Tourism industry in Vietnam – reasons to invest

Vietnam tourism has grown rapidly in recent years. Over the past decade, Vietnam has emerged as one of the highly attractive destinations in Southeast Asia with the number of international visitors to Vietnam increasing from 4.2 million in 2008 to 15.5 million in 2018, an 269% increase in 10 years, according to Vietnam National Administration of Tourism’s statistics.

Domestic tourism has also seen a strong growth, with domestic visitors increasing from 20.5 million in 2008 to 80 million in 2018 and total tourism revenue increasing from US$2.7 billion in 2008 to US$7.5 billion in 2018. This growth trend is expected to continue, with Vietnam forecast to welcome 17-20 million international visitors and 82 million domestic visitors by 2020.

There are several compelling factors that make Vietnam an attractive tourism investment destination:

Vietnam has diverse experiences for tourists

From bustling cities like Hanoi, Ho Chi Minh City and Da Nang to famous destinations like Ha Long Bay, Sa Pa and Phong Nha-Ke Bang National Park, Vietnam has experiences to suit every type of traveler. The long coastline with clear blue beaches, the landscape of the irrigation plains in the North and the rich cultural and historical attractions attract those interested in Vietnam’s feudal history.

Vietnamese cuisine and coffee culture have attracted a lot of tourists

Vietnamese cuisine is considered one of the top culinary experiences in Asia. Delicate and flavorful dishes such as pho, banh mi and goi cuon have made a splash around the world. Vietnam is also one of the top coffee producers, with the local coffee culture a highlight for visitors. Food and coffee tours are gaining a lot of attention from the tourists.

Lower costs comparing to neighboring countries

Compared to other popular Asian destinations such as Thailand, Malaysia and Singapore, Vietnam is relatively affordable. Accommodation, transportation and food costs can be 25-50% cheaper. For budget-conscious travelers, the lower costs make Vietnam more attractive. Investors can take advantage of the demand for cheap accommodation and travel experiences.

Economic growth and political stability

Vietnam has maintained a GDP growth rate of over 5% over the past decade. The rapidly expanding middle class with higher disposable incomes leads to more spending on travel and leisure. The stable political environment also gives confidence to investors in the tourism sector.

Improve aviation and infrastructure

Major cities such as Hanoi, Ho Chi Minh City and Da Nang have been improving their airport infrastructure to accommodate the increased number of visitors. Vietnam’s transportation infrastructure has also improved, making many destinations more accessible. Moreover, the rise of low-cost airlines such as Vietjet has made domestic travel more affordable. These improvements create opportunities for tourism investment beyond conventional destinations.

Young population with travel needs

More than 70% of Vietnam’s population is under the age of 35. This young generation, savvy with technology and social media, is keen to explore unique travel experiences. Additionally, Vietnam’s emerging middle class has higher disposable income and a desire to explore the country. This young generation represents a growing demographic of travelers.

Attractive investment opportunities

Some of the most promising investment areas in Vietnam tourism include:

• Street food and coffee tours;
• Companies organizing walking, cycling, kayaking tours;
• Tours to experience Vietnamese culture, cuisine and nature;
• Developing new destinations and spots to distribute visitors across the country;
• Budget hotels, hostels and motels outside the main tourist destinations;
• Boutique and luxury hotels in Hanoi, Ho Chi Minh City, Da Nang;
• Homestays and motels in remote areas such as Sa Pa, Ha Giang;
• Travel startups focusing on online tour booking platform technology.

Tourism in Vietnam still has great potential for development. Despite the impressive growth in tourist arrivals, Vietnam’s tourism industry has yet to reach its full potential. Currently, tourism accounts for 9% of the country’s GDP and the government has set a target of 10% by 2025. There is still much room for tourism investment to help Vietnam achieve its goals and become a leading destination in the region.

For investors, the growing interest in Vietnam from both domestic and international visitors presents a strategic opportunity. By capturing this rapidly growing market early, there is great potential to capitalize on Vietnam’s emergence as Asia’s next popular travel destination. The upside far outweighs any potential downside. Now is the perfect time for investors and would-be entrepreneurs to invest in Vietnam’s booming tourism industry.

Siglaw Law Firm

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