Thailand and Vietnam tourism models reveal competing pressures

Yuthasak Supasorn, chairman of the Industrial Estate Authority of Thailand (IEAT) and a former governor of the Tourism Authority of Thailand (TAT), has compared the competitiveness of Thailand’s and Vietnam’s tourism industries, pointing out that tourism statistics from 2024 to early 2026 clearly reveal differences in the growth cycle, ability to attract tourists and revenue-generation structure of the two countries’ tourism economies.

 

Deep dive into the Thailand-Vietnam tourism contest: who has the edge

The growth cycle of Thailand’s tourism industry is in a difficult adjustment phase.

In 2024, Thailand received 35.54 million international tourists, a strong recovery with growth of 26.27% from the previous year.

That momentum could not be maintained, with 2025 bringing a clear contraction.

Cumulative international tourist arrivals for the year stood at 32,974,321, down 7.23% from 2024.

More worrying was the contraction in total spending by international tourists, which fell 4.71% to THB1.53 trillion, driven by the decline in Chinese tourists.

Although long-haul markets increased, they could not offset the gap left by the Chinese tourist market.

By contrast, 2025 was a year of historic success and an important milestone for Vietnam’s tourism industry.

International tourist arrivals surged to 21.1-21.2 million, a leap of 20.4% from 2024.

This figure was not only the highest on record, but also 17.8% above the pre-COVID-19 level in 2019.

The inflow of international tourists and domestic consumption helped push Vietnam’s total tourism revenue beyond a level never reached before, crossing the VND1 quadrillion mark, or about US$39 billion, for the first time.

This prompted the Vietnamese government to announce more challenging strategic targets.

For 2026, Vietnam aims to attract 25 million international tourists while stimulating 150 million domestic trips, in order to push total revenue to VND1.125 quadrillion, or about US$45 billion.

Vietnam is falling into a ‘quantity trap’

However, despite the leap in tourist growth, Vietnam is facing a ‘structural issue in value efficiency’.

That is, while tourist numbers and total revenue are growing, the growth in revenue is mainly moving in direct proportion to the increase in visitor volume, making it volume-driven rather than value-driven through higher per-capita spending or premium value creation.

The system is expanding enormously in scale, but lacks progress in qualitative returns.

This reflects the profitability ceiling of Vietnam’s current tourism supply chain.

Comparing the tourism development index: Thailand and Vietnam

In the 2024 Travel & Tourism Development Index (TTDI), produced by the World Economic Forum (WEF), Thailand ranked 47th and remained strong in natural resources, culture and service infrastructure.

Its sharpest decline, however, was in ‘safety and security’, where it fell to 102nd, due to concerns over officials and crime.

Vietnam ranked 59th overall.

Although its total ranking trailed Thailand’s, it placed 16th globally for price competitiveness and 23rd for safety and security.

However, Vietnam still faces ‘institutional bottlenecks’, with service infrastructure ranked 80th and policy prioritising tourism ranked 98th.

An analysis of the strengths, weaknesses and comparative competitiveness of the two countries in each dimension found the following:

Infrastructure

Thailand has an absolute advantage in product diversity and connected transport, including the BTS/MRT mass-transit systems, which provide tourists with a high level of convenience when travelling around Bangkok.

Moreover, Thailand has an absolute advantage in the diversity and depth of tourism products, from leading shopping centres and night markets to excellent service standards in luxury hotels and medical services.

Efficient logistics management helps distribute tourists smoothly.

For Vietnam, this is a weakness.

A shortage of infrastructure and slow development are Vietnam’s most serious ‘bottleneck’.

The public transport network in the capital, Hanoi, remains limited and is not significantly connected with key tourist sites, while mass-transit projects in Ho Chi Minh City continue to face delays.

Beyond physical infrastructure, destination management remains insufficiently integrated, leaving service products fragmented and short of international standards.

In addition, the skills of personnel in the service industry remain behind Thailand, making it difficult for Vietnam to expand into the luxury tier, which demands flawless service.

Costs and prices

Vietnam wins by a wide margin.

The cost of living in Bangkok is 54% higher than in Hanoi, and travel in Vietnam is 20-30% cheaper than in Thailand across almost every dimension, from accommodation and food to internet access and drinks.

A 30-day internet SIM card in Vietnam costs only US$8, compared with US$28 in Thailand.

Local food such as pho starts at US$1.50.

Local draught beer, Bia Hoi, costs only US$0.50, with no comparable product at this price in Thailand.

This advantage is accelerated by the dong exchange rate, which appeals to dollar holders, making Vietnam the top choice for remote workers and budget travellers.

Thailand, by contrast, has a weakness in this area.

The strengthening of the baht, combined with inflation and rising business costs, has pushed Thailand’s TTDI ranking for price competitiveness down to 48th.

This directly affects its ability to attract Chinese tourists, whose behaviour has shifted towards budget travel and value for money, leading this group to view Thailand as offering less budget value than in the past.

Confidence in safety and image stability

This is Vietnam’s strength.

It has political stability and a low level of crime against foreigners, reflected in its global ranking of 23rd for safety in the TTDI 2024.

This image of a peaceful and safe country significantly attracts international tourists.

