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Tourism an overlooked key player

Released at: 12:42, 18/06/2015

Tourism an overlooked key player

Mr. Ken Atkinson, Chairman of the Vietnam Business Forum Working Group for Hospitality and Tourism, discusses the industry's impact on GDP and employment.

by Ken Atkinson

While visitor arrivals in 2014 were up 4 per cent from 2013 levels, at approximately 7.9 million, the figures concealed a worrying trend: significantly declining arrivals from China and Russia. In addition, the increase in actual tourist arrivals was only 2 per cent. This overall trend has continued, with arrivals in the first three months of 2015 down 12.9 per cent against the same period of 2014.

In April 2014 Chinese visitor arrivals were up 47 per cent over April 2013 and Russian visitors were up 37 per cent. By June these figures had fallen to 37 per cent and 30 per cent, respectively, year-on-year, and by year’s end stood at 2 per cent and 22 per cent, respectively, year-on-year. In the first quarter of this year Chinese arrivals were down approximately 40 per cent against the first quarter of 2014 and Russian arrivals were about 27 per cent down.

In 2014, countries where visa waivers apply (South Korea, Japan, Russia, Norway, Sweden, Finland, and Denmark) showed an average 5 per cent year-on-year increase and in the first quarter of 2015 were 7 per cent higher over the first quarter of 2014. South Korea registered the highest growth, at 13 per cent in 2014 and 31 per cent in the first quarter of 2015 year-on-year. Visitors from Finland also rose 28 per cent in the first quarter of 2015.

Travel & Tourism is a major contributor to both employment and to GDP and compared with other major contributors seems to be often sadly neglected.

The direct contribution of Travel & Tourism to GDP in 2013 was VND149.753 trillion ($6.8 billion), or 4.6 per cent of GDP. This is expected to have risen by 8.9 per cent to VND163.034 trillion ($7.49 billion) in 2014. This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines, and other passenger transport services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries being directly supported by tourists.

The direct contribution of Travel & Tourism to GDP is expected to grow by 6.3 per cent per year to VND299.846 trillion ($13.7 billion), or 4.7 per cent of GDP, by 2024.

The total contribution of Travel & Tourism to GDP (including the wider effects from investment, supply chains, and induced income impacts) was VND311.117 trillion ($14.3 billion) in 2013, or 9.6 per cent of GDP, and is expected to have grown by 8.9 per cent to VND338.66 trillion ($15.57 billion), or 9.9 per cent of GDP, in 2014.

Leisure travel spending (inbound and domestic) generated 89 per cent of direct Travel & Tourism GDP in 2013 (of VND233.062 trillion, or $10.7 billion) compared with 11 per cent for business travel spending (of VND28.762 trillion, or $1.32 billion).

Leisure travel spending is expected to have grown by 8.9 per cent in 2014 to VND253.786 trillion ($11.6 billion), and to rise by 6.4 per cent per year to VND471.505 trillion ($21.68 billion) by 2024.

On the employment front, in 2013 Travel & Tourism directly supported 1,899,000 jobs, or 3.7 per cent of total employment. This is expected to have risen by 5.4 per cent in 2014 and by 1.5 per cent per year to 2,329,000 jobs, or 3.9 per cent of total employment, by 2024.

In 2013 the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 7.9 per cent of the total, or 4,071,500 jobs. This is expected to have risen by 5.2 per cent in 2014, to 4,283,500 jobs, and to rise by 1.2 per cent per year, to 4,824,000 jobs, by 2024, or 8 per cent of the total.

The World Travel and Tourism Council (WTTC) ranked Vietnam 16th out of 184 countries in potential for long-term growth in the tourism sector in its 2014 impact report.

 
  • TAGS
  • Tourism
  • Travel

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