In a conversation with Saigon Investment, Mr. Đặng Mạnh Phước, CEO of The Outbox Company, which is an in-depth data analysis and market research company in tourism and hospitality, shared his views on how Vietnam can effectively move in this direction.
JOURNALIST: - Sir, in recent years tourism companies in Vietnam have continuously been receiving many prestigious international awards. On more than one occasion we have received the award for the world's leading heritage destination. But it still seems that the tourism industry has not yet made good use of this promotion to strengthen their marketing base in attracting more tourists. So how can we best benefit from these awards?
Mr. ĐẶNG MẠNH PHƯỚC: - First of all, it is necessary to affirm that the awards that Vietnam has received over the years are a great source of encouragement for the entire tourism industry in the country. Compared to some countries in the region, Vietnam has more advantages in terms of heritage. However, to answer the question of how to promote this value further, it is necessary to understand that in theory tourists will not spend on natural resources, and what tourists pay to come and see in a destination in Vietnam is the key product. We are very proud of the resources we have, but we have not yet produced that local resource, and have not built any attractive tourism product that could lure the target market. Therefore, the tourism industry needs to clearly define which market is being targeted for short-term and long-term goals.
I would like to add that in the current context of tourism development, when the trend of sustainable development is becoming so popular in many countries in the region as well as in the world, Vietnam should also focus more on the group of middle- and high-end spending customers, or even luxury customers so as to attract more revenue from tourists while ensuring environmental and social factors concerning sustainable development are well maintained and preserved.
- Sir, in your opinion, which is the market where the tourism industry of Vietnam can promote the country more, so as to attract luxury travelers? What solutions are needed to attract this group of high spending customers?
- In any market of the tourism industry in Vietnam, from the traditional markets such as China, South Korea, and Japan, to the other markets worldwide, there are always many customer segments. For instance, before the Covid-19 pandemic the Chinese market was a very big and lucrative market for Vietnamese tourism companies, but we have not yet received customers in the high-spending segment.
On the other hand, China is considered a high-end and luxury tourist market in the world and many countries want to attract this resource for their own tourism industry. Therefore, we do not need to ask where the high-end and luxury segment is. They are always there and across many terrains, but the problem is how to reach them. In my opinion, reaching this segment requires two important criteria.
Firstly, high-spending customers have high-end product requirements, so we must seriously invest in product development. It will be impossible to earn a lot of money from tourists without spending on our own brainpower, and not providing good resources at our end will not help in improving the situation.
Secondly, the luxury segment is not a mass segment, so reaching out to this segment requires a concerted effort on the part of the tourism industry and also needs the cooperation of market research enterprises, so as to understand the behavior and needs of luxury travelers. By combining these two factors, we will come to a specific communication strategy, position the tourism image of Vietnam to suit the luxury segment, and thereby launch more suitable products to attract this tourist segment.
- Sir, for a long time now Vietnam is still often compared with Thailand when discussing tourism, although we know that we still have many features that cannot compare with Thai tourism. However, in terms of luxury travelers is there anything that Vietnam can learn from Thai tourism?
- In my opinion, comparing Vietnam with Thailand is quite lame because the Thai tourism industry is heavily invested in and prioritized, so this is not only about attracting luxury travelers but also understanding the general picture of the tourism industry in Vietnam. As an observer, I think that tourism in Vietnam can learn from two main points. First, know that Thailand has built a clear strategic vision. The Thai tourism industry knows what they want, and which segments and markets to develop for tourism in the short, medium, and long term. Second, they have a specific and very aggressive implementation plan.
It should also be added that many people believe that tourism in Vietnam cannot be compared with Thailand in terms of communication and promotion budget. This is a fact, so when we don't have much money, we have to save the money we have by building a clear strategic vision and a specific plan, so as to ensure effective spending of money on key products.
Thailand has inherently become a strong brand name in attracting the luxury segment. On the other hand, to position Vietnam as a destination for high-end tourism or luxury tourism will require an overall long-term strategy rather than an idea and a thought that will fulfill the needs. This will require the cooperation of businesses in developing outstanding products and state agencies positioning themselves to represent a national brand and improving our strategy for effective promotion.
- Sir, when we mention the strategy to lure more luxury travelers from various parts of the globe, we can look at many domestic customers who are willing to pay for high-end services. This group of travelers prefers outbound foreign travel. So, is there any way we can retain this group of tourists for travel within Vietnam?
- As a business that always closely follows the changes of the tourist market in Vietnam, we can affirm that Vietnamese tourists are spending more and more, and it is true that Vietnamese tourists always tend to choose outbound tours more often. To find the cause, we need to put Vietnamese tourists on par with the international tourist market, to see why they don't choose a destination in Vietnam.
The first reason could be the product itself. According to our research, in 2022 when the tourism industry boomed again to welcome domestic tourists, travelers mainly spent a lot on short-term resort products, because there were not many products to choose from. Therefore, when outbound tours returned, Vietnamese people with a desire to explore the world chose to go abroad rather than travel within the country.
In my opinion, the synchronous development of outbound, inbound, and domestic tourism is normal, and there is no need to worry on how to dissuade Vietnamese tourists from traveling to foreign lands. It should be noted that Vietnamese people do not only travel once a year but travel more days in a year, hence it is necessary to understand more deeply the needs of Vietnamese tourists.
We must admit that the products of Vietnamese tourism are rather poor in the eyes of international tourists, and in the eyes of Vietnamese tourists maybe even poorer, so they do not choose to use them. If we can solve the problem of the Vietnamese group, the problem of attracting luxury customers will be much less difficult when there is a group of high-spending visitors wanting to travel to Vietnam.
- Sir, we just received good news that from 15 March China would put Vietnam on the pilot list of countries where the Chinese people could travel to easily. However, there are still concerns that if we continue to conduct tourism passively in 2023 it will be a difficult year for the tourism industry in Vietnam. What is your opinion on this?
- If we still conduct tourism passively and delay in opening our markets as we did before, then I agree that this year will be difficult for the tourism industry. The goal of the tourism industry in Vietnam is to welcome eight million international visitors this year. This is a modest figure compared to some countries in the region, such as Thailand, whose target has been raised to 20 to 30 million visitors per year. Our goal is equal to that of Cambodia, but it should be noted that Cambodia in the past was always lower than Vietnam. The goal is not too high for the tourism industry, but in the current format it will surely be a huge challenge.
The fact that China has put Vietnam on the second batch of the pilot list of a group of countries shows it is unlikely that it will be able to compensate for the number of international visitors according to this year's target. I think we need a preparation plan, a more proactive approach in terms of the market, and a more flexible scenario. Only then will we be able to reach the target of eight million foreign visitors for this year.
- Thank you very much.