How Tourism is Driving Vietnam’s Economy

The Vietnam tourism industry is expected to rebound this 2022. Read below to understand what businesses and professionals can do to capitalize.

April 2022 , by YCPS Marketing & Communication Group

As reported by Vietnam Plus, Vietnam reopened its borders to international tourists last March 2022. Since then, the country has welcomed a significant number of arrivals, which has bolstered its tourism sector. Given that Vietnam’s tourism industry lost approximately 23 billion USD in revenue in 2020, largely due to the adverse effects of the COVID-19 pandemic, the influx of visitors is welcome news.

Vietnam is also slated to host the 31st Southeast Asian (SEA) Games this May 2022, with a large number of tourists expected to enter the country to cheer on their athletes after delays due to the COVID-19 pandemic. With this, Vietnam’s businesses and professionals now find themselves in a unique position to help bolster economic recovery through the tourism industry.

Keys to Leveraging Tourism

Closely related to the expected increase in tourism revenue, a report by the Asian Development Bank (ADB) has also claimed that Vietnam’s economy will rebound by 6.5% this 2022, a sizeable jump when compared to the 2.6% rate recorded in 2021. 

The boost that the country will receive from the tourism industry will likely play a major role in Vietnam’s attempt to meet the economic projections set forth. Specifically, businesses in the hospitality industry, especially those that specialize in services such as food & beverage, lodging, and adventure & recreation, are expected to thrive especially as COVID-19 restrictions ease across the region and events such as the SEA Games drive tourist numbers.

As such, local businesses should leverage their position by innovating their products and services, while also optimizing their advertising and communication efforts to attract potential clientele. For example, in one of the most famous trade villages in Hanoi, several businesses in Bat Trang recently collaborated with travel agencies to design and launch tourism initiatives to cater to incoming tourists. This not only brings further awareness to the culture of Vietnam but more importantly, will likely increase economic revenue within the village. 

Moreover, the growth of the internet economy in Vietnam should also be an area of consideration for local businesses. In the YCP Solidiance white paper “Road to Recovery: Post Pandemic Business Outlook in Southeast Asia,” data revealed that internet economies in the ASEAN-6 (Indonesia, Thailand, Malaysia, Vietnam, the Philippines, and Singapore) grew at a CAGR of 37% from 2017 to 2021. For Vietnam specifically, the country’s internet economy exhibited a 29% CAGR—the highest in the region.

Exploring Related Opportunities
To fully capitalize on the expected activity within the tourism industry in the coming months, Vietnam should focus on initiatives like the Economic Recovery and Development Programme. Ratified last January, the government implemented this framework to bolster post-pandemic socio-economic recovery and development. More specifically, this programme will aim to help MSMEs scale and improve performance by addressing issues like housing for workers and social housing, obstacles that became evident during the pandemic. 

Public and private sector cooperation will also continue to be a point of emphasis as it enables the acceleration of businesses. In the YCP Solidiance report “Public and Private Sector Cooperation: Sustainable Urban Development in Vietnam,” collaboration in areas like logistics and transportation infrastructure will help facilitate goods and services of businesses to connect from major cities to rural areas, and vice versa. Moreover, the Hanoi Times also reported that the government has expressed its commitment to establishing an environment that encourages public and private partnerships (PPP) amid the rapid digital transformation. 

Given the importance of government initiatives and public and private collaboration, players who hope to capitalize on the surge of activity brought about by events like the SEA Games should actively seek out opportunities as interest in potential partnerships only continues to grow. 

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