Has tourism really 'won big'?

Many localities achieved bumper harvests and finished ahead of schedule.

In the final month of the year, many localities reviewed their socio-economic situation in 2023, with outstanding results belonging to the tourism sector. Most impressively, Quang Ninh, a leading tourism hub in the northern region, was recognized as one of the localities with the highest tourism growth rate in the country. Before the year ended, Quang Ninh had already achieved its target of welcoming 15 million tourists, including over 2 million international visitors. This growth figure exceeded that of 2022 by approximately 43% and brought in over 32,000 billion VND in tourism revenue for the budget.

International visitors to Vietnam increased in 2023. (In the photo: Foreign tourists shopping at Ben Thanh Market, Ho Chi Minh City)

Similarly, Da Nang , the tourism capital of Central Vietnam, has had a spectacular recovery year, reaching 7.39 million visitors even before the year's closing date, double the number in 2022 and 92% of the 2019 figure. This result was achieved thanks to the booming domestic market, which recorded a growth rate of 66% compared to the previous year and 113% of the 2019 figure. In addition, despite facing many challenges, the number of international visitors to Da Nang is also expected to reach nearly 2 million, a 4.2-fold increase compared to 2022 and 61% of the pre-pandemic level. Total tourism revenue is estimated at 28,000 billion VND.

Also in Central Vietnam, tourism in Hue City (Thua Thien-Hue province) this year has seen a very good recovery and growth. According to statistics from the Hue City People's Committee, the total number of visitors to Hue after nearly 12 months reached 2.1 million people, an increase of 12% compared to 2022. Notably, tourism revenue is estimated at 4,585 billion VND, an increase of 186.6% compared to the same period. This is also one of the four targets that Hue City has exceeded the plan set for 2023. Also enthusiastically announcing a "big win" in tourism, Binh Thuan province has exceeded its target of welcoming 8.3 million tourists, even before the end of November. Before the end of the year, Binh Thuan has already welcomed more than 9.6 million visitors, an increase of 16.4% compared to the forecast, with the number of foreign visitors doubling compared to last year, reaching nearly 500,000. The tourism industry has helped the provincial budget "pocket" more than 20,000 billion VND, officially placing Binh Thuan on the list of localities with large tourism revenues, exceeding 10,000 billion VND.

Explaining this rapid growth, Mr. Bui The Nhan, Director of the Department of Culture, Sports and Tourism of Binh Thuan province, said that in 2023, the province's tourism sector had many favorable factors. In particular, the opening of the Phan Thiet - Dau Giay and Vinh Hao - Phan Thiet expressways helped Binh Thuan make a leap forward, increasing the number of visitors by more than 2 million. Currently, the province is continuing to renovate and prepare to welcome a new influx of tourists after the Phan Thiet airport becomes operational. Binh Thuan leaders predict that the airport's operation will help attract many times more tourists.

Previously, Lao Cai was the first locality to announce that it had reached its 2023 annual tourist arrival target ahead of schedule. In the first 10 months, Lao Cai welcomed 6.5 million visitors, reaching 108% of the annual target and increasing by 66% compared to the same period in 2022. During this same time, Sa Pa was ranked among the top 50 most beautiful small towns in the world by an American magazine and consistently led in tourism growth in the northern mountainous region as well as the expanded Northwestern provinces.

Tourists visiting Grand World Phu Quoc

Each locality has recognized tourism as a "bright spot" in its economy, creating a vibrant overall picture for Vietnam's tourism industry. According to newly published research by Vietnam Report Joint Stock Company, a highlight of 2023 was the boom in both domestic and international tourist markets. In the first 11 months alone, Vietnam received 11.2 million international visitors, far exceeding the initial target of 8 million and reaching over 85% of the 12-13 million visitor target set by the Ministry of Culture, Sports and Tourism. Vietnam Report attributes the relaxed visa policy as one of the reasons for the continuous increase in foreign visitors to Vietnam in the past three months. Besides the strong growth in international visitors, the domestic tourism market also proved equally competitive, with 103.2 million domestic visitors in the first 11 months, surpassing the figure for the whole of 2019. Revenue from accommodation and food services in the past 11 months is estimated at 616,000 billion VND. Revenue from travel and tourism services is estimated at 34,000 billion VND, an increase of 50.5% compared to the same period last year.

The tourism ecosystem is still struggling.

Despite spectacular growth in tourist numbers in many localities, occupancy rates at numerous accommodation establishments have not met expectations. A survey by Vietnam Report in Ho Chi Minh City shows a supply of 15,641 rooms, with an average occupancy rate of 58% at a price of 1.9 million VND/room/night. In Hanoi, the supply reached 10,962 rooms, with an occupancy rate of 61% at a price of 2.7 million VND/room/night. In Hoi An (Quang Nam), tourism is booming with estimated total revenue exceeding 2,568 billion VND; however, many accommodation and restaurant businesses in the area are facing financial difficulties, with revenue insufficient to cover expenses, forcing them to sell assets to pay off debts. The exodus of many hotel and homestay owners in Hoi An continues unabated. It's not uncommon to find some prime real estate locations with low occupancy rates displaying "for rent" signs offering discounts of 30-50%.

Not only hotels, often likened to "the two wings of an airplane," but the aviation industry seems powerless to stop the growth of tourism. All four airlines are struggling with losses. Vietnam Airlines, the national airline of Vietnam, has recorded losses for three consecutive years and even faces the risk of delisting. Bamboo Airways is constantly changing its senior management and has sent notices to agents about temporarily suspending numerous international routes and reducing the frequency of many main and niche domestic routes to facilitate restructuring. The management of Vietravel Airlines also stated that they are still struggling to bear losses. Vietjet Air, however, reported a consolidated after-tax profit of 55 billion VND in the third quarter, but this was largely due to strong growth in ancillary services, ownership transfers, and aircraft trading. Furthermore, just before the peak Lunar New Year season, numerous routes have been cut, and the aircraft fleet continues to shrink.

