Issue #188: Vietnam is South East Asia's Hottest Travel Market: What Happens Next?

Travel and tourism are growing "at breakneck pace" - so are the "soft power" benefits

Welcome to Issue 188 of Asia Travel Re:Set.

Vietnam is the most talked-about travel economy in South East Asia.

The force of its overall economy under leader To Lam made last week’s cover of The Economist. Global leaders jet into Hanoi for trade talks. Foreign investment floods in.

Vietnam is ASEAN’s most dynamic manufacturing centre, and intends to become its second-largest economy by 2036. BRICS membership seems assured.

Meantime, it is developing one of ASEAN's largest airports, and its most ambitious high-speed railway - which two domestic industrial firms, VinGroup and Thaco, have tendered to fund and build, with proposed timelines of 5-7 years.

A draft Railway Law aims to attract more private finance to support further expansion of the national rail network for passenger and cargo transport.

But what happens next?

More broadly, can Vietnam enable the private sector to play a stronger role in making the jump from export-driven developing nation to an influential global trade power?

And where does tourism fit into the national development plan?

Thanks for checking in…

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Rethinking Asia Pacific Travel Markets in 2025 & Beyond

“We have seen that the travel recovery has been stimulated by ‘Asia Pacific For Asia Pacific’. Asian travellers have reignited and revitalised travel and tourism in our region, whether that's for business, leisure or MICE.”

I moderated a compelling panel at the Travel Daily Media Travel Trade Global Summit in Bangkok about the 2025 regional outlook, featuring Patee Sarasin, CEO, Really Cool Airlines; Deepshikha Sehgal, Head of Lodging, Ground & Sea, APAC, Sabre Corporation and Marga Manlapig, Editor, Travel Daily Media

We debated various hot topics including: Evolving intra-APAC flight paths. Concert tourism. Gen Zs vs Ageing Populations. Hotel RevPar vs Occupancies. Short booking windows. Start-up airlines. Luxury travel resilience. And the diversifying role of pillar markets, China and India (plus Russia and Middle Eastern countries).

CLICK HERE to read ‘Asia Pacific for Asia Pacific’, a summary of our discussion.

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Vietnam is South East Asia's Hottest Travel Market: What Happens Next?

To deconstruct the essential elements of Vietnam’s travel, soft power and economic outlook, I chatted with Dr Nuno Ribeiro, Senior Lecturer at RMIT University Vietnam on this week's The South East Asia Travel Show.

Nuno is an experienced tourism and hospitality management academic, professional, and speaker, and has held leading roles in academia and the travel industry in Europe, Asia, Africa and the US.

Here are 5 brief pointers from our in-depth discussion, and - as ever - the full reveal comes from listening to the podcast.

1) “A country with a rather brief and recent international tourism history”

Vietnam is a young travel economy, but has grown rapidly since the nation began its Doi Moi reform and opening-up programme in 1986. The highest number of inbound travellers to Vietnam was in 2019, with almost 19 million arrivals. This year, it could surpass 21 million. Ten years ago, in 2015, it attracted less than 8 million visitors.

2) “A nation of 100 million people with a dynamic Inbound, domestic and outbound travel market”

The country counts an increasing middle class that is travelling in significant numbers not just within the boundaries of Vietnam, not just in South East Asia, but further across the APAC region and the world. Things are happening so quickly across the entire economy, it feels like a unique period in time.

3) “The true economic value of tourism in Vietnam is under-estimated”

Vietnam has been incredibly successful at attracting foreign direct investment (FDI). Economists here are finding increasing evidence for a tourism-led growth hypothesis, which is something that was first studied in the late-1970s/early-1980s in Spain. The argument is that developing countries that invest in international and domestic tourism see their economies grow faster, especially as this helps to attract more FDI.

The World Bank says tourism’s economic value in Vietnam is 6%. It is far more likely to be in the double digits. The Vietnamese government is keenly aware that tourism is a key sector of the economy. It is perhaps the most effective soft power tool at its disposal. Countries that are welcoming to international tourists are far more likely to be received positively by the rest of the world.

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Click on the live link below to listen to Vietnam is the Hottest Travel Market in South East Asia: So What Happens Next?

Or search for The South East Asia Travel Show on any podcast app.

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4) “Hanoi-Ho Chi Minh City is the marquee HSR project in South East Asia”

China and Vietnam have resumed cross-border rail travel, which was stopped during Covid. You can travel once again by train all the way from Hanoi to Shanghai. I take this as an indication that developing the high-speed railway (HSR) from Hanoi to Ho Chi Minh City is a priority for the government. I would hazard a guess China will be involved in the HSR project in some capacity.

5) “We have a dire need for qualified human resources in tourism and hospitality in Vietnam”

Because the tourism industry has developed so recently and expanded at such breakneck speed, we’ve not had the chance to educate qualified local human resources with the theoretical and practical skills they are going to need - particularly at the managerial level.

In Vietnam, every year we need to graduate between 28-35,000 qualified tourism professionals, but we are only graduating at a rate of 9-12,000 annually. So, where are the rest going to come from? We need to be very focused on educating the workforce to enter the tourism industry immediately.

This the first academic role in my career where I can tell the parents of my students that I guarantee their son or daughter will get a job upon graduation, or even sooner. They frequently get offered jobs during their internships.

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And, that’s a wrap for Issue 188.

Asia Travel Re:Set will return next Sunday. Meantime, find me on LinkedIn.

Happy travels,

Gary