Vietnam aims to attract 28 million affluent Chinese tourists annually. Here’s how

Vietnam plans to attract 28 million affluent Chinese tourists annually through an expansion of shopping opportunities, according to strategic projections in the business sector.

On March 15, 2023, the Chinese government included Vietnam in its list of destinations for group tourism, marking the beginning of the second phase. Over the subsequent year, Vietnam hosted nearly 1.8 million Chinese tourists, placing second in terms of inbound tourism. However, this figure only represented 31% of the 2019 levels.

Mr. Nguyen Trung Khanh, Director of the Vietnam Tourism Administration told reporter that, the enduring importance of China as a primary market source. In 2019, Chinese visitors led the influx to Vietnam, comprising 5.8 million out of a total 18 million international arrivals.

The Vietnam Tourism Administration has observed a significant surge in Chinese visitor numbers in the first quarter of this year, with arrivals totaling 890,000, marking a remarkable 635% increase compared to the same period last year.

Chinese tourists typically spend an average of $1,022 per trip in Vietnam, surpassing expenditure from other markets such as Japan, Korea, and Southeast Asia. In 2019, revenue from Chinese visitors amounted to $5.9 billion, constituting 32% of the total revenue from international visitors.

Ben Thanh Market is a large marketplace in central Ho Chi Minh City, Vietnam in District 1. The market is one of the earliest surviving structures in Saigon and an important symbol of Ho Chi Minh City, popular with tourists seeking local handicrafts, textiles, ao dai and souvenirs, as well as local cuisine.

Mr. Johnathan Hanh Nguyen, Chairman of the Inter Pacific Group (IPPG), highlighted the vast untapped potential of the Chinese tourism market. Presently, Vietnam’s tourism offerings fail to cater adequately to the shopping preferences of high-spending Chinese tourists.

According to Mr. Hanh, approximately 80% of middle and high-end Chinese tourists allocate significant funds to shopping activities. However, popular destinations for Chinese tourists, such as Mong Cai, Nha Trang, or Ho Chi Minh City, lack sufficient infrastructure to accommodate this demographic and cater to their shopping requirements.

CEO of Fantasea International Travel Company, Dao Viet Long, noted that prior to the pandemic, Vietnam was a favored destination for Chinese tourists. However, despite attracting considerable numbers, especially in hotspots like Da Nang, Nha Trang, and Phu Quoc, Vietnam struggled to entice middle and high-end Chinese clientele.

Mr. Long pointed out that Chinese tourists typically prioritize luxury destinations, cultural experiences, entertainment, and shopping. Vietnam’s tourism offerings have primarily focused on fulfilling basic needs, lacking diversity in services, and failing to stimulate the shopping desires of Chinese tourists.

Vietnam has historically been perceived as a budget-friendly destination for Chinese tourists due to the prevalence of zero Vietnamese Dong tours and low-cost package tours. Additionally, the brief duration of most travel programs (typically 4-5 days), group-based itineraries, and limited discretionary spending contribute to lower expenditure levels.

Dubbed the “King of branded goods,” Johnathan Hanh Nguyen announced plans to collaborate with two Chinese partners to establish duty-free stores and develop shopping-centric tourism products in key tourist hubs.

Duty-free shops at the Bac Luan border gate in Mong Cai, Quang Ninh, are slated to commence operations by the end of 2024, with expectations of attracting an additional 10 million Chinese visitors to the region. In Nha Trang, an inner-city duty-free store in the central business district is scheduled for investment in 2024, with an anticipated opening in early 2025, poised to accommodate 12 million international visitors, half of whom are projected to be Chinese.

Mr. Hanh underscored that the activation of duty-free shops presents an opportunity to capture foreign currency expenditure from affluent Chinese tourists. IPPG estimates suggest that the partnership will draw approximately 28 million Chinese visitors annually to Vietnam, equivalent to 2% of the country’s population.

Mr. Le Huu Hoang, Standing Vice Chairman of the Khanh Hoa Provincial People’s Committee, expressed support for the development of the duty-free store model in Cam Ranh, anticipating an increase in international flights from Chinese cities to Cam Ranh, Khanh Hoa.

Mr. Nguyen Trung Khanh emphasized that collaboration with Chinese businesses offers a chance to enhance tourism trade, diversify Vietnamese tourism products, and cater to international visitors. The second half of 2023 is expected to witness monthly international visitor arrivals exceeding 1 million, while the first quarter of this year recorded 4.6 million visitors, marking a 72% increase compared to 2023.

To achieve the annual target of welcoming 17-18 million visitors, the tourism sector prioritizes collaboration with domestic and international partners, focusing on developing highly competitive tourism products, including shopping tourism.

Mr. Khanh highlighted successful duty-free store models in countries like Singapore and South Korea, emphasizing their role in stimulating tourist spending and building the shopping brand of a destination.

“If effectively invested and implemented, duty-free shopping facilities in Vietnam will contribute to boosting the tourism economy, fostering investment growth, attracting labor, and generating positive impacts across industries,” remarked Mr. Khanh.

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Source: Vietnam Insider