Vietnam takes steps to revive tourism hit by oil rig spat with China
Shrinking numbers of foreign tourists to Vietnam following violent anti-China protests in 2014 has pushed the government to take steps to boost the country’s sluggish tourism sector.
HA LONG, Vietnam: Vietnam’s tourism sector has taken a hit since anti-China protests broke out in the country last year over Beijing’s deployment of a deep-sea oil rig in waters claimed by Hanoi.
Following the incident, international tourist arrival numbers have slumped for a full year straight. In the first half of 2015, Chinese arrivals dropped 29 percent year-on-year, reversing a strong growth trend before the oil rig riots.
Tourists from Russia, another key source market, also dropped 13 percent following the plunge of the rouble in late 2014. Still, industry experts believe there is a silver lining.
“Consensus is the main thing for making decisions in Vietnam and the only time when people are driven to making decisions is when there is a crisis,” said executive chairman of advisory firm Grant Thornton Vietnam Kenneth Atkinson, who leads the Vietnam Business Forum’s tourism working group.
“There is a crisis in the tourism industry at the moment and people are very focused on ways to alleviate that problem.”
SHRINKING TOURISM PROMPTS GOVERNMENT ACTION
In the last five years, Vietnam’s domestic tourism sector recorded double-digit growth in volume. However, the forecast for the next five years is a robust growth rate of nine percent a year, according to market research firm Euromonitor.
It is a bright spot in a sector bogged down by the ongoing row with China, which has kept away Vietnam’s largest tourist group, the Chinese, since the anti-China protests in May 2014.
In bid to attract foreign visitors, Vietnamese authorities earlier this month dropped visa requirements for tourists from five European countries, including France, Germany, and the United Kingdom.
Government leaders have also pitched in, calling on businesses to tackle long-running problems such as service quality, scams and what is seen as locals’ lackluster hospitality towards foreigners.
During the 55th anniversary celebration of Vietnam’s tourism industry on July 9, Deputy Prime Minister Vu Duc Dam exhorted citizens to do their part. “They should smile, say thank you, pick up garbage left on the road and not elbow others to push them out of their way in a crowd,” state-owned Vietnam News Agency quoted Mr. Dam as saying.
TOURISM SECTOR SECURED BY LOCALS
Since September 2014, Hai Au Aviation has been running scenic flights at Vietnam’s iconic Ha Long Bay, with prices starting at just under US$300.
“The surprise was we saw a lot more demand coming from local tourists,” said its Group CEO Tran Trong Kien. Vietnamese make up 20 percent of Hai Au Aviation’s passengers.
According to tourism expert Kai Marcus Schröter from tourism consultancy Hospitality Tourism Management, domestic tourists may have cushioned the impact of foreign revenue losses so far. Still, there are risks of lagging infrastructure and fragile natural resources, given Vietnam’s 40 million domestic holidaymakers per year.
“We are right now at a very crucial stage because we’ve reached an economy of scale in terms of tourists, where it starts to tip the scale into a negative direction,” said Mr. Schröter. “We need to look out for this time in Vietnam and be concerned about how we handle this influx of tourists, the sheer numbers putting a strain on resources.”
Indeed, the UNESCO World Heritage site Ha Long Bay in northeast Vietnam, visited by millions each year, has seen its ethereal beauty blemished by overcrowded waterways and trash in recent years.
Still, homegrown entrepreneurs such as Tran remain optimistic about the future. “If you really do it recklessly, say, this beautiful place has a cable car connecting these (karsts), and maybe a hundred other boats going around us, then it would be a different story,” he said. “And I don’t see that happening.”
If it does though, the first to stop coming will most likely be international visitors and eventually Vietnamese travelers.