Two decades ago, the notion that Vietnam's tourism market would be a major competitor in Southeast Asia would have raised some eyebrows. But for the 21st century, the nation has posted impressive growth in arrival numbers.
Vietnam's National Administration of Tourism reported foreign tourist arrivals of some 11.3 million from January to August this year, with significant gains from several Asian source markets.
The standout market in terms of growth -- no surprise to local tour operators -- is Thai travellers, up 46.3% in the first eight months. The Chinese market dipped 0.9% during the period.
An estimated 310,955 Thais travelled to Vietnam in the first eight months this year, with a leap expected as airlines increase the frequency of flights and push new routes to the country.
The airspace over Hanoi and Ho Chi Minh City is becoming busier, with new destinations in the country scouted out by both domestic and international carriers.
Chotechuang Soorangura, associate managing director at NS Travel & Tours, said the growth of Thais travelling to Vietnam is the result of two factors: more flights and cheap prices for tourism facilities.
The travel time is also short and the cuisine not dissimilar to Thai food, he said.
From Bangkok, travellers can choose from seven destinations via direct flight. The central region is gaining in popularity, led by Da Nang, Hue and Hoi An.
Social networks mean travellers are sharing their stunning pictures of attractions online, tempting potential travellers to ask tour companies where the photos were taken so they can book a package themselves.
"The golden bridge, a magnet attraction in Bana Hills, is one example," Mr Chotechuang said. "When people ask about this place and come to learn more about Da Nang, they will know it is described as the best resort location in the country. This process may end with a booking."
The Thai Travel Agents Association said Thai visitors booking tour packages to Vietnam are up 30%, especially to Da Nang, Da Lat and Hanoi.
The variety of prices is another strength leading to growth. Travellers preferring a more luxurious trip can spend 20,000 baht per package for an elegant stay. But there are plenty of budget options for around 10,000 baht, Mr Chotechuang said.
With excursions of two nights and three days, it's a perfect match for office workers who have limited vacation time, he said.
Affordability is a draw for the whole country. International hotel chains with high standards are offering competitive prices with local brands.
Visitors looking to escape Hanoi can go to Sapa to see green terraced rice paddies, while sea lovers can bathe under the sun of Phu Quoc island, Mr Chotechuang said.
Women in tradional dress pose for pictures at a park in Hanoi. bangkok post file photo
Infrastructure edge
Puttipong Prasarttong-Osoth, president of Bangkok Airways, rates Vietnam as a rising star of the airline. This year the airline commenced its newest route, Bangkok-Nha Trang, the third city in Vietnam it serves.
Airlines are keen to enter Vietnam because the last two years have witnessed an expansion of infrastructure, new attractions and service facilities at many tourist destinations.
For instance, Nha Trang is a coastal city with a new airport opened a year ago to welcome more direct international flights, especially from Russia, China and South Korea.
"While tourism in Thailand is stagnant, demand for Vietnam is increasing because of the reputation of new destinations, strengthened by infrastructure investment from the government," Mr Puttipong said. "This is unlike the second-tier province promotion in Thailand, which has not been as effective because infrastructure such as transport is not in place."
This year Bangkok Airways decided to double the frequency of its Bangkok-Phu Quoc route from seven to 14 flights a week. The location has become more well-known in Western markets since the airline started service in October 2017.
Service to Da Nang has also doubled to two flights a day. If the market response to Nha Trang improves, the carrier has a plan to increase services from four flights a week to a daily flight.
Bangkok Airways also decided to focus on Vietnam because of a better yield compared with domestic routes. In addition to Thai and Vietnamese customers, global passengers from 27 alliance airlines with code-share agreements can use the airline to connect to the country.
Fierce LCC competition
The air routes that link Thailand and Vietnam have become a popular target for international low-cost carriers (LCC).
The fiercest competition involves urban links, Bangkok-Ho Chi Minh City, between rivals Thai AirAsia and Thai Vietjet.
Thai AirAsia offers three flights a day on the route, same as Thai Vietjet, but they fly out of different airports.
Based out of Suvarnabhumi, Thai Vietjet challenges the full-service carriers, such as Vietnam Airlines and Thai Airways. Thai AirAsia flies out of Don Mueang, competing with Nok Air, which has two flights daily on the route.
Thai AirAsia also has direct service from Bangkok to Hanoi and Da Nang, both with two flights a day. Newer destinations are Can Tho and Nha Trang. From Chiang Mai, the LCC flies direct to Da Nang and Hanoi.
Thai Vietjet, a more recent entrant in Thailand's LCC field, has an advantage as an affiliate of the biggest LCC in Vietnam, expanding to six routes. From Bangkok, it connects to Ho Chi Minh City, Hanoi, Da Lat and Haiphong.
To answer demand from Vietnamese tourists headed to Thailand, Thai Vietjet also flies direct to Phuket and Chiang Mai from Ho Chi Minh City. The Tourism and Sports Ministry said Thailand from January to July welcomed 651,698 tourists from Vietnam, a gain of 3.4% that was partly due to the expansion of LCCs offering attractive promotions.
Cautious of Chinese boom
The allure of a cheap destination also raises some concerns, especially fears of the zero-dollar epidemic that haunted Thai tourism for years.
Surawat Akaraworamat, secretary-general of the Tourism Council of Thailand, sees tourism in Vietnam following in the footsteps of Thailand. The rise of the Chinese market there is driven by volume growth from zero-dollar packages, Mr Surawat said.
"It's undeniable Vietnam has been a rising star for 3-5 years, with the unfortunate Phuket boat accident in 2018 shifting some Chinese visitors to that country after tour companies' charter flights veered from Thailand," he said.
But Mr Surawat has cooled on Vietnam's competitiveness, citing concerns about the negative effects of zero-dollar tour packages.
Naturally, nominees of tourism businesses are taking advantage of the influx of mass tour groups, he said. They are dominating the tourism supply chains, bringing in tourists and pushing them to hotels and souvenir shops owned by the company, earning the foreign investor healthy profits, Mr Surawat said.
"Low prices can be successful in attracting arrivals, but any country that embraces that formula has to be aware of nominees of foreign investors," he said. "In the end, local stakeholders will not receive the benefits they should."
Neither Vietnam nor Thailand has cured itself of the ills of the zero-dollar effect, Mr Surawat said, and both must create awareness among local communities of the reality that the cost in resources for an influx in tourists may not match the income received.