Stimulating domestic demand to maintain economic growth

SGGP 04/14/2023 08:54

In the context of slowing economic growth due to the impact of inflation and declining exports, stimulating domestic demand is an important factor to maintain growth rate.

Stimulating domestic consumption in the retail and service sectors can easily create a short-term growth effect. Thereby, it helps to partly offset the economic decline caused by the impact of the export sector. In the second quarter of each year, Vietnam has many opportunities to stimulate growth in retail, accommodation, food and beverage, and travel services because there are many festivals such as Hung King's death anniversary, April 30 and May 1 holidays... During long holidays, people will choose attractive tourist destinations with suitable costs such as air tickets, accommodation, food and beverage services, sightseeing, experiences, consumption... Therefore, the tourism industry will fail if it cannot create competition in these costs.

High prices do not necessarily mean high revenue and profit. This also depends on the sensitivity of prices to the demand of each specific type of goods and services. Normally, entertainment and tourism services are quite sensitive to prices. For example, if airfares to domestic tourist destinations are higher than to tourist destinations in neighboring countries, tourists will choose to go abroad. Similarly, if the prices of sightseeing tickets, accommodation and food services in the country are higher, tourists will also choose countries with lower costs. Many people involved in the retail, accommodation and travel services business think that during festivals, demand often increases, so they should increase prices to increase revenue and profit. However, in many cases, price increases lead to decreased demand, especially in the current difficult economic context, when people's incomes are reduced. In that context, only regions and countries with appropriate pricing strategies will attract tourists.

During the April 30 and May 1 holidays this year, a large proportion of people buying international tours instead of domestic ones will miss the opportunity to stimulate domestic demand. Currently, many domestic businesses are facing difficulties because they cannot sell their products; many hotels and motels have to put them up for sale because there are no guests. To solve this problem, it is necessary to stimulate consumption, specifically to encourage both domestic and foreign tourists to choose domestic tourist destinations. And to do that, there needs to be synchronous coordination between passenger transport units, accommodation businesses, service operators, wholesale and retail, etc.

Opportunities for the tourism industry are equally distributed among all countries. Countries with more competitive pricing and service strategies will attract more tourists and earn more profits. To improve the competitiveness of the tourism industry, in addition to long-term orientations such as developing tourism types, attractions, entertainment services, etc., it is necessary to pay attention to strategies to attract tourists at specific times, especially during long holidays. To do so, it requires the participation of related industries, such as the aviation industry needs to have cheaper flights than usual; accommodation units have preferential price programs and additional convenient services; tourist attractions pay attention to not increasing prices and attached promotions; sell to tourists at reasonable prices, etc.

When a large proportion of tourists choose to visit tourist attractions in Vietnam, it will create a stimulating effect on many industries, create many jobs, increase sales in many industries, and increase profits accordingly. Tourism cannot develop without a comprehensive strategy and responsible participation from the aviation, transportation, retail, etc. industries. When all industries understand the philosophy of tourism, the development of the tourism industry will stimulate related industries to develop in a more sustainable direction.

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