Vietnam’s tourism eager for EU trade deal opportunities

The EVFTA is opening a large market for Vietnam’s tourism

The EU, one of the leading foreign investors in Vietnam, is the second largest export market for Vietnamese goods, accounting for about 17 percent of Vietnam’s total export value. The EU ranks fifth among Vietnam’s import markets, behind China, the Republic of Korea, ASEAN and Japan, accounting for about six percent of Vietnam’s total import value. For its part, Vietnam is the 16th largest trading partner of the EU. Nguyen Thi Thu Trang, Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s WTO and Integration Center, said the EVFTA would have a strong impact on trade and investment between Vietnam and the EU. Vietnam’s exports to the EU are forecast to grow 20 percent in 2020, 42.7 percent by 2025 and 44.37 percent by 2030.

According to Trang, the EU is considered a potential market for the Vietnamese service and tourism sectors. The EU has advantages in source technology and ranks second in the world in terms of purchasing power. EU countries apply similar immigration policies and use the same currency, euro. They are also connected in terms of infrastructure. The EU is a cultural center of the world and has modern healthcare facilities. There are 2.3 million tourism businesses in the EU.

Data from the VCCI WTO and Integration Center show that the EU ranks first in the world in terms of annual number of travelers. In 2017, tourists from the EU accounted for 31.7 percent of total number of tourists worldwide. In 2018, European tourists accounted for 45.8 percent of total foreign visitors to developing countries, a 7.2 percent increase compared with 2017. The number of European tourists is forecast to grow six percent annually in the next several years and 2-3 percent in the next decade. Considerable increases are forecast for the number of tourists from Poland, Sweden, Russia, Germany and Austria.

The EVFTA is offering favorable conditions for Vietnamese tourism businesses to expand operations by taking advantage of market opening commitments and preferential policies applied to hotels, restaurants, travel agents, tour operators and tour guide services. “There will be great opportunities for Vietnam to attract investment and promote business cooperation in the field of tourism with the EU,” Trang said.

In the context of the Covid-19 epidemic heavily affecting the global tourism sector, many Vietnamese service and tourism businesses have taken the initiative of studying the terms of the EVFTA and expect this historical trade deal will pave a new way towards sustainable development for the non-smoke industry. However, to make the most of EVFTA opportunities for tourism development, businesses and state management authorities need to carefully study commitments between Vietnam and the EU and general regulations of the EU as well as specific policies of each member country regarding market opening and management. They also need to be aware of EU countries’ cultural management requirements, rules for trade and services, as well as the demand and taste of European consumers. This awareness will enable domestic tourism businesses to create suitable products to attract visitors as well as suitable business development strategies.