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Vietnam’s recent Visa-Free exemptions bring Tourism to the Front
Tuesday, August 15, 2023, marks the true reopening of Vietnam post-Covid. When will the 18 million visitors of 2019 be back again? Following March 2020 to March 2022, two loooong years of lockdown. After a false start in March 2022 (limited to 80 countries with a maximum 30-day tourist visa), Vietnam sees the light at the end of the tunnel today, despite some pushback problems with digitalization in Vietnam…
But we’re getting there. Thirteen countries have visa exemptions, and the rest of the world has e-visas for 90 days! Yahooooo! Let’s get back to business and bring back the 18 million visitors from 2019! Note: The 2023 year target was 8 million, but I’m sure this announcement will surprise the Vietnamese government forecasts.
What took so long? The pandemic was very tough for everyone, but as usual in Vietnam, some optimized the situation for their own benefit. Post-Covid, dozens of large-scale scandals were unearthed by Nguyen Phu Trong, the first secretary of the Vietnamese Communist Central Party, driving to eradicate corruption. To name a few, the Vietnamese Ministry of Health, the Transportation Vehicle Inspectorate, the Overseas Vietnamese repatriations, the Vietnamese Airlines hostesses’ drug smuggling…
As I write this, the processes are being implemented, and you can use the official links below… but still be patient as digitalized administration is not the preferred modus operandi of Vietnamese civil servants.
Covid Repatriation of Vietnamese Overseas and Other Investigations
In 2022, the scandal of the Vietnamese Overseas repatriations – involving the collusion of 8 high-ranked servants from various ministries – was a racket. Anyone wanting to board planes chartered by the officially authorized organizers would need to pay a minimum of VND 150 million, i.e., over US$6,000 per Vietnamese returnee to their home country to escape the worldwide Covid pandemic. As I write this, death sentences and average exemplary jail terms ranging from 12 to 20 years are being handed out. Then, recently in March 2023, the busting of a drug ring triggered by French customs informing their Vietnamese counterparts led to the arrest of 4 Vietnamese airline hostesses smuggling 11.4 kg of drugs. This almost triggered another round of extensive investigations. Hopefully, the ‘flight freight of information news’ has been lost in the Bermuda triangle of state secrecy.
HR Problems: Recruit – Train – Retain Vietnam Jailed Civil Servants?
Most foreigners in Vietnam are completely unaware of why it takes so long to reopen, despite 2 long years of Covid. The Vietnamese economy and workers desperately need to revive production and hospitality. As they shrugged off the overseas repatriation corruption case for two reasons: #1 it doesn’t concern them as it deals with Vietnamese citizen returnees, and #2 it is largely internal news in the Vietnamese language. There’s no pride in exposing Vietnamese officials’ corruption towards their own people. All the foreign community will buzz about are the court’s decisions on death penalty sentences. Read more about Covid repatriation organized bribery.
Pushback on E-visas and Digitalization
A bit of simple math and economics can explain the danger of introducing digitalization in the lives of government officials. Administration in Vietnam is poorly equipped, processing tons of paperwork that needs daily stamping by overwhelmed and slow civil servants who earn an average salary of VND 7 million (about US$300 per month). To accelerate the process, the visa service can help you process your visa application effortlessly and quickly for $70 per visa. Time, Vietnamese queuing, and language are all money, as the saying goes. Now let’s say the abuses manage to bust the ring, and there aren’t many staff members left in the ministries to do the job. It might be a good idea to introduce digitization and e-processing for visitors to apply online at a cost of $25 per person, just like banks allow you to service your own account needs. For you, it’s definitely a good idea, benefiting all with $25 in the e-wallet effortlessly! But think again, as you are about to wipe out $50 from the table for every visa processed.
What Made You/The Government Suddenly Hurry to Reopen the Doors of Vietnam?
Well, time and timing aren’t major problems for the Vietnamese government, which has its own agenda and priorities that don’t necessarily align with Western capitalism, as the complete Covid lockdown for two years has shown. The silence until yesterday on when and how Vietnam would return to normalcy on August 15, 2023, is evidence of this.
