Business Consulting Manager at InCorp Vietnam
Ian is a sales and marketing professional who has worked over 15 years in key accounts management.
Drawing on deep-rooted culture, rich history, evolving cities, diversified geography, and beautiful beaches along the 3.000 kilometers of coastline, Vietnam’s tourism and hospitality sector have long attracted potential international investors. For many investors in Vietnam, the ideal way to start doing business is to set up a company since not much capital is needed and options are diverse and flexible.
Why Vietnam’s Investment Opportunities are Unmatched
Vietnam was one of the first countries to reopen its doors on March 15, 2022, tourists, and the tourism sector has recovered strongly after the COVID-19 pandemic hit. In the first ten months of 2022, approximately 2.1 million tourists visited Vietnam, a 24.9-fold increase from the year before. Additionally, 8 to 9 million foreign tourists are anticipated to visit Vietnam between 2022 and 2023.
Vietnam spends more of its GDP than any other Southeast Asia on infrastructure. Infrastructure investment has been motivated by the dynamic expansion of Vietnam’s tourism and hospitality sectors to keep up with the industry’s growth. These investments are primarily going into the 2,000km of highways, metro systems, and other new construction and development in important cities in Vietnam: Hanoi and Ho Chi Minh City.
Nevertheless, despite all the positive developments and possibilities for this key industry, specific difficulties exist, such as a shortage of professional expertise and inadequate infrastructure in some locations. Vietnam’s tourism and hospitality sectors will be explored in greater detail in this article, along with the potential that foreign investors can tap into.
Popular Tourist Destinations in Vietnam
Vietnam was recognized by the United Nations World Tourism Organization (UNWTO) as “Asia’s Leading Destination” and was also included as the third-fastest-growing tourist destination in the world.
The following are some of the tourist hotspots in Vietnam where we could observe a thriving tourism industry following the pandemic lockdown:
Ho Chi Minh City (HCMC): According to statistics for the first seven months of 2022, around 765,585 foreign tourists visited Ho Chi Minh City during this time, a 100 percent increase over the corresponding period in 2021 and a 21.87% achievement of the 2022 target.
Hanoi: In the first ten months of 2022, the number of visitors to the capital city increased by more than five times compared to the same period in 2017. According to the Municipal Tourism Department, they included nearly 983,000 international tourist arrivals. With this outcome, Hanoi has reached the yearly goal of 9-10 million arrivals.
Quang Ninh: Quang Ninh welcomed about 10 million visitors in the first ten months of 2022, an increase of 3.55 times, while tourism earnings climbed by nearly four times compared to the same period in 2021. From now until the end of the year, Quang Ninh expects to welcome 1.5 million tourists for a total of 11.5 million over the entire year.
Da Nang: The city’s overall revenue from lodging and catering services during the first eight months of 2022 was projected at VND 11.85 trillion (US$503.7 million), an increase of 56.1 percent from the same period in 2021, according to the city’s Department of Statistics. Nearly 2.4 million people visited Da Nang, including 221,000 foreigners, an increase of 125.7% and 144.9% over the previous year.
Government Policies to Recover Tourism in Vietnam
The most recent plans for tourism development in Vietnam emphasize the need for the sector to grow sustainably so that it may lead the nation’s economy in the years to come. Quality, efficiency, and competitiveness of an industry that earned US$32 billion in 2019 are only a few of the planning’s key considerations. Tourism planning aims to restore tourism to the pre-pandemic state by 2025. In these growth scenarios, the country is expected to welcome 18 million international visitors and 120 million domestic tourists.
In addition to tourism funds, Vietnam is considering the number of nations qualified for visa exemptions to increase inbound tourism. Tourists from 25 countries are now exempt from obtaining visas upon arrival; however, the US and European countries may soon be added to this list. Additionally, the duration of the visa-free period could be increased to accommodate tourists searching for a more extended vacation.
Legislators in Vietnam have adopted a monetary and fiscal policy package to support the program on socio-economic recovery and development. Under this package, an estimated US$4.95 billion for infrastructure development will be implemented.
Hanoi’s government has also launched a plan to use its budget to invest as much as US$76.3 million into five infrastructure projects crucial to residents of its outskirts. It is calculated that by 2025, Hanoi will need around US$21 billion worth of public investment to develop its infrastructure projects.
In another case, Ho Chi Minh City People’s Council in late 2020 adopted a scheme of investing US$1.95 billion in infrastructure development for this year, including US$108.56 million sourced from the central coffers.
Incentives for travel businesses
If you want to start a travel business in Vietnam, as a tour operator, you’ll get a substantial deposit reduction for tour operation service. This is a deposit to be made to the bank to ensure the customer’s rights. See our guide to starting a travel business for more details.
An incentive valid for 80% of the service deposit applies to all tour operators established between 2022 and 2023.
Invest in Vietnam’s Tourism and Hospitality Industry Now
Vietnam’s tourism and hospitality sectors are expected to grow in 2023 due to several favorable factors. Given that multinational firms are spending more and more in Vietnam’s tourism and service industries to capitalize on the country’s expanding tourist industry, it is clear that the government has the potential to draw them.
Get in touch with us today by filling in the form below, and our market experts will provide some insights on how you can enter the Vietnamese market smoothly. There is no better time than now to Invest in Vietnam’s tourism and hospitality industry.
InCorp Vietnam is a leading market entry and corporate services firm in Vietnam. We are part of InCorp Group, a regional leader in corporate solutions that encompasses 8 countries in Asia-Pacific, headquartered in Singapore. With over 1,200 legal experts serving over 15,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business fit into the market perfectly with healthy growth.
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