Contributions of tourism to socio-economic development in the midland and mountainous areas of northern Vietnam

CONTRIBUTIONS OF TOURISM TO SOCIO-ECONOMIC
DEVELOPMENT IN THE MIDLAND AND MOUNTAINOUS
AREAS OF NORTHERN VIETNAM
Dr Pham Thai Thuy

MSc Le Van Cuong

Dr Le Thi Thanh Thuy:
Faculty of Economics and Business Administration, Hung Vuong University, Phu Tho,
Abstract
Recently, tourism development has paid more attention in Northern Vietnam, one of
the poorest areas in Vietnam. Many rural and poor local residents are involved in several
activities such as hosting tourists, providing traditional foods, drinks, and music
performance and selling souvenir, local products. These activities create many
opportunities for people to increase their living standards and to build up the rural
economy in general. Based on the secondary data in Phu Tho, Yen Bai, Lao Cai, Ha Giang
province, the study aims to explore the understanding of the aspects of tourism
development. Especially, we are particularly interested in the contributions of tourism
development to the four selected provinces‟ economies. We found that the local residents
gain more income and having better living standards through active participation in
tourism activities. At the provincial level, the results showed that tourism plays an
important role in the economy through increasing jobs and budget contribution. The
results can be of considerable interest to policy-makers in developing tourism.
Keywords: Contribution, Northern Vietnam, Mountainous Areas, Rural Economy,
Tourism Development
1. Introduction
Nowadays, tourism has significantly developed aiming at the improvement of
people‘s living standards worldwide. Tourism experts in the the United Nations
Conference on Tourism and International Travel agreed that tourism is the aggregation of
relationships, phenomenon, and economic activities that originate in the journeys and stays
of individuals or groups outside their regular place of residence or outside their home

country for the peaceful purpose. The place they come to stay is not their place of work.
This concept is intended to internationalize tourism (United Nations, 1963). In fact,
tourism is a business activity including many actors (e.g. tourists, travel agencies, local
residents and governments) in response to the needs of the travelers. It is a complex
activity as a whole. Therefore, we need to consider all involved actors in tourism activities
in order to satisfy their purposes as well as tourists‘ demand.

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According to the 2017 Law on Tourism (National Assembly of the Socialist
Republic of Vietnam, 2017): Tourism is all of activities related to the journey of a person
outside his/her usual place not more than one continuous year in order to meet the needs of
sightseeing, relaxation, recreation, exploration, discovering tourist resources or combining
with other lawful purposes. In this paper, tourism is considered a characteristic activity that
people desire journeys/trips out of their residence. Organizations and individuals engaged
in tourism business and agencies, organizations, individuals and population communities
involved in tourism shall gather services on the basis of exploiting tourist resources so as
to satisfy their demands.
Tourism plays an important role in the provinces‘ economies: (i) Developing tourism
contributes to increasing local region‘s budget and promoting economic development and
contributing to economic restructuring at the provincial level (Wurong Shil and Ninh T. H.
Do, 2016). Developing tourism will create favorable conditions for local people living in the
area to expand their businesses, increase their incomes and improve their living standards
through the form of businesses of restaurants, hotels, rest houses, souvenir products, small
travel services, etc. As a result, tourism positively contributes the local budget; (ii)
Developing tourism will stimulate investment at the provincial level. Tourism is made up of
different set of services. Since, investments in infrastructure are often low in profitability, the
State often acts as a facilitator for tourism development. Concequence, all classes and
businesses will investment in tourism development which will lead to investment in other

