Tourists increase, why is the tourism ecosystem still weak?

Where are the 11 million tourists?

At the end of November 2023, the Vietnamese tourism industry was delighted with the number of more than 1.23 million international visitors, "peaking" in welcoming foreign visitors since the beginning of 2023. In the first 11 months, the total number of international visitors to Vietnam reached over 11.2 million, exceeding the target set at the beginning of the year by more than 3 million visitors and almost reaching the target of 12 - 13 million visitors that the Ministry of Culture, Sports and Tourism had just set. South Korea continued to be the largest market sending visitors in the past 11 months with 3.2 million visitors (accounting for 28.5%). China ranked second, reaching 1.5 million visitors. Next was the Taiwan market (3rd) with 758,000 visitors, the US (4th) with 658,000 visitors, and Japan (5th) bringing 527,000 visitors to Vietnam.

International visitors to Ho Chi Minh City

The data from the National Tourism Administration surprised Mr. Hoang Anh (a tour guide in Hanoi ) because although the number of visitors to Hanoi has recovered quite a bit compared to the period just after the Covid-19 epidemic, overall it is still very small. "Last month, I led a group of European tourists on a self-guided tour, only booking a few services and hiring a local tour guide wherever they went. They stayed in Hanoi for 2 days and 1 night and then went to Sa Pa. That night, I took the whole group to Ta Hien, it was already past 10:30 pm but the whole row of shops was still deserted. My German friend turned to me and asked: 'Why do I read reviews saying this place is very crowded, or do Vietnamese people go out later?'. I couldn't explain it either because around the same time last year, I took guests here and it was already packed from 9 pm, with live music playing loudly. This year, it was strangely deserted! More than 90% of Western tourists coming to Hanoi go to Ta Hien, so if Ta Hien was deserted, I wouldn't know where the guests were," said Mr. Hoang Anh.

Mr. Thai Doan Hong, Chairman of the Board of Directors of Trade Union Tourism Joint Stock Company, was also surprised by the rapid growth rate of international visitors. Just recently, Mr. Hong received consecutive bad news when many foreign groups canceled their reservations at Rang Dong Hotel (belonging to Trade Union Company) right in the center of District 1, Ho Chi Minh City. The reason is that due to the difficult economic situation, foreign visitors also reduced their spending and "cancelled" their travel plans. Compared to the period from October to December last year and the years before the pandemic, the number of foreign visitors booking rooms at Rang Dong this year decreased by 30 - 40%.

Many foreign visitors come to Vietnam for purposes other than tourism but are included in the statistics.

Mr. Thai Doan Hong's friends in tourism from Phu Quoc, Da Nang, Nha Trang, and Hanoi also reported that the situation was not much better, "slow". If last year, the number of domestic tourists exploded and partly filled the gap of international tourists, this year, the economic difficulties, people only focused on worrying about food and clothing, so the demand for travel also decreased. In addition, the sharp increase in airfares has greatly affected the vacation plans of many families or teambuilding of enterprises. Some units planned teambuilding programs in Hanoi and Phu Quoc but then had to cancel because the cost was too high, airfares accounted for 50 - 60% of the total tour price. If they moved to nearby destinations such as Da Lat, Phan Thiet, and Vung Tau, most of the customers had already traveled a lot, were not excited, so they decided to save more money until next year to carry out the plan.

"Just like that, hotels and restaurants are deserted. Our revenue continues to decrease by 10-15% compared to last year. I just came back from Con Dao, it's both the end of the year and the weekend but it's still very deserted. Normally, I can't even buy a plane ticket because there are no seats available. Last week, I went to Phu Quoc, looking at the huge, magnificent, modern airport, there was only a Vietjet plane parked on the tarmac, it was heartbreaking. Before, during peak times, Phu Quoc could receive 130-150 flights a day, now sometimes there are only 1-2 international flights a day. The hottest destinations are now deserted, so I don't know where the sharp increase in visitors is coming from?", Mr. Thai Doan Hong asked.

