Market diversification gives tourism industry a boost to meet yearly target

More difficulties for travel firms

China is one of the largest international visitor markets in the world. In 2019, Vietnam welcomed nearly six million Chinese visitors, making up about one third of the total number of international visitors to the country.

Whilst the northern neighbour’s decision to reopen its borders on January 8 can be viewed as good news for businesses, including tour operators, its recent announcement of a list of 20 countries to launch outbound tours excluded Vietnam, a factor which has raised concerns among local tour operators. Indeed, many enterprises have longed to welcome the return of Chinese tourists after a three-year hiatus caused by COVID-19.

The past few months have seen travel firms, restaurants, and hotels face a range of difficulties caused by the Vietnamese international tourism market failing to recover as expected. Now with the latest information relating to the Chinese market, many businesses have come to a standstill. Bearing many costs and high bank interest rates, these firms are now facing the risk of mass closures.

Tu Quy Thanh, CEO of Lien Bang Travel, played down the concerns of local business, saying that although China has yet to resume group tours to Vietnam it is just a matter of “technical barriers.” However, businesses are still waiting for these technical problems to be resolved so they can move forward.

Currently, Chinese visitors to Vietnam are required to apply for an entry visa, while the e-visa policy has not been restored. Tourists who wish to travel to the country still have to book tours through travel agencies, with individual tourists unable to apply for a visa to travel on their own.

“The late opening for group tourists will not only affect travel agencies and airlines, but other catering, hotel and shopping services will also be affected when we are looking forward to welcoming group tourists,” said Thanh.

Opportunities from high-end markets

While travel businesses expect China’s technical problems to be resolved soon, they have been advised to seek opportunities from high-end markets.

Pham Hong Long, dean of the Faculty of Tourism, University of Social Sciences and Humanities (Hanoi National University), suggested that firms should focus efforts on markets with high spending such as Japan, the Republic of Korea, Australia, the US, and Europe.

“In 2019, more than 28.7 million Koreans travelled abroad, of whom 4.3 million chose Vietnam as a destination to visit. In January 2023, the RoK was still the largest market providing international visitors to Vietnam with 258,946 visitors,” Long explained.

Sharing this perspective, Huynh Phan Phuong Hoang, deputy director general of Vietravel, said her firm has made a shift in its business strategy.

“Currently, Vietravel focuses on emerging markets, specifically the Republic of Korea, India, Australia, Middle East countries and most recently the US. It’s simply because the trend of customers choosing a journey and searching for the Vietnamese market from these places is quite high,” said Hoang.

A representative of Vietnam Airlines revealed that amid continued global uncertainties, the national flag carrier is still trying to resume more international routes to Europe, the Americas, and Australia.

“The recent times has seen the route to Australia and Germany record a positive number of passengers, and we do hope that these markets will bring about good results moving forward,” said the representative of the airline.

The tourism industry has set a target of welcoming eight million foreign visitors this year. While China still closes its doors to Vietnamese tourism, market diversification will help the tourism industry to meet its target, with high-end markets such as Japan, the RoK, Europe, the US, and Australia being their primary targets.