Vietnam Wellness Tourism: Opportunities for Foreign Investors
The wellness tourism industry in Vietnam offers several untapped opportunities for foreign businesses in the hospitality, healthcare, and wellness domains. Vietnam is abundant in natural landscapes that provide attractive destinations for tourists seeking holistic experiences that cater to their mind, body, and spirit. We discuss the opportunities in this space, government support, and challenges faced by the tourism industry in Vietnam.
In today’s fast-paced world, people are increasingly confronted with stress, environmental changes, and rising epidemics, prompting them to take a proactive approach to caring for their physical and mental well-being. Consequently, traveling has undergone a significant transformation, extending beyond simple exploration. Specifically, wellness tourism has emerged as a notable niche within the tourism industry. In Vietnam, this industry holds tremendous potential, offering opportunities for individuals seeking holistic experiences that cater to their mind, body, and spirit.
What is wellness tourism?
Unlike medical tourism, which focuses on specific treatments and procedures conducted by healthcare professionals, wellness tourism offers a diverse range of activities and experiences designed to promote overall well-being.
From serene meditation retreats to spa treatments, from invigorating yoga getaways to immersive wellness-focused resorts, this emerging industry integrates relaxation, stress reduction, and self-care practices. Wellness tourism provides an enticing avenue for individuals to prioritize their well-being while indulging in the pleasures of travel.
The untapped potential of wellness tourism in Vietnam
Natural and cultural resources
With its breathtaking 3200 km coastline and sprawling forests, Vietnam boasts an extraordinary landscape that captivates the senses. But it’s not just the natural beauty that sets Vietnam apart. The country’s rich cultural heritage, steeped in traditions and customs that span thousands of years, adds an intriguing layer to its allure. With 8 UNESCO-recognized world heritage sites and countless other renowned landscapes, Vietnam is a treasure trove of exploration.
For its natural and cultural resources, Vietnam ranks 24th and 25th respectively worldwide according to the World Economic Forum’s (WEF) Travel & Tourism Development Index 2021. These remarkable attributes make Vietnam an ideal destination for wellness tourism, offering a place where visitors can reconnect with nature and find solace.
According to World Health Organization (WHO) data from 2019, a staggering 13 percent of the global population was affected by mental health disorders. Vietnam mirrored this trend, with Deputy Minister of Health Tran Van Thuan highlighting on World Mental Health Day 2022 that 14.9 percent of the country’s population is impacted by such disorders.
During and after the pandemic, this situation was further exacerbated as individuals faced the challenges of social distancing, isolation, and the need to adapt to a rapidly changing world. The toll of these circumstances highlights the growing need to achieve a balance between physical and mental well-being.
Vietnam’s position as a destination for wellness tourism is further enhanced by its remarkable price competitiveness. Renowned international luxury and lifestyle travel magazine, Condé Nast Traveler (CNT), recognized Vietnam as one of the top cheap places to visit in the world in 2023. Moreover, Vietnam’s exceptional price competitiveness is not limited to this recognition alone. In fact, the country holds an impressive standing in the Travel & Tourism Development Index, ranking 15th worldwide in terms of price competitiveness.
The allure of the price advantage acts as a magnetic force, drawing in both domestic and international tourists who seek affordable health-focused travel experiences without burdening their budget.
Growing wellness services
The growing demand for wellness tourism in Vietnam has spurred the expansion of services aimed at enhancing both physical and mental health.
Michelle Ford, the founder and CEO of Luminary Wellness, has recognized this trend.
“Many investors in the hospitality industry in Vietnam can see the potential of wellness tourism and they are investing in more products and services for this trend to adapt to the market,” she told The Investor.
This surge in investment has led to the establishment of state-of-the-art spa and wellness facilities in recent years.
An example of this is Six Senses Con Dao, which offers an array of spa treatments and meditation practices inspired by traditional Vietnamese methods, and carefully curated wellness programs to provide tourists with mental relaxation. Moreover, Vietnam’s abundant and diverse natural mineral water resources have opened the door to additional services, such as hot springs and bathing therapy, which are now being offered in resorts like Alba Wellness Valley by Fusion.
Challenges facing wellness tourism in Vietnam
Wellness economy size, rankings
|Country||US$ billion (2019)||Rank (2019)||US$ billion (2020)||Rank (2020)|
Source: Global Wellness Institute
In 2020, Vietnam was 33rd in terms of the size of its wellness economy, as reported by the Global Wellness Institute (GWI). While this indicates some progress in the country’s wellness industry, Vietnam’s presence remains relatively modest compared to its counterparts in Southeast Asia. This suggests potential weaknesses, including factors such as competition from other markets, regulations, and the quality of labor within the wellness sector and the tourism industry more broadly.
Competition from neighboring markets
Given the aforementioned landscape, it is evident that Vietnam faces substantial competition from neighboring countries in the region when it comes to developing its wellness tourism market. Notably, Thailand and Malaysia have emerged as prominent players in the wellness tourism sector, ranking 15th and 17th, respectively, in the list of the Top 20 Wellness Tourism destinations, published by GWI in 2021. These countries have successfully leveraged their abundant natural resources and cultural heritage to attract tourists seeking wellness-related activities and experiences.
