Tourism Team
College of Economics - Vietnam National University, Hanoi
Trinh, Tuan Anh
Nguyen, Quoc Tu
Nguyen, Linh Phuong
Nguyen, Thi Loan
Specially conducted by Prof. Nguyen, Thuy Linh
Specially supported by Chiba University of Commerce and College of
Table of Contents
List of tables and figures
CHAPTER I ..........................................................................................................8
1. The role of Travel and Tourism industry .........................................................8
2. Travel and Tourism industry in the 3 tourism centers of the world .................9
2.1. Asia ................................................................................................................9
2.2. United States of America .............................................................................11
2.3. Europe ..........................................................................................................13
TRAVEL&TOURISM INDUSTRY ..................................................................15
1. Impacts of the Financial Crisis in 2008-2009 ................................................15
a.Economical impacts of the crisis .....................................................................15
b.Social impacts of the crisis ..............................................................................17
2. Impacts of the swine flu .................................................................................18
3. Impacts of terrorism .......................................................................................20
COUNTRIES ......................................................................................................21
1. CASE STUDY 1: CHINA ..............................................................................21
Overview of the Tourism industry in China ............................................21
Problems occurred to that the Travel and Tourism industry ...................22
China Government’s strategies to help stimulate tourism .......................25
EFFECTS EVALUATION: ................................................................................27
2. CASE STUDY 2: JAPAN ..............................................................................28
2.1. Overview of the Tourism industry in Japan ................................................28
2.2. Problems that the industry has to encounter: ...............................................29
2.3 Japan Government’s strategies to help stimulate tourism: ...........................31
3. CASE STUDY 3: VIETNAM ........................................................................34
Overview of the Vietnam Tourism industry ............................................34
Problems occurred to the Travel and Tourism industry...........................35
Solutions to the problems .........................................................................40
Chapter IV ...........................................................................................................43
Conclusion and Recommendation ......................................................................43
We would like to express our gratitude to all those who gave us the possibility
to complete this thesis.
First and foremost, we wish to express our sincere thanks to our supervisor
Ms.Linh, Vice Director of Research, Cooperation and Development
Department, whose help, suggestions and encouragements have helped us
greatly in our research and completion of this thesis.
Secondly, we would like to thank Ms. Ngan from Vietnam GPAC Team 2008,
Prof. Hai Minh and Mr. Minh Anh for giving us many advices and pointers as
well as comments on our work.
Besides, during this work we have received remarkable help and
encouragement from our beloved friends in class QH-2008-E QTKD, without
whom we could not have completed the research.
Last but not least, we are indebted to the Colleges of Economic and the
Research, Cooperation and Development Department, for believing in us and
giving us the opportunity to participate in GPAC 2009.
Hanoi, August 2009
Nguyen Quoc Tu
Trinh Tuan Anh
Nguyen Thi Loan
Nguyen Linh Phuong
In July 2007, the global financial crisis of 2007-2009 began in the United
States, and then started to spread to Europe and Asia. As the crisis deepened, a
considerable number of banks, mortgage lenders and insurance companies
failed, equity prices plummeted, and economic activities experienced a
significant decline, sucking the economic world into a period high volatility.
In April 2009, an outbreak of swine flu started in Mexico. Two months later, the
virus spread globally, and the World Health Organization (WHO) declared the
outbreak to be a pandemic. As all transmission of the virus is human to human,
the virus spread internationally with such a surprising speed that healthcare
systems worldwide were overwhelmed and put under stress.
Beginning with what is considered the largest act of international terrorism - the
incident of September 11, 2001 – the new wave of terrorism has put the world
in fear.
Other major terrorist attacks have also occurred around the globe: in New Delhi
(Indian Parliament attacked); in Bali (car bomb attack); London subway
bombings; Madrid train bombings and the most recent attacks in Mumbai
(hotels, train station and a Jewish outreach center), deliberately target or
disregard the safety of civilians.
It was recognized that changes to the world’s climate nowadays are
considerable and has become a cause for concern. Sea level rises threaten the
viability of coastal zones and small islands. Temperature rises are predicted to
change precipitation patterns that will likely cause problems about the water
supply. Finally, extreme climatic events such as storms and sea surges are
predicted to increase in both magnitude and frequency.
Above are some of the main problems that has recently plunged the world into
an economically and socially unstable state. As a result, the Tourism industry as
a whole is facing a period of austerity and uncertainty in the near future.
However, some regions have managed to turn the current crisis into
opportunities, attracting millions of tourists and generating billions of dollars in
revenue. In this paper, we first analyze in-depths the current situation of the
Tourism industry, both wholly and regionally, to find out the impact of the
world’s affairs on Travel and Tourism. Consequently, we discuss in details the
current situation the government’s strategies and policies to support the
Tourism industry in 3 Asian countries – Vietnam, Japan and China.
List of tables and figures
Figure 1: Contribution of the T&T Industry to Worlds' GDP and
Figure 2: Contribution of South East Asia T&T Industry to Total GDP and
Figure 3: South East Asia Tourism GDP real growth………………………...10
Figure 4: Contribution of T&T industry to South Asia GDP and
Figure 5: United States T&T industry’s growth rate and contribution to
Figure 6: Contribution of US T&T industry to GDP and employment……….13
Figure 7: European Union Travel and Tourism GDP………………………...14
Figure 8: EU- Travel & Tourism Economy GDP and Employment…………..14
Figure 9: Top Five-Overseas World Regions for Visitation to the U.S…..…….17
Figure 10: Swine flu’s current situation……………………………...………………….18
Figure 11: Contribution of Vietnam T&T industry to total GDP and
Figure 12: Total international visitors to Vietnam……………………..……………..36
Figure 13: Total international visitors to the United States………………...………37
1. The role of Travel and Tourism industry
The economy in the 21st century is dominated by three industries:
telecommunications, information technology and tourism. In 2009, the Travel
and Tourism Industry (T&T industry) as a whole provides 7.6% of global
employment – which means more than 219 million people worldwide are
employed in the sector – and contributes US$5.474bn to World's total GDP
(9.4% of total GPD).
