Why Vietnam failed to achieve its foreign tourism target

Vietnam was one of the first Southeast Asian countries to fully reopen to international tourism after the Covid-19 pandemic thanks to its widespread vaccination campaign.

However, the country has failed to take advantage of the early reopening and foreign tourist number to the Southeast Asian nation is expected to reach only 3.5 million this year, around 70% of the target of five million.

On the other hand, several of Vietnam's Southeast Asian neighbors – including Thailand, Singapore, Indonesia, and Malaysia – have achieved their annual targets this year.

Visa woes

Experts have pointed out time and time again that Vietnam's cumbersome visa policies are a major bottleneck preventing foreign visitors from returning to Vietnam.

Just after Vietnam opened in March, luxury tour operator Lux Group brought the first group of European visitors to northern Vietnam's UNESCO World Heritage Site Ha Long Bay.

The group was granted 15-day visa exemption for single entry, so after visiting Ha Long they went to Cambodia for a few days before coming back to Vietnam to visit Vung Tau, said Lux Group chairman Pham Ha.

"They had to go through complicated procedures to enter Vietnam twice, and there were moments we thought they could not get in."

Chris Farwell, a member of Vietnam Tourism Advisory Board (TAB), told a recent conference that foreign visitors were complaining that applying for visas at Vietnamese embassies in their countries was extremely difficult.

Applicants must be guaranteed by companies or introduced to expensive visa granting services that often cost $200-$500 per person even though the official visa application fee is only $25.

Miquel Àngel, another member of the board, said that when the government chose March 15 as the reopening date, it did not announce whether the visa system was going to be the same as it was before Covid, or there would be a new system.

"So everybody gets very confused."

Vietnam now offers a visa exemption for nationals of 24 countries for stays of 15-30 days. Chileans get 90 days, and a one-month single-entry e-visa has been granted to visitors from 80 other countries. A multi-entry three-month visa available before Covid has not been brought back.

Its major tourism competitor Thailand offers visa exemptions for 65 countries with a maximum stay of 90 days, while other Southeast Asian countries have launched "golden visa programs" with maximum stays of up to 20 years.

"We just need to compete with Thailand," said Tran Dinh Thien, a member of the Vietnamese prime minister's economic advisory group. "Vietnam should follow in Thailand's footsteps and exempt visas for more nationals."

Experts also argued that Vietnam's low readiness to welcome international tourists back after the two-year hiatus has contributed to the sluggish recovery of the local tourism sector.

There had been mixed messages from ministries about reopening.

Angel said one week before the Ministry of Tourism decided to reopen to international tourism, the Health Ministry "declared Vietnam was not safe to travel, so all efforts of the tourism ministry to reopen was clearly destroyed."

The health ministry had required that foreign tourists self-isolate for three days upon entering Vietnam and take Covid tests two to three times before getting to travel the country. The proposal was rejected by the tourism ministry and eventually did not take effect.

But according to Àngel, it still turned tourists away, and most flocked to Thailand instead.

Despite opening, Vietnam lost the second quarter and foreign tourists only started coming to the country in June, he added.

A little rusty

A lack of human resources due to Covid layoffs, as well as dilapidated infrastructure that went unused and unmaintained during lockdown, have also been cited as major obstacles towards providing foreign nationals an attractive environment in which to travel.

"More than 90% of tourism service establishments have had to virtually start from scratch post pandemic," said tourism researcher Nguyen Duc Chi, "so the tourism sector needs more time and capital to get human resources and infrastructure back to pre-pandemic standards."

According to a report by the Vietnam Hotel Association released last month, the Vietnamese tourism sector had about 400,000 workers in 2019.

But nearly half the workforce left their jobs due to the pandemic, so now there is on average only one staff member per room at five-star hotels, the report said.

The report also showed that 30-40% of hospitality facilities have yet to reopen due to the low number of foreign visitors.

Chi said that while solutions for the long-furloughed industry had been discussed openly at several major conferences recently, representatives from the ministries of diplomacy, public security and finance had remained absent from the talks.

Additionally, external factors such as the fact that the key markets of China, Japan, Taiwan and Russia, which had in total accounted for more than half of international arrivals in Vietnam before the pandemic, had yet to fully reopen by the end of the third quarter this year.

Quality control

Experts also agree that low-quality tourism services are a major challenge for the tourism industry.

Nguyen Ngoc Bich, CEO of Mekong Rustic Tourism Company, said current tourist destinations are only focusing on the construction of high-end hotels while ignoring the lack of new tourism products.

Major cities such as Ho Chi Minh City and Hanoi are home to mediocre nightlife scenes and also lack the new tourism services needed to attract tourist spending, according to Bich.

Àngel of TAB said nobody expected Vietnam to be underperforming, given its tourism achievements before Covid.

In 2019, the year before the pandemic hit, Vietnam's foreign tourists surged 20% from the previous year to an all-time high of 18 million.

Angel said he had thought the target of five million "was easy to surpass," "but the reality was very different."

Struggling with disappointing numbers, the tourism industry has set a target of just eight million foreign tourists in 2023.