Since Vietnam opened up to the globalized world in the 1990s it has quickly become an investment hotspot, with low wages, a young and skilled workforce and business friendly policies. However its natural beauty, friendly people and outstanding cuisine is world-class and and makes for a booming tourism industry. In fact in 2019 alone, according to Statistica, Vietnam had over 18 million visitors, one of the highest on record. Post-pandemic Vietnam is expected to quickly recover as a global tourism destination.
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Tourism is one of the most important industries that are driving the economy in Vietnam. It continues to contribute up to 48.7 trillion VND of the country’s GDP and generate high profits for the locals and foreigners involved.
This is why the government has been focusing on the tourism sector. In an effort to attract more visitors to Vietnam to boost the tourism sector further, the Vietnamese government published a useful guideline known as the Strategy on Tourism Development until 2020 and Vision to 2020 in Vietnam.
This guideline aims to bolster the tourism industry in Vietnam to a much greater height.
Read on to gain insights into the tourism sector of Vietnam and why you should invest in this sector in 2020.
Invest in Vietnam’s Tourism Sector Now
Needless to say, Hanoi and Ho Chi Minh City are always the two cities which draw in the highest number of international travellers due to its diverse landscape and cultural scenes, as well as better developed infrastructure and transportation.
Furthermore, the two dynamic cities are expected to become the cities of the future as the government aims to build several mega projects to further develop them. Ho Chi Minh City is projected to become the first smart city in Vietnam by 2020, followed by Hanoi in 2030.
Other than Ho Chi Minh City and Hanoi, the country has also started to promote Binh Duong more. Thanks to the strategy’s goal to develop other Vietnamese provinces for tourism growth, Binh Duong has turned into one of the most preferred destinations for visitors in the south of Vietnam. The strategy helps promote Binh Duong’s tourism through various activities through cultures, people and food.
Apart from the major cities mentioned, overall, Vietnam is experiencing the growth of medical tourism. Medical tourism in Vietnam is quite a significant contributor to the entire tourism success in the country compared to other Asian countries. In 2017 alone, it is recorded that 80,000 international visitors came to Vietnam for different medical treatments and check-ups, contributing to US$2 billion of revenue.
What can be Improved for Vietnam’s Tourism Sector
Every sector has its own set of challenges in Vietnam and tourism is no exception. The challenges of the tourism sector in Vietnam are mainly coming from the poor infrastructure, especially airport infrastructure, and lack of quality professionals.
Airport Infrastructure in Vietnam
The airport infrastructure in Vietnam is still considered unsatisfactory even though the tourism sector is prospering. The major obstacle for the tourism industry is the overcrowded airport which is unable to accommodate the increasing number of tourists and flights. For example, Tan Son Nhat Airport in Ho Chi Minh city is currently operating at a overcapacity rate of more than 33%.
However, the Vietnamese government has been working on introducing several long-term and short team solutions: counter rearrangement, reduction of restaurants, increase of waiting lounges, and relocation of airport.
It is true that Vietnam is lacking professionals for its tourism industry in terms of not only quality but also quantity. This shortage is even more significant for hotels looking for qualified employees in customer services, housekeeping and maintenance departments.
In order to bridge the gap, the strategy issued by the Vietnamese government has also included the initiatives to train more qualified and professional personnel for the tourism sector in order to meet the increasing demand.
Some of the best ideas for you to start projecting when it comes to investing in the tourism sector include the following.
Starting a Travel Agency
In order to be able to operate a travel agency in Vietnam, a foreign investor needs to find a local partner and together they can form a joint venture. This joint venture is to be registered with the Trade Register.
Fulfill the following requirements upon entity establishment:
- Apply for a foreign tourism license
- Submit a business plan along with a tourism schedule
- Meet the minimum capital requirements
- Fulfill the conditions of the management and employment
In addition to the above requirements, you are to satisfy the following conditions as well:
- If you wish to offer inbound service, the minimum capital is USD 12,500 (VND 250,000,000)
- If you wish to offer outbound service, the minimum capital is USD 50,000 (VND 500,000,000)
- The manager that you hire should have at least 4 years of experience in the tourism-related industry
- To operate your travel agency, it needs to employ at least 3 travel agents and they all should possess certifications and licenses.
Opening a Hotel
Good news for foreign investors interested in establishing a hotel in Vietnam, there is no minimum capital requirement. But, construction and building supporting facilities may require a significant amount of expenses.
Similar to starting a travel agency, a foreign investor is required to cooperate with a local partner who will be appointed as the legal representative of your company.
Furthermore, you will need to be able to show quality infrastructure along with security plan and fire prevention certificate, among others. To know more, please ask Cekindo.
Invest in Vietnam with Cekindo
Strategic consultancy since a company’s inception is the key to success in Vietnam’s tourism sector.
Cekindo’s distinguished consulting services are here to empower entrepreneurs with invaluable insights and strategies to thrive in the competitive Vietnamese market.
Our outstanding team at Cekindo comprises legal experts and business consultants with decades of solid experience in diverse fields such as company setup, operational management, outsourcing, taxes and finances, mergers and acquisitions and many others.
Cekindo responds to a growing need for legal and business knowledge in Vietnam, and aims at changing the game for foreign investors and entrepreneurs.
Discuss your business plan with us. Invest in Vietnam seamlessly. Start by filling in the form below.