As The Star has reported, Vietnam’s tourism department hopes to welcome approximately eight million foreign visitors in 2023 while generating 27.5 billion USD from the tourism industry. To achieve this goal, it will be necessary for Vietnam’s tourism sector to innovate.
One of the ways that the tourism sector can drive industry-wide innovation is through digitalization initiatives and the application of such solutions. Doing so provides two specific benefits: (1) improves incoming visitors’ travel experience and (2) catalyzes overall growth of the tourism market.
How Vietnam Can Explore Digitalization of Tourism
Before interested parties capitalize on digitalization opportunities related to Vietnam’s tourism industry, it is first essential to understand how the sector has performed in recent years.
Like other countries, the Vietnamese tourism market suffered a significant decline at the onset of the pandemic due to travel restrictions. Many players hoped that 2022 would usher in a sector rebound as Vietnam’s Ministry of Culture, Sports, and Tourism (MCST) estimated that the country would receive five million tourists by year’s end. Despite eased border restrictions to encourage the arrival of foreign visitors, Vietnam’s tourism sector failed to meet the goal set by the MCST, as only 3.5 million tourists were welcomed in 2022, per data from Vietnam Briefing.
Further innovation is needed to ensure that Vietnam’s tourism industry has improved results, especially considering the lofty goal for 2023. The importance of accelerating digital transformation in the industry cannot be understated, as it can provide accelerated development across the industry. Tourism businesses that utilize digitalization tools will be able to streamline operations via data-driven insight while also reducing operating costs, thus translating to the business’ improved overall efficiency.
There are several potential digital opportunities for tourism in Vietnam, such as the following:
- Augmented Reality (AR): With travelers relying more on online planning, virtual tours through augmented reality can be used to highlight destinations, attractions, and experiences. AR tours can also act as an added dimension to a business’ consumer experience, acting as a competitive advantage against companies in other countries.
- Mobile Applications & Platforms: Although applications related to tourism already exist, they focus on online bookings pertaining to hotels, tour operators, and the like. Instead, future mobile applications could be more specialized, like a government-sponsored application that directly assists the day-to-day agenda of tourists, acting as a virtual, on-the-go tour guide.
- Digitalization of Related Industries: To supplement the growth and draw further business to the tourism sector, other industries will need to continue to leverage digital transformation. For instance, the financial sector should continue to promote fintech solutions like e-money or mobile payments, effectively encouraging tourism as it increases financial accessibility for incoming foreign visitors. Other avenues include furthering investments in sustainable tourism, as digital technologies can be used to promote eco-friendly practices that help reduce the potentially harmful impact of tourism on local communities.
Sustaining the Digital Transformation of Tourism in Vietnam
While these digital opportunities will certainly guarantee short-term benefits, it is essential to ensure that the digital transformation of Vietnam’s tourism industry also reaps long-term success. Public-private partnerships (PPPs) will likely be the most significant factor.
The public and private sectors are actively driving their respective digital transformation initiatives. Although their endeavors will still contribute to the overall transformation of the tourism industry, collaborations need to be leveraged as these partnerships have the potential to affect the most impactful change.
For instance, some examples of potential PPP initiatives include: (1) a centralized website or application with verified travel information from legitimate organizations certified by relevant public and private tourism entities, or (2) the development of a singular, aligned, and detailed framework that will help guide tourism’s step-by-step digitalization process. The possibilities of public and private collaboration in the context of tourism’s digital transformation in Vietnam are endless.
Vietnam’s tourism industry undergoing digital transformation presents several benefits, both in the short and long term. Given the several profitable digital opportunities in the sector, potential investors should expect rapid industry growth in the coming years, with digital transformation playing a significant role.
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