Nevertheless, a nation of 100 million inhabitants cannot hold its breath forever to stay alive. So, do the government rulers understand their people and their level of resilience, pushed to the limits of tolerance?
Hospitality and Tourism is Booming… for Thailand
Vietnam’s travel and tourism business figures:
- In 2019: 18 million visitors.
- Covid 2020: zero visitors.
- Year 2021: zero.
- Year 2022: 3.6 million.
- Year 2023: 5.5 million as of the end of June, with a target of 8 million.
As Vietnam doesn’t want to lose travelers who might shift to Thailand (famous for tourist addiction and repeat business), there’s a risk of losing Vietnam’s fans forever. Thailand recorded a record number of 40 million visitors in 2019. For Thailand, travelers post-Covid:
- In 2022: 11.1 million visitors.
- Up to June 2023: 11.4 million have already visited.
The real estate, commercial, and residential sectors are 70% empty. Considering that commercial outlets aren’t reopening – as seen with 2 years having passed and only 1 out of 5 shops open in most streets of most cities – rental rates on Airbnb are low due to occupancy not having returned to 2019 levels. Restaurants and hotels offer good deals all year since March 2022. Now it’s hurting the landlords, who are mostly oligarchs and somehow related to the government. Hence, there’s a ‘clear and present danger’ and incentive to establish a ‘sense of urgency.’
The People and the Foreign Expat Business Community
When shops are closed, it’s a clear sign that people don’t have money to spend, or worse, they’re idle and may foster unrest. When Vietnam invited foreign investors to invest and build factories during 2020-2021 to prepare for ‘China+1 supplier / Friend shoring’ and the post-Covid rebound, the logical next step in 2022-2023 is to open business visas and work permits for all to partake in the fruits of economic revival and consumption boom.
Factors Affecting Vietnam’s Return to Pre-Covid Tourists
The trend in tourism has been +8% growth year-over-year for the past 30 years. With the catch-up effect of the 2-year Covid lockdown, hopes were very high. In the short term, the ‘open bar’ online application and cheaper visa prices will likely match or exceed the 2023 target of 8 million visitors.
Well, let’s put Vietnam into perspective with the massive economic loss of the China-USA war, estimated at a $550 billion loss by The Economist. The world supply chain balancing ‘China + 1’ is favorable for Vietnam’s increased business and expatriate employees.
Business and Expats
Opening the doors to all countries for business visas and work permits is a big relief for job opportunities and better income for the Vietnamese. They will surely upgrade their inbound travel. While business travel with Laos, China, and Cambodia isn’t high-end, having an easy and open relationship with the three biggest investing neighboring economies – Japan, Korea, Taiwan, and Hong Kong – is definitely a high-end market.
In the medium term, the missing big 4 – Russia, Ukraine, China, and Vietnamese overseas – are key. China, Russia, and Ukraine have historically been the major providers of mass tourism. The war and lockdown have had an obvious impact. Will they be back soon? Some Chinese travelers have started showing up again timidly.
A 30-day tourism visa doesn’t match the needs of Vietnamese overseas who would typically return for the festive seasons. They usually travel from December to Lunar New Year, set on Saturday, February 10, 2024.
The real problem with Vietnam’s tourism sector is infrastructure. Vietnam has a limited budget to allocate to tourism infrastructure. Public transportation is virtually non-existent. The Ho Chi Minh City Tan Son Nhat airport has a capacity for 8 million visitors, while the current need is estimated to be 12 million passengers.
Apart from services that don’t meet international standards and are sometimes low-end, these issues can be easily fixed. For some visitors, it’s part of the ‘charm of a frontier country.’
Vietnam Visa Exemption Resources (Vietnamese language)
The Portal: https://dichvucong.bocongan.gov.vn/bocongan/tintuc/chitiet?matin=141
The guidelines:
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