Looking back on a year since Vietnam officially opened its doors to tourism (March 15, 2022), Prime Minister Pham Minh Chinh wondered: "Besides objective reasons such as the Covid-19 pandemic, the Russia-Ukraine conflict, and the difficulties the whole world is facing, what are the subjective reasons that make tourism "go first and return late"? Why is the rate of international tourists returning to Vietnam still low? Are the solutions correct and on target?". From there, the Prime Minister asked businesses and experts to speak at the conference in a "non-flamboyant, non-showy, straight-to-the-point manner, proposing solutions for Vietnam to attract international visitors".
Foreign tourists check in at Tan Son Nhat International Airport
Big challenge of destination competition
Identifying some of the main causes from the issues raised by the Prime Minister, Minister of Culture, Sports and Tourism Nguyen Van Hung said that Vietnamese tourism enterprises still depend on traditional markets, while these markets have not opened up due to the impact of Covid-19; have not proactively exploited new markets and potential markets. The implementation of promotional activities, advertising, and providing information about Vietnamese tourism internationally has not been carried out promptly, regularly, and continuously. In particular, in the context of increasingly fierce competition from countries in the region, many countries have open ways with flexible policies, although Vietnam's visa policy has many innovations and advances, compared to other countries, it is still modest.
Vietnam needs more measures to attract international tourists to spend money.
"To continue developing Vietnam's tourism, the tourism industry aims to have 8 million international tourists in 2023; 102 million domestic tourists; and total revenue from tourists of about 650,000 billion VND. To achieve the target, the Ministry of Culture, Sports and Tourism proposed that the Government issue a Resolution after the conference, setting out tasks and solutions for ministries and branches, including removing bottlenecks in the visa exemption policy. At the same time, consider and propose to the National Assembly to amend and supplement to improve the competitiveness of Vietnam's tourism, creating more favorable conditions for international tourists to enter Vietnam...", Minister of Culture, Sports and Tourism Nguyen Van Hung said at the conference.
Ms. Nguyen Thi Nga, Chairwoman of BRG Group
From an aviation perspective, Vietnam Airlines General Director Le Hong Ha said that up to now, all Vietnamese airlines, including Vietnam Airlines, have reopened all international routes and opened two new market areas during the pandemic, namely India and the US. However, international tourists are still low, so the utilization rate of airlines on international routes is only 60 - 64%. In particular, it is forecasted that in 2023, international air transport will return to 80%, domestic air transport will reach 95% compared to before the pandemic with a small profit, but the Asia - Pacific region will still be lower than 70% and continue to lose 6.9 - 7 billion USD. These figures show that Vietnam is in the trough of the aviation industry's recovery. Aviation is closely linked to tourism and this is a huge challenge.
"Countries in the region will have strong policies to attract and promote the tourist market. This creates great competition for national destinations," said Mr. Le Hong Ha.
Prime Minister Pham Minh Chinh
Sun Group Chairman Dang Minh Truong also assessed that Vietnam is facing a huge challenge as competition between destinations is increasingly fierce. "In 2019, Vietnam welcomed 18 million visitors while Thailand welcomed 40 million. In 2023, we set a target of 8 million but they welcomed 25 million and according to the report of the Ministry of Culture, Sports and Tourism, in 2030, Vietnam expects to welcome 35 million visitors but Thailand already wants to welcome 80 million visitors by 2027. Thus, if we do not have breakthrough solutions and stronger reforms right now, we will be far behind," Mr. Truong worried.
To improve the tourism industry's "picture", Sun Group's representative proposed that ministries and branches should soon consider analyzing, evaluating, submitting to the Prime Minister, and reporting to the National Assembly to amend and supplement the provisions of the Immigration Law. The procedures need to be shortened so that they can be completed in just one session and can take effect immediately. Specifically, increase the visa duration for international tourists from 90 to 180 days, the temporary stay from 30 to 45 days and allow multiple entries. For countries that unilaterally exempt entry visas, increase from 15 days to 30 to 45 days and also allow multiple entries. In addition, it is necessary to study and propose extending or expanding the subjects and countries that can be unilaterally exempted from visas, including key markets.
Which products to attract "big customers"?
Mr. Vu The Binh, Chairman of the Vietnam Tourism Association, affirmed that since March 15, 2022, when the Government allowed full reopening, tourism businesses have actively restored operations, proactively diversifying many new types of products such as MICE tourism (tourism combined with conferences, seminars, exhibitions, events, etc.), sports tourism, especially golf. However, to strongly develop these types, there are still many policy shortcomings.
