Vietnam's economy in 2023: Exciting yet challenging (Part 2)

Vietnam's economy in 2023: Exciting yet challenging (Part 2)

2023 could be a year of great opportunities to solidify the importance of Vietnam as a strong economy of the region, RMIT experts anticipated.

Read “Vietnam's economy in 2023: Exciting yet challenging (Part 1)” here

Tourism sector in 2023 – cautiously optimistic outlook

Vietnam welcomed 3.66 million foreign visitors in 2022, 23.3 times higher than the figure in 2021, but still down 79.7 per cent compared with the pre-pandemic level in 2019.

While the domestic tourism market rebounded spectacularly during last year, and contributed to offset the losses from international tourism, domestic spending and average length of stay are still low, according to research on the domestic tourist market in 2016-2022 conducted by the Vietnam Institute of Tourism Development.

According to RMIT Vietnam Deputy Senior Program Manager for Tourism and Hospitality Management Dr Nuno F. Ribeiro, the outlook for 2023 is cautiously optimistic.

“A flurry of high-profile media exposure and a variety of international travel awards in 2022 may bring the needed turnaround. Optimistic projections point towards 10 million international arrivals, with most international tourists coming from South Korea, Japan, United States, and several European Union countries.

“The relaxation of COVID-19 travel restrictions is also helping towards this growth”. Dr Ribeiro said. 

news-1-vietnams-economy-in-2023-exciting-yet-challenging-part-2 Dr Nuno F. Ribeiro, Deputy Senior Program Manager for Tourism and Hospitality Management, RMIT Vietnam.

The Vietnamese Government’s efforts in promoting Vietnam as a “green”/sustainable destination have already bore some fruit, as was demonstrated, for example with the ecological tourism project in Phu Yen and in the Mekong Delta region.

Several indices show Vietnam’s improvement, though there is still much to do to achieve top ratings. Vietnam placed 52nd in the Travel & Tourism Development Index (TTDI) in 2021, an increase of eight places from 2019. Last year, Vietnam was placed 23rd in the Asia Pacific Risk Reward Index according to Fitch Solutions.

Dr Ribeiro added: “Vietnam will increasingly attract tourists who seek to visit sustainable tourism destinations, and that offer a combination of tourism products – these include traditional sun, sea, and sand destinations like Phu Quoc, cultural heritage destinations such as Hoi An, and interesting urban centres such as Hanoi and Ho Chi Minh City.

“However, Vietnam will also have to content with competition from neighbouring tourism markets such as Thailand, Singapore, Indonesia, and Malaysia, which were faster in removing COVID-19 restrictions and already benefit from less stringent visa and arrival procedures.”

news-2-vietnams-economy-in-2023-exciting-yet-challenging-part-2 Vietnam will increasingly attract tourists who seek to visit sustainable tourism destinations, and that offer a combination of tourism products (Picture: Unplash).

To strengthen the tourist sector, Dr Ribeiro suggested two recommendations:

First, addressing the tourist visa issue. Increasing the number of countries that are granted visa-on-arrival, increasing tourist visa length from 15 to 30 or even 60 days would lead to an increase in international tourism and consequently a rise in tourism receipts. 

Second, increasing the sustainability of Vietnamese tourist products by forming public-private partnerships that specifically address international tourists’ needs. These needs are quality consistent tourism service delivery by duly qualified and trained human resources; offering ecologically sustainable products and services and offering tourism products that combine multiple attractions such as beach destinations, cultural sites, and city centres.  

Overall, the year 2023 will be a very interesting but also challenging year. Most of the economies on the globe will be struggling with decreasing economic growth bordering recessions. Vietnam will not be an exception to this, as we rely heavily on international trade. But it is also a year of great opportunities to set the base for future, sustainable growth becoming more transparent, less corrupt, and “greener.”

Story: Dung Pham

02 March 2023

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