In its latest report on ASEAN tourism, Maybank Kim Eng pointed out that the Greater Mekong Sub-region, comprising Thailand, Vietnam, Laos, Cambodia and Myanmar, is where visitor growth is the greatest: double-digit compound annual growth rate over the past 10 years.
The sub-region is outperforming Malaysia and the Philippines with a slower 3.4 per cent rate. Looking at tourism receipts as a share of GDP, in Thailand, Vietnam and Cambodia, these exceed 10 per cent, while they are much lower at 2.1 per cent in the Philippines and 1.4 per cent in Indonesia.
Accordingly, Vietnam has enjoyed a 25 per cent growth in visitor arrivals for the period of 2016-2018, while Indonesia and Philippines witnessing a 15 per cent and 11 per cent growth, respectively.
International arrivals to Vietnam jumped to 15.5 million in 2018, more than three folds the 5.1 million in 2010. Number of overnight visitors jumped by 95 per cent in 2016-18 despite relatively low penetration of international hotel chains/brands.
ASEAN’s market share of total international visitor arrivals has grown to 10.6 per cent of global arrivals in 2017 (up from 8.6 per cent in 2010) and 38.8 per cent of Asia Pacific arrivals in 2017 (up from 35.2 per cent in 2010).
Tourism receipts, meanwhile, account for a sizeable share of the economy in Vietnam, at 11 per cent of GDP, Cambodia 16 per cent and Thailand 12 per cent.
Despite the positive figures in visitor arrivals, ASEAN still lags in tourism competiveness in global rankings, especially Vietnam (no. 67 out of 136 countries), Philippines (no. 79), Laos (no. 94) and Cambodia (no. 101). Indonesia and Vietnam have made the biggest improvements since the 2015 ranking, both climbing 8 places in 2017.
Number of hotel rooms in Vietnam per 1,000 tourists topped ASEAN countries at 39.3. However, 80 per cent of them are below 3-star standards.
Most of the hotel chains are home-grown and penetration of international brands was only 1.4 per cent, the lowest among major ASEAN markets.
“As infrastructure is being built out, gaps are appearing. One is the lack of quality hotels in Vietnam, which has the highest hotel rooms per 1.000 tourists in the region, but only 20 per cent of rooms are 3-5 star rated," noted Sadiq Curimmbhoy, regional head of research at Maybank Kim Eng.
"We were puzzled by why average tourist spending in Vietnam is dropping and we can’t help but think that there are not enough higher-quality services to spend on. As this changes in the coming years, we could see both higher tourist arrivals and higher spending per tourist,” he added.
2019-2021 may see a change in presence of international brands. Approximately 5,400 rooms under brands such as Ritz Carlton, InterContinental, Westin and Okura Prestige and others will be added, increasing the supply of 5-star hotel rooms by 16 per cent, to help change the visitor mix more towards Western tourists.
According to Maybank Kim Eng, low spending per tourist in Vietnam is mostly due to its cheaper accommodation, transportation and food. Affordability has been one of Vietnam’s attractiveness for foreign travellers.
Tourist services in Vietnam are still simple, relying on either natural beauty or historic sites. There are limited choices of souvenirs or local specialties to bring home.
Chinese tourists have been increasing, accounting for nearly a third of foreign tourists to Vietnam in 2018. Lower spending per visitor during 2016-17 was due to the number of arrivals increasing faster thanks to better connectivity and visa relaxation and easing prices for transportation and meals, which are still bulky in terms of total spending, besides accommodation.
The report also showed that heritage tourism is on the rise, with ASEAN boasting 37 UNESCO World Heritage sites. Vietnam’s heritage sites include Ha Long Bay and Hoi An Ancient Town which are emerging as popular destinations, receiving 1.8 million foreign tourists in 2017.
As technology now plays a crucial role in boosting travel, especially through home sharing platforms such as Airbnb, Vietnam is seeing rapid growth on the Airbnb platform, with the Vietnamese Dong one of the fastest-growing currencies in the Airbnb payment system.