Figure 1: Contribution of the T&T Industry to World’s GDP and Employment
Also, tourism is a global-scale industry with growing impacts on the
environment, as well as profound implications for regional and local
development. In many developed and developing countries, tourism
increasingly provides new opportunities, employment and economic benefits to
local communities. Many countries see tourism promotion as an expedient and
relatively inexpensive strategy to attract foreign direct investment by, for
example, showcasing natural areas and local indigenous cultures.
2. Travel and Tourism industry in the 3 tourism centers of the world
In Asia, mass travel has blossomed in recent years. Tourism has become one of
the most important sectors in the economy in Asia Pacific countries, and the
region is now regarded as a new centre of tourism. An emerging wealthy
middle class of Asians are joining their European and American counterparts on
their pleasure, business, and adventure trips around the globe. The rapid growth
of the tourism industry has been attributed to a number of factors, among which
are strong economic growth, increase in disposable income and leisure time,
easing of travel restrictions, successful tourist promotion, and recognition by
the governments.
Unlike its EU and US counterparts, the tourism industry in Asia cannot be
elaborated as a whole due to the vast diversity in geographical and cultural
features of Asian countries. The continent is, from a tourism viewpoint, divided
into 5 regions: North East Asia, Middle East, South East Asia and South Asia.
Based on the focus of this study which revolves around Vietnam, Japan and
China, we only discuss the statistical data of the tourism industry in South East
Asia and South Asia.
a. South East Asia.
The Travel and Tourism Industry plays an important role in the economy of
South East Asia. As we can see from the two charts below, in 2009 the industry
contributes directly US$56 bn to total GDP, which is equal to 3.7% of total
GDP. The tourism industry also directly creates more than 8 million jobs
(representing 3.1% of total employment). As a whole, the contributions of T&T
industry are even greater. In 2009, the T&T industry as a whole contributes
US$156 bn (10.1% of total GDP) in revenue, and creates more than 23 millions
Figure 2: Contribution of South East Asia T&T Industry to Total GDP and Employment
However, due to the economic recession, South East Asia’s Tourism industry is
facing a sharp drop in the period. In fact, it is predicted that at the end of 2009,
the industry would experience a real decline of -3.2% in GDP growth.
Figure 3: South East Asia Tourism GDP real growth
b. South Asia
Although South Asian countries possess geographical and cultural features
which are similar to their South East Asian counterparts in many ways, the
Travel and Tourism industry in South Asia has somehow managed to develop
significantly to become one of the main tourism markets in the world, standing
at World’s No.1 in term of growth rate in recent years.
Figure 4: Contribution of T&T industry to South Asia GDP and Employment
According to WTTC, in 2009 the Tourism industry in South Asia contributes
5.9% to total GDP and 5.8% to total employment of the region. Even though the
T&T industry today has to face many issues and troubles, some countries such
as China have managed to not only overcome those problems but turn them to
their advantages. As a result of successful strategies and policies to encourage
Tourism, China has achieved a positive growth rate of 0.6% in 2009, compared
to the 0.0% of the region
United States of America
U.S. Tourism has stood at the position of World’s No.1 in term of capital
investment, generated revenue and number of visitors. With its natural wonders,
cities, historic landmarks and entertainment venues, the U.S. attracts millions of
international and domestic tourists each year. The Tourism Industry in the
United States grew rapidly in the form of urban tourism during the late
nineteenth and early twentieth centuries. New York, Chicago, Washington, D.C.
and San Francisco, all major US cities, has already attracted a large number of
tourists by the 1890s. By 1915, city touring had marked significant shifts in the
way Americans perceived, organized and moved around in urban environments.
Nowadays, T&T is one of the main sources of income of U.S. Economy. By
2009 the tourism industry had climbed to contribute US$1,356.9 bn (9.5%) to
the country’s total GPD.
However, due to recent threats, particularly terrorism, financial crisis and the
swine flu, there has been slower growth in travel volume, reflecting a maturing
industry and a period of challenges and slowdown in the industry. In fact,
according to a report of World Travel and Tourism Council (WTTC), in 2009
U.S. T&T industry is expected to see real decline of 4.2%, the largest fall since
9/11 terrorist attack.
Figure 5: United States T&T industry’s growth rate and contribution to GDP
In the future, as expected T&T industry will have more contribution to the total
GDP. As a result, the number of employments in T&T industry will also
increase but with a lower rate.
Figure 6: Contribution of US T&T industry to GDP and employment
2.3. Europe
By far, Europe is largely considered the top travel destination in the world, with
a gigantic resource of history, cultures, and cuisines. For those with an interest
in the past, there are the fabulous art galleries, museums and old buildings,
while those who enjoy the great outdoor have a wide range of opportunities
from the golf courses of Ireland and Scotland to the hiking trails and snowy
mountains of the Alps. Moreover, Europe generally provides high quality
transport, accommodation and restaurant facilities to tourists though those in
Western Europe can be expensive compared to other tourist destinations.
Only after the Second World War is Europe’s tourism industry considered truly
developed. Due to factors such as increasing personal income, lengthening life
expectancy and the reduction of working hours, the tourism industry has now
grown to directly contribute US$581 billion to the total GDP (which is
equivalent to 3.4%). However, since Travel & Tourism touches all sectors of the
economy, its real impact is even greater. EU’s Travel & Tourism economy
directly and indirectly accounts for 9.9% of total GPD, which equals to
US$1,668 billion, as described in the graph below.
Figure 7: European Union Travel and Tourism GDP
Following a period of recession, in 2009 EU’s T&T Industry face a decline rate
of 3.5% in term of Economy GPD and 3% in term of Employment. In spite of
that, both growth rates in Tourism’s generated GPD and Employment are
projected to increase sharply in the coming years
Figure 8: EU- Travel & Tourism Economy GDP and Employment
1. Impacts of the Financial Crisis in 2008-2009
The world financial crisis occupies the first pages of newspapers all over the
world for several months now. It is understandable that the tourism industry,
being volatile and fragile as it is, may not stay unaffected by the crisis.
