How a Strategic Shift is Reshaping the Multi-Billion-Dollar Regional Travel Industry

A quiet transformation is reshaping Southeast Asia’s tourism landscape. While Thailand has long dominated the region’s visitor statistics, Vietnam emerged in 2024 as the unexpected star, capturing record numbers of Chinese tourists and fundamentally altering competitive dynamics across a market worth tens of billions of dollars annually.

Vietnam welcomed 17.5 million international visitors in 2024, achieving a 39.5% increase compared to 2023, positioning the country at 98% of pre-pandemic levels. More significantly, China delivered approximately 3.74 million arrivals to Vietnam in 2024, representing a remarkable 114.4% increase from 2023. This surge represents far more than statistical achievement—it signals a strategic realignment in how Asian travelers are choosing their destinations.

Why are Chinese tourists choosing Vietnam over Thailand?

Chinese tourists are choosing Vietnam due to five key factors: visa-free entry for 45 days, 30-40% lower costs compared to Thailand, improved flight connectivity with 200+ weekly direct routes, cultural familiarity with shared heritage, and post-pandemic travel diversification strategies encouraged by Beijing’s outbound tourism policies.

The Numbers Behind Vietnam’s Meteoric Rise

Vietnam’s tourism recovery stands as Southeast Asia’s fastest-recovering tourism market, outpacing regional peers like Singapore at 86% and Thailand at 87.5%. The momentum began building in early 2024 when China regained its leading position in the Vietnamese tourism market with nearly 357,200 visitors in May, up over 140% compared to the same month the previous year.

By mid-2024, the trend solidified. International visitor arrivals to Vietnam grew by 58.4% year-on-year to more than 8.8 million in the first six months of 2024, including almost 2 million from China. November 2024 brought additional validation when international arrivals rose by 15.6% year-on-year to 1.98 million, with China leading growth at 27.5%.

These aren’t merely impressive statistics—they represent a fundamental redistribution of tourism dollars. Vietnam’s tourism revenue is projected to generate $32 billion in 2024, placing it firmly in competition with established powerhouses like Thailand and Malaysia.

Top Benefits for Chinese Travelers to Vietnam:

• Visa-free entry for up to 45 days (compared to visa requirements for Thailand)
• Lower travel costs: Hotels 40% cheaper, dining 35% less expensive
• Direct flights from 25+ Chinese cities with 3-hour average flight time
• WeChat Pay and Alipay widely accepted in tourist areas
• Cultural similarity with Chinese language signage in major destinations
• Safety ranking: Vietnam scored 8.2/10 for Chinese tourist security
• Diverse attractions from beaches to mountains within compact geography

Why Chinese Travellers Are Choosing Vietnam: Five Strategic Advantages

1. Simplified Entry: The Visa Revolution

Vietnam’s visa policy overhaul has eliminated a traditional friction point for Chinese travelers. While not offering complete visa-free access for Chinese nationals, Vietnam implemented an expanded e-visa system in August 2023 that transformed entry procedures. The country now offers 90-day e-visas for single or multiple entries to citizens of all countries, dramatically simplifying what was once a cumbersome process.

This contrasts sharply with some regional competitors where visa procedures remain more complex. Thailand, despite its tourism prowess, requires Chinese travelers to obtain visas on arrival or apply in advance, adding administrative burden. Vietnam’s streamlined digital system allows Chinese tourists to secure authorization quickly through an online platform, reducing planning friction and encouraging spontaneous travel decisions.

For European visitors, Vietnam’s open visa policy allows citizens to stay temporarily for up to 45 days, effective from August 15, 2023, demonstrating the country’s commitment to facilitating international travel across multiple source markets.

“Vietnam has emerged as the unexpected winner in Southeast Asia’s tourism resurgence, capturing market share with a precision that surprised industry veterans.”

2. Economic Value: More Bang for the Yuan

Vietnam’s cost competitiveness represents perhaps its most compelling advantage for Chinese middle-class travelers. Accommodation, dining, and activities consistently cost 30-40% less than comparable experiences in Thailand or Indonesia. A four-star hotel room in Hanoi or Ho Chi Minh City averages $60-80 per night, while equivalent accommodations in Bangkok or Bali command $95-150.

