Ep 21: It's All About Vietnam: Asia's Hottest Post-COVID Destination

This week, Gary and Hannah discuss all things Vietnam.

The country’s success in containing the coronavirus has made it the most talked about destination in Asia. But Vietnam also counts thriving domestic and outbound travel sectors, and its airlines are expanding aggressively. Sustained GDP growth, a young population and expanding middle class make Vietnam a South East Asian all-star economy.

Tourism benefited from this surging economic momentum, but what are the opportunities and challenges in a post-COVID world? And when will Vietnam reopen its borders for international travel?

Show notes

01:10 Vietnam’s low COVID-19 cases and its positioning as a test case for reopening tourism.

“It is simply remarkable.” (Gary)

“You’re going from a COVID safe destination to an entirely unknown COVID future.” (Hannah)

02:20 Before the pandemic, Vietnam was developing into one of Asia’s brightest success stories in terms of volume. It received 18 million arrivals in 2019, with top markets including:

1. China - 5.8 million
2. South Korea - 4.2 million arrivals
3. Japan
4. Taiwan
5. USA

“79% of the visitors to Vietnam last year were from Asian countries.” (Gary)

“That stands them [Vietnam in good stead post pandemic, as long-haul markets will take longer to recover, so they can rely on Asian markets to buoy up their arrivals.” (Hannah)

03:32 Vietnam’s 2010 arrivals target was just 4.5 million - at the start of 2020 (pre-pandemic), the government set 2025 targets of 35 million inbound travellers, and 120 million domestic travellers.

04:00 Vietnam also had one of the highest GDP growths in Asia last year, at about 7%, with strong inbound, domestic and outbound travel sectors.

“If you look at the size of the population, it’s growing very, very fast, but it’s also very, very young. 70% of Vietnam’s population is under 35 years old and the middle class is growing extremely fast.” (Gary)

“You do get the feeling that Vietnam feels that there are opportunities to grow quickly and rebound fast once all the lockdowns are lifted.” (Gary)

“Vietnamese in general are some of the most confident in SE Asia in their belief that the economy will rebound.” (Hannah)

06:13 Domestic travel in Vietnam. A recent survey on how consumers feel about travelling domestically: 25% of Vietnamese plan to travel domestically in the next 3-6 months vs 30% in the Philippines. Diversity of cultures, food, geography helps to create a diverse domestic product.

“Across our region, people do want to get travelling again.” (Gary)

“As Vietnamese people travel to more different locations and take pictures, we’ll see a lot more imagery across social media that perhaps we as travellers may not have seen, which will generate its own interest for the inbound market once it comes back.” (Gary)

08:30 Outbound travel from Vietnam was booming, with airlines starting to open up new routes. One point holding it back previously was the lack of easy visa access.

“Last year, the Vietnamese market was really becoming one to watch. The numbers of Vietnamese travelling to destinations like Japan, Korea, Australia, even Europe was starting to increase.” (Hannah)

“Vietnam has a lot of cards to play, as one of Asia’s first countries to open. There could be a reset button, and there could be deals underway with other countries to make access a little easier.” (Gary)

10:27 Vietnam Airlines and their potential fleet expansion. They are contemplating taking on 50 new planes despite the pandemic.

“They see that opportunity, but are also very fearful as the aviation market in Vietnam is becoming so cut-throat and opportunistic, with new airlines such as Bamboo Airways, that VNA [Vietnam Airlines] feel they have to act now.” (Hannah)

11:54 The political factor impacting Vietnam’s decisions. The cycle of the government’s key positions are up for change in Jan 2021, creating impetus to get the economy moving.

12:33 When will Vietnam open up? Domestic tourism has already opened up, and the load factor for some air routes is 80-90%.

“Are they going to risk the COVID-free status and open up to tourists? Who would they open up to? When will they open up?” (Hannah)

“If we look at the rates of reopening, Europe is opening much more quickly, and there’s a reason for that, Europe has the summer season coming, but Asia is still very reticent, and we’re not seeing any first-movers.” (Gary)

“We will probably first open air routes to countries and regions which are in a similar situation to us.” (Kien Tran Trong, Chairman of the Vietnam Tourism Advisory Board)

14:52 Who will Vietnam open up to? Inevitably, there’s backchanneling between countries, and a lot of discussions we can’t see right now.

“They’re giving away some clues - countries who have successfully contained the disease, so you would look at Korea. China’s the biggest market.” (Gary)

17:00 Is there an all-ASEAN opening coming?

“I think there will definitely be an ASEAN bubble of some kind, but the problem is that all the countries are at such different levels […] until the countries are all on the same level, it’s going to be hard to open them all up to one another.” (Hannah)

“June will be a critical month. It’s coming to the point where economies really do need to start opening up.” (Gary)

18:25 From July 1st, Vietnam will allow e-visa applications from 80 countries worldwide.

“We’re starting to see the pieces of the jigsaw come together.” (Gary)

19:40 Are there going to be standardised hygiene and sanitary procedures across ASEAN airports?

“You’d think that there should be, really, that major ASEAN airports would have a standardised process going forward, but we don’t have any information on that right now.” (Gary)

20:22 How will social distancing work with international flights, given that Vietnam has now relaxed those restrictions?

“Are they going to have to impose the rule of no longer having a middle seat for international flights, will fares be more expensive as a result?” (Hannah)

21:22 Would Vietnam still open up to Europe in time for the summer season? Could it be included in Australia’s travel bubble?

“Bamboo Airways was about to launch its Czech Republic inaugural route, so you never know!” (Hannah)

23:30 E-visa policy - applications from 1 July, but no more details than that.

“Why are they making this announcement now, rather than announcing when or who will be allowed to travel? But it’s a smart play - 80 countries is a big deal.” (Hannah)

“From what I understand, they have to write this into law, so they’ll enshrine that 80 countries will be allowed to get e-visas, but it doesn’t mean that they’ll be able to get visas from day 1, or that they’ll necessarily be able to get them at all, as we don’t know when flights will start.” (Gary)

26:33 Feedback from our readers on what countries they think will return fastest to Vietnam.

“Korea no doubt… but announcing evisa resumption and no entry date (when in fact the number 1 most important item to declare in VN evisa application is intended date of entry) amounts to no news… what good is an evisa with no entry? both news need to be released in tandem… i.e. visa applications reopen July 1st, entry September 1st…” (Luis Riestra, Opening/Rebranding General Manager - Country Rep. of Corporate Social Responsibility for Accor Hotels in Korea)

“All of these news are speculations. Vietnam is not opening borders to tourism yet and i don’t think they will do it until is 100% secure. If they have been one of the best countries to prevent faster and more effective the epidemic why they will now be the first ones to open? All these news are related for special cases and that’s all.” (Sanchez Ramos, a travel specialist on the Spanish and Latin American markets)

Resources

Link to Google consumer survey HERE