Considerations of the government’s role in its efforts to boost the tourism industry in Vietnam with some attention to regional factors

Abstract

To focus on Vietnam’s post-war recovery, agriculture and industry have become the two main economic sectors of Vietnam. In particular, the Doi Moi Policy 1986 (comprehensive innovation policy) has helped the government gradually increase economic openness and cooperate in technology transfer to extend access to the vibrant international market. Consequently, Vietnam is gradually becoming an attractive destination for great investors, the growth has risen steadily over the years and quality of life has improved. Vietnam's long-term development strategy aims to boost the service industry's contribution to the GDP, with a particular focus on the tourism sector. Over the past three decades, the industry has seen a significant increase in domestic and international travellers, total revenue and its contribution to the GDP. In 2017, the government issued the Tourism Policy, which aims to promote the tourism sector as a key economic sector alongside agriculture and industry. This is the first official policy that illustrates the government's comprehensive research into the resources, potential and competitive advantages of Vietnam's tourism industry. Research into Vietnam's tourism sector has been flourishing since 2012. The main topics include the potential of resources and proposed solutions; planning a strategy for sustainable tourism development; and the benefits of tourism development such as reduction of poverty, creating more jobs for women and improving equality and empowerment. Many studies focus on as communities have more first-hand experience regarding the cost and benefits of tourism development, they are more willing to lend their support and increase their participation in related activities. In addition, there are various studies on the potential and development of types of tourism, namely eco-tourism, cultural tourism, community-based tourism, rural tourism, etc. Topics such as micro- and macro-environmental factors affecting the growth of tourism industry are not popular. Although tourism has been identified as a key economic sector since the launch of the tourism policy in 2017, there has not been any research to analyse, measure and discuss the effectiveness of this policy. While, in general, the literature reviews affirm the vital role of the government in orienting and launching development strategies for economic sectors in Vietnam, and it has a large gap in research on government intervention in tourism. Moreover, there also seems to be a lack of studies measuring government efficiency in managing and operating the tourism sector, i.e., the governance put great effort in practicing good governance since the Declaration of Independence, and has these efforts positive impact on tourism development so far? Vietnam's tourism industry has developed for six years with the priority of investment and development as the key economic sector. Furthermore, during 34 years of development (1990-2023), there have been no studies that officially assess the role of government in promoting the development of the industry. To fill this gap, this dissertation is conducted to have in-depth discussions of the following two questions: Has all the government's efforts in practicing good governance (improving public administration, government competitiveness and public policies; raising economic openness and maintaining political stability) during these 34 years (1990-2023) increased the motivation to travel and tourists’ spending which leads to the growth of revenue for a whole? And recently, has Tourism Policy 2017 positively boosted the tourism industry? Due to the broad scope of the research question, this dissertation employs a multi-method approach, integrating diverse datasets and econometric models. Firstly, a systematic literature review is to identify the research gaps and research questions. Afterward, a semi-structured interview, spatial models and ARDL models are applied, respectively, to work on these research questions. The six chapters, respectively, stick to the main purposes and provide insightful reports related to the operation of the tourism industry in the studied period. Vietnam's tourism economy has achieved significant success, which demonstrates the government's capacity for governance. This research hope to prove that effective institutions and good governance are key factors in the success of the tourism industry. Additionally, the government's wise interventions, such as sound and timely policies, play a central role in economic activities. Measuring the impact of good governance on the tourism industry and estimating the success magnitude of the tourism policy are to better understand the government's mindset, vision and governance. These research findings draw the framework of Vietnam’s tourism industry and then serve as the ground for decision-making and new policy promulgation in the future.