Da Lat attracts many visitors but struggles to boost tourism revenue

Nguyen Thuy Dung, 32, of Ho Chi Minh City loves the Central Highlands city and has visited it so many times that she has lost count. Her most recent trip in early February cost VND3 million (US$118) for three days, covering hotel, rent, food and transport.

"Traveling in a group lowers costs per person to around VND2 million ($79)," she says.

According to Vietnam National Authority of Tourism, the country received 12.5 million visitors during the nine-day Tet holidays from Jan. 25 to Feb. 2.

Among the most popular destinations, Da Lat also stood out as the most searched by Vietnamese travelers.

It accounted for most of the 380,000 visitors to Lam Dong Province, but despite attracting more visitors than neighboring Khanh Hoa Province (250,000), Lam Dong’s revenues from tourism were only VND750 billion (US$29.5 million), 60% of Khanh Hoa's VND1.3 trillion ($51 million).

Tourism company Vietourist Holdings said Da Lat is one of its key destinations where it offers three-day, three-night package tours starting at VND1 million ($39) per person.

Such a low price is possible because the company has long-term partnerships in Da Lat and a steady flow of customers booking their services.

"Da Lat's pleasant weather and Vietourist's flexible tour schedules make it an easier sell, allowing the company to offer more discounts," the company said.

Huynh Ho Dai Nghia, a lecturer at the Ho Chi Minh City University of Economics and Finance, said Da Lat's popularity stems from its budget-friendly tourism model.

It mainly attracts domestic travelers, particularly young people and groups who opt for low-cost options like homestays and budget hotels and prefer street vendors over high-end restaurants.

"The average visitor in Da Lat spends around VND2 million (US$79) per day, half of what tourists usually spend elsewhere," Nghia said.

Most visitors stay only one or two nights, unlike in other destinations where they typically stay three to four nights and so spend more money.

This results in Da Lat's per capita tourism revenue being lower than that of Da Nang, Nha Trang or Phu Quoc.

Da Lat’s night market is crowded during summer 2024. Photo by VnExpress/Quynh Mai

Kim Thi Uysana, CEO of Vietnam Tourist, said tours to Da Lat make up 50% of her company's domestic tours, and each month it handles 10 to 15 groups with around 600 travelers.

The tour prices are VND500,000 (US$20) less than for Nha Trang or Phan Thiet.

"Beyond its cool climate and Instagram-worthy spots, Da Lat draws visitors for its affordability," Uysana said.

Many travel companies now sell "free and easy" packages, which only cover transportation and meals in Da Lat.

In November 2024 Agoda ranked Da Lat as Vietnam's most budget-friendly destination and among the top choices in Asia for budget-conscious travelers.

Despite its popularity, Nghia pointed out that Da Lat's tourism industry lacks coordination and a clear development plan. Most businesses operate independently, focusing on sightseeing services rather than high-value tourism, such as luxury resorts, MICE (meetings, incentives, conferences, and exhibitions) or niche travel experiences.

Tourists visit Da Lat’s Pink Grass Hill in late 2024. Photo by VnExpress/Van Phu

The city has yet to fully tap into its potential in green tourism, community-based travel, agricultural experiences, or creative tourism tied to its UNESCO title as a city of music.

Another limitation is Da Lat's nightlife and cultural events, which remain underdeveloped, giving visitors little reason to extend their stays. Without premium tourism services, unique products or diverse entertainment options, high-spending travelers are unlikely to stay longer or spend more.

Da Lat sees a surge in visitors on weekends and holidays, leading to overcrowding then, but it does not translate into steady long-term revenues.

Its accessibility encourages repeat visits, but each trip tends to generate minimal spending.

"To boost revenues, Da Lat needs more exclusive and high-end tourism products that appeal to wealthy travelers who will stay longer and spend more," Nghia added.