According to The United Nations World Tourism Organization (UNWTO), the
situation in the tourism sector is getting worse. There is a drop in demand from
both business and leisure tourists. The slowdown has begun with the 2008
summer holidays in the northern hemisphere. Further drop in the sector
appeared in late 2008 and the first half of 2009.
a. Economical impacts of the crisis
Travel and Tourism investment are expected to suffer greatly during this time
of recession, with the credit crisis causing firms and businesses to cut down on
all deferrable costs. In fact, the total capital investment on Tourism in 2009 is
US$ 1,220 bn, a 5.25% drop compared to the last year. Further decrease are
also predicted over the next two years, especially in cooperate travel. Resident’s
travel, which tends to be less affected, also experiences a 3% drop, despite the
substitution of domestic travel over foreign trips.
The global financial crisis will have had its heaviest impact on the real sectors
of countries in the Middle East, such as Tunisia, Algeria, and Morocco, where
export revenues, capital inflows and tourism are expected to slow significantly.
In 2007, export revenues as a share of GDP was 44.7 percent in Algeria, 42.7
percent in Tunisia and 19.5 percent in Morocco. The 3 countries are expected to
witness deteriorating labor market conditions. Also, as unemployment in
Europe rises, remittances from expatriates will decrease, affecting investment
and household consumption. In 2007, remittance inflows made up around 9% of
GDP in Morocco, 5% in Tunisia and 2.2 percent in Algeria. In addition to
remittances, capital inflows from these countries are expected to reverse the
growing trend, worsening the current account balance in these countries, which
was had a 1 and 2.6 percent deficit in 2008 and is expected to further worsen by
2012, according to IMF estimates.
The situation is particularly critical in Morocco, where the T&T industry is
threatened with a decline in its revenue from international tourism, expatriate
remittances, and its external investment (the bank’s external deposits have lost
around 7 percent), which has already decreased by 17 percent. These sources
make up around $20 billion and have been traditionally used to finance
Morocco’s external trade deficit. Though the government has publicly stated
that the Moroccan economy will face difficulties in 2009 due to the wider
spillover of the financial crisis and its potential impact on its revenues of hard
currencies, Morocco has been slow to develop recovery packages.
Those large tourism centers of the world also suffer from the current economic
environment. An example is in the U.S, where international visits fell 12
percent in May 2009 from the year before. Those still flying over spent a lot
less – only $9.5 billion, down 22 percent from the same period last year. May
was the seventh consecutive month in which international visitor spending
declined. For the first five months of the year, international visitation fell 10
percent, and spending dropped 14 percent to $50.1 billion relative to the first
five months of 2008.
(Source: U.S. Department of Transportation)
Figure 9: Top Five-Overseas World Regions for Visitation to the U.S
b. Social impacts of the crisis
First of all, it can be seen that during the crisis period, many people lost their
jobs, making it harder for them to support themselves and their families. Having
a tighter budget, they have to save money by only buying necessities instead
of luxuries goods such as branded products, jewelries, etc. It is also due to that
reason that nowadays people are cutting down on travelling and vacations,
therefore affecting the Travel and Tourism (T&T) industry. An example can be
seen in American, where many Americans in the past used the equity in their
homes to finance vacations, among other things. Now in the reality of tighter
credit availability, people will be taking fewer, shorter vacations close to home.
Tourists also expect to spend less on souvenirs and shopping, meals and
entertainment, and on hotels.
Besides, the soaring price of crude oil led to increased cost for airlines,
trains, cruise lines, and bus lines, leaving them no option but to raise ticket
prices or services costs, while at the same time consumers had less discretionary
income for travel. Even though the price of oil has dropped tremendously in the
last few months, the airlines still predict multi-million dollar losses in 2009 due
to the projected three percent drop in number of passengers.
However, people will not stop to travel. Even though the global economic crisis
industry, it’s generally understood
that instead
continuing to decline, the tourism industry will flow in a different way. It is just
like the first law of economics says: “the economy is self-adjusting” and the
same is valid for tourism. Nevertheless, there will be change in the traveling
behavior of the people, and it will be up to the managers and marketing
departments in
the Tourism and Hospitality
businesses to adopt
strategies to survive.
2. Impacts of the swine flu
Figure 10: Swine flu’s current situation
While the world economy should in principle be able to cope with the swine flu
pandemic, there is a significant risk that it might trigger a set of unfavorable
behavioral changes that tip the world back into recession.
If the H1N1 virus mutates and results in a more severe outbreak in the autumn,
this would hit the world economy just as it starts to recover from the credit
It would interfere with economic activity, threaten already fragile
businesses and put further strains on financial markets and fiscal balances.
People would be reluctant to travel and would avoid public spaces. This could
generate a vicious cycle that postpones the economic recovery – as well as that
of travel and tourism – for another couple of years.
As an illustration of a bad case scenario, Oxford Economics estimates that an
epidemic in the UK with a 30% infection rate and a 0.4% death rate might knock
5% off GDP, including a 60% shortfall in tourist arrivals for six months and a
30% cut in discretionary spending by UK consumers.
Such a scenario is not yet any more than a possibility which is difficult, if not
impossible, to quantify. In the meantime, consumers still have to face the weak
economic environment. Although Europeans have been willing to postpone or
cancel their secondary holidays, the majority are expected to protect their
principal summer holidays, thus suggesting that arrivals Figures over the current
quarter will be only slightly lower than those in the same period of 2008. But
there is general agreement that consumers will be economizing: lengths of stay
will be shorter and spending lower, and domestic travel may benefit at the
expense of international destinations.
3. Impacts of terrorism
It can be said that terrorist attack is one of the biggest threat to human being.
