Experiencing a rapid growth in the tourism industry, Vietnam could become a regional leader in the coming years. Yet, Vietnam and its tourism businesses need to combat an important cultural setback if they want to reap the benefits of the country’s entrepreneurial spirit and grow tourism in quality as well as in quantity.
In this TEDx talk, Jason Lusk, who launched the MIST accelerator for tourism startups in the Mekong region with the Asian Development Bank, explains his views on the tourism industry in Vietnam and how it can focus on innovation.
Copycats: a pernicious business habit in Vietnam
In Vietnam, a business habit is ruining many industries, especially the tourism industry. Whenever a company becomes successful through the creation of an innovative new way of providing a product or service, they get copied by many other companies who end up saturating the market with more offer than demand.
Companies involved in this hyper competitive market become involved in a price war against each other, and the quality of the product or service falls. Sometimes competitors even copy the name of the successful provider, spoiling their reputation and creating problems for the original innovator.
Tourism: a rapidly growing industry
Yet, the tourism industry in Vietnam is poised to see a rapid growth of about 9.5% year on year, expected to reach a yearly 19 Billion US $ by 2020, which will account for about 7% of the Vietnamese GDP.
In order to reap the benefits of this dynamic growth, Vietnam needs to bypass the hurdle of business copycats. Though the growing numbers of tourist will drive the industry, the increase of productivity and innovation is the key to really boost the economic output. It is therefore time for Vietnam to focus on this approach to profit from tourism.
A first method for Vietnam to succeed is to focus on the preservation of its rich nature and culture instead of extensively building soulless resorts and attractions at the expense of its heritage. The country should focus on innovation for quality tourism instead of quantity tourism.
Create a cluster for tourism in Vietnam
A second method is to create a ecosystem for the tourism industry. Building a cluster of related companies in the tourism industry will enhance the productivity for all and provide the best results for Vietnam.
Associating government policies, universities, venture capitalists, business associations and a variety of small, medium and large companies is the key to creating a successful ecosystem for the tourism industry. And Vietnam is ripe with all these organizations, but it misses one thing that will help in the fight the problem of imitators: provide opportunities for innovators to exit their operations.
By imitating Silicon Valley’s system, the Vietnam tourism industry could focus on innovation and succeed in the regional and global competition. It could allow innovators to benefit from their originality and the country to reap the benefits of increased spending rather than increased tourists volumes only.
Video from April 2017