AI can be a game changer for Vietnam tourism

Artificial intelligence can play a pivotal role in enhancing both operational efficiency and customer experience in the tourism industry, writes Dr Nuno F. Ribeiro, a senior lecturer at RMIT University and chairman of the tourism and hospitality sector committee at Eurocham Vietnam.

The beauty of artificial intelligence, or AI, lies in its versatility. Unlike traditional software designed for specific tasks, AI is a multi-use technology capable of solving a wide range of problems.

From powering virtual assistants like Siri and Alexa to enabling self-driving cars, AI is transforming industries. This adaptability stems from AI's ability to learn and adapt to new information and challenges, constantly evolving and improving its performance over time.

AI technology is revolutionizing the travel industry, offering numerous advantages to both travellers and businesses. The World Travel and Tourism Council forecasts that AI will profoundly shape the future of travel and tourism, not only by significantly enhancing operational efficiency for businesses but also by enriching customer experiences.

For travellers, AI enhances the entire travel experience by personalizing recommendations and itineraries. By analyzing factors such as travel dates, budgets, and personal interests, AI-powered systems can create tailored travel plans that integrate seamlessly with booking platforms, making the journey from planning to reservation easier, faster, and cheaper. Additionally, AI-driven chatbots and virtual assistants provide real-time support, aiding with research, bookings, and adjustments during trips.

Businesses in the travel sector are also seeing substantial benefits. Advanced AI algorithms can process large datasets to predict shifts in consumer demand, allowing for dynamic pricing and precisely targeted marketing strategies, minimizing the effects of seasonality.

Airlines can use predictive AI to foresee flight delays and consumer booking patterns, while hotels have begun to deploy AI-driven check-in systems and concierge robots to improve customer service. Furthermore, AI can analyze customer feedback, social media sentiment, and online trends to pinpoint areas for enhancement, helping businesses refine their offerings.

The global tourism industry, rebounding from the Covid-19 pandemic, anticipates a landmark year in 2024, with international arrivals and expenditures expected to soar beyond their pre-pandemic levels.

Vietnam's tourism sector is also experiencing a remarkable resurgence in 2024, driven in part by its more favourable visa policies and evidenced by the significant increase in international arrivals. This remarkable recovery presents a ripe opportunity for Vietnam to solidify its position as a leading tourist destination in Southeast Asia, and AI is poised to play a key role in this endeavour.

Vietnam's potential for further AI use is directly related to its robust digital infrastructure and the increasing rate of digital literacy and adoption of digital technologies. According to the World Economic Forum's Travel & Tourism Development Index, released in May 2024, Vietnam ranks 57 out of 119 countries in terms of Information and Communication Technology (ICT) readiness, which assesses the availability and use of information and communication technology infrastructure and digital services.

Furthermore, a growing body of evidence suggests that AI is already being effectively deployed in several key areas across the Vietnamese tourism sector.

AI algorithms are employed to forecast tourism demand by analyzing historical data and trends. This helps businesses in the tourism sector optimize their operations, manage resources efficiently, and tailor marketing strategies to anticipate fluctuations in tourist arrivals.

Under the broad umbrella of smart tourism, AI technologies are integrated into various aspects of the travel experience to enhance convenience and personalisation. This includes the use of AI for faster booking processes, virtual tour guides, travel safety, and interactive information systems that improve the overall tourist experience.

AI-driven tools are also used for customer relationship management, automated check-ins, and personalized marketing, leading to improved efficiency and customer engagement.

AI-powered chatbots and recommendation systems play a crucial role in providing personalized suggestions to tourists. These systems analyze user preferences and behavior to offer tailored itineraries,

AI is used to perform sentiment analysis on customer reviews, social media posts, and media coverage. This helps tourism businesses gauge public perception, identify areas for improvement, enhance their marketing efforts, and adjust their services accordingly to meet customer expectations.

While these examples highlight the promising inroads of AI in Vietnam's tourism sector, the industry is on the cusp of a much more profound transformation as it grapples with fundamental challenges. One such challenge is the shortage of qualified personnel in the sector.

Experts have consistently emphasized the need for upskilling and retraining in tourism and hospitality, particularly in the post-Covid landscape. A recent study highlighted the gap between supply and demand: while approximately 20,000 students graduate annually in travel, tourism, and hospitality fields, the industry requires a minimum of 40,000 trained professionals each year. This shortage often translates to inconsistent service quality, hindering Vietnam's efforts to boost repeat visitation rates.

AI is a powerful tool to help address this human resource challenge. By automating tasks and streamlining operations, AI can alleviate the burden on existing staff and enhance overall service quality. Moreover, AI-driven training programs can provide personalized learning experiences, equipping the workforce with the digital skills needed for a rapidly evolving industry.

As Vietnam embraces AI, it unlocks the potential for sustainable growth and a competitive edge in the global tourism market. Strategic investment in both AI technology and human capital development will be crucial for Vietnam to achieve its goal of becoming a leading force in the global tourism landscape.