Tourism firms upbeat about Vietnam's 2023 outlook

Tourism firms are optimistic about the outlook for 2023, especially the goal of welcoming 110 million visitors to Vietnam this year when sharing with The Hanoi Times on the occasion of the Lunar New Year holiday.

Travelers from Colombia visit Hue City and Hoi An Ancient Town, Quang Nam Province. Photo: Asia Exotica Vietnam Travel

Alberto J. Lugo-Vina, General Manager, Hotel de l’Opera Hanoi: The hospitality industry is recovering strongly.

The first quarter of 2022 was very challenging for us, and we believe not only us but many other hotels and hotel team members feel exhausted after such a long time of so many ups and downs. The opening of tourism from March 15, 2022, is an important milestone for Vietnam's tourism industry and our hotel. 

After the re-opening of international flight routes, as of April 2022 onwards, the industry started receiving positive and rapid signs of recovery and flourishing, demonstrated in many indicators. Our hotel has seen significant improvements in both occupancy and room rates compared to 2021 and 2020, and both figures have almost rebounded to those of 2019. 

Besides positive financial figures, one of the most highlighting successes is that despite having gone through the hardest time, we did not lay off any of our employees. We take our team members as the core of the business and truly appreciate their diligence and loyalty. 

Right after the pandemic outbreak, Vietnam has been very effective in fighting Covid-19 and was ranked the ninth safest place in Asia-Pacific to get through the pandemic. The introduction of effective vaccines and health guidelines, as well as the country’s flexible response policy, have given foreign tourists more entry advantages, and they assessed Vietnam as one of the countries with convenient entry procedures, a safe environment, and many places to visit. 

In addition, the Vietnamese Government has shown great effort to support businesses and boost the recovery of the travel sector, such as VAT favorable policy (reduction from 10% to 7% in 2021 and 8% throughout 2022) or the “Safe travel – Full experience” campaign, focusing on launching safe, flexible, and adaptive domestic tourism. 

Those decisive and effective efforts from the government have provided not only us but other businesses in the tourism industry great support to mitigate expenses, overcome difficulties, and be well-prepared for recovery.

Hotel de l’Opera Hanoi's General Manager Alberto J. Lugo-Vina. Photo: Hotel de l’Opera Hanoi

If we look at the global pandemic from a different angle, the “quiet time” is a precious lesson and a reminder for us, the hotel business, to pause and think. Some practices we have been doing for the past five or ten years might not be applicable and effective anymore. The dependence on only a few key source markets and segments made the hotel business fragile. 

The Covid-19 experience has given rise to innovative business models such as contactless service and online orders. The hotel business should be more creative, react faster, and have more resources in 2023 to adapt to unforeseen changes. 

One more recommendation is regarding manpower. After almost three tough years, many staffs have changed their career, causing a serious shortage of highly qualified human resources. There will be fierce competition among hotels in recruiting employees and talent in the coming year. Personnel is the core of the hospitality industry, how we retain our key members, attract new talents, train them and keep them motivated will be the key. 

In addition, despite the positive signs, hotel businesses should still be very cautious in managing expenses. Three factors hindering tourism's recovery include high inflation, rising flight costs, and continued disruptions in key source markets such as China and Russia. 

Factors, we believe, are key contributors to the impressive numbers of international visitors in 2023 as follow:

Post Covid-19, Vietnam’s hospitality industry remains positive because of the improvement in infrastructure, favorable visa policies, and the political will to turn tourism into a key industry. With diverse natural conditions and topography, Vietnam has the advantage of being able to experience many types of tourism, meeting the travel preferences of many different types of tourists. In particular, Vietnam still has many undeveloped regions, which are natural scenic spots that can exploit attractive natural landscapes. 

If we look at the bigger picture, not only in Vietnam but also in other countries in the world, the hospitality industry is seeing a strong recovery. People feel confident and excited to travel again after months of lockdown and tend to travel independently to a safe destination. Therefore, Vietnam has many advantages to attracting tourists.   

Bui Bang Giang, Co-founder of Asia Exotica Vietnam Travel: Vietnam is one of South American travelers’ favorite destinations.

2022 was a year of many challenges and opportunities for businesses in this field, especially after Vietnam fully opened up to international travel as of March 15, 2022.

Contrary to the general comments from our industry colleagues, to be honest, we are very happy with 2022. Our expectation at the end of 2021 was worse, and we did not expect a quick opening in March 2022. Although our business in 2022 was equivalent to 40% of 2019, we are optimistic in 2023, we can reach the pre-pandemic level.

On the one hand, we have prepared well for the reopening during the pandemic, we still had a core team, and our office was never fully closed. Our sales and marketing efforts were continuously thought out for 2020-2021.

Asia Exotica Vietnam Travel's Co-founder Bui Bang Giang. Photo: Asia Exotica Vietnam Travel

Focusing on South America, one of our fortunes is that our markets were less affected by the conflict in Ukraine and unprecedented inflation, along with rising fuel and gas prices. People in South America are eager to visit Southeast Asia, and Vietnam is one of their favorite destinations.

However, visa policy and the high cost of flights are the main challenges for the travel industry. I believe that with the resumption of tourism in 2023, there will be more flights with a lower cost.

As the visa issue seems persistent and we see no sign of a change in that, we hope that the government can relax the visa policy in Thailand to attract more visitors.

