Vietnam tourism companies adapt to market challenges

The number of foreign arrivals to Vietnam in 2022 is far from the level recorded prior to the Covid-19 pandemic, causing many financial woes for the country's travel service companies. But many firms have navigated the tough situation to ride out the difficulties with new initiatives.

Flexibility to adapt in a variable market

A total 12,000 foreign tourists is the peak number that Image Travel & Events Company served in 2018 and 2019 before the Covid-19 pandemic. But it welcomed only about 1,200 foreign visitors, mainly from European countries, in 2022.

"It can be a shock for a travel company specializing in the inbound market, which has built a good brand over more than 10 years, like us," said Toan Nguyen, managing director of Image Travel & Events.

“To maintain company operations and retain staff, we had to change our business strategy by adding new scope to meeting domestic market needs, including organizing company trips and MICE events as well as overseas tours for Vietnamese visiting Europe, Korea, Indonesia, Singapore and Malaysia,” he said.

According to the Vietnam National Administration of Tourism, the number of international tourists to Vietnam fell sharply, to only 3.5 million in 2022, hitting 70% of the year’s five-million target.

The decrease was derived from China’s ‘Zero-covid’ policy, Vietnam’s limited visa policy, the Ukraine- Russia war, and the global economic downturn in the last months of the year.

As a result, Image Travel & Events and many other inbound travel companies have suffered heavily.

“However, our difficulty is that our brand is not known locally. Therefore, when we reached out to the domestic market, we had to spend a lot of time building our brand. With good services and quality products, we got positive feedback from customers.

"In fact, 2022 we considered successful in the aspect of building a brand for the domestic market despite financial strife," Toan added.

In 2023, besides maintaining ready-made tours, the company will prepare human resources to develop new products for South American destinations including Argentina, Bolivia and Chile.

Terraverde Travel, an outbound company focusing on German speaking tourists, is more flexible in approaching the domestic market, even during the pandemic by supporting partners and clients involved in travel services.

When the domestic market reopened in March 2022, the company was ready to pick up, for both the outbound and inbound market in the segment of medium- and high-end tourists. It focused on organizing tours and events for corporate and business delegations with customized programs as per client request.

According to Truong Dieu Linh, co-founder of Terraverde Travel, in 11 months of 2022, the company earned revenues valued around 45% of 2019’s figure. “For 2023, we will still concentrate on the segment of business delegations, MICE and corporate trips, mainly for medium and small groups with one-stop services, which is our strong point,” Linh said.

The bright part in the picture of Vietnam tourism in 2022 has been lightened by the impressive number of domestic tourists at more 101 million, gaining over 150% of the goal for 2022, the Vietnam National Administration of Tourism reported. In fact, the domestic tourism market saved Vietnamese travel companies in 2022.

Nguyen Minh Hien, deputy director of PYS Travel said: “As a travel company focusing on domestic tourists, we served nearly 45,000 tourists in 2022, with 95% being Vietnamese. Our revenue hit about VND200 billion ($8.48 million), which is almost equal to 2019’s figure.”

Actually, it’s a good result that many travel companies expected but hard to reach this year. According to Hien, turnover could be better if the company had enough staff.

“After Covid-19, the big problem of travel companies are human resources. During summer high-season, tourist numbers increased but we didn’t have enough staff, so we were sorry to refuse some groups,” she added.

International markets returning

Vietnam tourism in Q3 and Q4 this year experienced the remarkable return and quick increase of Indian and South Korean tourists.

With over 760,000 visitor arrivals in the 11 months of 2022, South Korea is considered the leading source market of Vietnam tourism. Nha Trang-Cam Ranh is one of their most favourite destinations. To serve this promising market, Korean Air and Jin Air have opened new Incheon-Cam Ranh routes this December with four flights per week.

Hotels and resorts in Nha Trang have quickly caught on. Wyndham Garden Cam Ranh is among resorts welcoming the most Koreans. “In December of 2022, Korean guests have made up 79% of our total guests. During the Tet holiday in 2023, the figure will increase to 90%,” Ruben LLenarez Gaor, general manager of the resort, said.

"Since October the resort has offered attractive promotions. In addition, we have trained about 40% staff at the resort’s reception who can speak Korean to serve guests better. The resort’s information is translated into Korean while our menus have added more Korean dishes."

Ranking among the top 10 source markets of Vietnam tourism, the total number of Indian visitors to Vietnam in 11 months of 2022 hit 109,000 arrivals. According to the General Statistics Office, 27,000 Indians visited Vietnam in November 2022, an increase of 31% compared to the previous month and 50% higher than the same period in 2019.

The figure of 1,300 room/night for Indian guests is what Bay Hotel Ho Chi Minh experienced in November 2022. "The number of Indian guests have increased regularly month-over-month during Q4,” Theresa Tran, regional director of sales at Bay Hotels & Resort, said. "We are always flexible to meet their needs. Normally, Indian groups travel with their own chefs and request to set up private kitchens."

Mentioning the Indian tourist market, Nguyen Minh Hien from PYS Travel said: "In 2023, we will invest to develop the Indian market more strongly, both outbound and inbound. In Q1, we will organize activities in Vietnam and India including FAM trips for Vietnamese travel agents to India in January and invite 80 Indian travel agents and partners to join journey around Vietnam in March."

China, one of Vietnam’s most important tourism markets, has already announced quarantine-free policies for travel after January 8, 2023. Vietnam Airlines, Bamboo Airways and Vietjet has reopened more flights to China starting from early December 2022. And of course, Vietnamese tourism enterprises are also preparing to serve this prospective market.