Explaining this situation, Mr. Tran The Dung, General Director of Vietluxtour Company, said that first, we need to review the statistics of the tourism industry. Previously, we just collected the total number of foreign visitors to Vietnam and attributed it to the tourism sector. However, out of nearly 12 million visitors this year, how many came for tourism, how many came to visit relatives, how many came for work for only 1-2 days, how many were diplomatic or business travelers, etc.? None of this has been clearly categorized. If they are international visitors coming for business, then the localities they visit benefit. They don't go on vacation, so other provinces and cities remain "starved" for visitors. Furthermore, spending on accompanying services is not high, so the tourism ecosystem doesn't benefit much. Furthermore, some localities such as Phu Quoc, Nha Trang, Da Nang, Phan Thiet, etc., have historically relied primarily on international tourists from Russia, China, and South Korea. The absence of these two markets has left a significant gap that cannot yet be filled, causing growth to rely mainly on domestic tourists. Vietnamese tourists may visit one destination this year and switch to another province next year, or if domestic tour prices are high, they will consider overseas destinations. When the domestic market cools down, airlines, accommodation facilities, restaurants, and other services will also face difficulties.

"It's difficult to judge whether tourism has had a successful year based solely on statistics. We need to clearly categorize the sources and target groups of tourists to determine if our target customer base has arrived and if the recovery has truly met expectations. Furthermore, we need accurate statistics on tourist spending because even if the number of visitors hasn't reached pre-pandemic levels, if we attract tourists who stay longer and spend more, benefiting many sectors, that's still a positive shift," commented Mr. Tran The Dung.

A series of blockbusters will provide the foundation for a breakthrough in 2024.

As Mr. Tran The Dung rightly pointed out, although the tourism industry recorded very good growth compared to 2022, it still needs to make a great deal of effort to recover to its golden age before 2019. That is why localities and businesses are accelerating in the "race" to revitalize the image of tourism.

Passengers board the plane at Noi Bai Airport.

For example, Phu Quoc, after a year of "incidents," is striving to regain its position as a resort paradise by officially announcing the tourism stimulus campaign "I Love Phu Quoc." The campaign begins with a coordinated effort by inter-agency teams to monitor tourism activities and issue a code of conduct for civilized tourism, aiming to strengthen supervision, improve service quality, and build a civilized, friendly, and world-class destination for the island. Accompanying this is a series of "blockbuster" projects and high-class products invested in by Sun Group with a total investment of 4,000 billion VND, including: the opening of the Kissing Bridge – a masterpiece of art promising to make the Sunset Town one of the most beautiful sunset viewing spots in the world; and the launch of La Festa Phu Quoc hotel under the Curio Collection by Hilton brand. Phu Quoc is launching the innovative Fun-Fest Bazaar night market along with a series of experiences that will make Phu Quoc a "phenomenon" at the end of this year and the beginning of 2024. Ho Chi Minh City has also just become the only city in the world to have a 24/7 open-top double-decker bus city tour, reinforcing its "city that never sleeps" brand, alongside the launch of many new waterway tours…

A tourism expert believes that a series of new "blockbuster" projects will be the springboard for a stronger surge in tourism in 2024. Currently, with the difficult economic situation and many political and social changes around the world, both international and domestic tourists will tend to tighten their spending and be more selective about their destinations. In this context, creating new, high-class products to increase competitiveness and attract target customers to stay longer and spend more is crucial. However, because tourists have many choices, destinations that are friendly, easily accessible, and make tourists feel welcomed will win. Therefore, visa policies for key markets such as Australia, the US, and Europe need to be more open. Domestic service pricing policies also need to be developed and calculated reasonably to create appropriate and competitive tour prices. Simultaneously, a strategy to boost tourism promotion and advertising on international platforms is necessary. This needs to be done regularly, as part of a well-structured campaign at the national and international levels.

"For tourism to recover, we need strong investment. We need to recognize this as a recovery phase and a time to attract tourists back, not a period of a bursting 'bubble,' so we need appropriate policies and coordinated efforts to achieve the best results," this tourism expert suggested.

Visa continues to be seen as a key driver for 2024.

According to a survey of tourism and hospitality businesses conducted by Vietnam Report, 66.7% of businesses believe the outlook for the tourism industry in 2024 will be slightly more positive. Specifically, 92.9% of businesses expect the strongest growth in revenue in 2024, followed by profit and the number of tourists (85.7%). Visa policies continue to be considered the main "lever" driving the continued growth of Vietnamese tourism by 92.9% of surveyed businesses.

Tan Son Nhat Airport is expected to receive approximately 140,000 passengers per day during the peak Tet holiday season.

Tan Son Nhat International Airport has announced that during the upcoming peak Tet holiday season, it expects to receive an average of approximately 140,000 passengers per day. Specifically, during the peak period of the 2024 New Year (December 23, 2023 - January 2, 2024), it is expected that there will be approximately 680-740 flights to and from Tan Son Nhat Airport each day, with an average of 110,000-120,000 passengers per day. During the peak period of the 2024 Lunar New Year (January 26 - February 24, 2024), Tan Son Nhat Airport is expected to serve approximately 860-900 flights to and from the airport each day, with an average of 135,000-140,000 passengers per day. To prepare for the peak Tet holiday season, Tan Son Nhat International Airport proactively held pre-peak meetings and developed unified plans with all units involved in airport operations; coordinated and promptly deployed personnel at the Operations Coordination Center; increased staffing, developed detailed work plans at each position, as well as in emergency response; and regulated vehicles and equipment appropriately to prevent congestion.

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