Vietnam’s Tourism Hits New Heights with 19 Million Visitors, Yet Travel Agencies Face Financial Struggles Amid Changing Preferences and Online Rivals

Published on December 16, 2025

Vietnam’s Tourism Boom Faces Challenges: The Rise of Independent Travel and Declining Revenues

Vietnam’s tourism sector has reached new heights in 2023, attracting over 19 million international visitors between January and November. However, despite this surge in tourist arrivals, many travel firms are reporting a decline in revenues. Tour operators are grappling with shifting travel trends, evolving visitor preferences, and increasing competition from independent travel platforms.

The Shift to Independent Travel

One of the key reasons for the decline in revenues is the growing trend of independent travel. Tour operators and travel businesses have long relied on mass-market group tours to bring in steady revenue. However, with the increasing popularity of self-guided and backpacking trips, many international tourists are bypassing traditional tours altogether. These travelers, seeking more freedom and flexibility, prefer to organize their own trips via online platforms like Traveloka, Agoda, and Booking.com, allowing them to book flights, accommodations, and experiences independently.

Pham Quy Huy, director of Kiwi Travel Company, pointed out that the lucrative Meetings, Incentives, Conferences, and Exhibitions (MICE) segment has also been shrinking. Historically, MICE tourism was a major revenue generator for hotels, cruise services, and event organizers. However, securing groups of 100-200 guests, which was once commonplace, is now rare. “Getting a group of around 100 MICE tourists is considered excellent and rare,” Huy stated. The loss of such a high-value segment has placed pressure on many businesses within the tourism ecosystem.

The Rise of “Free & Easy” Travel Models

With group tours on the decline, some travel companies are adapting by introducing more flexible, “Free & Easy” travel packages. Thi Quoc Duy from BenThanh Tourist explained that the increasing demand for self-guided travel, especially among younger travelers, is a clear sign of the times. “The rise of self-guided travel is irreversible in the digital age,” Duy said, noting that their company had adapted to this shift by offering packages that combine elements of both traditional and independent travel.

BenThanh Tourist has reported a significant increase in international arrivals to Ho Chi Minh City, with a 100% growth in the 11-month period. By focusing on international digital marketing and offering unique cultural experiences—such as cooking classes in Hoi An, homestays in the northern highlands, and farming activities in Tra Que—BenThanh has successfully attracted a more diverse group of travelers, including those from Europe and India. These efforts have helped boost both their revenue and profit margins.

Challenges with Customer Spending Patterns

Despite the influx of tourists, revenue from tourism remains underwhelming, largely due to changing spending patterns. According to the 2024 Statistical Yearbook, the average spending per international visitor increased by nearly 27% in 2023 compared to pre-pandemic levels, reaching $1,449.7. However, tourists are spending less on traditional items like accommodation, dining, and shopping, while expenditure on individual experiences, services, and entrance fees has risen.

Notably, shopping expenditure has seen a significant decline, dropping to just 8.4% of total spending—the lowest in years. This presents a challenge for the retail sector, as tourists are increasingly reluctant to spend on shopping, especially in a country where the shopping experience is often viewed as lacking in variety and sophistication. Unlike high-end shopping destinations such as South Korea, where tourists often spend more than the cost of their entire trip, Vietnam struggles to attract high-spending shoppers due to the limited availability of world-class malls and the lack of high-quality local products.

Additionally, the shopping experience in cities like Ho Chi Minh City often consists of night markets that feature repetitive offerings, with inexpensive street food being the main attraction. While these markets offer a glimpse into Vietnamese culture, they may not appeal to affluent tourists looking for unique and exclusive items.

Adapting to the New Normal

As the tourism landscape evolves, many travel operators are rethinking their business models. To stay competitive, some companies are introducing “shared tours,” allowing them to cater to smaller groups while optimizing costs. These flexible tours aim to fill gaps and allow additional travelers to join, ensuring that prices remain affordable for guests while maintaining a profitable margin for businesses.

Furthermore, many tour operators are expanding their partnerships with online travel platforms and local suppliers, offering more customizable and flexible packages to suit the diverse needs and budgets of modern travelers. As independent travel continues to grow, the tourism industry in Vietnam must continue to adapt in order to thrive in the competitive global travel market.

Conclusion

While Vietnam’s tourism industry has seen record-breaking visitor numbers, the revenue generated has not kept pace due to shifting travel trends and spending behaviors. As independent and self-guided travel continues to rise, traditional tour operators must adapt their business models to meet the needs of a changing market. By focusing on flexibility, unique cultural experiences, and better customer spending strategies, Vietnam’s tourism industry can work towards ensuring long-term sustainability and success in the global travel landscape.