Beyond basic costs, Vietnam’s integration of Chinese digital payment systems has eliminated currency exchange friction. WeChat Pay and Alipay acceptance has expanded rapidly across tourist zones, allowing Chinese visitors to transact as seamlessly as they would domestically. This technological integration, combined with favorable exchange rates, makes Vietnam particularly attractive to cost-conscious travelers who can stretch their budgets significantly further than in traditional destinations.

3. Geographic Proximity and Cultural Resonance

Vietnam shares a 1,450-kilometer border with China, creating natural connectivity advantages. Direct flight routes have proliferated, with more than 200 weekly connections linking Chinese cities to Vietnamese destinations. Flight times from major Chinese hubs to Hanoi or Ho Chi Minh City average just three hours, making Vietnam accessible for long weekends and short breaks.

Cultural familiarity enhances Vietnam’s appeal. Historical connections, shared culinary traditions, and linguistic similarities create comfort for Chinese tourists. Unlike more culturally distant destinations, Vietnam offers recognizable elements—from food ingredients to architectural styles—that reduce travel anxiety while still providing exotic appeal.

4. Infrastructure Investment and Modern Connectivity

Vietnam has committed substantial resources to tourism infrastructure development. The Vietnamese government’s overall infrastructure investment target for 2024 and beyond is around $36 billion, covering transport networks, airports, seaports, and utilities, which indirectly supports tourism growth.

Airport expansions have transformed accessibility. Major infrastructure projects, including airport expansions and metro completions, are on track in both Hanoi and Ho Chi Minh City, potentially boosting the hospitality sector further. These improvements directly benefit international visitors by reducing connection times, improving transportation options, and enhancing overall travel experiences.

The aviation sector specifically shows remarkable growth potential. The Vietnam Airport Construction and Modernization Market is projected to grow from US$72.4 billion in 2025 to US$125.6 billion by 2031, at a compound annual growth rate of 9.5 percent, according to Vietnam Briefing, demonstrating sustained commitment to connectivity infrastructure.

5. Strategic Timing and Market Positioning

Vietnam’s tourism surge coincides with China’s evolving outbound travel policies. Post-pandemic, Chinese authorities have gradually reopened international travel while encouraging diversification beyond traditional mass-market destinations. Vietnam positioned itself perfectly to capture this trend, offering familiar Asian experiences without the overcrowding that now characterizes places like Thailand’s Phuket or Bali during peak seasons.

The country has also benefited from regional competitors’ challenges. Thailand’s tourism infrastructure, despite high arrival numbers, shows signs of strain with environmental concerns and occasional service quality issues. Vietnam enters as a fresh alternative offering unspoiled beaches, emerging resort destinations, and enthusiastic hospitality without the jaded service culture sometimes found in over-touristed locations.

The Broader Southeast Asian Tourism Realignment

Vietnam’s success reflects wider shifts across Southeast Asia’s tourism ecosystem. In 2024, the combined arrivals to Thailand, Malaysia, Singapore, Indonesia, Vietnam, and the Philippines reached approximately 114 million visitors, representing about 89 percent of the 2019 total of 127 million.

This regional recovery masks significant variations. Vietnam led the region in year-over-year growth, achieving 39.5% increase in arrivals in 2024 compared to 2023, allowing Vietnam to surpass Singapore and secure third place in total arrivals, according to The Outbox Company.

Thailand, while maintaining leadership with 35.5 million visitors, faces growth challenges. Recent data suggests Thailand is currently on pace to see fewer tourists than it did in 2024, with arrivals as of June 2025 approximately 5 percent lower than the same period the previous year, as reported by The Diplomat.

Malaysia demonstrates steady progress with 25 million arrivals in 2024, approaching but not quite matching its 2019 peak of 26 million. Singapore and Indonesia show modest recoveries, while the Philippines lags significantly at just 5.9 million visitors—well below its modest 2019 benchmark.

Economic Implications: A Multi-Billion-Dollar Redistribution

The tourism realignment carries substantial economic consequences. The Southeast Asia Tourism Market is expected to reach USD 35.52 billion in 2025 and grow at a CAGR of 11.43% to reach USD 61.02 billion by 2030, according to market research from Mordor Intelligence.

Within this expanding market, Vietnam is positioned for disproportionate gains. Vietnam is projected to log the fastest 13.75% CAGR through 2030, suggesting the country will capture an increasing share of regional tourism revenue.

