The first quarter of 2023 is coming to an end. Up till now, the good signs of the inbound tourist market are not really clear. Thus, the domestic market will continue to play a key role in Vietnam tourism this year.
The inbound tourist market still gloomy
Chinese tourists not yet come back a lot
In the second pilot phase, China has allowed to resume group tours to 40 more countries, including Vietnam, from March 15, 2023. Despite excitement, experts say that in fact, Chinese tourists will not flock to Vietnam soon.
We should clarify that the Chinese government has only agreed to organize pilot group tours in Vietnam. It is not that from March 15, the Chinese market has completely recovered. Even under fully open conditions, it takes a certain time for a market to reconnect. In the brightest scenery, it’s not until Q2, even Q3 this year that Chinese tourists will return.
Korean tourists not know much about Vietnam
Before and after the pandemic, South Korea has always been one of Vietnam’s largest inbound markets. According to the General Statistics Office of Vietnam, there were more than 3.6 million international visitors to Vietnam in 2022. In which, Korean tourists accounted for the largest proportion, reaching over 965,000 arrivals (26.4%). In the first two months of this year, the number of foreign visitors to Vietnam was estimated at over 1.8 million. Korean tourists continued to lead with more than 560,000 arrivals.
However, according to a recent survey by Outbox, the majority of Korean visitors are not impressed and know much about Vietnam. Therefore, their loyalty and net promoter score will not be high. We need to find new ways to attract and improve their satisfaction while waiting for the Chinese market to recover strongly.
Indian market: Potential but complicated
With the world’s second largest population and a fast-growing economy, the Indian market is considered a “delicious cake” for many destinations, including Vietnam. According to India MOT, in 2019, the total number of Indian outbound tourists was 29 million, an increase of 143% between 2009 and 2019. However, it is still a vague and complicated segment for Vietnam. There are still barriers of language, cuisine, or suitable travel services for Indian tourists in Vietnam. Every market is different, and in order to please visitors, we need to understand and research to connect with them effectively.
Other faraway markets
The Americans are increasingly interested in Vietnam tourism. In February 2023, the US ranked only after South Korea in the number of visitors to Vietnam (estimated at 69,648 visitors). Their spending power is also always among the top in the world. Nevertheless, with the current immigration and visa policy, it will be difficult for Vietnam to attract tourists in faraway markets such as the US and Europe, who prefer long stays.
The power of domestic market
In 2022, the domestic market was the bright spot of Vietnam tourism with 101.3 million arrivals, an increase of 1.5 times compared to the target of 60 million, exceeding the 2019 level. Based on that, Vietnam tourism expects to welcome 102 million domestic tourists in 2023. Though many suppose that this goal is not easy to achieve. Anyway, compared to the international market with many unknowns, the domestic market will still be much brighter.
The reasons why many people think this year’s target is difficult to reach are because pent-up travel demand has been relieved and international destinations have all reopened. Even so, the domestic market is still expected to lead the way to the recovery of Vietnamese tourism.
Firstly, Vietnam’s domestic market has the ability to recover quickly after the crisis. The evidence is the post-pandemic figures mentioned above. Secondly, the domestic market is less affected by external factors such as natural disasters, pandemics, crises, flight restrictions, etc. Finally, the domestic market doesn’t depend on the imbalance of foreign arrivals between peak and low season.
Although the number of Vietnamese domestic tourists increased, revenue from domestic tourism decreased. During 6 days of the Lunar New Year 2023, there were nearly 9 million domestic visitors, an increase of nearly 50% compared to the same period last year. But revenue dropped sharply, estimated at 17,500 billion dong, down 30% over the same period. The reason is that the old communication is no longer effective. The behavior and preferences of tourists have changed a lot before, during and after the pandemic. For example, outbound tourists in 2019 chose self-guided travel (52%), package tours (38%) and tailor-made tours (10%). However, during the pandemic, in 2021, they no longer preferred customized tours, the two most popular were self-guided tours (70.85%) and package tours (29.15%). By 2022, as travel policies have been eased and tourism has been gradually recovering, the vast majority of tourists chose self-guided tours (84.5%) and others went on a package tour (15.5%). It is clear that with only one index on the type of outbound travel, the proportion and tastes have changed very much.
Now we can no longer rely on experiences or “outdated” assumptions about travelers and impose inappropriate campaigns to reach them. Businesses need a quality data platform to track, update and do more research to better understand the needs and tastes of visitors. Thereby, they can make new and effective strategies that are flexible to market changes.