Data from Agoda indicate that Vietnam’s repeat-visit rate rose to third among Asian countries, behind only Japan and Thailand.

In particular, the resort city of Da Nang made history by entering the top 10 Asian cities with the highest repeat visits.

Thailand, meanwhile, has a weakness and is facing a ‘chronic safety problem’.

Shocking incidents involving Chinese nationals and a crisis of confidence have caused the Chinese tourist confidence index to fall sharply.

Market structure and value-creation efficiency

Thailand has the potential to attract long-stay and high-spending groups.

Chinese visitors spend an average of THB42,428 per person and stay for 7.35 days.

However, Thailand is now increasingly dependent on tourists from neighbouring countries such as Malaysia, whose visitors spend only THB21,450 and stay for 4.17 days.

This means Thailand needs two Malaysian tourists to generate the same revenue as one Chinese tourist.

For Vietnam, this is a weakness.

Its market concentration relies mainly on Northeast Asia, such as South Korea, Japan and Taiwan, as well as domestic tourists.

An Outbox report found that more than 50% of revenue comes from domestic tourism, where the average budget per trip is below VND20 million, or about US$800.

This group’s behaviour focuses on short, frequent trips rather than luxury spending.

With its brand positioning tied to the phrase ‘beautiful but cheap’,

Vietnam faces major difficulty in attracting tourists willing to pay premium prices, leaving its industry structure constrained in terms of profitability and efficiency.

Strategies driving tourism in Thailand and Vietnam

Thailand: policy targeting quality

• Thailand is driving the strategy ‘Up Level, Add Story, Create Value’, with the ultimate goal of stimulating total revenue to THB3.4-3.5 trillion. A key mechanism is promoting Thai soft power through the concept ‘5 Must Do in Thailand’, Must Taste, Must Try, Must Buy, Must See and Must Seek.

Prosperity is also being spread to secondary cities under the Hidden Gem Cities concept, reducing pressure on infrastructure in the capital and major cities.

• Immigration policy reform through the Destination Thailand Visa (DTV) aims to attract high-purchasing-power, long-stay groups, digital nomads and those interested in soft-power activities. The DTV is valid for five years and allows holders to stay for up to 180 days per entry, with an additional 180-day extension per year.

The screening mechanism requires applicants to be aged 20 or above and to show financial evidence of at least THB500,000, or about US$15,000-US$16,000.

The policy is designed to increase the economic multiplier by extending the length of stay and attracting high-potential human resources directly into the economy.

• Thailand is raising specialised industries through niche market elevation, using its service strengths to build a world-class event hub, MICE tourism and a global entertainment hub.

This also includes medical and wellness tourism, particularly specialised medical services, preventive care and longevity science, which are especially high-spending segments.

Vietnam: dual visa policy and a national digital revolution

The Vietnamese government’s strategic direction is clear, stable and focused on raising long-term global competitiveness, to enter the top 30 in the TTDI by 2030.

Vietnam’s policies are systematically integrated with technology and the legal system.

• Strategic dual visa policy: Vietnam has reformed its immigration system to break down barriers to entry, using two complementary tools.

Mass-market expansion: under Resolution No. 229, Vietnam has granted unilateral visa exemption to citizens of 13 target high-purchasing-power countries, mostly in Europe, allowing stays of up to 45 days.

This policy is binding over the long term until 2028.

Vietnam has also introduced e-visas for all countries worldwide, extending stays to 90 days with multiple entries.

Attracting investors and high-level figures: under Decree No. 221/2025, Vietnam has introduced a special visa policy to attract investors, global corporate leaders, scientists and international influencers, in order to facilitate technology transfer and directly enhance the country’s image.

• Transition to the digital economy and the ‘Visit Vietnam’ platform: one of the most important strategies is the use of technology to remove infrastructure weaknesses. The Viet Nam National Authority of Tourism, together with major business networks such as Sun Group, Visa, Mastercard and Trip.com, has developed ‘Visit Vietnam’ as a national tourism super app.

The platform will work with the national data centre to integrate all databases.

Its functions include single-screen ticket booking, the use of artificial intelligence (AI) to analyse and plan routes, and blockchain technology to verify the transparency of reviews.

The platform is scheduled for full operation by 2027, during the hosting of APEC, enabling the public sector to use data-driven insights to manage and predict future trends accurately.

• Rebranding the country through ESG value: to move beyond its market position as merely a cheap destination, Vietnam’s tourism industry executives have proposed a rebrand.

This would be under the acronym ‘VIETNAM’, Varied landscapes, Indigenous culture, Exotic beaches, Truly emotional, Nature, Ancient cities and Memories, alongside the integration of an environmental, social and governance framework, or ESG framework, to create sustainable net positive impacts.

In conclusion, Vietnam is falling into a ‘volume trap’.

If it does not develop upper-end products, its marginal yield is likely to decline.

If Vietnam cannot reform its structure to offer world-class services and ESG development, the ceiling of revenue growth will soon be hit.

Thailand, meanwhile, faces a ‘transition liquidity crisis’ because its basic businesses were designed to accommodate the 40-million-visitor level.

When tourist numbers fall, but costs rise, these businesses face a liquidity crisis.