The hospitality sector specifically shows explosive growth. The Vietnam hospitality market was valued at USD 7.0 Billion in 2024 and is projected to reach USD 20.7 Billion by 2033, growing at a CAGR of 12.20%, as reported in hospitality market analysis.

Foreign direct investment reflects this optimism. In January 2025, new FDI in accommodation and food services reached US$13.63 million across seven projects, with global hotel chains including Marriott, Accor, and Hilton expanding their portfolios in Vietnam, according to Vietnam Briefing.

Vietnam’s Strategic Infrastructure Push

Vietnam’s tourism success isn’t accidental—it results from deliberate policy choices and sustained infrastructure investment. As of 2023, Vietnam has over 20,000 registered hotels, providing diverse accommodation options from budget guesthouses to luxury resorts.

The accommodation sector continues expanding rapidly. Tourism infrastructure continues to receive investment, with approximately 40,000 accommodation establishments and 800,000 rooms nationwide, as noted by Vietnam’s tourism authorities. This supply growth matches demand increases while maintaining competitive pricing.

Coastal development represents a particular focus area. In 2024, the average absorption rate for coastal hotels and resorts reached 57%, doubling that of 2023, according to the Vietnam Association of Real Estate Brokers, indicating robust demand for beachfront properties. The analysis from The Investor suggests this trend will accelerate.

Premium developments signal investor confidence. The Trump Organization announced a US$1.5 billion project near Hanoi featuring luxury hotels, two 54-hole golf courses, and residential areas, as reported by ASEAN Briefing. Such large-scale commitments validate Vietnam’s tourism trajectory and attract additional capital.

Emerging Destinations Beyond Traditional Hubs

Vietnam’s tourism growth extends beyond Hanoi, Ho Chi Minh City, and Ha Long Bay. Places such as Ninh Binh, Binh Dinh, Quang Ngai, Phu Yen, and Ninh Thuan have experienced remarkable increase in total tourist arrivals over the past three years, according to hospitality analysis. These secondary destinations offer authentic experiences without overwhelming tourist crowds, appealing particularly to experienced travelers seeking undiscovered locations.

Provincial diversification spreads economic benefits more evenly while reducing environmental pressure on popular sites. As major cities reach maturity, investor interest is pivoting to provinces like Ninh Binh, Vung Tau, and Ha Giang, gaining visibility through government promotion, new roads, and community-led tourism, creating opportunities for boutique hotels, eco-resorts, and cultural tourism ventures.

Challenges Ahead: Can Vietnam Sustain This Momentum?

Vietnam’s rapid tourism growth brings inevitable challenges. Infrastructure, while improving, still struggles in some areas. While air travel infrastructure has improved significantly with more direct flight routes, regional and inter-provincial road networks still lack effective connectivity, potentially hampering accessibility during peak seasons.

Environmental sustainability concerns mount as visitor numbers surge. Destinations like Ha Long Bay face overtourism risks that threaten the natural beauty attracting visitors initially. Balancing growth with conservation remains an ongoing challenge requiring careful management.

Workforce development presents another constraint. The percentage of trained workers has reached approximately 67%, approaching the set target, although there are still limitations in terms of high-quality labor and specialized skills. Rapid expansion strains available talent pools, potentially affecting service quality if not addressed proactively.

Legal and regulatory frameworks require modernization. Vietnam’s 2017 Tourism Law is considered outdated as it leaves gaps in business regulation and constraints on funding and workforce development, according to industry analysis from Vietnam Briefing. New accommodation formats like capsule hotels and farm stays lack standardized regulations, creating uncertainty for investors.

What This Means for Travelers, Businesses, and Competitors

For Chinese Travelers

Vietnam offers exceptional value combined with convenient access and familiar cultural elements. The best times to visit remain shoulder seasons—April to May and September to November—when weather conditions optimize and crowds thin. Beyond major cities, destinations like Hoi An, Nha Trang, and emerging spots like Ninh Binh provide diverse experiences from ancient architecture to pristine beaches.

Savvy travelers should note that rapid development means destinations change quickly. Places considered “undiscovered” this year may be substantially more developed next year. Early visits to emerging destinations offer authentic experiences before mass tourism arrives.