"We need more policies to attract high-spending customers. Vietnam has a lot of potential to develop a series of new products such as golf tourism. In 2019, out of 5 million Korean visitors to Vietnam, more than 1 million went golfing, bringing in billions of dollars in revenue for the tourism industry. We propose to reduce or exempt special consumption tax for golfers who are tourists to attract more of these luxury customers to Vietnam," Mr. Vu The Binh proposed.
Analyzing more clearly the tax "burden", Ms. Nguyen Thi Nga, Chairwoman of BRG Group, cited: Not to mention income tax, just taking into account the revenue from golf tourists, businesses must pay 10% VAT and 20% special consumption tax. For every 100 VND in revenue, 30 VND must be paid in tax. This is a high level because surrounding countries only impose taxes of 5 - 7%.
"In 2017 and 2022, Vietnam was honored as the best golf tourism destination, and we have also organized the top golf tournaments in Asia. There have never been as many tourists coming to Vietnam to play golf as there are now. This is a group of guests with spending levels 2-3 times higher than normal guests. They spend an average of 200-300 USD/day, staying 3-4 days. Recently, BRG's hotel in Phu Quoc organized a wedding for an Indian billionaire, earning over 7 billion VND in revenue in 5 days. We expect the Government to adjust policies and issue many solutions to attract more high-end guests who spend a lot and stay for a long time," said Ms. Nguyen Thi Nga.
Expressing regret that the growth rate of Vietnam's visitors has risen to the top 4 in Southeast Asia but the total spending of tourists is only 40% compared to Thailand and much lower than Singapore, Indonesia, Malaysia, Korea, Japan, etc., Mr. Johnathan Hanh Nguyen - Chairman of the Inter-Pacific Group (IPPG) commented that the biggest reason is that Vietnam is missing out on two new trends in tourism including health tourism and shopping tourism. All countries with developed tourism industries in the region such as Thailand, Korea, Japan, China or further away, the US, Europe, etc. use the factory outlet model (shopping malls selling discounted goods through the season) to attract tourists, increase spending and tourism revenue. Thailand's shopping tourism contributes to a sharp increase in international spending revenue with a compound growth rate of 28.2% and health tourism contributes up to 4.7 billion USD in 2020.
"Linking the value chain is the "key" to help the Thai tourism industry thrive and all components in the value chain, from transportation to accommodation, services... will benefit. We need to launch a campaign to promote tourism together like the "SMILE" campaign that Thailand has done, in which the state plays a coordinating role, linking airlines, travel agencies to destinations, accommodation, restaurants and services. Airlines will "join hands" with travel agencies to reduce ticket prices, take customers to duty-free shopping centers and receive compensation for commissions. This is a huge resource for travel agencies to quickly recover. International visitors will flock to Vietnam to spend money, airlines, hotels and restaurants will also immediately recover", Mr. Johnathan Hanh Nguyen advised.
Policy breakthrough to breakthrough the goal
After listening to 26 recommendations from delegates at the conference, Prime Minister Pham Minh Chinh assigned the Ministry of Culture, Sports and Tourism to preside over and coordinate with the Government Office and relevant agencies to seriously absorb all opinions, promptly complete and submit for promulgation the Government's Resolution on accelerating recovery - accelerating effective and sustainable tourism development.
Prime Minister Pham Minh Chinh
The Prime Minister emphasized that tourism is an important economic sector, a smokeless industry, contributing increasingly to the economies of many countries. This is the development trend of the future, green, sustainable, and environmentally friendly development.
"By 2030, international tourists to Vietnam must reach 47 - 50 million, tourism must contribute about 14 - 15% of GDP and increase the proportion of the service sector in GDP to over 50%. These are high targets, not easy to achieve. However, I have a firm belief that with high determination, great efforts, drastic, effective actions, focus, key points, finishing each task, being proactive, creative, responding promptly, flexibly, clearly assigning responsibilities to the subjects, we will achieve these goals, with important foundations", the Prime Minister expected.
Regarding specific tasks and solutions, Prime Minister Pham Minh Chinh requested ministries, branches, agencies and localities to focus on reviewing, promptly updating, amending and supplementing mechanisms, policies and regulations on tourism in a synchronous, modern and integrated direction, creating favorable conditions for both domestic and international tourists; Research and propose breakthrough mechanisms and solutions to develop the tourism industry, especially exploiting Vietnam's unique factors.
First of all, it is necessary to amend and improve the policy on entry and exit procedures for international visitors in the direction of increasing the number of countries exempted from visas and extending the appropriate length of stay with reasonable fees, expanding e-visas; Creating conditions for domestic and international airlines to open routes and directly connect Vietnam with key and potential tourism markets. At the same time, strengthening international cooperation, especially with large, multinational tourism corporations and groups in promoting connections and attracting large and potential tourist markets...
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