This type of activities often occurs in public places, where there are many
people coming to and gathering. The victims are visitors attracting spots such as
supermarkets, commercial centers, great buildings or crowded cities. Because
of this, when the terrorists attack these places, the damage is very huge and
First of all, it will destroy infrastructures of society in general and of tourism
industry in particular. As a result, the fall in the number of visitors to these
places will appear. It is because of a fact that, when these structures are
attacked, they will become less attractive to travelers than before.
Secondly, the regions that are attacked or in the danger of being attacked by
terrorists or in the cases of wars cannot have as many visitors as they used to.
When hearing about the threat of terrorists or even the warning about it, people
become afraid of traveling or coming to crowded places. They think they can be
attacked whenever and wherever and may be they will be dead. The fear is
always beside them. They decide to stay at home and reduce traveling as much
as they can to be safer. However, traveling doesn’t stop in that case, people still
travel but in nearer distance or travel to safer destinations. This is not only bad
for domestic tourism industry but also not good for international tourism
industry. Especially, today with high technology’s development, people around
the world can update information very quickly and exactly, so it is easy for
them to choose safer destination as well as avoid dangerous places.
In the other hand, terrorist can bring chance in some cases. Some countries
which have stable politics and peaceful environment can take advantage of this
event to attract more tourists. In this situation, they become safer than the rest
so they can develop their T&T industry in this period of time.
Overview of the Tourism industry in China
Thanks to the great importance attached by the government, the tourism
industry in China has become a new but most dynamic and potentially strong
factor in the industry. It has been serving as a new growth point in China’s
national economy. And in many parts of the country, tourism has been regarded
as a pillar, superior or priority industry in bringing up the local economic
development. The position of tourism in the national economy continues to be
enhanced and upgraded.
In 2002, China ranked the fifth in the world in inbound tourism in terms of both
overnight tourist number and foreign exchange earnings. While its domestic
tourism was among the world’ s biggest, fastest- growing and most potential
markets, China’s outbound tourism also saw steady development with each
passing year. The international tourism development of China has investment
environment, intensified the opening to the outside world, and helped the
growth of related industries. It has played an active role in increasing internal
demand and employment, in enhancing the structural readjustment and interregional economic link, and in assisting the poor areas to break away from
poverty. Moreover, it has greatly promoted the economic prosperity and social
development of China’s and the friendly exchanges between the Chinese people
and the peoples of the world.
From 1996- 2002, tourism in China has been growing by 2- digit numbers for
seven straight years, which is far above the average GDP growth rate of the
same period, and has thus become a new growth point in the national economy
of the country.
Currently, China has become an important tourism destination in Asia.
Domestic tourism is also growing vigorously. In 1999, the number of domestic
tourists reached 719 million, spending a total of 283.2 billion Yuan-14.3
percent and 15.9 percent increases over 1995, respectively. With the
improvement of the Chinese people's living standards, Chinese citizens have an
increasingly strong interest in traveling abroad. In recent years, Chinese citizens
have traveled to Southeast Asia and Europe. Foreign travel agencies are now
opening offices in China to attract Chinese to travel abroad.
Problems occurred to that the Travel and Tourism industry
Despite of the fact that China’s Tourism industry has consistently been
achieving two-digit growth rates since the last decade, it is due to the current
inhospitable economic and social environments that the industry is facing many
challenging problems that, if left unsolved, can lead to the industry’s first real
decline in more than 10 years.
a. The swine flu and its comparison to the SARS epidemic in 2003
The first difficult challenge that the T&T industry in China has to overcome in
recent years is none other than the 2009 swine flu pandemic. It is reported by
Saturday’s China Daily that the flow of outbound tourists in China has largely
decreased due to people's concern over A/H1N1 flu. Group tours to Chinese
mainland travelers' favorite destinations such as Hong Kong, Japan, the republic
of Korea, the United States., Europe, Australia and Southeast Asia dropped the
most. Tours to almost all overseas destinations have seen a big drop, though
many of these places have not reported even a single case of A/H1N1 infection.
The outbreak of the flu also imposed a forced holiday on travel agency
employees. Statistics from Beijing-based China M&R Special Tours showed
about 40 percent of the firm's tour guides and group leaders are out of business
because of the flu scare. Domestic travel, on the other hand, seems to be
enjoying a raise in the number of tourist because of the flu. In Taipei, Taiwan,
the spread of swine flu cases in neighboring Asian nations is inducing a
growing impact on the tourism industry here, prompting more travelers to
cancel trips to affected areas and opt for domestic tours.
It is still hard to appraise at this stage how profound the impact on overall
business will be, but the increasing A (H1N1) cases in Japan and other
neighboring Asian nations are forcing tour operators to extend their discounts
for overseas trips and persuading their customers to take domestic tours.
One of the key factors is the concern of growing swine flu abroad. In addition
to promoting domestic tours targeted at local residents, the larger travel
agencies are also assigning more manpower and resources to cope with
increasing tourist arrivals from China. Some travel agents said Chinese tourists
will help offset the possible decline in revenues caused by the drop of overseas
trips. Also, shares of hotels and other firms in the tourism and transport sectors
made impressive rises on the Taiwan Stock Exchange.
However, according to the impact so far and the predictions of experts in the
field, the H1N1 pandemic is not going to leave as big an impact on China’s
T&T industry as the SARS epidemic in 2002-2003. For a few months in 2003,
SARS held Hong Kong in virtual quarantine. Schools closed. Employees
worked from home. Hardly anyone traveled. When they did go out, many
people wore surgical masks. As a result, there was an abrupt backslide in the
year 2002 when the revenues earned by the China tourism industry dropped
from $67.3 billion to $59 billion in the year 2003, causing the economy as a
whole to lose billions more of US dollars.
b. Natural disasters – 2008 Earthquake in Sichuan Shake Tourism Industry
The 8-magnitude earthquake that devastated Sichuan province on May 12, 2008
has seriously hampered tourism in affected regions. Given the difficulties of
restoring the damaged infrastructure, it was difficult to resume trips to Sichuan,
not to mention that many tourists would be reluctant to visit affected areas
because of the "psychological shadow" casted by the disaster.
