Why Has Vietnam’s Tourism Industry Yet to Become a Leading Economic Sector?
Vietnam’s tourism industry has witnessed impressive growth in recent years and emerged as a bright spot in the country’s economic landscape. The sector has significantly contributed to economic restructuring, poverty alleviation, urban and rural development, and cultural preservation. However, despite its potential, Vietnam’s tourism sector is still grappling with multiple challenges and has not yet achieved its goal of becoming a leading economic sector.
Vietnam’s Tourism Falling Behind in a Changing World
Between 2017 and 2019, Vietnam’s tourism sector saw its highest growth, contributing 9.2% to the national GDP. However, Vu The Binh, Chairman of the Vietnam Tourism Association, argued that this figure still falls short of making tourism a pillar of the economy. Comparatively, Thailand’s tourism sector contributed 23% to its GDP in 2023, while the Philippines recorded 22.5%, and Cambodia reached 25.8%. Meanwhile, the global average stood at 10.3%, higher than Vietnam’s peak performance.
Although the government has designated tourism as a key economic sector, uneven awareness and inconsistent implementation of policies at the local level have hindered progress. Investments remain scattered and inefficient, and inter-regional coordination is often lacking, resulting in missed opportunities for development.
Institutional Weaknesses and Policy Gaps
One of the main issues lies in Vietnam’s outdated policies and regulatory framework. Pham Van Thuy, Deputy Director of the National Tourism Administration, pointed out that government regulations have failed to keep pace with evolving tourism trends and modern practices. Lengthy and complex processes for revising legal frameworks have slowed the development of favorable policies.
Moreover, Vietnam’s tourism products, while increasingly diverse, still lack competitiveness and premium quality to establish a world-class brand. The collaboration between educational institutions and businesses in training tourism professionals is also limited, leading to skill gaps and a shortage of high-quality human resources.
Nguyen Quoc Ky, Chairman of Vietravel, emphasized that post-pandemic recovery efforts have shifted global competition in tourism to focus on four areas: policy, promotion, marketing, and leveraging national strengths. He suggested Vietnam must reassess its competitiveness by addressing gaps in its 2017 Tourism Law and introducing policies to ease business constraints and improve funding and workforce capabilities.
One of the legal shortcomings includes the lack of comprehensive regulations covering emerging forms of accommodation, such as campsites, farm stays, capsule hotels, and condo hotels. Standards for agricultural and community-based tourism remain undefined, leaving businesses without clear guidelines.
Additionally, Vietnam’s regulations on online booking platforms such as Airbnb, Agoda, and Booking.com are still ambiguous, leading to inconsistent enforcement. The absence of clear frameworks has created challenges in managing these services effectively.
Overcoming Barriers and Boosting Vietnam’s Tourism Potential
Vietnam has set ambitious targets for its tourism industry. By 2025, the sector aims to recover fully from the pandemic, achieve annual domestic visitor growth of 8–9%, and contribute 6–8% to the GDP. It also aims to create 5.5 million jobs, including 1.8 million direct jobs.
Looking ahead to 2030, the industry plans to position itself as a leading economic sector by adopting sustainable and green growth practices. It hopes to attract 35 million international visitors and 160 million domestic tourists, contributing 10–13% to GDP and generating over 10 million jobs.
However, these goals will remain out of reach unless the aforementioned barriers are addressed. Experts stress the need for policy reforms, streamlined regulations, and improved infrastructure to create a competitive and sustainable tourism industry.
Key recommendations include:
- Enhancing Investment Environment: Simplify administrative procedures, develop transparent investment policies, and offer incentives to attract both domestic and foreign investors.
- Legal Reforms: Revise the 2017 Tourism Law to incorporate new types of tourism services and accommodation, ensure safety and standards, and establish criteria for licensing businesses.
- Public-Private Partnerships: Leverage private-sector investments to modernize tourism infrastructure and develop smart destinations.
- Digital Transformation: Implement a comprehensive digital strategy to streamline data collection, facilitate bookings, and promote destinations effectively.
- Marketing and Promotion: Launch large-scale promotional campaigns through international media and collaborate with globally recognized brands to strengthen Vietnam’s image as a luxury and cultural destination.
Improving Infrastructure and Services
In addition to policy reforms, Vietnam must focus on improving its tourism infrastructure and services. Many tourist destinations still lack high-quality facilities, transportation links, and entertainment options, which reduces their appeal to high-spending travelers.
For example, Vietnam’s airports are often congested and in need of expansion and modernization. Poor connectivity between tourist hotspots also limits accessibility, especially for international visitors seeking seamless travel experiences.
Moreover, the quality of services and customer experiences at many destinations remains inconsistent. Enhancing staff training and introducing strict quality standards could significantly boost satisfaction levels and repeat visits.
Human Resource Development
A skilled workforce is crucial for the tourism sector to thrive. Experts advocate for closer collaboration between universities, vocational schools, and businesses to design training programs aligned with industry needs.
Programs should focus on language skills, customer service, and digital tools to prepare workers for evolving industry demands. Certifications and licensing systems must also be strengthened to ensure professionalism across the sector.
Sustainable and Green Tourism
Sustainability has become a global trend, and Vietnam has the opportunity to capitalize on its natural beauty and rich cultural heritage by promoting eco-friendly tourism practices. Destinations like Hue have already set examples by integrating art and cultural events into their tourism offerings, attracting international attention.
The government should encourage similar initiatives across the country, ensuring that development balances economic growth with environmental preservation and cultural integrity.
Building a Stronger National Brand
Finally, Vietnam must invest in building a strong tourism brand that highlights its unique offerings, from world-renowned heritage sites to luxury cruise experiences. Partnerships with international influencers, travel bloggers, and media outlets can amplify Vietnam’s appeal to global audiences.
The rise of niche markets, such as adventure tourism and culinary tourism, also presents opportunities for growth. Businesses should focus on creating personalized and premium experiences to cater to high-spending travelers.
Conclusion
Vietnam’s tourism industry has made significant progress but remains far from its goal of becoming a leading economic sector. Key barriers such as outdated laws, fragmented policies, and inadequate infrastructure have hindered its development.
To overcome these challenges, Vietnam must embrace policy reforms, promote sustainable practices, leverage digital transformation, and invest in high-quality products and services.
With clear strategies and determined efforts, Vietnam’s tourism sector can fulfill its potential and emerge as a vital driver of the national economy. It’s time for Vietnam to transform its tourism industry into a globally competitive and sustainable powerhouse.
