Tourism Outlook: Vietnam
Tourism is a vital component of economic growth globally and for the Social Republic of Vietnam. This year, Vietnam’s travel and tourism industry is expected to generate VND231,268BN (US$12.5MN) of economic activity (GDP) and currently contributes 12.4 percent of Vietnam’s Gross Domestic Product (GDP). Real GDP growth for the travel and tourism economy is expected to be 3.4 percent in 2010 and to average 7.3 per annum over the coming 10 years.1 By these measures, travel and tourism is a significant contributor to the Vietnam economy. However, its real impact is even greater, as travel and tourism touches nearly all sectors of the national economy and contributes to nearly one out of every ten jobs nationwide. The Vietnam National Administration of Tourism (VNAT) is targeting 4.5 million foreign visitors in 2010, a 20 percent increase over their 2009 ambitions. To achieve this target, a $1.35 million national action program was designed to develop tourism products and promotion programs.1 We discuss this program in greater detail in our report. However, if Visa cardholder spend is used as a measure, VNAT’s program is already having a material impact on Vietnam’s economy with double digit increases on year on year Visa cardholder spend. At the same time, the Vietnam General Statistics Office reports that international visitors to Vietnam during the first six months of 2010 surpassed 2.5 million, a 33 percent increase over the same period last year. This is particularly impressive as the number of foreign visitors often declines during summer months. Visa is committed to providing its partners in the tourism industry – in Vietnam and globally – with current and accurate spending information and related insights that support their efforts to grow tourism arrivals and revenues. Today’s international travelers are embracing digital currency over paper money – whether they are settling a bill at a hotel or restaurant or reaching in their pockets at the beach or at the shops. Visa will continue to work with our tourism industry partners and financial institution and merchant clients to ensure that travelers can make purchases conveniently and securely anywhere in the world. As the world’s largest retail electronic payments network, Visa brings a compelling perspective on national and international tourism spending trends. Turning Visa transaction data into actionable information is one of the ways Visa delivers value to businesses and countries, such as Vietnam, that rely on tourism revenues. This information enables public and private entities to improve their product offerings and marketing strategies to ensure that they have the right tools and business models to attract a sustainable flow of visitors. It is in this spirit of partnership that I am pleased to present Visa’s first Tourism Outlook: Vietnam. This publication details spending on Visa cards by international visitors to Vietnam for the past two years, as well as the first six months of 2010. Truong Minh Ha, Vietnam Country Manager, Visa Inc.
1 World Travel and Tourism Council, Travel & Tourism Economic Impact: Vietnam, 2010
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Inbound Tourism Spending in 2009 and Early 2010
While overall Visa cardholder spending by visitors to Vietnam dropped by 15 percent from $606 million in 2008 to $518 million in 2009, spending during 2010 is on the rise, according to VisaVue Travel data, which is based on Visa cardholder spending on Visa-branded payment cards by international travelers. During the first three months of 2010, inbound tourism spend on Visa payment cards in Vietnam increased by 14 percent to $157 million. While the first two months of the year are traditionally part of the peak travel season in Vietnam, the fact that inbound tourism has continued to see double digit growth into the
second quarter is significant. In the second quarter, Visa cardholder spending continued to increase – up 24 percent to $144 million versus $116 million in 2009.
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Top Source Countries for Vietnam Tourism
Vietnam Your Destination Campaign
According to recent reports from the Vietnam General Statistics Office (GSO), the total number of international arrivals to Vietnam in the first half of 2010 grew by 32.6 percent over the previous year, with inbound tourism accounting for 64 percent of total visitors to the country. While visitors originating from China represent the largest number of inbound arrivals to Vietnam, Visa spending data indicates that other Asia Pacific and Western nations are stronger contributors to tourism revenues.
Beginning in the first quarter of 2010, the Vietnam National Administration of Tourism (VNAT) began the “Vietnam – your destination” program designed to attract visitors from ASEAN (Association of South East Asian Nations) countries, Japan, China, North America and Northern and Western Europe. The VNAT also engaged in promotional efforts at tourism industry events in Singapore, Bangkok, Moscow and at ITB Berlin to reach tourism operators and potential visitors. In addition, the VNAT conducted a sales campaign in August and September 2010 similar to the first quarter program aimed at both domestic and international tourists. This discount program on shops, tours and transport in Hanoi, Ho Chi Minh City and Da Nang was designed to boost tourism in the low season. As part of this initiative, businesses were encouraged to decrease prices of tourist services by 10 to 30 percent to boost sales and arrivals.
