Tourism's contributions to the Vietnamese economy, including both direct and indirect amounts, are expected to exceed 15 percent of the country's GDP this year, according to a newly-released report by VinaCapital, a Vietnam-based investment and asset management firm.

Michael Kokalari, chief economist at VinaCapital, said purchases by foreign tourists have accounted for approximately 10 percent of retail sales in Vietnam this year, significantly bolstering the country's economic growth.

Foreign tourism puts money into the hands of a wide range of local merchants, further boosting the national economy, albeit indirectly, Kokalari said.

VinaCapital also estimated the number of foreign tourists visiting Vietnam to increase 40 percent this year thanks to the continued recovery of outbound Chinese tourism.

Foreign tourism accounted for about eight percent of Vietnam’s pre-COVID-19 GDP.

The continued tourism recovery in 2024 will add over one percentage point to the country’s GDP growth this year after having boosted its economic expansion by over four percentage points last year.

According to VinaCapital, Chinese tourists previously made up one-third of Vietnam’s foreign tourist arrivals and China only reclaimed its position as the largest source of visitors to the Southeast Asian country last month for the first time since the COVID-19 outbreak.

The ongoing recovery of outbound Chinese tourism, coupled with the growing desire of Americans to travel, means the total number of foreign tourists to Vietnam will likely exceed pre-COVID-19 levels by more than five percent this year.

In the first five months, the number of Chinese tourists visiting Vietnam soared more than 300 percent, reaching 75 percent of pre-COVID-19 levels.

VinaCapital expected Chinese tourists to Vietnam to recover to 85 percent of pre-COVID-19 levels this year. 

Meanwhile, American tourists to Vietnam have been well above the pre-COVID-19 numbers and high spending by those tourists has likely contributed to high occupancy rates at upscale hotels.

Vietnam welcomed nearly 7.6 million international travelers in the first five months of this year, surging 65 percent year on year to slightly above pre-COVID-19 levels.

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