Vietnam Overtakes Thailand as Modern Chinese Tourists' Favourite
Vietnam’s meteoric rise in tourism is reshaping Southeast Asia’s multi-billion-dollar industry, as the country successfully lures a new generation of Chinese holidaymakers
- A new generation of independent Chinese tourists is shifting its preference from Thailand to Vietnam, a trend that could cost Thailand over $3.5 billion in lost revenue.
- Modern Chinese travelers are seeking more authentic, less crowded, and fresh experiences, which they increasingly find in Vietnam over the more established Thai destinations.
- Vietnam is actively adapting to attract these tourists with new festivals, Chinese-language signage, and Mandarin-speaking staff, while Thailand faces challenges like reduced flight capacity, rising costs, and safety concerns.
- This shift is reflected in data showing a 44% year-on-year increase in Chinese tourists to Vietnam, while flight capacity from China to Thailand has decreased by over 11%.
Vietnam’s rapid growth is reshaping Southeast Asia’s multi-billion-dollar tourism industry, according to a report by Bloomberg.
This surge is in stark contrast to regional giant Thailand, which is losing its market share.
Data from China Trading Desk, a firm that monitors Chinese travel and spending, suggests this shift could cost Thailand more than $3.5 billion in lost revenue, with the money instead flowing to Vietnam and its neighbours.
This phenomenon is largely driven by a new generation of Chinese tourists who prefer independent travel, reflecting a structural change in the world's largest tourism market.
"For this new group of Chinese tourists, Vietnam offers a new and fresh experience," says Subramania Patra, CEO of China Trading Desk. "Many tourists feel that Vietnam is still less crowded and more authentically local."
This year, Vietnam has welcomed a record high of nearly 14 million international tourists. Chinese tourists, its largest market, increased by 44% year-on-year during the first eight months of the year (January-August).
Malaysia has also seen a 35% increase in tourists from mainland China during the first half of the year, accompanied by a nearly 50% increase in flight seat capacity from China.
Shaharruddin Saaid, Executive Director of the Malaysian Association of Hotels, stated that the visa-free policy for Chinese citizens and a weaker Malaysian ringgit are expected to attract even more travellers from mainland China.
So far, hotels have reported higher demand and occupancy rates than last year.
Vietnam Adapts its Strategy to Attract Modern Chinese Tourists
The Vietnamese government and private tour companies are actively working to attract international visitors, particularly from China.
In Quang Ninh province, which borders China, officials have partnered with businesses to organise paragliding and hot-air balloon festivals to encourage tourists to stay longer.
In the coastal city of Da Nang, large signs in Chinese are now ubiquitous, from hotel entrances to street-side restaurants and massage parlours.
Hotels have also started hiring staff who can speak Mandarin or are using translation apps to communicate with guests.
Modern Chinese tourists are shifting away from the budget tour groups that were popular before the COVID-19 pandemic.
"Currently, over 40% of Chinese travelling abroad for the first time are independent, educated and looking for an authentic foreign experience," said the China Trading Desk CEO. "This group of tourists doesn't want to be put on a bus and taken to destinations where everything feels like China. And, importantly, they are willing to pay more."
Hava Travel, a tour company in Da Nang and Nha Trang, has shifted its strategy from the budget tour market to boutique tourists who want curated, specialised experiences. In August alone, the company served around 2,000 customers, an increase of 20% from the beginning of the year.
"Our Chinese tourists are willing to pay higher prices," said Nguyen Ngoc Thien, Deputy General Director of Hava Travel.
Additionally, at the Mercure Nha Trang Beach Hotel, almost half of the rooms are consistently booked by Chinese tourists, according to Luong Phu Hai, Director of Marketing and Sales for the Accor SA hotel chain.
Thailand Faces Multiple Challenges
The situation in Thailand is different. Data from Cirium, an aviation analytics firm, indicates that during the first eight months of this year, one-way flight seat capacity from China to Thailand decreased by more than 11% compared to the previous year, to just 5.1 million seats.
Although tourists from mainland China remain Thailand's largest market, the decline has resulted in an overall 7% drop in international tourist numbers during the first eight months, despite strong growth from European and American markets.
The Kasikorn Research Centre forecasts that the revenue of Thailand's hotel business will contract by 4.5% this year, with a decrease in occupancy rates.
The abduction of Chinese actor Wang Xing, who was tricked into coming to Thailand before being transferred to Myanmar by a call centre gang, remains a negative image that makes tourists cautious.
Furthermore, many Chinese tourists have commented on social media about the price increases for hotels, food, and taxi fares in Thailand since the pandemic.
However, there is still hope for a recovery during the upcoming winter season, which is Thailand’s peak tourism period.
Damien Pfirsch, Chief Commercial Officer at Agoda, revealed that Bangkok remains the top Asian destination that tourists choose to revisit on their platform.
He believes the tourism industry still has a chance to recover, especially if Chinese tourists start travelling again, which would be a key driver for revitalising the sector.