According to Visa spend data, the top three contributors to Vietnam’s tourism economy in 2009 were the United States, Australia, and Japan. These three nations collectively accounted for 35 percent of all Visa transactions by international visitors to Vietnam in 2009, which was unchanged from spending patterns in 2008.
Other efforts by the VNAT have included partnerships with China, New Zealand, Cambodia and other nations supporting individual nations’ efforts to boost tourism levels also had a positive impact on the tourism industry. Discount tours built by companies such as the Vietravel Tourism Company with industry partners and tourism operators from France, Greece, Austria and Germany have also positively impacted tourism arrivals and spending.
During the first half of 2010, the United States and Australia remained the top two contributors to Vietnam’s tourism economy and South Korea captured the third position. In keeping with this spending trend, these three nations collectively accounted for more than a third of all Visa transactions by international visitors to Vietnam in the first half of 2010.
These efforts seem to have made a material difference to Vietnam’s economy in reviewing Visa cardholder spend during the first six months of 2010. During the first quarter of 2010, total spend on Visa cards by international visitors in Vietnam was $157 million, up 14 percent from $137 million recorded during the first quarter of 2009. The upward trajectory continued during the second quarter, with Visa cardholder spend totaling $144 million, up 24 percent over $116 million during the same period in 2009.
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Tourism Spending by Top Source Countries
While inbound spending from all ten major source countries for Vietnam tourism decreased in 2009, the first and second quarters of 2010 reversed that trend. During the first quarter, all but one source country (the United States, whose inbound spending declined only one percent year-on-year) saw increased spending levels. Several leading source countries saw significant double-digit increases in tourist spending, most notably South Korea (51 percent), the United Kingdom (26 percent), Norway (24 percent) and Australia (19 percent). Notably, the visa exemption granted by Vietnam to select countries appears to have given a significant boost to inbound travel and spending. In January 2009, an exemption was granted for South Korea and Japan – both nations which have consistently been top contributors to Vietnam inbound tourism spending. The impact of the visa exemption is evident in first quarter 2010 spending – up 51 percent year-over-year for South Korea and 12 percent for Japan. This trend continued into the second quarter – with South Korea up 54 percent and Japan up 36 percent.
In the second quarter, following Vietnam’s peak travel season, all ten top source countries continued to see year-on-year growth, with the majority rising at double-digit levels. Consistent with the first quarter, South Korea spending increased heavily – at 54 percent year-on-year. Thailand also reported a 54 percent increase, with the United Kingdom and Japan up 36 percent and Australia up 30 percent compared with the second quarter of 2009.
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Top Source Countries for Vietnam Tourism in Q1 2010
Top Source Countries for Vietnam Tourism in Q2 2010
United States -1%
United States 12%
January – March 2010
April – June 2010
$23.2M $22.9M Australia 19%
$18.1M $20.3M South Korea 54%
$14.1M $16.8M
South Korea 51%
$10.6M $16.4M
Australia 30%
$10.2M $15.5M
France 12%
$12.1M $15.7M
Japan 36% $11.5M $12.9M
$10.4M $13.1M
Japan 1%
United Kingdom 36% $12.0M $12.2M
$8.7M $11.8M
United Kingdom 26%
France 9% $9.2M $11.6M
$10M $10.9M
Canada 7%
Thailand 54% $3.2M $3.5M
$8.3M $8.9M
Top Source Countries for Singapore 29% Vietnam Tourism in 2009 $6.1M
Singapore 11% $5.9M $6.6M
$7.9M January – December 2009
Germany 9%
Canada 18%
$4.7M $5.1M
$5M United States -18% $5.9M
Norway 24%
$95.6M $78.7M
Germany 22% $3.6M $4.4M
2009
$2.9M Australia -15% $3.5M
2010
2009
Source: VisaVue Travel data, 2009-2010
Japan -22%
Top Source Countries for Vietnam Tourism in 2009
$60.3M $47.3M $47M $44.7M
South Korea -25% $59.4M $44.5M
United States -18%
United Kingdom -3%
$95.6M $78.7M
$39.2M $37.9M Singapore -19%
$65M $55.4M
Japan -22%
2010
France -5%
January – December 2009
Australia -15%
$65M $55.4M Source: VisaVue Travel data, 2009-2010
$32M $25.9M Canada -14%
$60.3M $47.3M
$27.6M $23.6M
France -5%
Germany -5% $16.1M $15.2M
$47M $44.7M
Thailand -2%
South Korea -25% $59.4M $44.5M
$12.6M $12.3M
United Kingdom -3% $39.2M $37.9M Singapore -19% $32M $25.9M
2008
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2009
Source: VisaVue Travel data, 2008-2009
Leading Market Segments for Vietnam Tourism Spending
Retail purchases continued to account for the largest share of tourism spending by international travelers visiting Vietnam. In 2009, the three largest merchant segments for Vietnam inbound tourism spending, based on transaction volume, were general retail purchases, lodging, and travel agency spending. Based on the challenging economic environment that defined 2009, all five major merchant segments saw decreased transaction volume compared with 2008.