Statistical error or low target?

This is not the first time that tourism statistics have raised many questions. A tourism expert said that many years ago, those working in tourism development research pointed out that the quality of the industry's reports was low and the data was unreliable. We just collect all the foreign visitors to Vietnam and "embrace" them for the tourism industry, while among those more than 11 million visitors, how many came for tourism purposes, how many came to visit relatives, how many came to work for only 1-2 days and then return, how many were diplomatic guests, business guests..., all of which are not classified or specified. According to data from the Ministry of Public Security, in terms of entry purposes, of the number of foreigners entering Vietnam in the first 10 months of 2023, 85% entered for tourism purposes, 15% for other purposes such as investment, work, visiting relatives, studying abroad, etc. However, in reality, this number is also difficult to be accurate because the statistical method still has many shortcomings.

Not to mention, the data reported by localities to the Department of Tourism is also confusing. There are many cases where the same group of 200 tourists from Australia arrives in Hanoi, Hanoi "records it in its book" and then the same group of tourists flies to Ho Chi Minh City and is added by Ho Chi Minh City to the list of foreign visitors to the city. In the end, both lists are reported and added to the Department and the Ministry, resulting in a group of 200 tourists but can be multiplied to 400, or even 600 - 800 people if they go to many places and each province performs the same type of statistical work. That is also why it leads to the "half-crying, half-laughing" situation like in 2022, when the whole country set a target of welcoming 5 million international visitors by the end of the year but by the end of November only welcomed about 3 million visitors, yet Ho Chi Minh City has already received 5 million international visitors.

"With such messy data, we cannot be too happy to see that the plan has been exceeded. That is not even taking into account the decreasing spending of tourists. The growth rate of tourists must be proportional to the growth in revenue of hotels, restaurants, and accompanying service systems; it must be proportional to the bustling, bustling atmosphere of big cities, tourist capitals... Only then can we consider tourism to have recovered," the expert emphasized.

The key issue is still resources. Our enterprises are mainly small and medium enterprises, with very weak resources, and need to access preferential capital sources from the government to be able to work with the authorities to restructure the international market and promote tourism. The government needs to innovate the activities of the Tourism Development Support Fund to promote these activities.

Mr. Vu The Binh, Chairman of Vietnam Tourism Association

From another perspective, Mr. Vu The Binh, Chairman of the Vietnam Tourism Association, acknowledged that the tourism industry reached the finish line early, exceeding the target of welcoming international visitors from the 9th month, but in reality, observations show that the number of foreign visitors is still low, because our plan is set very low. If we exceed, we must exceed by double to be on par with countries in the region and create the same vitality as before the pandemic. Along with that, the growth rate of domestic visitors has decreased, so services in the tourism ecosystem still face many difficulties.

Special period, need special policy

Why have we not yet attracted many international tourists? Regarding this question, Mr. Vu The Binh especially emphasized that Vietnam's tourism promotion activities are still slow and ineffective. According to him, the implementation of overseas promotion to attract international visitors to Vietnam is too little, many of the world's leading international fairs such as WTM London (UK), JATA Tokyo (Japan) are ignored or participated in sparingly, with only local participation. This makes Vietnam's tourism image pale compared to the international level.

Meanwhile, provinces and cities focus too much on organizing superficial activities in the country such as festivals, political, cultural and economic events associated with tourism. Associated with tourism but not achieving the goal because festivals are born from national customs and practices, from the spiritual life of the community. Not to mention, tourists are very little interested in grand opening ceremonies, performances by thousands of non-professional actors. They are only interested in traditional cultural identity. If those funds were transferred to international tourism promotion activities, it would be much more effective. Then there is a serious shortage of human resources in the market, affecting the quality of services. Currently, the tourism industry only attracts about 60% of workers, many highly skilled workers have moved to other industries. Many tourism businesses, especially accommodation establishments, have to use untrained workers to serve customers. Not to mention, investment in research and development of new tourism products is still too little.