Many customers bound for other regions in China cancelled their trips with the
company after the quake.
The quake is the second disaster to negatively impact the country's tourism
industry this year, after the worst blizzards to hit China in half a century
wreaked havoc on the southern part of the country in February. Prolonged cold
weather put the chill on travelers' enthusiasm during Spring Festival. That year,
the country's tourism industry earned 39 billion Yuan ($5.62 billion) during the
Golden Week, 6.2 percent less than in 2007, China National Tourism
Administration (CNTA) Figures show. Many popular tourist sites reported
fewer visitors during the period, as weather and traffic concerns led many
people to cancel travel plans.
China Government’s strategies to help stimulate tourism
With holiday tourism developing vigorously and going to the standard, the State
Council of China has been paying great attention and giving support to the
development of tourism.
The Chinese Government Tourism industry has stated that “China's tourism
industry has worked out a long-term plan for development prospects for
following 20 years. Based on the historical leaping over from a country with
only rich tourist resources to an important tourist country in Asia over the past
20 years, China will continue to develop itself from an important tourist country
in Asia to the one in the world after another 20 years of efforts”
And to ensure that outcome, the government has issued a series of projects and
plans to stimulate tourism in different regions of China. From rural tourism
development and encouraging eco-tourism to organizing worldwide events to
attract both international and domestic tourists, China has proved its
determination to turn the country in to the largest tourist destination in the
China 'Disaster Tourism' Policy as a Subsidy to Devastated Areas
Cashing in on huge public interest in one of the deadliest earthquakes of recent
history, China has officially endorsed 'disaster tourism' as a form of economic
subsidy to devastated areas. As part of the project, home debris and whole
sections of partially wiped out cities and villages during last year's massive
earthquake in southwestern China will now be open to tourists.
The severity of the quake, which ripped through the mountainous areas of
Sichuan province on May 12 last year, killing 90,000 people and the
government's initial tolerance of reports from the disaster area have generated
huge interest among a Chinese public unaccustomed to official news of public
suffering and devastation.
Ruins from the quake have become a draw for visitors - attracting hundreds of
thousands of tourists - the state agency reported. Donghekou village where only
300 of more than 1,400 villagers survived a landslide triggered by the
earthquake is now amongst the hottest tourist destinations in the Sichuan
province. More than 260,000 tourists have visited the Donghekou Relics Park
since it opened last November.
As a site of some of the most devastating earthquakes in modern history, China
should be equipped to deal with remembrance, with consigning the pain to the
past and drawing lessons. But, a year after the Sichuan earthquake the country
is grappling with to how to commemorate the dead without raising
uncomfortable questions.
In our opinion, there are both advantages and drawbacks to this strategy. On
one hand, taking advantages of the attraction of the devastated areas will
contribute in recovering a part of the material damages, thus helping the local
community in some way. Secondly, by establishing a tourism center in
devastated areas, the local community can attract the attention and sympathy of
both national and foreign individuals and groups that may decide to support
them in the future. Also, people that have learnt about the disaster in this way
will also learnt the cause of these horrific accidents, and become more aware of
the effects their actions may have on the environment.
On the other hand, there are situations when ignorant tourists have worsened the
pain of the locals that have lost their family members with indifferent or even
cruel comments and jokes. Also, there are sometimes questions over whether
this type of tourism can be considered extorting the pain and suffering of the
people in those areas, which makes it an immoral way of earning money of the
travel agencies.
Report has shown that this new trend of disaster tourism to Sichuan province
boosted visitors to record levels during the recent May Day holiday, after a 10%
slump in revenue last year, according to the provincial tourist bureau
2.1. Overview of the Tourism industry in Japan
Tourism today remains a vital part of the Japanese economy and society. The
contribution of the tourism industry to the overall Japanese economy is equal to
the leading and typical industries such as automobile and electric machinery.
The share of tourism industry in total GDP was 2.2% in 2000, whereas the
automobile industry was 2.3%, telecommunication 2.0%, electricity 1.9% and
agriculture 1.5% respectively.
The share of tourism industry in total employment was 2.9% in 2000, compared
with government employee 3.2%, electric machinery 3.0%, finance/insurance
3.0%, and food industry 2.3%.
As the tourism market continues to grow
steadily, tourism industry is expected to become the leading industry of Japan
throughout the 21s t century.
The contribution of the Japanese tourism industry to its national economy,
however, has been relatively small compared to foreign countries. According to
the survey by MLIT in 2000, for example, the share of tourism in total GDP in
Australia amounted to 4.5%, followed by Chile 3.8%, New Zealand 3.4%,
Canada 2.4%, the United States and Japan identically at 2.2%. Also the share of
tourism in total employment in Australia was 5.4%, followed by New Zealand
4.1%, Canada 3.5%, the United States 3.5%, Chile 3.2%, and Japan 2.9%
In particular, the ratio of tourism consumption by foreign visitors to overall
tourism consumption has been remarkably smaller in Japan compared with
foreign countries. Based on the survey by MLIT in 2000, the ratio was only
6.2% in Japan, whereas the ratio was as high as 35.6% in France, 30.0% in
Canada, 22.0% in Australia, and 20.9% in the United States respectively.
2.2. Problems that the industry has to encounter:
a. The swine flu:
Although in the first months of 2009, the industry were expecting that they
could somehow manage to keep the figures close to that in 2008, there has been
a huge drop in the number of visitors to Japan this year. Comparisons to the
banner year of 2008 can be misleading, but even when compared with 2007
there is a drop of about 40 per cent. Experts consider the H1N1 virus to be
blamed for this situation.
As an example we now look at a case study of the Prince Edward travel agency.
Two companies, P.E.I. Select Tours and Prince Edward Tours, cater almost
exclusively to Japanese tourists. P.E.I. Select Tours said 80 per cent of their bus
tours for the Japanese have been cancelled. They've had to lay off four staff.
