1. Lawyer in Vietnam Oliver Massmann TOURISM AND VISA
Travel and tourism is a growing contributor to the Gross Domestic Product (GDP) and
employment sector. With regards to GDP, in 2013, travel and tourism directly contributes 4.6%
to the GDP (equivalent VND149,753 billion). It is forecast that this number will increase by
8.9% in 2014. Until 2024, direct contribution of travel and tourism is expected to grow by 6.3%
per year, making contribution to GDP of 4.7%. This contribution is generated by industries such
as travel agents, airlines, hotels and other services directly supported by tourism.
Travel and tourism also contributes a number of employees, when it supported 3.7% of the total
jobs in 2013. In 2014, this number is expected to rise by 5.4% and by 1.5% per year (3.9% of
total employment) in 2024.
Visa exemption, visa waiver and visa on arrival
The biggest impact on the number of travel and tourism flow has the entry visa policy. Visitors
will switch to another country which has a more convenient entry policy to save time and cost.
Thus, in order to ensure competitiveness, attract direct investment and international tourist flows,
many countries are now under the process of adopting visa exemption policy (either unilaterally
like Thailand, Malaysia and Singapore or bilaterally). As a result, there has been an increasing
number of visitors coming to these countries from the adoption of such policy.
From 01 July 2015, the visa-free travel policy will be applicable to citizen of five European
countries including Germany, France, UK, Italy, and Spain, with a permitted 15-day stay for
each entry. As such, Vietnam will waive visas for such citizens within one year from the
Resolution’s effective date (i.e., from 01 July 2015 to the end of 30 June 2016).
This measure will hopefully enable Vietnam to attract international tourists, when the recent
statistics on foreign tourist arrivals does not really appear satisfactory
Vietnam could also potentially increase tourism arrivals by 8% to 18% if it were to move to a
program of visa on arrival, which should be different from the procedure which is taking place at
the moment where people have to wait hours to get their paperwork done.
Transit and visa on arrival
It has been proved that the grant of extended transit visa’s on arrival has led to an increase of
tourism stop overs and spending by transiting passengers. However, even when tourists have to
transit in two different cities in Vietnam (i.e., arrival and departure cities are not the same), they
are required to obtain a 30-day tourist visa to take a domestic flight which lasts for only two to
three hours. Therefore, it is recommended that Vietnam provide 24-72 hour domestic transfer
authority to allow for transfer between airports. It is further suggested that Vietnam creates a
visa-free zone in tourist attracting places for major international/ regional flights to create a
transit hub, thus attracting more tourists coming to Vietnam.
2. Vocational Training Opportunities Scheme (“VTOS”) and its impact on hotel star rating
VTOS is considered as a great attempt by the Government in developing larger, better qualified
and well trained employees in the tourism sector. This scheme, when being applied in locally
managed 1-3 star hotels without international standard training programs, could significantly
lead to positive results.
It should be noted that international branded hotels, despite not being considered as training
institutions, conduct their own trainings to their employees based on their recognized brand
standards. This makes them stand differentially from other competitors. Thus, it is necessary to
figure out a solution to adopt VTOS for local hotels and at the same time recognize international
standards by internationally branded hotels. It would be very wrong if we require compliance
with VTOS by such international hotel chains and place financial penalties for their
incompliance.
Destination marketing
In order to attract tourists, value and experience that each destination brings to visitors are of
utmost importance. They are a result of unite cooperation among several public and private
service providers, working together towards a common goal to ensure the viability and integrity
of their destination. In that sense, destination management plays an important role. In Vietnam,
destination management is largely the responsibility of the Department of Culture, Sport and
Tourisms to report to the provincial People’s Committee. There is no regime for shared
responsibility among government agencies. It is now time to start a strategic planning initiative
to strengthen destination management at each place with tourist value.
In addition, regional tourism management should also be enhanced. Tourists normally do not
visit a single place but make a tour throughout a region based on its available tourism products.
Thus, destination management should not only require efforts at each destination but also
collaboration within the region, whether in the form of public-private partnership or other forms,
to develop joint regional products. These products will encourage visitors stay longer and plan
their trip back to many different parts of Vietnam.
Current marketing efforts by the Government
Since its establishment in 2014, the Tourism Advisory Board (“TVB”) has worked closely with
the Vietnam National Administration of Tourism (“VNAT”) to develop a global marketing
program for Vietnam. The aim of this program is to increase global awareness about Vietnam as
a must-see destination in South East Asia, attract high-value visitors with long stays and high
expenditure, and increase number of international visitors to Vietnam, etc. Till the end of 2015,
TVB and VNAT will launch a campaign for online marketing. This is said to be an effective
channel to attract tourism given the limited Government’s budget. Key target markets of this
campaign are USA, Germany, France, UK, Japan, Singapore, Malaysia and Australia.
3. However, budget for the global marketing campaign is very constrained. Up to now, the funding
is less than US$1.5 million, which is too little compared with the contribution of Vietnam’s
neighbouring countries to their national tourism promotion plan. Taking into account the fact that
travel and tourism in total accounts for about 10% of the GDP, the Government is recommended
to provide further support to the industry.
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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if
you have any questions on the above. Oliver Massmann is the General Director of Duane Morris
Vietnam LLC.