For Tourism Industry Businesses

Vietnam presents compelling investment opportunities across multiple segments. The hotel sector, particularly in secondary cities and coastal areas, shows strong fundamentals with rising occupancy rates and improving average daily rates. Both Hanoi and Ho Chi Minh City recorded higher than historical average daily rates as of June 2024, according to hospitality consultancy CBRE Vietnam.

Technology-enabled tourism services represent another growth area. According to Vietnam’s Tourism System Master Plan for 2021-2030, the highest-priority investment projects are those in digital transformation, including software and mobile applications for tourists, as outlined by Global Angle.

Sustainable tourism ventures align with government priorities. Policies now require tourism establishments to eliminate single-use plastics by 2030, creating demand for eco-friendly operations and green technology providers.

For Regional Competitors

Vietnam’s success provides instructive lessons. The country’s combination of streamlined visa processes, competitive pricing, aggressive infrastructure investment, and strategic marketing created powerful momentum. Competitors observing market share erosion should examine these elements.

Thailand, despite maintaining leadership, must innovate to prevent further declines. Its proposals to legalize casinos represent one attempt to differentiate and attract new visitor segments. Malaysia’s “Visit Malaysia 2026” campaign signals recognition of competitive pressures.

The broader lesson: complacency invites disruption. Established destinations assuming historical dominance will continue indefinitely risk losing ground to more agile competitors willing to invest and adapt.

The Future: 2025-2027 Forecasts and Scenarios

Vietnam’s government has set ambitious targets reflecting confidence in continued momentum. Vietnam is forecast to welcome more than 22 million travelers in 2025, far eclipsing the pre-pandemic record.

Market analysts project continued robust performance. With Chinese tourism recovery still incomplete—Vietnam’s 3.74 million Chinese arrivals in 2024 remain significantly lower than the 5.8 million visitors recorded in 2019—substantial upside exists if pre-pandemic ratios return.

Several scenarios could unfold through 2027:

Optimistic Scenario: China’s outbound travel fully normalizes, Vietnam captures 25-30% of Southeast Asian Chinese tourist flows, and annual arrivals reach 28-30 million by 2027. This scenario requires sustained infrastructure investment, maintained price competitiveness, and successful environmental management.

Base Case Scenario: Vietnam maintains current growth trajectory with 20-23 million annual arrivals by 2027, representing steady but unspectacular progress. Chinese tourism continues growing but faces competition from Thailand’s renewed efforts and new destinations entering the market.

Challenging Scenario: Infrastructure constraints, environmental degradation, or regional competitors’ aggressive responses slow Vietnam’s momentum. Arrivals plateau at 18-20 million, still representing recovery but falling short of transformative potential.

The most likely path combines elements of the base case with selective achievements from the optimistic scenario. Vietnam’s trajectory appears sustainable given fundamentals, though execution risks remain substantial.

Southeast Asian Tourism’s New Era

The tourism realignment underway across Southeast Asia represents more than temporary post-pandemic adjustment—it signals lasting structural change in how travelers choose destinations and how countries compete for valuable tourism revenue.

Vietnam’s emergence challenges established hierarchies and demonstrates that strategic positioning, policy reforms, and infrastructure investment can rapidly reshape competitive dynamics. For a country that welcomed just 4.2 million international visitors in 2008, reaching 17.6 million in 2024 with clear momentum for further growth represents remarkable achievement.

Chinese tourists’ pivot to Vietnam drives this transformation but reflects broader patterns. Travelers increasingly seek value, convenience, and authentic experiences over traditional status destinations. Countries offering these attributes while maintaining competitive pricing and streamlined access position themselves for sustained success.

The multi-billion-dollar redistribution of Southeast Asian tourism spending will continue reshaping regional economies, employment patterns, and development priorities. Vietnam currently rides this wave most successfully, but the dynamic nature of tourism suggests continued evolution ahead.

For travelers, this creates opportunities to explore an improving destination before it becomes as crowded and commercialized as some alternatives. For businesses, it offers investment prospects in a high-growth market with favorable fundamentals. For competing destinations, it serves as both warning and inspiration—adapt and invest, or watch market share erode to more agile competitors.

Southeast Asia’s tourism map is being redrawn. Vietnam holds the pen at present, but the final picture remains unfinished.