What can US$100 buy you in Sapa – or the “Tonkinese Alps” – in northwestern Vietnam?
Roughly a one-night stay at a five-star resort, three scenic rides to the summit of Fansipan Mountain and back, in the world’s longest three-wire cable car system, or a two-day guided visit to ethnic villages.
Just five years ago, none of these options existed. The once-sleepy town of Sapa has experienced a surge in both domestic and international tourism, drawn by the area’s signature cool, crisp climate and jaw-dropping mountain and valley landscapes.
Between 2012-17, Lao Cai Province – in which Sapa is the primary tourist attraction – saw its per capita tourism revenue rise by over 400%, according to World Bank estimates. But this rapid growth has come at a cost, as Sapa now seems stuck in a never-ending construction boom where dust fills the once-curative air, and modern man-made structures change its pristine natural landscape.
Sapa’s experience is echoed across Vietnam’s tourist hotspots. In total, between 2008 and 2018, the number of international and domestic travelers in Vietnam increased roughly four-fold. In 2018, 15.5 million foreigners visited Vietnam, while domestic travelers completed 80 million trips. Vietnam is now the fourth most-visited country in Southeast Asia, behind Thailand, Malaysia and Indonesia. Tourism’s contribution to GDP has risen from 5.3% in 2014, to 7.9% in 2017.
Beyond GDP growth, this boom has also brought a variety of economic, environmental, and social challenges, examined in detail in a recent World Bank analysis of Vietnam’s tourism sector. The industry now arguably stands at a tipping point, where continued rapid visitor growth, if not properly managed, could do more harm than good to Vietnam’s economy and environment.
With its increasingly mass-market nature, tourism in Vietnam is starting to see diminishing returns. The number of foreign tourists may be up, but they are spending less, on average—US$96 per day in 2017, compared to US$106 in 2011.
In the rush to meet tourism demands, Vietnam’s vulnerabilities in several dimensions of environmental sustainability have also been overlooked. Without the necessary structural improvements, more tourism activity will continue to exacerbate air pollution, strain waste management systems, and increase biodiversity loss in these areas.
In places where cultural tourism is front and center, modernization and commercialization have left few heritage sites untouched; modern buildings are replacing old structures without necessarily preserving historic and cultural values, nor adding to the tourist experience.
These trends may dampen tourists’ overall experiences and discourage repeat visits. Repeat visitors accounted for only 32-40% of the total international arrivals to Vietnam in 2017, whereas the rate for Thailand was between 60-70%.
What, then, can be done to tame the sector’s current growth and steer it toward a more sustainable path?
On the one hand, it is encouraging to see that Vietnam’s top leadership has recognized the strategic importance of the tourism sector as a driver of socio-economic development and is seeking to position the country as a leading destination in Southeast Asia. On the other hand, the role of myriad players in the sector remains vaguely defined, resulting in uncoordinated decision making, duplication of functions and, in some cases, conflicting incentives.
One example of this is the increasing autonomy of local authorities in implementing tourism development strategies. While this is intended to encourage more destination-specific development, local state agents end up competing for greater visitor numbers at any cost.
In the city of Da Nang, for example, parcels of land originally designated for residential use are being converted and used for new large hotels whose utility requirements (e.g. electricity, water, solid waste collection) far exceed the amounts initially provisioned for residential buildings.
The transition towards more sustainable growth requires Vietnam to go beyond mass-tourism offerings catering to just a few markets and reach out to new audiences, including in Europe and the Americas, which accounted for only 19% of the international tourists to Vietnam in 2018. Product and market diversification could also reduce strains on already-overcrowded popular destinations, increase visitor spending, and more equitably distribute tourism benefits.
The World Bank tourism analysis also recommends the wider use of pricing instruments to alter visitors’ behaviors and at the same time raise revenues to fund preservation efforts and investment in tourism-related public goods. One tool that has proven effective in managing visitor flow in overcrowded destinations are tiered pricing—which charges higher fees for more fragile areas—and congestion pricing, which is applied during peak-demand periods.
While improving the sustainability of Vietnam’s tourism development requires serious commitment and action from the government and industry players, every tourist should do his or her part too. “Take nothing but pictures, leave nothing but footprints,” as the saying goes. If insufficient action is taken, the scenic beauty of Sapa and other charming places in Vietnam might very well exist only in postcards in the not-too-distant future.