sectors in the region such as construction, transportation, telecommunication, banking, etc;
(iii) Tourism development will attract laborers and create more jobs. It not only brings jobs
to the workers themselves but also attracts and creates jobs for other workers in other sectors
in the region; (iv) Other socio-cutural aspects also are very important contributions. Tourism
development contributes to the spirit of national pride, patriotism, and preserving and
promoting the values of the national cultural heritage. Through tourism, people are changing
the environment, satisfying the curiosity and at the same time expanding knowledge.
Tourism creates conditions for people to open their understanding of cultural history,
customs, ethics and social regimes (Le Thi Thanh Thuy, 2015).
The Midlands and Mountainous region Northern Vietnam has diversified natural
resources, capable of diversifying its economic structure, with its strengths in mineral
mining and processing, hydro-power, and tropical agriculture, sub-tropical and temperate
products, integrated marine economic development and tourism. The region covers an area
of 9,526.7 thousand hectares (accounts for 30.3% of the country's area), with an average
population of 11,667.2 thousand people in 2014 with over 20 ethnic groups, of whom the
majority are ethnic minorities. The Northern Vietnam is still the most difficult, with double
the average poverty rate country. Moreover, due to limited infrastructure, labor resources
and living standard, the organization of rural areas has disadvantages compared to tourism
organizations in developed areas like cities.

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This paper focuses on the following issues: (i) overview of tourism development in
four selected provinces; (ii) Opportunities, challenges and major directions for tourism
development in Northern Vietnam; (iii) Relevant policies recommendation to policymakers in the region. The Midlands and Mountains in Northern Vietnam are bordered by
the three provinces of Guangdong, Guangxi and Yunnan of China to the North, Laos to the
West, the Red River Delta to the North. Its location is the great value for long-term
development of tourism.
2. Methods

In this paper, we combined both macro-level and provincial-level data on tourism to
examine the contribution of this sector to the total Gross regional domestic
product (GRDP) using national statistics and existing literature. Data collection was
conducted in four provinces in Northern Vietnam, the most poorest areas in Vietnam as
mentioned before.
Based on the research materials (e.g., research monographs, government statistical
reports and legal documents, journal and newspaper articles), the authors synthesize issues
and contributions of the tourism to four selected provinces as well as Vietnam‘s tourism.
Important indicators are employed to explore the contributions such as number of tourists
each year, the number of labor, the share of tourism in GRDP, and the investment growth
rate of tourism development.
To have better understanding of the role of tourism, we applied the SWOT method
to analyze the strengths, the weaknesses, the opportunities, and the threats of tourism
development. In the analysis process, we delved into the analysis of two combinations: the
strengths with the challenge; the weakness analysis with the opportunity to draw some key
conclusions about appropriate solutions to boost tourism in the region.
3. Results
3.1. Contributions of tourism to economies
Travel and Tourism creates jobs, drives exports, and improve living standards
worldwide (World Travel and Tourism Council (2015, 2017). According the data, in 2016,
this sector directly contributed GDP was VND 207,789bn (USD9.3bn) (accounts for 4.6%
of total GDP); and directly supported 1,960 thousand jobs (accounts for 3.6% of total
employment); visitor exports generated VND 184,811bn (USD 8,3bn). Compared to the
world ranking (out of 185 countries), total contribution to GDP of Vietnam‘s travel and
tourism was at 50 (absolute value in 2016), 104 (relative size in 2016), 17 growth rate
(2017 forecast), and 38 long-term growth rate (2017-2027 forecast).
The Vietnamese government is paying more attention on tourism development (by
increasing investment in this sector), Vietnam‘s tourism and travel attracted capital investment
of VND 121,565bn in 2016 and expected to rise by 6.9% over the next ten years.

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Table 1: Number of tourists’ arrivals in Vietnam
Unit: Thousands of Visitors
Year

Domestic tourists

International tourists

2010

28,000

5,049.9

2011

30,000

6,014.0

2012

32,500

6,847.7

2013

35,000

7,572.4

2014

38,500

7,874.3

2015

57,000

7,943.7

2016

62,000

10,012.7

Source: Vietnam National Administration of Tourism, 2017
As showed in Table 1, in 2016 Vietnam received about 10 million international
tourists, in 2010 the number was 5.05 million, almost double in size, an increase of 12,09%
annually. The number of domestic tourists has increased by 14,17% annually. An
increasing number of tourists have opened up and invested in tourism development,
making tourism a key driver of socio-economic progress through an increase in national
budget, the creation of jobs and enterprises, and infrastructure development.

