According to expert Luong Hoai Nam, China’s reopening of tourism in Vietnam also reduces challenges for the resort real estate market. Without guests, many projects would slip into disrepair status as “ghost towns”.
Recently, the Ministry of Culture, Sports, and Tourism requested that Vietnam be included in the list of pilot nations to welcome Chinese visitors in groups.
This decision comes after China permitted domestic travel companies to offer overseas excursions to 20 countries worldwide, including numerous Asian countries but not Vietnam.
According to analysts, management authorities must aggressively support the reopening of Vietnam’s tourist industry, as this would benefit the tourism industry and other economic sectors.
Dr. Luong Hoai Nam, a member of the Vietnam Tourism Advisory Board (TAB), claimed that the Ministry of Culture, Sports, and Tourism’s letter requesting that the Chinese side reopens to Vietnamese tourism is a timely step by our country’s tourism management agency.
According to experts, 5.6 million Chinese tourists visited Vietnam in 2019, accounting for one-third of all overseas visitors. This number of tourists generates more than $5 billion in income for Vietnamese tourism businesses.
The Chinese tourism sector accounts for more than half of Vietnam’s agricultural exports to China. As a result, this is a critical market for Vietnam.
Many “ghost towns” because of a lack of tourists
Mr. Nam believes that resort real estate is a crucial issue in the real estate industry in Vietnam. Tens of billions of dollars have been spent in resort real estate developments that include classic items like villas, townhouses, and condotel flats.
Yet, the lack of visitors, inhabitants, and activities transforms these areas into “ghost streets” and “ghost towns” making it impossible for homeowners to do business in tourism services and obtain liquidity.
“How can there be commercial potential if there are no tourists, especially international ones? How can tourist services exist in the absence of commercial opportunities? Would tourists still visit without tourism services? Such a vicious circle has brought beach resort real estate projects to a standstill “Mr. Nam raised the issue.
This expert stressed that if international visitor arrivals to Vietnam are not met and exceeded before the COVID-19 pandemic, tourism businesses would not only be stalled and exhausted, but real estate agents will spend too much on resort real estate, making it much more difficult.
Expecting investment inflows from China
According to economist Pham The Anh, the openness of China will have the largest influence on investment flows from China to Vietnam, in addition to the component encouraging tourism services.
According to the trend of investment shifting, China’s FDI inflows into Vietnam grew dramatically in 2019. This capital flow, however, decreased three years later as a result of the COVID-19 outbreak. Until China reopens, Investment will probably continue to flood into Vietnam.
Vietnam’s exports are likewise significantly reliant on raw material imports from China. As a result, when this nation opened up, Vietnam’s exports had little influence, but imports had a significant impact.
Nevertheless, when exports to important Vietnamese markets such as the US and the EU slow down, so does the equivalent import of raw materials from China.
In terms of tourism, Chinese visitors represent a potential market for Vietnam if the government normalizes cross-border travel. Analyst Pham The Anh believes that when China reopens, it would benefit Vietnam’s tourist and service industries.