"The key issue is still resources. Our businesses are mainly small and medium-sized enterprises, with very weak resources, and need to access preferential capital sources from the state to be able to work with authorities to restructure the international market and promote tourism. The government needs to innovate the activities of the Tourism Development Support Fund to promote these activities," the Chairman of the Vietnam Tourism Association proposed.

Agreeing, Mr. Thai Doan Hong also said that the main reason for the slow recovery of the international tourist market is the difficult economic situation. When consumers tighten their spending, tourism will be the first and most heavily affected industry. Vietnam's major source markets such as China and Russia are also facing difficulties, so they do not encourage people to travel abroad. We hope to have an alternative market, but it is very difficult. In that context, countries and territories such as Thailand or Taiwan have implemented the right and accurate stimulus programs. The government will spend the budget, even refund cash to tourists, just to spend and shop. For example, in Taiwan, if a group of tourists comes to this territory and stays for 4 nights, each night, the hotel will reduce the price for each guest by 200 TWD. At the end of the trip, each passenger will be refunded 800 TWD. This money is supported by the government to stimulate demand, not by the hotel.

"The promotion and stimulus programs in Vietnam are mainly the government's efforts to persuade businesses to reduce prices, but businesses are now exhausted and losing money, so where can they find the money to reduce prices? Everyone understands that high airfares make travel miserable, but we cannot force airlines to reduce prices when their input costs are skyrocketing, and the more they fly, the more they lose. In special times like this, special regulatory policies are needed. The government can balance by reducing taxes and fees for the tourism industry, especially the aviation industry, to support them so they don't have to increase prices and have suitable and stable prices. From there, there will be room to implement more promotional programs, stimulate demand, and promote, attracting international visitors to Vietnam," said Mr. Thai Doan Hong.

International tourists visit the Cham Museum in Da Nang

Da Nang is among the most attractive destinations in Asia.

International travel magazine Condé Nast Traveler has just suggested 11 most attractive destinations in Asia that cannot be missed next year. Of which, Da Nang is ranked 2nd. Da Nang is rated by Condé Nast Traveler as an attractive destination with beautiful beaches, high-class resorts, vibrant entertainment complexes, unique ecological nature reserves, special cuisine and annual international fireworks festival.

A modern coastal city located among many UNESCO-recognized sites, Da Nang is one of the most resilient and developed tourist cities in Asia after the Covid-19 pandemic, thanks in part to the resumption of international flights, increased frequency of flights from abroad to the city and the organization of promotional programs to stimulate tourism.

There are small actions that have a huge impact on the tourism industry that we need to pay attention to. For example, controlling alcohol concentration. The police force patrols day and night, going to every corner, requiring not just one but many people to stop in the middle of the road to check alcohol concentration, seriously affecting the image of Vietnam tourism. Many foreign tourists do not know that it is just a check and think that we have a problem. The policy is right but we need a more reasonable way of doing it, harmonizing the interests of many parties.

Mr. Thai Doan Hong , Chairman of the Board of Directors of Trade Union Tourism Joint Stock Company

Opening of direct flight between Ho Chi Minh City and Shanghai

Vietjet Air has just launched a new route connecting Ho Chi Minh City with Shanghai with 7 round trips per week. With just over 4 hours of flight time, passengers can easily reach Shanghai, the most populous city in China and also a leading economic and financial center. Meanwhile, Ho Chi Minh City, with a population of nearly 9 million people, is a prominent economic, cultural and tourist center of Vietnam with a bustling modern lifestyle. Vietjet has also put the Ho Chi Minh City tourism symbol on the fuselage with a promotional message about a friendly and hospitable Ho Chi Minh City. The direct route is expected to open up new opportunities for tourism and economy between the two largest cities in Vietnam and China.

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