Maps of selected provinces in Northern Vietnam

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Table 2: Number of tourists’ arrivals in the selected provinces
Unit: Thousands of Visitors
Indicator

2010

2011

Ha Giang
Lao Cai
Phu Tho
Yen Bai

n/a
860.0
392.7
368.2

273.0
944.0
429.9
414.1

Ha Giang
Lao Cai

Phu Tho
Yen Bai

n/a
611.0
389.8
358.2

257.6
685.0
425.6
404.7

Ha Giang
Lao Cai
Phu Tho
Yen Bai

n/a
249.0
2.9
10.0

15.4
259.0
4.3
9.4

2012
2013

2014
Number of Tourists
310.4
376.5
403.9
974.0
1,050.0 1,130.0
624.0
665.3
731.6
417.6
450.8
411.0
Domestic Tourists
293.9
356.5
346.3
674.0
758.0
857.0
619.4
660.6
726.5
410.3
444.3
403.6
International Tourists
16.5
20.0
57.6

300.0
292.0
273.0
4.6
4.7
5.1
7.3
6.5
7.4

2015

2016

575.7
1,278.0
752.2
342.3

652.4
n/a
833.5
328.7

516.8
947.0
747.2
337.1

591.7

n/a
828.0
324.0

58.9
331.0
5.0
5.2

60.7
n/a
5.5
4.7

Source: Ha Giang, Lao Cai, Phu Tho, Yen Bai, Statistical Yearbook 2011; 2012; 2013;
2014; 2015; 2016 [Online], Statistical publishing house.
According to statistics, in 2015, Lao Cai greeted nearly 1,3 million tourist arrivals,
of which nearly 0.3 million were international tourists much higher than other provinces.
Meanwhile, Ha Giang, Phu Tho, and Yen Bai welcomed 58.9; 5.1; 7.4 thousand
international tourists respectively. The main reason is that Lao Cai has the most tourist
attractions in the region attracted numerous tourists, such as Sapa and Bac Ha. The places
have many hill tribes, as well as rice terraces, lush vegetation, and Fansipan, the highest
peak in Vietnam. Another reason is the province is home of many ethnic minorities live
making very diversity culture (Truong V. Dao, 2014).
Table 3: Contributions of tourism in the four provinces’ economies
Indicator

2010

2011

2012

2013

2014

2015

2016

Contribution of Tourisms in GRDP (billion VND)
Ha Giang

n/a

128.0 136.2

139.6

155.0

173.4

201.0

Lao Cai

224.0

292.5

254.2

260.1

285.0

310.9

n/a

Phu Tho

249.7

267.5

291.0

316.0

331.8

362.5

n/a

Yen Bai

179.4

204.8

214.6

231.8

233.6

236.3

249.0

Share of Tourism in GRDP (%)
Ha Giang

n/a

1.5

1.5

1.5

1.5

1.6

1.8

Lao Cai

1.8

2.3

1.7

1.6

1.6

1.6

n/a

Phu Tho

1.1

1.2

1.2

1.2

1.2

1.2

n/a

Yen Bai

1.9

2.0

1.8

1.8

1.7

1.6

1.6

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Indicator

2010

2011

2012

2013

2014

2015

2016

Share of Tourism investment in Total development Investment (%)
Ha Giang
n/a
0.6
0.5
0.1
0.7
1.1
0.6
Lao Cai
2.0
1.9
3.6
1.0
1.5
1.5
n/a
Phu Tho
n/a
n/a
n/a
n/a

n/a
n/a
n/a
Yen Bai
1.1
0.3
2.0
0.5
1.3
0.4
0.4
Source: Ha Giang, Lao Cai, Phu Tho, Yen Bai, Statistical Yearbook 2011; 2012; 2013;
2014; 2015; 2016 [Online], Statistical publishing house.
The Table 3 showed how the tourism contributes to the economies in term of GDP
contribution. In spite of its importance, the tourism sector only contributed to 1.1 – 2.3% of
total GDP. Lao Cai had the largest share of tourism, meanwhile Phu Tho had the lowest
share. Based on the results, we can say that tourism still has the great potential for longterm development in the region. Although the tourism industry in Vietnam is still
developing, it plays a key economic role in the country.
3.2. Opportunities, challenges and major directions for tourism development
Based on the SWOT analysis framework and the current status of tourism
development in the midland and mountainous areas in Northern of Vietnam, we analyzed
the strengths, weaknesses, opportunities and threats to tourism development in the four
selected provinces (see Table 4)
Table 4: SWOT analysis in the tourism of the four selected provinces
Strengths
- Convergence of valuable cultural heritage
unique.
- The unique cultural status of many ethnic
groups, especially ethnic minorities.
- A rich source of tourism labor, especially

- Travel is a important economic sector and
expected to grow quickly
- Many attractions: Ha Giang (10), Lao Cai (47),
Phu Tho (18), and Yen Bai (7).

