Why did Vietnam drop in the tourism competitiveness index?

Loosely connected service supply chains and “strong” infrastructure are some of the weaknesses that cause Vietnamese tourism to fall in the competitiveness index.

According to a report from the World Economic Forum (WEF) at the end of May, Vietnam’s Travel & Tourism Development Index (TTDI) ranked 59th, down 7 places compared to 2022. Vietnam’s total score reached was 3.96 out of 7, down 0.14% from the total score of 4.1 in the previous ranking.

AZA Travel CEO Nguyen Tien Dat “feels sad” when Vietnam tourism has made many efforts to develop but still drops in rankings. Mr. Dat said many experts commented that this year’s rankings were “inaccurate” about the industry’s capacity.

According to WEF, the data is largely based on data summarized at the end of last year. Meanwhile, many Vietnamese policies such as visa relaxation will only begin to be implemented from August 2023. To get clear results about the benefits of the policy, Vietnam needs more time because not all policies are effective immediately. Many indicators may not accurately reflect the competitiveness of Vietnamese tourism, causing the industry to “suffer”.

Korean tourists visited Nha Trang in April. Photo: Bui Toan

Associate Professor Dr. Pham Hong Long, Head of the Department of Tourism Studies – Hanoi University of Social Sciences and Humanities, said many countries in Southeast Asia have dropped in rankings, not just Vietnam.

Singapore in 2022 ranked 9th out of 117 countries and territories and this year ranked 13th, down 4 places. Thailand dropped 11 places, from 36th place in 2022 to 47th this year. Cambodia dropped the most with 16 places, from 69 to 85. Four countries increased, including Malaysia, which rose 3 places to rank 35, Indonesia rose 10 places to 22nd, the Philippines rose 6 places to 69th, and Laos rose 2 places to 91. Other countries in ASEAN are not updated.

However, experts say that Vietnam’s tourism industry still has many weaknesses compared to other countries such as sustainability, infrastructure and services, leading to a decline in rankings.

“After the pandemic, many countries have policies that prioritize tourism development earlier or stronger than Vietnam,” Mr. Long pointed out as one of the possible reasons why Vietnam scored low.

TTDI 2024 ranked 119 countries and territories. The score is made up of 102 individual indicators within 17 pillar indicators. These 17 categories are evenly divided into 5 large groups: favorable environment; policies and create conditions for tourism activities; infrastructure and services; tourism and travel resources; Sustainability.

Among the 5 major groups, 4 Vietnamese groups dropped in ranking and one group promoted for favorable environment, increasing one place from 60 to 59. The group with the biggest decline in ranking was policy and creating conditions for tourism activities – 7 ranks, from 57 to 64. Infrastructure and services from 57 to 62. Resources fell from 24 to 26, sustainability ranked 116, down two places.

Ranking of Vietnam’s 17 pillar indicators in 2022-2024 compared to the world:

Index 2024 2022
Business environment 65 62
Safe security 23 19
Health, hygiene 82 81
Human resources & labor market 49 48
IT capacity (digital services, communications technology infrastructure) 57 60
Priority level for tourism & travel 98 94
Travel openness 80 82
Competitive on price 16 20
Air transport infrastructure 43 26
Port and road infrastructure 54 52
Infrastructure and tourist services 80 84
Natural resources 26 24
Cultural resources 28 25
Resources other than entertainment 38 37
Environmentally sustainable 93 90
Impact on economy and society 115 115
Sustainable demand 54 30

WEF’s ranking criteria have changed a lot compared to previous years, more closely following the issues of sustainable development, gender equality, and high income that the United Nations is currently concerned about. WEF also changed the name of the infrastructure group to “infrastructure and services”, making the overall assessment of the industry broader and deeper.

Mr. Long commented that Vietnam’s infrastructure in recent years has changed positively in the railway and road categories, many highways have been opened such as the Ho Chi Minh City – Mui Ne section or beautiful roads, shortening travel time like Hanoi. – Quang Ninh – Hai Phong. But these are only short trips. Guests who want to go further will have to fly. However, infrastructure at airports such as Noi Bai and Tan Son Nhat is still overloaded and has many shortcomings. That is also one of the reasons why the ranking of air transport infrastructure (in the Infrastructure and services group) dropped sharply this year.

Singapore is doing very well with its infrastructure when the air transport infrastructure index ranks 4th in the world, after the UAE, the US, and Spain. Changi Airport is continuously upgrading its infrastructure. One of the newest services is the automatic immigration gates applied at all 4 stations in Changi, helping travelers entering and exiting the country only take about a minute to perform all operations.

International guests wearing Vietnamese costumes during a trip to Vietnam in May. Photo: Nguyen Anh Tuan

Mr. Long also pointed out that the service part of Vietnam’s tourism (in the main section Infrastructure and services) also needs upgrading as the service supply chain and connection are still loose.

Good connectivity in Thailand’s service delivery method is reflected in cheap tour prices. When Thailand does tourism, the whole country does it together, not just the tourism industry. Therefore, the supply chain is strong, even at some links accepting losses but in return the overall profit. Meanwhile in Vietnam, service infrastructure is still “strong and everyone does it”, according to Lux Group CEO Pham Ha.

Sustainable tourism development (included in the Sustainability in Tourism & Travel index) is also a weak point of Vietnam, according to Mr. Ha. Many construction destinations are rampant, making the land itself worse, losing its original natural landscape. Concreting or modernizing tourist attractions may benefit mass tourism, but it will make international visitors, the high-spending group, feel bored and not return or not want to come. Meanwhile, in Thailand, when planning any area, the government prioritizes tourism development first.

The 4 indexes that increased this year in Vietnam are competitive prices from 20 to 16, international openness from 82 to 80, tourist service infrastructure from 84 to 80, and information technology capacity from 60 to 80. 57. In addition, other indexes achieving high rankings (top 40) are safety and security ranked 23rd, natural resources index ranked 26th, cultural resources ranked 28th, and resources other than entertainment and recreation. rank 38.

CEO Pham Ha believes that there are 4 main criteria for a country’s tourism to attract visitors: natural landscape, cuisine, culture and people. After the epidemic, people are more concerned about security and safety. Vietnam has all the criteria customers need. Therefore, in order for the tourism industry to increase its competitiveness as well as its ranking in the WEF rankings, Vietnam needs to reshape its national tourism promotion strategy. One of them is to become a high-class destination in the eyes of international visitors, the people are friendly and hospitable, not cheating or cutting corners to “please arriving guests, satisfy departing guests”. Competitive prices are also a strong point to attract tourists. But instead of reducing prices, Vietnam should focus on improving service quality so that customers feel they get their money’s worth.

Vietnam also has an advantage in the natural resources index, ranking 26th out of 119 countries and territories. However, the tourism industry has not properly exploited this strength to upgrade its ranking.

“We are begging for heritage,” Mr. Ha said.

Vietnam has many heritage sites recognized by UNESCO but currently only guides visitors to visit things available in nature. Instead, the tourism industry needs to create highlights, new products, and stories behind the heritage to tell visitors. International visitors who are attracted and impressed with these products will want to come back to explore more and introduce them to friends and relatives.

The 2024 ranking is built based on an assessment focusing on countries’ tourism industry’s readiness to deal with future risks, its socio-economic and environmental impacts as well as the motivation for global prosperity. WEF said that to achieve control over the situation, tourism industry leaders of countries and relevant parties need to proactively shape the industry for more comprehensive and sustainable development.

To upgrade the tourism industry, Associate Professor Long said it is necessary to look at reality, “wherever it is poor, improve there”, emphasizing the need for coordination and support from all industries and professions.

By Editor

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