Consequently, competition in the Southeast Asian market itself is already significant, necessitating the development and implementation of more effective strategies to attract visitors in line with Vietnam’s potential.
Despite the growing number of workers in Vietnam’s tourism industry, there remains a significant shortage of human resources, particularly in specialized fields. According to data from 2019 the General Department of Tourism, the Vietnam tourism industry requires nearly 40,000 additional workers annually, while the number of students and graduates with specialized training is only around 15,000 per year. This would have been significantly impacted by the drop in tourist numbers during COVID-19. As things stand, the majority of human capital in the tourism industry possess intermediate, or short-term training levels, indicating a scarcity of highly qualified labor. With Vietnam’s economy recovering, this skills shortage will limit growth prospects in the wellness sector.
That in turn would create the risk of unregulated establishments, methods, and practices being utilized by individuals with limited professional qualifications or without adequate verification of their efficacy. This situation raises concerns as it can significantly impact the overall visitor experience and shape the perception of Vietnam as a trustworthy wellness destination.
Opportunities for foreign investors
Despite the widespread effects of the pandemic, the global wellness tourism market still reached US$476.1 billion in 2022 and is expected to grow to US$1.02 trillion in 2030, according to Statista. These figures underscore the immense potential and future prospects of the industry.
As a result, while challenges persist, the wellness tourism sector still presents compelling opportunities. This is particularly evident in Vietnam, where the market is largely untapped.
Some potential destinations for wellness tourism
Phu Quoc Island
Phu Quoc is a naturally stunning island endowed with breathtaking scenery and a diverse marine ecosystem. This is also home to Phu Quoc National Park, a UNESCO-recognized World Biosphere Reserve, which plays a crucial role in the preservation of rare and precious species.
Given its potential, the development of Phu Quoc as a special economic zone is a priority for Kien Giang province, and this has led to the implementation of various favorable policies.
According to Official Dispatch 4271/TCT-CS from the General Department of Taxation, investment projects on Phu Quoc Island enjoy a corporate income tax rate of 10 percent throughout the project’s duration. This, along with other advantageous terms, incentivizes both domestic and foreign investments.
Furthermore, Phu Quoc has also witnessed substantial investments in infrastructure upgrades, with billions of Vietnamese dong dedicated to these improvements. Notably, the An Thoi seaport has been enhanced to accommodate international trade, facilitating the passage of goods from 500,000 to 700,000 tons annually and serving around 360,000 passengers each year.
These factors bolster Phu Quoc’s potential as an investment destination and support its growth as a thriving hub for wellness tourism.
Lao Cai has natural landscapes, such as the majestic Fansipan mountain peak and an abundance of golden rice terraces.
Notably, in 2023, CNT Travel magazine selected Sapa town in the Hoàng Liên Son Mountains of Lao Cai province as among the 50 most beautiful small towns in the world. Beyond its natural beauty, Lao Cai is also home to approximately 25 ethnic minorities, contributing to its rich cultural tapestry.
Furthermore, Lao Cai is recognized as one of the eight key locations in Vietnam for the development of herbal medicine. With an impressive array of around 850 species of medicinal plants, including endangered species under conservation, the province holds significant potential for wellness tourism. Visitors can indulge in revitalizing herbal baths, experience health care practices rooted in traditional remedies, savor herbal cuisine, and engage in activities, such as yoga and meditation.
Ba Ria – Vung Tau
Ba Ria – Vung Tau province in Vietnam is a promising destination for wellness tourism, offering attractions such as the Binh Chau hot springs and the scenic Ho Tram beach.
Recognizing the untapped potential, foreign investors are active in the region. For example, there is an international collaboration between Vietnam’s Charm Group and Thailand’s Goco Hospitality Group. This project aims to create a line of upscale wellness retreats. Additionally, US franchise Best Western Hotels & Resorts, a renowned global hospitality company, will participate in managing and operating the beach apartments and villas within the project.
The rising demand for wellness experiences has created additional opportunities in various ancillary sectors. These include organic and healthy food options, products catering to yoga or meditation practices, and technology products that enhance personalized wellness vacations for customers. Therefore, investing in these supporting sectors presents profitable opportunities for investors looking to capitalize on this trend.
Numerous resorts have embraced the integration of organic products in their offerings. One notable example is The Anam Cam Ranh, which operates an organic farm that supplies its restaurants with fresh ingredients. Similarly, Meliá Ho Tram has established Willow’s Garden, a sustainable garden spanning over 2,000 square meters, catering to tourists. In addition, the resort has also partnered with US cleaning and hygiene solutions company Diversey on the “Soap for Hope” project to reduce soap waste generated by hotels.
Despite the spillover effects of the pandemic, wellness tourism is becoming more popular. Vietnam is well poised to benefit, with its diverse natural landscapes, rich cultural heritage, and rising demand for holistic well-being experiences. In this respect, foreign wellness firms and businesses engaged in supporting sectors would do well to consider expanding into this emerging market. Key areas that require foreign capital and development of expertise include wellness facilities in identified locations, specialized training, and organic products to cater to wellness, healing, and lifestyle management.
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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at email@example.com or visit us at www.dezshira.com
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