To improve and promote the development of business activities in 2023, I suggest improving the visa policy, supporting airlines, opening representative offices, and the Government allocating a budget to advertise and promote the destination as Thais and Malaysians do, as well as organizing a national campaign to create a new workforce for tourism. Many qualified guides and travel advisers have left their job and moved into other sectors.

In 2023, the tourism sector expects to receive 110 million visitors, of which eight million are foreigners, a figure higher than the 3.5 million last year. I think the goal is achievable. Vietnam is a good destination and is on the must-see list of many travelers.

Once China reopens, and inbound tourism from the Korean and Japanese markets picks up, I don't think we will have any problem reaching eight million international arrivals. In 2022 many travel agencies were not ready to promote Vietnam due to lack of time, but this year 2023, they are much more ready for it.

As for the business plan, we aim to achieve 300% revenue growth in 2023 and welcome more clients than 2019. It is ambitious, but I am confident that we can achieve it. We are currently working hard to promote Vietnam in various international markets.

Spanish tourists enjoy trying egg coffee in Hanoi. Photo: Asia Exotica Vietnam Travel

Rajit Sukumaran, Managing Director, South East Asia & Korea, IHG Hotels & Resorts: The future of Vietnam’s travel and hospitality industry is bright.

2022 was a fantastic year of recovery as people started traveling again to reconnect with loved ones, explore new destinations, and meet for business. 

Globally, we saw strong demand as IHG’s group-wide RevPAR [Quarter 3 2022] exceeded pre-pandemic levels, with leisure stays room revenue increasing 12% in 2019 and ongoing return of business and group travel. The rate was also up 11% versus 2019.

We opened some wonderful IHG hotels in Vietnam in 2022 - the first Holiday Inn Resort in the country with Holiday Inn Resort Ho Tram Beach, the country debut of legendary modern luxury brand Regent in Phu Quoc, and the world’s largest premium brand Crowne Plaza landed in Vinh Yen with its signature work/life blend stay experience.

We also signed two exciting landmark portfolio deals last year that firmly established our footprint as a market leader in Central Vietnam, including a four-hotel, 2,709-room agreement with decade-long partner Sun Hospitality Group across two destinations, Quang Hanh and Ba Na Hills and a three-hotel portfolio deal with 668 rooms with new partner ConBap Ecological Tourist Co., Ltd near the fabled UNESCO Heritage Site of Hoi An.

STR [Smith Travel Research], data shows us that occupancy across Vietnam is steadily increasing. While the airlift is not yet back to pre-pandemic levels, where there is direct air travel, we are seeing the demand for leisure and MICE from ASEAN countries, India, and long-haul markets in Europe, America, and Australia. 

IHG South East Asia & Korea Managing Director Rajit Sukumaran. Photo: IHG

Our unique portfolio continues to enjoy strong domestic demand. We see multi-generational and multi-family trips to our beautiful and award-winning resort destinations in Danang and Phu Quoc, while business travel and weddings have returned to the cities, particularly Hanoi and Ho Chi Minh City.

The future of Vietnam’s travel and hospitality industry is bright, and we want IHG to be at the forefront of it. As we more than double our estate portfolio within the next few years from 15 to 37 hotels and introduce new brands, including voco hotels, Hotel Indigo, and Holiday Inn Express, we are building a robust eco-system, including a highly experienced in-market team and strong long-term partnerships to support that growth.

2023 will be a year of growing fast and taking stunning opportunities. We will continue to invest in our people, create world-class destination concepts and experiences, bring in well-loved and globally renowned brands, and also do business responsibly. This will enable us to create wonderful hotels and resorts sought after by travelers across the country.

Vo Thi Hoai Thi, Commercial Director of Ana Mandara Cam Ranh: The target of serving 110 million visitors to Vietnam is achievable and possibly exceeded.

Ana Mandara Cam Ranh Commercial Director Vo Thi Hoai Thi. Photo: Ana Mandara Cam Ranh

2022 was a year with many challenges, but it also opened up many new opportunities for the tourism industry. In particular, Vietnam's tourism industry also underwent a significant transformation, becoming more diversified and focused and having a correct assessment of the development of the domestic tourism market and the national tourism stimulus policy.

After the pandemic, tourists became more concerned about the health and value of their families, and the tourism industry is now taking many new steps to adapt to this trend. Caravan tourism typically focuses on wellness tourism and enhancing family experiences.

Tourism is the industry affected the earliest but recovered the latest compared to other sectors. Immigration and openness policies to attract foreign visitors to Vietnam directly affect businesses. In 2022, Vietnam was considered one of the countries that best adapted to the changing global tourism situation and has had many flexible and timely plans.

Tourism needs synchronization and coordination to create more attractions for destinations. We can combine with air carriers to promote and stimulate demand in key markets.

A local family stays at the five-star resort in Cam Ranh Bay, Khanh Hoa Province. Photo: Ana Mandara Cam Ranh

With a positive turnaround in Vietnam's tourism industry in the early days of 2023, the target of welcoming 110 million visitors to the country is achievable and possibly exceeded. The recovery of key markets and the opening of more air routes to new markets, such as India and Kazakhstan, will help the tourism sector quickly reach its target.

The industry is based on customer experiences, so we always consider human resources as a factor that helps build a successful hospitality brand. We focus on training professional, educated, and understanding staff to bring a good experience and brand to the hospitality sector.