Chinese tourist arrivals are decreasing, partly due to bilateral tensions that resurfaced last month, according to a spokesperson for Vietnam National Administration of Tourism (VNAT). Vietnam welcomed more than 674,000 foreign tourists last month, down nearly 10 percent from April, VNAT announced early this week, noting that a sharp drop in Chinese arrivals accounted for the overall decline. VnExpress reported that in addition to the tensions sparked by China’s deployment of an oil rig into Vietnam’s exclusive economic zone on May 2, the slump could also be attributed to the beginning of the low season.
Almost no Chinese tourists entered the country through Vietnam’s northern border gates and several Chinese travel companies canceled tours that would have brought tourists to Vietnam by air. Some local travel companies reported a reduction of 80 percent in their revenues last month, as Chinese tourists canceled tours to Vietnam, VnExpress reported. Ly Tat Vinh of the Cho Lon Tourist Company in Ho Chi Minh City told the website that his company’s Chinese business had declined by 30-40 percent year on year. A representative from the Huong Giang Travel Company in Hanoi said the company is in trouble, as 20 percent of its sales come from Chinese tourists, but it has received no bookings during the last month.
The slowdown also hit hotels: The news site quoted an employee at the Nhat Thao Hotel in HCMC’s backpacker area as saying that between five and ten Chinese customers once booked rooms every month, but they hadn’t seen any since last month, adding that most of their customers are now from Europe. A representative from the Tan Hoang Long Hotel in District 5, where Chinese visitors often stay, said the number of Chinese customers has fallen by half–from around 600 a month. Duong Duy My, director general of Windsor Plaza, also complained that the sea tensions have caused troubles for his hotel, after 100 percent of their Chinese customers canceled their bookings.
A shift in focus
VNAT chief Nguyen Van Tuan told the website that for many years China has been the largest market for Vietnam’s tourism with its citizens accounting for some 25 percent of Vietnam’s international arrivals. However, Chinese tourists mainly travel by road and spend very little, between US$300-650 each person, he said. Many Vietnamese tourism officials and experts believe that the slump in Chinese arrivals will present an opportunity for travel businesses to focus on markets that offer big spenders.
During a recent tourism conference, the Ministry of Culture, Sports and Tourism proposed government solutions for the current slowdown, like suspending promotional activities in China and reallocating those budgets to other key markets. The Middle East, India, Indonesia, Japan, and South Korea have been considered potential markets for Vietnam, according to VnExpress. Vu The Binh, chairman of the Vietnam Tourism Association, said Vietnam recently opened its first overseas tourism office in Japan, which is considered “the most important” market.
The opening of the tourism office is expected to boost the number of Japanese arrivals to over a million in the coming years; in order to achieve that target, Vietnamese businesses needs to introduce new and better products, Binh said.
Official figures show that while Japan is the third largest market with some 604,000 tourists last year, its tourists spent the most. Travel company representatives told VnExpress that they are focusing on local tourists, offering discounts to attract them while seeking new markets. However, a Hanoi travel company spokeswoman (speaking on condition of anonymity) said it will take time and money to make an effective shift away from their reliance on the Chinese market. The company tried, in the past, to invest in a new market without success. Since it opened five years ago, the company that has relied on Chinese tourists for 80 percent of its sales, and even opened a representative office in Beijing.
Without any Chinese bookings in the last month, the company has had to sack half its staff, she said.
But, she remained hopeful that the market would rebound before the year’s end, adding that they remain in close contact with their Chinese partners.