Recovery halfway from a sharp decline in Vietnamese tourists

25 Dec 2023

By: B&Company Vietnam

Vietnam’s tourism sector has been a dynamic and growing industry, making a significant contribution to the GDP. 2021 is the lowest year since 1995, the tourism industry’s GDP contribution rate to tourism in 2021 will only reach 1.97% (it reached 9.2% in 2019 and 3.58% in 2020). The past few years have seen numerous fluctuations and transformative events that affected the industry. The main influencing factors include COVID-19 pandemic, Russia-Ukraine tensions, and Government policies.

The decrease in the number of international visitors leads to a sharp decline in revenue. Revenue from Vietnam’s tourism industry will be at its lowest point in 2021, which has now been improved but not significantly. The Covid-19 pandemic is most significant disruption to Vietnam’s tourism market. In 2019, Vietnam’s tourism industry was still growing, but it declined sharply in 2020 and 2021. After the impact of the pandemic, the tourism industry has been recovering, with the number of international visitors to Vietnam in 2022 being 23.3 times higher than in 2021. However, despite this significant increase, the number of arrivals remains 79.7% lower compared to 2019, the year before the COVID-19 outbreak occurred. Vietnam is one of the first countries in Southeast Asia to reopen after the Covid-19 pandemic, but the rate of tourism recovery is lagging behind countries in the region such as Thailand, Singapore, and Malaysia…

The pandemic has also led to changes in the types of tourist attractions that are popular. With health and safety concerns, outdoor and less crowded destinations became more appealing. This shift has prompted a reevaluation of the traditional hotspots and fostered a renewed focus on ecotourism, rural experiences, and less-explored regions.

The Russian-Ukraine war has a two-sided influence on international tourists visiting Vietnam. Firstly, there is an increase in petrol prices, leading to a rise in the cost of product services. While people are still tightening their spending, so they will decline in tourism demand, due to the ongoing effects of the pandemic. Secondly, Vietnam does not have a direct flight connection to Russia, and the Visa exemption time is 15 days compared to before the pandemic is 30 days and many ASEAN countries ranges from 30 days to 45 days, even 90 days, partially limiting the number of Russian visitors as well as other international visitors to Vietnam. In 2022, the number of visitors from Russia dropped to 94%, from 646,524 visitors (ranking 6th on the list in 2019 decreased to nearly 30,000 in 2022. Although the number of Russian tourists coming to Vietnam is not substantial, they contribute significantly to the tourism industry as they spend twice as much on average compared to Chinese tourists. Despite this, the majority of guests visiting Vietnam still come from Asia. South Korea (with 965,400 visitors), the US (with 318,200 visitors), and Japan (with 174,700 visitors, ranking 6th) were the most important markets sending tourists to Vietnam in 2022. In terms of continents, Asia remains the leading source of visitors, accounting for 70.9%[1] of the total.

Vietnam strives to increase its tourism ranking to 30th [2]. According to the global tourism development capacity index of the World Economic Forum (WEF) in 2021, Vietnam Tourism ranked 52/117 economy, an increase of 8 steps compared to 2019. The government issues a resolution 82/ NQ-CP Dated May 18, 2023. One of main tasks and solutions is to continue creating favorable conditions to attract international tourists to Vietnam. The resolution aims to improve policies and facilitation entry, exit, and travel for international tourists. As well as enhance the management capacity at airports. Additionally, Vietnam plans to develop new types of tourism, such as the Traveling on charter flights. With these efforts, Vietnam has made great steps on the rankings but compared to other Southeast Asian countries, Vietnam is still ranked fifth in the 5th rank, after Singapore 9, Indonesia 32, Thailand 36 and Malaysia 38.

Vietnam’s tourism industry has made changes to gradually adapt to the fluctuations of the world. The recovery of this industry is still slow, but we have to recognize the efforts that are being implemented so that the Vietnam Travel industry is growing.

B&Company

This article has been published in the column “Read Vietnamese trends” of ASEAN Economic News. Please see below for more information

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ASEAN Economic News「よむベトナムトレンド」

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