“Not only community tourism and local exploration were trends in 2016, but also ecotourism,” she said.

Nevertheless, tourists from different countries have different tastes. For example, French tourists, generally speaking, prefer a quiet environment and hate noise, and so prefer the northeast or northwest mountainous areas in Vietnam, Mr. Quan said. 

“The French like easy services such as trekking, biking or experiencing homestay services, while Russian tourists prefer sea resorts and so head to Mui Ne Beach in Phan Thiet or to Nha Trang,” he explained. 

Domestic tourists, meanwhile, prefer destinations such as Phu Quoc, Con Dao, Co To and Ly Son Islands, and more people are looking for new tourism destinations such as flower roads and festivals. 

There is also an increasing number of domestic tourists, especially young people, who are travelling by themselves and not booking tours, Ms. Nguyen said. “The young previously often traveled with their partners, friends or families, but now there are more travelling alone for a new experience,” she said. 

To stay abreast of this new trend, her company is developing tailor-made tours where tourists can create their own flexible tour.

Growth factors

The continued positive development of the tourism and hospitality industry will require effort and input from all stakeholders, with the State still playing a central role and facilitating the significant acceleration of sustainable and beneficial growth in the industry through guidance and support, according to the Vietnam Business Report 2016 released in December. 

Prime Minister Nguyen Xuan Phuc has many times emphasized his determination to turn tourism into a key economic sector. 

“Tourism development requires determination and participation from all of the political system and full cooperation among ministries, cities and provinces, and sectors, as well as dynamic and creative cooperation among enterprises, investors, and the people,” he told a national tourism conference held on August 9 in Hoi An.

Following the call, local authorities expressed ambitions for developing tourism. “Consensus among the government and localities has never been as great as it is now,” Mr. Binh pointed out. The decision to develop tourism into a key sector is a sound choice in the context of other sectors facing a host of difficulties, he added. 

As a result, a wide range of tourism development policies have been issued around the country, such as master plans for developing Nui Coc Lake in northern Thai Nguyen province, turning Tam Dao Mountain in Vinh Phuc province into an ecotourism site, helping south-central Binh Thuan province become a national marine tourism and sporting hub, with Mui Ne a national tourism zone, Phu Quy a national tourism destination, and Phan Thiet a tourism city, further developing tourism in the Mekong Delta, and south-central Phu Yen province paying greater attention to medical tourism.

Cities and provinces also have specific plans to improve infrastructure to develop tourism. For example, Binh Thuan province is to open an airport by 2018 to cater to increasing numbers of tourists to Mui Ne, known as the “Kingdom of Resorts”. 

To develop tourism at Ba Be National Park in northern Bac Kan province, a new road is being built from Thai Nguyen to Cho Moi in Bac Kan to shorten the journey from Hanoi by one and a half hours, making it one and a half hour to two hours.

Twenty years after being cancelled, the Tourism Development Support Fund has been restored at the Prime Minister’s direction, with capital from VND200 billion ($8.8 million) to VND300 billion ($13.2 million). 

This is a positive sign and a much-needed step, the Vietnam Business Forum 2016 noted.

 “It is critical that the resources to market the country are provided and there is a major opportunity to work with the Tourism Advisory Board and the private sector,” the report noted.

Last but not least, visa exemptions are a key factor in driving up the number of international tourists, with Avitour, for example, seeing growth of 15 per cent in European customers since certain countries became subject to visa-free policies. 

“Visa exemptions have prompted increases in international visitors coming to Vietnam, of 13.5 per cent, 39.3 per cent, and 39 per cent year-on-year, respectively, in Ho Chi Minh City, Hanoi, and Nha Trang,” according to a CBRE report released in August. 

Mr. Binh agrees that new visa policies have stimulated growth in the tourism sector. Exemptions are now available for tourists from five European countries. 

As at June 2015, international tourist numbers had fallen for 13 consecutive months but since visa exemptions were introduced at that time the numbers have gradually increased, he said.

The number of countries whose citizens are exempt from visa requirements is now 22, which remains quite modest compared to 169 in Indonesia, 155 in Malaysia, and 56 in Thailand, and it’s a policy that needs to be expanded. 

An electronic visa scheme to be implemented in January is another positive step that brings Vietnam in line with its immediate ASEAN neighbors, Cambodia and Laos, the Vietnam Business Forum report assessed. 

“We are excited about e-visas and are preparing to welcome a surge in international tourists to Vietnam as soon as the policy comes into effect,” Mr. Quan said. 

Stability concerns

As Vietnam makes greater efforts to attract more international tourists, some Vietnamese tourists have turned their backs on domestic tourism. Outbound tourism has appeared as a new trend this year, both Mr. Quan and Mr. Binh said. 

“A typical example is the remarkable growth in Vietnamese visiting Japan and South Korea, which saw year-on-year growth of about 27 per cent and 30 per cent, respectively, in 2016,” Mr. Binh said. 

Furthermore, Vietnamese tourists are among the biggest spenders in Japan, according to Mr. Tsutomu Takebe, Special Advisor at the Japan - Vietnam Friendship Parliamentary Alliance.

Both these countries have had very good promotions and Vietnamese tourists seemed to choose outbound tours that are cheaper, Mr. Quan said. 

“International airlines also have a very keen eye on tourist demand and have opened many direct flights to Vietnam to attract more tourists and minimize travel costs,” he added. 

For this reason, compared to previous years, 2016 had more outbound travel agencies than inbound travel agencies, according to figures from the Vietnam Tourism Association.

Though Vietnam has done a great deal to encourage international tourists to visit the country, it can’t afford to lose the gains to outbound tourism, Mr. Binh said.

Regardless, when looking ahead, Mr. Binh predicts that 2017 will see development trends maintained if stable policies are introduced and kept in place. 

“International tourist arrivals will increase 20 per cent this year,” he believes. “Travel demand among domestic tourists will also increase because travel has become more common, so there must be major investments in tourism destinations to diversify products and meet demand of local tourists for new experiences.” 

In the long term, Vietnam retains its incredible potential for the further development of its tourism and hospitality industry, which was ranked 5th out of 184 countries in terms of the importance of its contribution to GDP during the 2016-2026 period in the Economic Impact 2016 - Vietnam report from the World Travel & Tourism Council.

VN Economic Times