Don’t be too optimistic about influx of Chinese tourists in Vietnam: insiders

China's domestic tourism industry has yet to return to pre-pandemic levels as predicted by many economic experts, so it is too early to expect a sudden surge of Chinese tourists landing in Vietnam, said Tran Viet Dung, CEO of Crystal Bay Golf & Resort.

China announced a plan to exit its zero-Covid strategy and to live with the coronavirus in December. It reopened its borders on January 8 and resumed issuing nearly all types of visas for foreigners on March 15.

Four months after re-opening, China's tourism industry has yet to fully recover as people are reluctant to spend. According to experts, tourism was expected to be a top beneficiary from the country’s reopening, due to the release of pent-up travel demand.

“Optimism about a recovery in China’s tourism sector in the post-Covid-19 era might prove to be short-lived, as hotels, airlines and tourism must first hire back all the staff they let go,” a South China Morning Post report wrote.

A survey conducted by the All-China Federation of Industry and Commerce in May 2022 showed that the tourism industry, which was estimated to have employed 30 million people before the pandemic outbreak in 2020, laid off 68% of employees.

Zheng Honggang, CEO of Shanghai-based Kate Travel, said China’s tourism sector is not prepared to serve a rising number of tourists since it is short of employees.

According to Jackey Yu, a partner with global consultancy McKinsey, this summer, overall travel business in China is expected to recover to just 40-50% of 2019 levels. “A full recovery will not occur until next year,” he said.

“Some analysts were overly optimistic,” said Franco Feng, CEO of Shanghai-based travel service firm Shenxiaokou. Air tickets are still expensive because the number of international flights remains low. Lots of tourists are taking a wait-and-see approach, he added.

In general, Chinese people are not yet ready to spend due to the austerity trend over the past three years.

Chinese consumers saved nearly $870 billion during the epidemic, tripling the 2019 figure. Thousands of businesses from restaurants and tea shops to amusement parks and hotels all expected consumers to go on revenge shopping sprees post-pandemic.

However, “people are not going to spend heavily on consumer items or entertainment services soon”, said Yin Ran, an angel investor in Shanghai. They are still not confident about their job and income prospects, Ran added.

Over the past decade, China has emerged as an important source of international tourists for Asia in particular and the world in general. The number of Chinese tourists traveling abroad increased from 10.5 million in 2000 to 150 million in 2018, an average growth rate of 16% per year.

In addition to the two traditional domestic destinations, Hong Kong and Macau, Chinese tourists have had a change in travel habits as their destinations have expanded to Southeast Asia, Europe, South America, Africa and even the polar regions. In 2017, 76% of trips made by Chinese tourists were to Asian countries, 9.3% to Europe and 8.7% to South American countries.

World Tourism Organization data showed that in 2018, Chinese outbound spending reached $277 billion, up 5.2% from 2017 and accounting for more than 50% of Asia’s total spending on international tourism, and 20% of the world's figure. Also that year, Chinese tourists boasted high average spending, reaching $1,850 per trip, ranking China among the top countries in the Asia-Pacific region in this regard, after Australia ($3,370) and Singapore ($2,440). Therefore, the reopening of China, the world’s most populated market, had heightened hopes of a business boom.

Like others around the world, Vietnamese tourism also pinned high hopes on an influx of Chinese visitors post-pandemic.

In Nha Trang and Cam Ranh, two tourism hubs of Khanh Hoa province in south-central Vietnam, businesses repaired and reinvested in facilities to welcome this source of tourists.

In late March and April 2023, Vietnamese airlines including low-cost Vietjet and national flag carrier Vietnam Airlines announced "dense" flight schedules from many Chinese provinces to Cam Ranh. Vietjet alone planned 15 flights per day, carrying about 3,000 Chinese tourists.

However, “now there are only a few flights from China a day. We were optimistic a bit early," said Muoi Quoc, the owner of a firm offering pickup car services at Cam Ranh airport. "Before the pandemic broke out in late 2019, we had to serve a huge number of passengers. Many drivers even caused accidents since they fell asleep while driving."

Prior to the Covid-19 pandemic, China was the second biggest source of foreign visitors to Vietnam with 5.8 million in 2019, after South Korea.

In April 2023, Vietnam welcomed only 112,000 Chinese tourists, much lower than the figure of 427,000 recorded in the same month of 2019.