Weaknesses
- Tourism products are still limited, not really
promote the true value.
- The capacity of the tourism business
enterprises is weak.
- The lack of professional qualifications of low
tourism workers and lack of skills.
- Infrastructure is inconsistent between provinces
and between tourist zones.
- A limitation of travel intelligent investment
(modern technology).

Opportunities
- The local authorities are always interested in
creating an open and equal investment
environment.
- The Communist Party and Government have
been developing socio-economic infrastructure.
- International economic integration.
- Positive impact of Industrial Revolution 4.0

Threats
- The awareness and protection of the tourist
environment has not been improved.
- International integration create the high level of

competitiveness within travel agents in Vietnam
as well as international
- Negative impact of Industrial Revolution 4.0.

Source: Authors‟ illustration, 2018

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* Strengths and challenges
Tourism in the midland and mountainous region in Northern Vietnam has many
potentials and advantages. It is considered a spearhead economic sector, but in the process
of development, tourism encountered competitive pressure from neighboring countries
(e.g., Thailand, Laos, and China) is not small. Therefore, it is the competition from the
deep integration into the international market as well as the spread of the 4.0 industrial
revolution. Besides, the people‘s awareness of environment and cultural protection in the
process of tourism development is rather low.
The issues raised in this analysis are:
- It is necessary to promote propaganda, raise awareness of people and tourists in
tourism development, calling for all people to join hands to protect the environment and
culture, especially ethnic minorities.
- It is necessary to actively and flexibly respond to market changes, to renovate and
update information technology in tourism development.
- It is important to adapt to the needs, trends of tourism in the world and the region.
* Weaknesses and opportunities
Although the authorities at the provincial level are very interested, creating
environment and policies to attract investment for tourism development. However, the
technical infrastructure of tourism is weak and not synchronized, the quality of tourism
labor is low, the competitiveness of tourism enterprises is low, tourism products are mainly
raw and not well linkage. These are the advantages of tourism products.

The issues raised in this analysis are:
- It is needed to increase budget for information technology application in
promotion, tourism promotion, application of flexible mechanism, ...
- It is needed to improve the quality of tourism human resources, especially
manpower management, skilled manpower,...
- It is necessary to step up investment in, upgrade and improve the system of
infrastructure and technical and tourist facilities in a synchronized and modern manner, meeting
the requirements of competition, including the system of airports and houses. railway, road
traffic system, public transportation, restaurant system, hotel, chamber room, museum system,...
The master plan for Vietnam's tourism development up to 2020, with a vision to
2030, with the objective to 2020, to become a spearhead economic sector with
professionalism and infrastructure. technical equipment is relatively synchronous, modern;
Tourism products of high quality, diverse, branded, bearing bold national cultural identity,
compete with other countries in the region and the world. By 2030, Vietnam will become a
developing country.
In order to contribute to the achievement of the above objective, tourism in the
Northern Uplands, Vietnam is determined to: Focus on the development of tourism
products based on the outstanding values of tourism resources to create different
characteristics of tourism products; Developing tourism in depth, in the direction of

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improving quality and professionalism; Rapid development to integrate with tourism
development in the region, the country and the world.
In the master plan for tourism development in the midland and mountainous region
in Northern Vietnam up to 2020, the target to 2020, tourism in the mountainous areas in
Vietnam has a system of quality tourism products that be diversified, branded, competitive;
Highlighting the cultural identity of ethnic minorities in the midland and mountainous
areas in Northern Vietnam, attracting tourists to contribute to the preservation and

