Vietnam Drops Out Of Race To Become Chinese Tourist Destination

    Vietnam's violent anti-China riots have dashed developers' hopes of turning the country into a key tourism destination for Chinese visitors.
    Vietnamese protesters outside the Chinese embassy in London on May 18, 2014. (Shutterstock)
    Jing DailyAuthor
      Published   in Finance

    Vietnamese protesters outside the Chinese embassy in London on May 18, 2014. (Shutterstock)

    Earlier this year, developers in Vietnam had high hopes for turning the country into a prime destination for Chinese tourists. With several multi-billion dollar resort-casino complexes planned and growth by more than a third in the number of Chinese tourists last year, the Southeast Asian nation was joining a growing number of countries across the world cashing in big on China’s outbound tourism boom. These aspirations have all come to a grinding halt this week as violent anti-China riots rage across the country and Chinese tourists flee in fear of being harmed.

    After the riots began last week as a result of Vietnamese protests over a Chinese oil rig dispatched to waters claimed by both China and Vietnam, hundreds of Chinese have been injured and some have even been killed. The unrest began outside of Ho Chi Minh City and quickly spread to other parts of the country as protesters attacked facilities owned by Chinese, Taiwanese, and other Asian companies. As a result, thousands of Chinese nationals have been evacuated by the Chinese government, and Vietnam's government sent police to quell the chaos.

    Needless to say, the crisis has taken a major toll on Chinese tourism to Vietnam. After the Chinese National Tourism Administration posted travel warnings, Chinese travel agencies have suspended their tours to the Southeast Asian country and online booking site Ctrip will refund payments for tickets booked. Meanwhile, several airlines are canceling flights from China to Vietnam.

    Earlier this year, Vietnam had high hopes of attracting Chinese tourist spending. An estimated 1.8 million Chinese tourists visited Vietnam last year, marking a 33.5 percent year-on-year increase. Vietnamese developers have several multi-billion-dollar casino-resort projects planned in hopes of competing with the likes of Macau and South Korea as a top gambling destination for Chinese high rollers, with new projects underway in Da Nang, Lang Song, Vung Tau, and Phu Yen.

    Vietnam’s tourism chief Nguyen Van Tuan made an attempt at damage control on Monday, stating that members of the Vietnamese tourism industry must keep “aggressive, discriminative and unfair actions from happening to Chinese tourists.”

    This may not be enough, however. A recent Xinhua op-ed hinted that China may use discouragement of tourism to Vietnam as a form of punishment for both the protests and for Vietnam’s position on the South China Sea:

    For the Vietnamese government, its failure or inaction to prevent such tragedy can only tarnish its image as a favorable destination for international investment and tourism, which could bring about severe consequences for its own economy.

    It is worth noting that any mishandling of the anti-China protests and the territorial disputes behind would sacrifice Hanoi's ties with Beijing, which have been generally stable in recent years.

    It is advisable for the Vietnamese government to think of the bigger picture and not to get stuck in extreme nationalism so as to avoid escalation of violence and complication of the situation in the South China Sea.

    It doesn’t look like China got what it wanted to hear—Vietnam’s prime minister announced on Wednesday that the country was teaming up with the Philippines to oppose China’s “illegal” actions in the South China Sea. As a result, Southeast Asia-bound Chinese tourists are likely to head to areas with less political strife at the moment such as Bali or Sri Lanka for the time being.

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