Prince Edward Tours said it would normally host between 10 and 30 Japanese
visitors per day, and Thursday they had only one.
In a normal year, about 10,000 Japanese visit P.E.I. That represents about one
per cent of the Island's annual visitors, but they are worth more than that in
dollars. P.E.I.'s Tourism Department says the average North American visitor
spends $67 a day during their P.E.I. vacation, but Japanese visitors spend at
least $88 a day.
Earlier this year, tour operators were hoping more Japanese tourists would
come to P.E.I. in September and October. But now, with health officials
predicting a major jump in swine flu infections in the fall, that situation seems
b. The economic crisis
The Japanese economy is facing “twin crises”
(1) The short-term crisis (the risk of a negative spiral)
Amid the deepening “global financial crisis” and the “synchronized global
recession”, the Japanese economy is facing a rapid contraction of exports and a
severe financial environment.
Under these circumstances, the risk of a negative spiral, including the case that
the deterioration of the real economy destabilizes the financial system further,
which in turn will aggravate the economic condition, is growing.
(2) The structural crisis
The Japanese economy is also confronted with a “structural crisis.” Over the
past decade or so, the global economy continued to grow strongly under global
imbalances, while Japan enjoyed an economic recovery mainly led by exports.
The current financial and economic crisis makes it inevitable for the global
economy to undergo a “great adjustment” as countries around the world explore
a new balance. In addition, it is likely that common challenges facing the world
such as achieving a shift to a low-carbon society and ensuring health and
longevity will become increasingly important when the global economy recovers
from the crisis.
2.3 Japan Government’s strategies to help stimulate tourism:
a. Strategic framework for promoting foreign visitors
New Tokyo International Airport (Narita Airport) opened its second runway on
April 18, 2002, just in time for the 2002 FIFA World Cup Soccer games. The
2180 meter strip increases the total number of departures and arrivals to 200
thousand a year from the current 135,000. Since Narita Airport is the Japan’s
gateway to the world, Ministry of Land, Infrastructure and Transport (MLIT)
intends to utilize the airport strategically for promoting foreign visitors.
Welcome Plan 21
International tourism enhances mutual understanding among people in different
nations of different cultures. In order for Japan to foster the long-standing
friendship and trust among nations, it is highly important to facilitate overseas
visitors to Japan and gain true understanding of the Japanese.
The number of Japanese overseas travelers in 2000 reached 17.8 million, while
incoming foreign visitors to Japan in the same year was 4.76 million, only one
fourth of outbound flows. In terms of visitor arrivals, this figure ranks Japan
below neighboring countries and other developed countries around the world.
This substantial imbalance between outbound and inbound volumes is an
unfavorable situation for the development of tourism in Japan.
Based on the above background, “Welcome Plan 21” or the “Plan to double the
number of incoming visitors to Japan” was set up in 1997, together with the
enactment of the “Law to Promote Inbound International Tourism”. To be
concrete, the Ministry of Transport (MOT) decided to take all possible
measures, together with parties concerned, to increase the number of incoming
visitors to 8 million by 2007.
Visit Japan Campaign by Japan National Tourist Organization (JNTO)
JNTO has been actively developing strategic promotional activities overseas in
cooperation with overseas Japanese embassies, local governments, tourism
industries and foreign national tourist organizations (NTOs).
In particular,
JNTO lays an emphasis on creating an image of Japan itself as a tourist
destination, such as inherent natural beauty, art, culture, tradition, festival and
food, instead of an image of industrial and manufacturing country.
In 2001 JNTO carried out numerous public relations activities for the purpose of
inbound market development. In conducting the campaign, JNTO strategically
varied the appealing points in correspondence to the respective market
1. TV spot advertisements in Korea, China and Hong Kong
Advertisement in influential newspapers and magazines in Korea,
China, Hong Kong, North America and the United Kingdom, which directly
appealed to 150 million consumers in total
3. Invitation of foreign press and travel agents to Japan
4. Seminar for inbound market development
JNTO extensively upgraded its website in 2001, providing latest and attractive
tourist information to all over the world in ten languages. The JNTO website
( was accessed by 17 million visitors in 2001.
In April 2002, JNTO, together with international airport authorities in Japan,
produced a “Visit Japan promotion video”, taking the great opportunity to host
the 2002 FIFA World Cup Soccer games. Minister of Land, Infrastructure and
Transport Ms. Chikage Oogi appears in the promotional video in person,
introducing tourist attractions of Japan and inviting foreign travelers to visit
Japan. The video is shown in the cabin of incoming international flights of
Japanese airlines and eight airport terminals nationwide until the end of this
China-Japan Mutual Visit Year 2002
Since year 2002 is the 30
anniversary of the establishment of diplomatic
relations between Japan and the China, a variety of commemorative events and
cultural exchange programs are planned in both countries. In this connection
MLIT and CNTA (China National Tourism Administration) design to organize a
large-scale mutual tourism exchange program. 5,000 Chinese people from all
provinces came to Japan in May, attended the commemorative ceremony in
Tokyo, and visited all over Japan afterwards in separate groups to deepen the
mutual understanding and friendship. In September this year, 10 000 Japanese
tourists are scheduled to visit China in return, participating the commemorative
ceremony in Beijing and grass roots exchange programs. It is indeed a good
opportunity to promote Japanese culture, people and other tourist attractions to
Chinese people. MLIT intends to expand the number of visitors from China
through such exchange programs.
b. Other policies goals with priority
Safety and mobility of physically handicapped and elderly travelers
Projects are under way to build the environment that improves convenience and
safety of the physically handicapped and elderly travelers in tourist facilities,
pavements, public transportation, accommodation, etc. For example, installation
of elevators, escalators and wheel chair lifts at stations and bus/ship terminals,
widening of the pavements and installation of guidance tiles for the visionimpaired.