promotion of cultural values of mountainous ethnic groups for tourism development.
3.3. Relevant policies recommendation to policy-makers
Based on the literature review and the findings, we propose several policy
recommendations to policy-makers as following.
To concentrate on developing the most typical tourist form to bring into full play
the region's tourism resources.
To promote the development of eco-tourism, explore the nature associated with
caves, high mountains and midland, associated with the landscape. Develop geological
tourism associated with science based on the Dong Van Plateau (Ha Giang).
Exploiting the outstanding characteristics of cultural and historical resources in order to
promote the market of cultural tourists, sources and spiritual festivals based on the population
of historical and cultural relics of Phu provinces. Tho, Yen Bai, Lao Cai. Community tourism,
indigenous cultural experience in ethnic minority cultures in the mountains.
In addition, in order to promote the "topography" position with the system of border
gates and border economic zones, it is necessary to develop border tourism in association
with trade in border gates and public services.
Strengthening cooperation and linking tourism development
Provinces in the region have diverse tourism resources and favorable transport
conditions for the development of tourism products with advantages. Linking tourism
development in the region will contribute to promote the values of tourism resources to
build tourism products characteristic.
Linking tourism development to other provinces in the region and other regions will
contribute to promoting the value of tourism resources to build integrated tourism products attractive.
The content focuses mainly on the development of tourism programs and products,
promotion of image promotion and training to improve the quality and quality of tourism labor.
Strengthening information technology in promoting and promoting tourism
Taking advantage of the support of national tourism agencies, domestic and foreign
organizations to implement e-marketing, application of communication technology and
social networks to improve the effectiveness of advertising.
Develop intelligent tourism model with new technology application programs to

bring tourists unique products, services and experiences such as smart travel portal, digital
map travel, residential management, mobile applications, traffic management, rescue and
rescue, weather information, residential information, data analysis systems, and intelligent
travel forecasting.

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4. Discussion and Conclusion
All in all, the case of tourism development in the Midland and mountainous areas in
Northern Vietnam contributed new insights into our understanding of its contribution to
provincial economies. We find that although the share of tourism sector in GRDP of the four
selected provinces is rather small (about 2%) but it is still very promising sector. The findings
of this study have several important implications for policy making. As expected, in order to
develop tourism in the region, we should implement policies such as: To concentrate on
developing the most typical tourist form; To promote the development of eco-tourism; to
exploit the outstanding characteristics of cultural and historical resources; to strengthen
cooperation and linking tourism development; to create favorable transport conditions, Linking
tourism development to other provinces; Strengthening information technology in promoting
and promoting tourism, Taking advantage of the support of national tourism agencies, Develop
intelligent tourism model with new technology application programs.
Thus, policy-makers should focus more on addressing and strengthening tourism
sector through the linkage within tours, tourism products within provinces in the region.
5. References
1. Le, T. T. Thuy (2015), Study root tourism development in the source in Phu Tho
province, PhD thesis, Hanoi University of Agriculture.
2. Nguyen T.K. Chi and Vien T. Ha (2016), Factor influencing on Vietnam‟
Tourism Development
3. The Vietnamese National Assembly (2017), Law number: 09/2017/QH14 dated
19/6/2017, approving Law on Tourism [Online], Hanoi.

4. The Vietnamese Government (2013) Decision No. 1064/QD-TTg dated
08/7/2013 approving the master plan on socio-economic development in the northern
midlands and mountainous areas up to 2020 [Online], Hanoi.
5. Truong, V. Dao (2014), Tourism and Poverty Alleviation: A Case Study of Sapa,
Vietnam, PhD thesis, University of Canterbury, New Zealand.
6. United Nations, the definition of the terms ‗visitor‘ and ‗tourist‘
regarding international statistics, Conference on International. Travel and Tourism, Rome, Italia.
7. William C. Gartner (2005), A Perspective on Rural Tourism Development, The
Journal of Regional Analysis & Policy, 35:1.
8. World Travel and Tourism Council (2015), Travel and Tourism Economic
Impact 2015, Vietnam.
9. World Travel and Tourism Council (2017), Travel and Tourism Economic
Impact 2017, Vietnam.
10. Wurong Shih and Ninh T.H. Do (2016), Impact of Tourism on Long-Run
Economic Growth of Vietnam, Modern Economy, 2016, 7, 371-376.

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