Market InsightsVietnam

The Rise of Domestic Tourism in Vietnam

By 20 July, 2020June 30th, 2023No Comments

Boats in Halong Bay Vietnam

Due to the unpredictability and complexity of COVID-19’s development, international tourism industries are not likely to return to their normal state in the near future. This includes Vietnam, which has suffered heavily from the lack of international visitors. In order to cope with the situation, and tackle the crisis as well as possible, Vietnamese tourism companies have started to promote domestic tourism. This trend is projected to strongly continue in to the third quarter and will remain the new normal for the rest of 2020.

At the beginning of 2020, the Vietnamese tourism sector witnessed a robust growth in the number of both international and domestic travelers (up by 33% compared to the same period of 2019). However, after the Lunar New Year at the end of January, these numbers quickly went down due to the increasing concerns about the COVID-19 pandemic. In April, the number finally hit rock bottom, as social distancing and other heavy measures were put in to place. In the first five months of 2020, the number of international tourists only reached 3.7 million (down by 50% compared to 2019), while the number of domestic tourists also plunged to 16 million (down by 58.5%), according to a recent report by Vietnam National Administration of Tourism. The total revenue of tourism decreased by 47.4% to 6.5 billion dollars.

Graph showing tourists visiting Vietnam in 2019 and 2020

In 2019, international tourism played an important role in Vietnam as they contributed to 55% of the country’s total tourism revenue. Moreover, they were expected to continue driving the growth of Vietnam’s tourism industry in 2020. However, this scenario has been ruled out due to international travel restrictions and border closures. The Vietnam National Administration of Tourism forecasted the total number of international tourists in 2020 to only reach five to eight million, depending on when the travel restrictions are lifted. Amidst this situation, the Vietnamese government has decided to promote domestic tourism instead to foster the economy.

Domestic travelling activities has gradually been recovered since the social distancing rules were eased at the end of April. Many provinces have cooperated to diversify their offers to attract more local tourists. Furthermore, many big companies in the tourism industry are now promoting compelling deals, including flight tickets and fancy accommodations with 20-50% discount off normal prices. Local airlines have also resumed 50-100% of its domestic capacity to serve the rising demands during summer. As a result of the cooperation between governmental and private sectors, many touristy destinations have recorded positive growth for the first time after a long stagnant period. The occupancy level of many resorts and hotels has increased from 50% to 80% during weekends.

The fact that Vietnam has successfully controlled the spread of COVID-19 has presented an opportunity to boost domestic tourism. The current prices for traveling, accommodation and other additional services are expected to remain stable until the end of this year, while the service quality will be continually improved. Domestic tourism is still on the rise and is considered a key factor in recovering the suffering industry, as well as the economy as a whole.

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