Expect congestion this year on the figurative US-Vietnam bridge. The stars are aligning in a way that foretells a surge in bilateral traffic as more American tourists and investors discover opportunity in the world’s 13th most populous country.
the US Tour Operators Association rates Vietnam as the 2nd hottest spot for travel in 2013 — after Myanmar but ahead of India, China, and several Latin American countries. Until now, Vietnam has been considered an off-the-beaten-track site, attracting 450,000 of the 40 million Americans that spend $40 billion traveling abroad every year. Thailand, Malaysia, and Singapore all entertain about one million Americans annually, and now it’s Vietnam’s turn.
When Americans arrive in Vietnam, they’ll feel more at home with the opening in Saigon next month of the first Starbucks, the latest of a long line of popular American brands investing in Vietnam.
American investors also started the year by participating in Vietnam’s two public equity markets. Barrons highlighted Vietnam as a prime frontier market play last week, and Vietnam’s stock market opened the year with a strong rally — already up more than 8% in the first days of the year after an 18% gain for all of 2012.
The connection between Vietnam and the US includes 25 million Americans linked directly or through family ties to the Vietnam War and a large Vietnamese American community that stays in contact with relatives still in their homeland. But the memories of the war years continue to distort American perceptions of Vietnam; so there’s a need for cultural bridges, constructed largely with investments, tourism and humanitarian assistance.
The bridge has been under construction for two decades, and the trend will accelerate in 2013 after a 2012 in which Vietnam experienced a tourism surge despite a sluggish economy.
In 2012, Vietnam welcomed 6.8 million international visitors, nearly a 10% increase that included 16% more business travelers compared to 2011. The biggest increases were travelers from Russia, South Korea, Japan, Taiwan and three neighboring Southeast Asian countries. Americans landing in Vietnam stayed virtually unchanged at 444,000 — but look for that number to grow this year.