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.

Vietnam tourism has recorded many achievements regarding revenue and tourist arrivals since the beginning of 2023. During the first three days of the Lunar New Year, travel agencies continuously updated images of delegations departing in early spring.

Travel companies and tourist destinations earned high revenue

Nguyen Minh Man, Director of Communication, Marketing and Information Technology of TST Tourist Company, said that TST Tourists welcomed about 1,000 individual and family visitors. Saigontourist Service – Travel Company also served more than 21,000 visitors.

Besides, the number of visitors to tourist destinations also increased. Particularly, Ho Chi Minh City led the list with revenue of about VND 6,300 billion in the first five days of the Lunar New Year. Hanoi was estimated to welcome 32,000 international visitors in just 6 days of the holiday, bringing in more than VND 1,000 billion in revenue from tourism. Khanh Hoa also achieved outstanding achievements when receiving 15 flights carrying Chinese tourists, with 180 to 220 guests each. The total number of international visitors staying here during the 6 days of Tet reached 11,300.

Ba Ria-Vung Tau also welcomed about 10,688 international guests staying during Tet. In addition, the tourism revenue of Tay Ninh province reached VND 293.3 billion, up 88.6% over the same period in 2022.

It is estimated that about 9 million domestic tourists are traveling to spring in the country during the 6 days of the Tet holiday, up 47.5% over the same period last year. The number of international guests booking accommodations also reached 30-40% of the total bookings during the Lunar New Year.

The domestic market will still be the bright spot of Vietnam tourism

Nguyen Trung Khanh, General Director of the Vietnam National Administration of Tourism, hopes the Vietnam tourism market will be dynamic in 2023.

According to many experts, global tourism will grow strongly in 2023. Therefore, we can believe that Vietnam tourism will boom this year, especially in the context that many countries open their borders and tourism.

Besides, Nguyen Huu Y Yen, General Director of Saigontourist Travel, said that the domestic market is still a bright spot to help Vietnam tourism to strongly recover this year. Before the pandemic, China, Russia, and South Korea were the three largest markets contributing to the number of international visitors to Vietnam. However, only the Korean market has now begun to prosper, but there are not many Chinese tourists and no Russians.