Last updated: 12:00 PM ET, Wed December 09 2015

How Vietnam Reversed A Six-Month Tourism Slump

Destination & Tourism | Josh Lew | December 09, 2015

How Vietnam Reversed A Six-Month Tourism Slump

Photo courtesy of Thinkstock

During the first half of 2015, Vietnam’s travel industry was in the midst of a slump. For the first six months of the year, the country saw an 11.3 percent drop in the number of foreign arrivals compared to the first six months of 2014. In fact, this past June, Vietnam had its 13th straight month with fewer international arrivals than the corresponding month the previous year. The once-promising destination seemed to be heading downhill fast. 

A major slump

What happened? Part of the problem was the dispute between Vietnam and China over islands, oil fields and fishing rights in the South China Sea. When anti-China protests erupted in some Vietnamese cities, Beijing warned its citizens to stay away from the beach destinations along the East Coast that they had previously been flocking to. 

Other countries in the region - Thailand, Myanmar, Singapore, Cambodia, and even Laos - had been courting Chinese tourists as well. They saw the situation in Vietnam as a chance to get more people from the Mainland to opt for their countries. 

A quick recovery

In June, after the 13th month of the slump, Vietnam enacted some changes that now seem to have paid off. The National Administration of Tourism has just announced a huge November. With more than 730,000 international arrivals, the country had 20 percent more visitors last month than they did in November of 2014. They are now on track to break even by the end of the year (meaning 2014 and 2015 will have almost the same number of foreign arrivals).

One of the biggest changes was that the Chinese started returning to the country in July. They are now the largest group of foreign tourists in Vietnam. The other thing that happened was that Hanoi finally decided to change its often-cumbersome visa rules.    
Changes to the visa policy

Tourists from France, the U.K., Spain, Italy and Germany were given 15-day visa-free stays starting on July 1. These countries join Russia, Scandinavian nations, Japan and South Korea on the free-visa list. Vietnam is also considering changes for American and Australian travelers, who currently are not eligible for the 15-day stamp. Ideas such as a six-month or one-year multiple entry visa have been suggested. Unfortunately, these plans were first floated at the same time the other visa changes were made in June and July, but nothing has yet been finalized.

Because it has been involved in disputes with China, Vietnam has been especially friendly with its former adversary, the U.S., in recent years. While China remains an important trade partner and source of tourists, the U.S. has been more willing to recognize the sovereignty of Vietnam and other nations that have claims in the South China Sea.   

Vietnam’s security and improving infrastructure make it an attractive destination. Other countries in the region are also intent on raising their tourism profiles. Easing visa restrictions is a necessity if Vietnam does not want to fall behind the other regional hotspots. 

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