Diversification of prices and services in the field of travel and transport
All stakeholders in the tourism industry are working on the diversification of
prices and services for foreign visitors, aiming at changing the image of Japan as
“an expensive country”. Efforts are also being made to develop new resources
such as experience-oriented, self-fulfillment type tourism. An example is the
“Interpretation Program” which aims to foster nature guide tours.
Provision of tourism-related infrastructure
Development of “Multi-modal transportation system” is in progress in order to
produce effective and convenient traffic environment by enabling higher speed
and smoother connections through the coordination in multiple transportation
means of the air, land and water. Integration of airports and high-speed railway
networks is, for example, under way.
Overview of the Vietnam Tourism industry
Vietnam is one of many countries which have great beauty spots and famous
natural landscapes. This is one of many advantages helping Vietnam develop
Travel and Tourism industry. Thus, because of this, T&T industry has become
one of the main sectors in economics of Vietnam. In some recent years, T&T
industry in Vietnam has developed rapidly and stably. Moreover, the situation
of politics in Vietnam is very stable and peaceful. This also helps Vietnam
attract more and more visitors all over the world.
Figure 11: Contribution of Vietnam T&T industry to total GDP and Employment
Every year, the contribution of T&T industry to GDP increases gradually.
Although it has had a little decline in 2009 but it has still accounted for 13.1%
to GDP (VND 234,776.0 billion). Besides, the distribution of this sector to the
employment has raised and is expected to remain level at 4,862,000 jobs in
2009, 10.4% to the total employment. In the next ten years, it is expected to
reach the number of 5,675,000 jobs, 10.4% of the total employment.
3.2. Problems occurred to the Travel and Tourism industry
However, as many other countries and regions, Vietnam also has to suffer the
impacts from terrorists, financial crisis and recent swine flu.
What happens to Vietnam’s T&T industry when these affairs occur?
a. The impact of terrorist on Vietnam’s T&T industry
Figure 12: Total international visitors to Vietnam
In this period of time, the T&T industry of Vietnam can see a rapid
development every year. In 2001, the 9/11 attack happened in New York and
had many negative impacts on economics in general and in T&T industry in
particular. But, being famous for its peace and stability of politics, it sound that
Vietnam didn’t get any damage from this event. The number of international
visitors to Vietnam still increased from 2,140,000 in 2000 to 2,330,000 in 2001
and to 2,628,000 in 2002. Despite giving not much damage, this event also
reduced the growth rate of this sector in Vietnam as the above chart described.
This is because of the fact that when this attack happened, people became afraid
of traveling. In the other hand, this helped Vietnam attract more international
visitors because now they feel that traveling in the countries like Vietnam is
safer and better for them and their relatives. Whereas in the United States of
America, the tourism industry had to faced a tough situation.
Total international visitors
Figure 13: Total international visitors to the United States
The number of international visitors decreased sharply from 51,238,000 in 2000
to 46,927,000 in 2001 and to 43,581,000 in 2001. Evenly, it still decreased
down to 41,218,000 visitors in 2003. This big decline was the impacts of not
only the 9/11 attack but also of SARS. Also because of this epidemic, the
number of international visitors to Vietnam declined a bit to 2,429,000 visitors
in 2003. However, after 2003, Vietnam’s tourism industry had a recovery and
continued to develop with a stable growth rate.
b. The impact of financial crisis on Vietnam’s T&T industry
After the above period, Vietnam’s tourism industry continued to develop
rapidly. Estimately, international visitors to Vietnam in December 2005 gained
308000 arrivals. Totally, international visitors in this year reached 3.467.757
arrivals, increasing 18.4% in comparison with year 2004. Next, international
visitors in 12 months of year 2006 reached 3,583,486 arrivals, 3% higher than
those in the same period of year 2005. Until to 2007 when the financial crisis
occurred, our tourism industry still maintained the rapid developing rate with
4,171,564 arrivals, 16.0% higher than those in the same period of year 2006 and
in 2008 with 4,408,000 arrivals, 0.6% higher than those in year 2007. However.
due to the result of the financial crisis, the developing rate was slow down very
dramatically in 2008.
During this time, the T&T industry still developed continuously in Vietnam.
The number of arrivals increased very quickly although the growth rate was a
bit slowdown. Directly, the financial crisis in lately 2007 did not have much
affect on the tourism industry of Vietnam. Europe and the US are the countries
that had to suffer the biggest impacts of the world financial crisis. This crisis
caused unemployment so people decided to cut down their spending on luxury
things and traveling to afford their livings and necessities. However, most of
travelers to Vietnam were from Europe and the US and as a result the growth
rate of tourism industry was down in 2008. A sharp drop in the number of
visitors from these high-income countries, such as the US and Canada, is also
causing great concern within the tourist industry because visitors from highincome markets like these countries account for 40 per cent of the total number
of foreign arrivals.
The concomitant fall in hotel room occupancy is also worrisome. Many luxury
hotels reported room occupancy rates of only 55 per cent in the first ten months
of 2008, 10-15 per cent lower than the rate recorded during the same period of
Although the global financial crisis and economic recession are regarded as the
main culprits for the decline, there were additional factors behind the drop in
overseas visitors, including natural disasters, floods, weak infrastructure, and
the low quality of guides and services provided by the hospitality sector.
c. The impact of H1N1 epidemic on Vietnam’s T&T industry
The first six months of the year 2009 have been also a tough time for the global
tourism industry in general and Vietnam’s tourism industry in particular. With
the global economic crisis and the A/H1N1 virus, foreign visitors coming to
Viet Nam dropped by 70% during May and June.
The last three months, which has seen the A/H1N1 flu virus arrive in Vietnam,
has been particularly bad, causing visitor numbers to drop even more sharply.
From 2008 to 2009, the number of arrivals has dropped from 4,408,000 to
3,814,780 (as expected). This has been a very significant decline in some recent
years since 1998.
Despite a large fall in demand, many hotel rooms have actually increased in
cost due to taxes, inflation and increases in electricity and water. Some hotels
around the country have increased their rooms to be 30 to 40% higher than
countries in the region. This is also one of some reasons leading to the drop in
the number of visitors to Vietnam.
