Rapid expansion has brought Vietnam’s tourism industry to a tipping point in its development, where continued growth, if not well managed, could result in adverse economic, environmental, and social impacts, according to a World Bank report released on Monday.

According to the 'Vietnam’s Tourism Developments: Stepping Back from the Tipping Point – Vietnam’s Tourism Trends, Challenges, and Policy Priorities' report, Vietnam has experienced a boom in both inbound and outbound tourism over the past decade.

The number of international arrivals to Vietnam nearly quadrupled in this period, from 4.2 million in 2008 to 15.5 million in 2018.

Domestic tourism in Vietnam, which is significantly greater in volume than arrivals from abroad, experienced a similar surge - a fourfold increase in the number of domestic trips, from 20.5 million in 2008 to 80 million in 2018.

As of 2017, tourism directly accounted for eight percent of Vietnam’s GDP.

“Due to its tendency to employ high shares of low-skilled, rural, and youth workers, tourism has also had high pass-through effects on poverty reduction in Vietnam,” the bi-annual economic report reads.

“In the process, it also appears to have facilitated some redistribution of income from richer to poorer localities in Vietnam.”

But Vietnam’s richer provinces still capture the majority of tourism revenues. For instance, the report points out that 60 percent of revenues accrue to just two big cities, Ho Chi Minh City and Hanoi, out of Vietnam’s 63 localities, and nearly 90 percent to only nine localities.

With these characteristics in recent development, the report said that Vietnam’s tourism is facing important challenges that will need to be addressed to ensure that future growth is more sustainable, inclusive, and geographically balanced.

“Rapid visitor growth has been achieved, in large part, through a shift to a lower-spending visitor mix, a continued emphasis on mass market tourism products, and increased concentrations of visitors into already-crowded and popular local destinations,” the report underlined.

“This has exposed Vietnam’s vulnerabilities in infrastructure capacity, tourism human resources, and environmental sustainability.”

According to the report, if left unchecked, this profile of tourism growth risks diminishing its economic impacts, degrading natural and cultural tourism assets, and eroding local community support for tourism amidst perceptions that benefits do not sufficiently exceed the costs.

The World Bank report also suggested tourism policy and development priorities that experts say could help address some of Vietnam’s key development challenges in the field.

These priorities include strategic coordination of destination planning and product development, strengthening tourism human resources and local economy linkages, visitor flow management, enhanced infrastructure, services, quality standards for destination sustainability, and environmental and cultural asset preservation.

The researchers of the report believe that if effectively implemented, these measures could help Vietnam avoid a fate of over-tourism and environmental, cultural, and social degradation.

The report was released at a conference attended by Brian Mtonya, a senior economist at the World Bank, in Hanoi on Monday.

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