Vietnam tourism faces competitiveness drop: Time to address limitations

The World Economic Forum (WEF) recently released the Travel and Tourism Development Index (TTDI) 2024, which saw Vietnam fall three places to 59th out of 119 economies. Within Southeast Asia, Vietnam ranks fifth, following Singapore (13th), Indonesia (22nd), Malaysia (35th) and Thailand (47th).

Viet Nam National Authority of Tourism (VNAT) explained the ranking of Vietnam was affected by the changes in assessment methods of WEF. For example, Vietnam ranked 115th in pillar of Travel and tourism socioeconomic impact might not accurately reflect the true situation, potentially due to WEF lacking up-to-date statistical data on Vietnam's tourism.

However, Dang Manh Phuoc, CEO of Outbox Company, a travel insights intelligence, argued that WEF's rankings are based on criteria designed to minimize statistical discrepancies across economies. He dismissed the idea of lacking of information was to blame, stating, "WEF’s assessment is objective and based on international competition rather than internal market conditions."

"Vietnam appears to be running its tourism sector in its own way but it is need to align with international standards to know what the tourism needed to do to keep pace globally," Phuoc added.

He also emphasized that the lower ranking does not negate Vietnam’s efforts but highlights the slower pace of improvement compared to neighboring countries.

For example, while Singapore’s Changi Airport continually enhances its services, Vietnam's largest airport, Tan Son Nhat, struggles with long-standing infrastructure issues. Phuoc suggested that completion of Long Thanh Airport and better flight routes could boost Vietnam's ranking.

"The true meaning of WEF’s assessment lies in continuous improvement. The issue is not what Vietnam has done but what it needs to do compared to other countries. From this perspective, Vietnam has ample room for development and improvement," Phuoc explained.

Another tourism expert stressed that tourism management agencies should look directly at the indicators to see where Vietnam is compared to the region and the world instead of analyzing whether the indicators are right or wrong or where they are inadequate.

"Recent accolades from foreign magazines might make the ranking drop disappointing, but WEF provides a realistic view, which is exactly what we need," the expert noted.

Addressing bottlenecks and stakeholder roles

WEF’s indices highlight the bottlenecks in Vietnam’s tourism development, posing challenges for management agencies, businesses, and stakeholders. Vietnam recorded significant drops in air transport infrastructure (down 17 places), travel and tourism demand sustainability (down 24 places), and other key areas like openness to travel & tourism.

Hoang Nhan Chinh, Head of secretary of Tourism Advisory Board (TAB) said the rankings indicate the need for Vietnam to adapt to global trends in sustainability. TAB in the past proposed liberalizing the aviation sector to increase competition and allow more private airlines to improve services and prices.

"We should adopt a spirit of openness first, then review aviation infrastructure to reassess capacity and plan airport expansions with a 5-10 year vision," Chinh recommended.

He added that tourism and aviation must cooperate more closely by a common mechanism, suggesting that the State Steering Committee for Tourism should coordinate and promote this.

Vietnam can learn some experience from Thailand when its tourism provides a notable example of such cooperation, with a seamless service chain from aviation to hospitality, enhancing their tourism sector's competitiveness.

"Tourism development should involve all stakeholders, from high-level management to local departments and businesses, to devise reasonable plans for all parties," Chinh emphasized.

Phuoc also highlighted the fragmented role of destination management agencies, suggesting a more integrated approach. Vietnam was one of the first countries to reopen post-Covid-19 but lacked a long-term strategy, focusing more on events than sustained planning.

Other countries, despite reopening later, have seen faster tourism recovery due to better preparation and strategic planning. He recommended Vietnam tourism should focus on the sustainability of market demand and diversifying the customer base, not just by nationality but by different customer segments.

"Vietnam needs to continue repositioning its target market and focus on specific segments to maximize resources and enhance competitiveness," Phuoc concluded.