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Leading Merchant Segments by Purchase Volume
Similar to 2009, retail purchases maintained the largest share of tourism spending by international travelers visiting Vietnam during the first half of 2010. The largest merchant segments for Vietnam inbound tourism spending during the first half of 2010, based on transaction volume, mirrored those from 2009: general retail purchases, lodging, and travel agency spending.
General Retail -7% $287.0M $265.4M Lodging -23%
$175.0M $135.1M
Travel Agencies -22%
Discounts provided by shops, tour operators and transportation companies as part of the VNAT’s promotional efforts and marketing program have helped give rise to lodging, travel agency and general retail purchases. In addition, as inbound arrivals have increased with the economic recovery, destinations in Vietnam such as Da Nang saw significant increase in lodging demand causing a shortfall of inventory during the summer months.
$38.7M $30.0M
Restaurants -8% $25.6M $23.7M Other Travel and Entertainment -4% $22.2M $21.3M
2008
2009
Source: VisaVue Travel data, 2008-2009
Leading Merchant Segments January – March 2010
Merchant segments with the greatest year-onyear increases in the first quarter of 2010 included purchases made at furniture and equipment stores (224 percent), other travel and entertainment (82 percent) and bill payments (40 percent).
General Retail 10% $73.6M $81.0M Lodging 14%
$34.3M $39.1M
Travel Agencies 18% $7.9M $9.3M Restaurants 82% $4.3M $7.9M Other Travel and Entertainment 28% $5.9M $7.5M
2009
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2010
Source: VisaVue Travel data, 2009-2010
Opportunities Ahead
As Vietnam continues to make investments to attract inbound visitor arrivals and revenues in the months and years ahead, there is a significant opportunity for travel and tourism to continue supporting the national economy as a growing contributor to the Gross Domestic Product. The significant investment in promotional programs, partnerships and cooperation with other nations in the Asia Pacific region not only made a significant impact on Vietnam’s inbound arrivals and revenues during early 2010, but has laid the foundation for continued growth in late 2010, 2011 and beyond.
tourism industry to analyze tourism’s economic contribution and tailor marketing, promotional strategies and budgets based on up-to-date visiting spending information. The reports feature: > Comprehensive and distinct reports which isolate leisure and business traveler spending > Date on the number of Visa cardholders visiting the country, as well as total sales and average purchase size
Visa is committed to working with national and local tourism organizations and tourism operators in Vietnam to support continued growth. Visa provides not only the currency of choice for cross-border transactions, but is also a reliable and secure global payments network that includes millions of cardholders around the globe.
> Analysis of tourism spending based on country of origin > A detailed overview of tourism spending across thousands of merchant categories
For more information regarding Visa’s partnership with the tourism industry and VisaVue Travel data referenced in Tourism Outlook: Vietnam, contact globalmedia@visa.com
Visa is a valuable partner for the tourism industry, providing tools and resources that offer insight into how best to attract international visitors and strengthen a country’s tourism competitiveness. With a network that connects 1.8 billion Visa cards and the people who carry them with tens of millions of merchant outlets and 1.7 million ATMs around the world, Visa is in a unique position to foster better understanding of travelers mindsets and where and how they spend their money when traveling abroad. With VisaVue Travel data, Visa turns transaction data into actionable information that delivers value to countries and businesses that rely on tourism revenues.
About VisaVue Travel Data Launched in 2009, VisaVue Travel data is a service offered by Visa Inc. that provides government agencies, hotels, airlines and other organizations within the U.S. tourism industry unique insights into spending by international visitors. VisaVue Travel data utilizes aggregate international cardholder spending on Visa debit, credit, commercial and prepaid cards to help the 8
Tourism Outlook: Vietnam