Vietnam boasts huge potential for wellness tourism development

In recent years, people have grown used to the term "wellness life" or "healthy life". This trend has grown stronger since the appearance of Covid-19, resulting in a higher demand for a healthy life.

“Wellness life” contains many aspects from culture and lifestyle to economy, including nutrition, sports, health care, spa, and environmental protection. All of these combined with tourism activities create “wellness tourism”.

Global trends

According to a report released by the Global Wellness Institute (GWI), the global wellness economy was valued at $4.4 trillion in 2020 despite the widespread impacts of the pandemic, and is expected to reach $7 trillion in 2025.

Asia took the lead with a value of $1.5 trillion and a growth rate of about 8.1% from 2017 to 2019, as compared to 6.6% of the world average.

Wellness tourism value alone reached $617 billion in 2017 and $720 billion in 2019. This is predicted to increase to $816.5 billion this year and to exceed $1,127 billion in 2025, with a likely average growth of 20.9% per annum.

In Asia, China, Japan, India, Thailand, South Korea and Malaysia were among the top 20 wellness tourism markets in the world in 2020, with respective turnovers of $19.5 billion, $19.1 billion, $7.2 billion, $4.7 billion, $4.3 billion and $3.5 billion.

Wellness tourism includes a wide range of activities from sightseeing, nursing, medical treatment-rehabilitation and spa breaks to culture and belief practicing, healthy eating breaks and local community exchanges.

The leading countries in this model include Japan with onsen bathing that creates a Japanese resort tourism brand; South Korea with salt crystal bathing; India with tours featuring meditation and yoga retreats; and Thailand with resorts for retirees.

Notably, wellness tourism spending is always higher than that for regular tourism, with foreign visitors’ spending 35% higher and domestic tourists’ 77% higher. Especially the cost of rooms in resorts is always high, ranging from a few hundred to thousands of U.S. dollars a night, even in Vietnam.

The above figures show that the wellness tourism industry is very attractive and will further grow in the future. It makes a significant contribution not only to the national economy but also to the development of social life.

Potential in Vietnam

In Asia, Vietnam is considered a country with a lot of potential for wellness tourism development. The country is expected to become a leading destination as it possesses diverse natural landscapes, a long coastline of 3,200 kilometers featuring beaches considered among the world's most beautiful, and subtropical climate.

It also boasts many hot mineral springs, a traditional medicine sector with herbal sources very suitable for health care, world heritages, historical relics, beliefs, and cultural diversity. Especially, attractive foods and cheaper travel costs compared to many other Asian countries are also the country’s advantages.

This type of tourism has taken root in Vietnam in recent years with mineral spring attractions in all three regions of the country, along with eco-tourism cultural activities. For example, there are high-end health care resorts with hot mineral springs in Quang Ninh province, Hue town, Danang city, Ho Tram-Binh Chau in Ba Ria-Vung Tau province, Nha Trang town of Khanh Hoa province, or herbal baths of the Dao ethnic minority people in some northern provinces.

In addition to its natural potential, Vietnam also boasts fast-growing middle and upper classes and flourishing tourism activities, meaning more spending in the wellness sector.

In 2019, before the Covid-19 outbreak, domestic tourists totaled nearly 85 million, creating a revenue of VND334,000 billion ($14.5 billion) for the sector. Besides, every year many Vietnamese expats return to their home country for dental and beauty care and traditional medicine therapy. Meanwhile, each year thousands to tens of thousands of Vietnamese travel abroad for medical treatment and travel, spending billions of U.S. dollars.

Challenges

Despite great potential, wellness tourism in Vietnam is still of small scale, mainly based on the spontaneous activities of companies. In addition, there remain a lot of difficulties and challenges.

First of all, wellness tourism is still a new concept in Vietnam and as such, lacks clear definitions, development orientations, criteria and standards. It is simply understood as spa breaks, mineral bathing, mud bathing, yoga retreats and meditation. Those services are now simply utilities of a resort, and do not yet form an overall system.

Most importantly, there is no overall policy orientation for land planning, investment incentives, certification standards and other procedures. Coordination between the tourism, health care, and sports sectors is also limited.

The absence of an overall policy orientation has led to spontaneous and scattered development of health care tourism. Many providers have also shown a lack of professionalism and abused this type of service for their own interests. Meanwhile, marketing and promotion campaigns both within and outside the country for highlighting wellness-based lifestyle options are limited.

The third challenge is the environment, a matter of worldwide concern. Every day the media reports, whether in Vietnam or around the world, global climate change, extreme weather, global warming, sea level rise, forest fires and floods, along with the inappropriate exploitation, even destruction of natural resources via the massive construction of hydroelectric power plants, destructive fishing, and uncontrolled use of agrochemicals.

The fourth challenge is capital. It has a direct impact on resort tourism and is also a bottleneck to its development. Resort real estate, a very important factor in resort-wellness tourism, is currently subject to biggest credit restrictions amid the central bank's tight control of real estate credit.

The resort real estate segment has become stagnant since 2009. Limited capital has left many projects unfinished or operating inefficiently, affecting not only the economic efficiency but also infrastructure facilities of the sector.

These important and fundamental challenges are barriers to the development of wellness tourism in Vietnam.

Solutions

In order to fully tap the potential, it is necessary to solve the above-mentioned difficulties and challenges. At many seminars and in reports, businesses and experts have put forth a number of solutions for the future development of the sector.

The first is to design a policy to support its development in line with the national tourism development strategy for 2025 and 2030.

Secondly, Vietnam’s overall tourism development planning or national land use planning must include the use of land associated with tourism and the conservation of natural resources and the environment.

The third solution is to build a national network connecting professional areas like health care, sports, culture, arts and beliefs in overall tourism development to increase the quality and economic value of wellness tourism.

Next is to build a mechanism to help investors gain better access to capital sources. For example, allowing foreigners to buy condotel products will mean not only more capital inflow but also lure more wellness tourists to Vietnam.

The fifth is to strengthen management capacity from standardizing service criteria and monitoring quality and safety to professional issues related to the health of service users.

Last but not least, it is necessary to strengthen the promotion of Vietnam’s wellness tourism by increasing budgets for advertisement and organizing events through media channels as well as diplomatic, cultural, sports and economic activities.

With the synchronous implementation of all the above solutions, in the next five years, wellness tourism could develop stronger and make up a larger proportion of the national or local economic structure, helping Vietnam secure a more important position on the global wellness tourism map.

* Nguyen Hoang is one of the leading real estate consultants in Vietnam.