Tourism growth driven by domestic demand: experts

Domestic demand is driving a tourism recovery in Việt Nam and compensating for the lower number of international visitors, tourism and hospitality experts said.

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Foreign tourists visit the Central Post Office, one of the popular tourist attractions in HCM City. — Photo Thu Hằng

HCM CITY — Domestic demand is driving a tourism recovery in Việt Nam and compensating for the lower number of international visitors, tourism and hospitality experts said.

Việt Nam has welcomed 8.9 million international visitors in the first nine months of this year. The number equals 69 per cent of the number of visitors during the same period in 2019, according to data from the General Statistics Office.

Domestic visitors reached 93 million during the period.

The tourism sector in Việt Nam has seen significant growth, driven largely by domestic tourism, according to Dr. Jackie Ong, senior programme manager of the tourism and hospitality management programme at RMIT University Vietnam.

In fact, the recovery of domestic tourism led to Việt Nam becoming the world’s fastest-recovering domestic aviation sector and the world’s fifth fastest-growing aviation market. It is expected to reach 150 million air transport passengers by 2035, Ong said.

After countries reopened their borders, Việt Nam gained in popularity as a global travel destination. This is evident in the country winning 16 top award categories in the 2022 World Travel Awards and being recognised as Asia’s Leading Destination (for the fifth time) and Asia’s Leading Nature Destination (for the second time) at the 2023 World Travel Awards.

To support the recovery of the tourism sector, tourism products are being diversified. Along with conventional types of nature and cultural tourism, the promotion of river tourism, cuisine or gastronomy tourism, rural tourism, and wellness and spiritual tourism are also becoming popular, she said.

Notably, the green and sustainable tourism trend has led to a higher demand for rural nature tourism, while community-based tourism has resulted in an increase in homestays, huts and local dining experiences.

There has been more focus on promoting and implementing sustainable tourism measures, such as bicycles for rent and walking streets in Hà Nội, HCM City and Đà Nẵng, and tourist entrance fees in the ancient town of Hội An.

Another commendable development is the move toward digitisation and use of technology to promote tourism by the government authority and travel industry.

QR codes are available at many popular travel destinations, and instant translation apps are being adopted by tourism service providers, she added.

Mauro Gasparotti, Director of Savills Hotels, said, “in the medium term, the market focus should be on increasing international marketing campaigns and destination marketing.”

“The extension of visa validity to 90 days is encouraging news and establishes a strong foundation for both leisure and business travellers, enabling them to plan their trips to Việt Nam without the limitations of entry numbers. However, Việt Nam’s tourism industry must proactively redefine its destination image, enhance its tourism offerings, and reinvigorate the market,” Gasparotti said.

“Promotions in other countries and the establishment of overseas sales offices are crucial for generating demand, especially during this period of intense competition among different countries to attract tourists,” he said.

When comparing Phú Quốc to other islands such as Phuket, Bali, and Boracay, it becomes apparent that the destination awareness of the Vietnamese island is much lower. Similarly, destinations such as Hồ Tràm, Quy Nhơn, and Mũi Né would greatly benefit from international marketing efforts, particularly those with high-quality resorts, he said.

The global hotel market is on the path to recovery, with occupancies in most regions nearly reaching 2019 levels, although the Asia Pacific region still trails, he said.

In Southeast Asia, Singapore has had the greatest market recovery, followed by Thailand. However, Việt Nam is still struggling to surpass its 2019 occupancy and rate benchmarks.

Việt Nam’s performance was behind that of regional competitors like Thailand, the Philippines, Indonesia, and Malaysia. These competitors reached occupancy of above 50 per cent and Singapore’s occupancy was nearly 75 per cent, but occupancy in Việt Nam struggled at 40 per cent in the first eight months of 2023, a decline of 20 percentage points below pre-pandemic levels.

Looking into the long-term potential of Việt Nam tourism, Gasparotti said, “there is no doubt that the hospitality industry will continue to play a fundamental role in the country, creating jobs and giving rise to new destinations, among other benefits. However, for Việt Nam to remain competitive, the market must change and update its offerings with a focus on local culture and the creation of communities. There also needs to be better infrastructure and increased attention to sustainable tourism.”

Việt Nam set a target of welcoming eight million international visitors for the whole of 2023, the lowest level among the top five Southeast Asian countries with the largest numbers of international arrivals, according to a report conducted by Outbox Consulting, a research and consulting firm.

The Ministry of Culture, Sports and Tourism will propose that Government raise this year’s target to 12.5-13 million tourist arrivals.

Theo Vietnamnews