With the situation, Vietnam’s tourism industry is finding it difficult to achieve
the target of 4.5 million foreign visitors this year. They may welcome more than
3.8 million visitors instead, a decrease of around 20% compared with last year.
In the next years, according to statistics of World Travel and Tourism council,
the number of international visitors to Vietnam will continue to decline till 2010
and after that it will get a recovery and maintain the developing rate.
To sum up, through the period from 1998 to 2009, among three main factors, it
can be said that H1N1virus and swine flu epidemic has had the biggest negative
impact on Vietnam’s T&T industry. In the next months, the impact may
become heavier and heavier because at present the cases of H1N1 virus have
continued to increased every day.
3.3Solutions to the problems
Recently, in spite of being impacted by negative above factors, tourism industry
in Vietnam still develops gradually. The number of visitors to Vietnam has been
improved due to one of the main reasons is that in 2008 Vietnam held Miss
Universe 2008. This event attracted many travelers coming to Vietnam. This
also helped to minimize the negative impacts of crisis on the tourism industry.
However, recently due to impacts of both financial crisis and A/H1N1 virus, the
number of visitors dropped sharply. So what can we do in this situation?
Vietnam’s Government and some tourism firm in Vietnam gave some following
 Broadcasting promotional campaign called “Vietnam Impressive”, with the
participation of media in and outside the country, especially in key markets;
General Department of Tourism has built a website for promotions to the
domain:; organized Famtrip and Presstrip groups for
travel companies and foreign press to Vietnam
 Establishing nine market groups, including international travel companies
and Vietnam Airlines, with the participation of some hotels, restaurants and
shops. This is the core for developing the promotion
 Creating new tourism products. This is a long-term solution, to give favored
conditions for sustainable development of Vietnam’s tourism, as a base to
attract international visitors and promote domestic tourism services such as
hotels, transport businesses and tourist companies should reduce tour prices and
provide special treatment to international visitors. The tourism industry should
promote and advertise destinations to neighboring countries, namely Thailand,
Singapore, China and Korea
 More types of insurance:
According to some travel companies, athough it's the high time of tourism the
number of tourists to foreign countries reduced significantly due to the swine
flu A (H1N1). Many have cancelled or changed their tours. The increase of
insurance and A(H1N1) insurance by travel companies have ensured tourists in
their tours. Saigontourist has increased AIG insurance fees for outbound
tourists. Special insurances are applied for natural calamities, diseases,
accidents and baggages. Outbound tourists of Saigontourist and its agents in
Hanoi, Da Nang, Can Tho, Quang Ninh have maximum insurance of
USU$50,000/person to Europe and US$10,000/person to other places. The
insurance also includes the service of International SOS with free hot-line call
and health care of international standards. Saigontourist staff will ensure
maximum safety for tourists. In addition, A(H1N1) patients of Saigontourist
will be granted US$5,000 a person and US$100 per day in case of
For its part, Vietravel has increased its insurance fee to US$75,000/person to
European tour and US$10,000 for other countries, while local tourists are also
granted insurance of US$5,000 at maximum. Cantho tourist has bought global
tourist insurance from AAA for A (H1N1) for outbound tourists with a
maximum of US$75,000/person. With the application of such insurance
packages, the number of outbound tourists has resumed. Vietravel
representative disclosed that tours to Singapore, Malaysia, China, Thailand,
Cambodia and especially Europe have increased. Those have cancelled their
tours have resumed the tours again.
 New low cost tours:
In addition to insurances, travel companies have also introduced new promotion
tours, especially outbound tours with attractive prices, some even at half price.
Among tours to the countries in the region, “Sale trade fair 2009” in Thailand is
the most attractive tour. Saigontourist has introduced a shopping and golf tour
in Thailand with US$225-345/person as well as Vietravel with a 6-day tour in
Thailand at VND2.8-4.4 million/person. Travel companies have also developed
promotion tours to Singapore, Bali, Malaysia, Cambodia, Hong Kong.
Saigontourist has launched super-saving Iko travel to Phu Quoc, Tuy Hoa, Ha
Long, Nha Trang with good services at 4-5 star hotels and resorts and special
savings for families. In Phu Quoc, for example, the savings are up to
VND300,000-550,000 per family. For its part, Vietravel has increased tours to
both Nha Trang, Phan Thiet, Phu Quoc in the South and Hanoi, Ha Long, Ninh
Binh in the North with savings of VND2 million/person.
Chapter IV:
Conclusion and Recommendation
Although having a relatively short history, the Travel and Tourism industry has
shown a vigorous ability to grow, and it has been playing an important role in
the economy of countries all around the world. In fact, the Tourism industry
each year contribute an average of about 10% to the total global GDP and more
than 200 million jobs to global employment. There are now countries such as
Switzerland that generates most of its income from Tourism. However, it is true
that the Travel and Tourism industry is facing a period of challenges, from the
financial crisis and credit crunch that cause the sharp drop in tourism capital
investment to the swine flu pandemic that swindles greatly the number of
tourists. The new wave of terrorism and the unstable political environment in
recent years are also factors that have harmfully affected the Tourism industry.
In order to tackle the crises, many governments have issued policies and put in
action strategies and projects to stimulate the indigenous Tourism market.
These strategies range from developing local tourism to issuing nation-wide
policies to attract tourists both in the country and abroad. While most of these
strategies have given some initial benefits, they have their own drawbacks so
that the governments would have to consider carefully before putting these
projects into action.
Taking these matters in mind, we would like to propose that one solution for the
governments to overcome the current crises would be to work together to
strengthen the cooperation and solidarity between the countries. By establishing
regional organizations with the aim of each organization being developing that
region’s Travel and Tourism industry, the countries in that region would be able
to more effectively stimulate both inbound and outbound Tourism, as well as
having coordinated plans to overcome any challenges they may have encounter.