Da Nang: developing tourism into a key economic sector

The Cau Vang (Golden Bridge) on the top of Da Nang’s Sun World Ba Na Hills_Photo:baodanang.vn 

1. Introduction

In the process of implementing Resolution No. 08-NQ/TW dated January 16, 2017, by the Politburo on developing tourism into a key economic sector, Da Nang City's tourism industry has developed drastically, making important contributions to the socio-economic growth and development of the city. It also contributes to the improvement of Da Nang’s image and brand in the eyes of tourists. After a period of stagnation due to the impact of the COVID-19 pandemic, tourism in Da Nang City has gradually recovered, especially in the domestic sector, which is achieving many accomplishments.

2. Institutions for tourism development in Da Nang City

After the Politburo’s Resolution No. 08, the Government issued Resolution No. 103/NQ-CP dated October 6, 2017, on the Government's Action Program to implement Resolution No. 08 of the Politburo. Resolution No. 103 covered many aspects and established the institutional framework to truly make Vietnam's tourism industry a key economic sector. Politburo Resolution No. 43-NQ/TW dated January 24, 2019, on building and developing Da Nang City until 2030, with the vision to 2045, identified tourism as one of the five key economic sectors of the city.

Based on these foundations, the City Party Committee, People's Council, and People's Committee of Da Nang City have specified many guiding documents for the city's tourism industry, including:

(i) Action Plan No. 10652/KH-UBND dated December 30, 2017, by the City People's Committee on implementing Resolution No. 08; Decision No. 1679/QD-UBND dated April 17, 2019, by the City People's Committee on approving the Project to develop Da Nang City's tourism industry until 2025, with a vision to 2030; Decision No. 190/QD-UBND dated January 17, 2020, by the City People's Committee approving the Project for the development of theaccommodation system in Da Nang City for the period of 2020 - 2030;

(ii) Program No. 38-CTr/TU dated January 31, 2020, by the Da Nang City’s Party Committee on implementing the thematic plan "Focusing on developing tourism and high-quality services associated with resort real estate; making Da Nang become the leading tourism and service destination at the regional level; a city for events, and the international conference center"; Program No. 45-CTr/TU dated February 25, 2020, by the Da Nang City Party Committee on implementing the thematic plan "Building and implementing training programs, developing high-quality human resources to meet development requirements, focusing on key areas of the city";

(iii) Plan No. 2984/KH-UBND dated May 7, 2020, by the City People's Committee on implementing the thematic plan "Focusing on developing high-quality tourism and services associated with resort real estate; making Da Nang into the leading tourism and service destination at the regional level, a city for events, and the international conference center"; Decision No. 3613/QD-UBND dated September 28, 2020, by the City People's Committee on promulgating the Project to develop night-time economic activities in Da Nang City; Decision No. 3860/QD-UBND dated October 13, 2020, by the City People's Committee approving the Project to restructure Da Nang's tourism industry until 2025, with a vision to 2030; Plan No. 7513/KH-UBND dated November 16, 2020, by the City People's Committee on Da Nang tourism development in the period 2021-2025; Decision No. 1726/QD-UBND dated October 19, 2022, by the People's Committee of Da Nang City on promulgating the Project for the development orientation of tourismin Da Nang City until 2030, vision to 2045.

With a system of guiding, directing, managing, and administrative documents fromtheDa Nang City, the institutional system to develop Da Nang City’s tourism as a key economic sector is relatively complete. These legal bases provide great support for the outstanding development of the tourism industry in Da Nang City in comparison with some other cities and provinces in the region; creating a stable and confident enviroment for investors that intend to develop tourism services in the city.

3. Current status of Da Nang City’s tourism development during the period of 2017 - 2030

Contributions to local economic growth

According to data from the Da Nang City Statistics Department, tourism in Da Nang City, during the period of 2017 - 2023 has made a relatively high contribution to the city's GRDP. Excluing the two years of the COVID-19 pandemic (2021 and 2022), the tourism industry’s annual contribution to the city’s GRDP was 10.6% per year (meeting the criteria to be classified as a key industry); For the whole period of 2017 - 2023, it contributed about 9.83%/year to the city’s GRDP (which does not met the criteria to be classified as a key industry)⁽¹⁾.

Suitability with local potentials and advantages

Da Nang is a region with diverse and rich resources that are of high value for tourism development. The city's cultural heritage is abundant and has been recognized to include 2 special national monuments, 17 national monuments, 65 city-level relics, and 6 intangible cultural heritages in the national intangible cultural heritage list⁽²⁾; 6 national treasures⁽³⁾. Many of the above mentioned sites are tourism resources that have been effectively exploited.

Growth rate of tourist numbers

The average number of tourists from 2017 to  2023 was 5.01 million visitors/year, of which international tourists were 1.98 million/year and domestic tourists were 3.03 million/year. The average number of tourists during this period is high compared to the numbers from the 2010 - 2016 period (3.43 million/year). The growth rate of tourist arrivals in the period of 2017 - 2023 averaged 4.28%/year. Excluding the COVID-19 pandemic period from 2021 and 2022, the average growth rate would be around 7.62%/year. Thus, in terms of tourist growth criteria, the period 2017 - 2023 has not yet met the criteria to be considered a key economic sector.

Quantity and quality of labor in the tourism industry

Da Nang City is a vibrant locality in the field of tourism services and this industry has created a large number of jobs for local workers. After implementing several measures following Resolution No. 08 by the Politburo, the proportion of jobs created by tourism continuously increased from 6.97% (2017) to 8.68% (2019) before decreasing due to the impact of COVID-19 pamdemic⁽⁴⁾.

After the pandemic was under control, regional and global economies reopened, domestic travel restrictions were lifted, and the demand for tourism services in Da Nang City strongly recovered. The City People's Committee has led and oriented relevant local government agencies to implement and apply numerous tourism recovery programs, initially achieving good results. The proportion of employment in the sector nearly returnedto pre-pandemic levels. In 2023, the employment rate in the tourism sector was 7.63%.

From 2017 to 2023, improving the quality of labor resources was crucial for the sustainable development of the sector and played a particularly important role in making tourism a a key economic sector. Annually, the Department of Tourism issued plans to improve the quality and quantity of tour guides with focused themes, aiming towards major local events. These efforts demonstrate the interest and determination of city leaders to improve the quality and quantity of human resources so that tourism can truly become a local key economic sector as per the orientation of Resolution No. 08 of the Politburo.

Average tourists expenditure

The average expenditure of tourists⁽⁵⁾ during the period of 2017 - 2023 is 3.5 million VND/trip/tourist. This spending level is higher than during the period 2013 - 2016, which was 2.68 million VND/visit/tourist. During the peak of the COVID-19 pandemic, tourist spending in Da Nang City decreased by half compared to the peak of 5.23 million VND/visit/visitor in 2019. The average spending of tourists in 2023 increased, which is equivalent to 72% of the 2019 level.

Tourist satisfaction levels

Surveys on the satisfaction level of visitors to Da Nang conducted on a biennial basis. The results of the 2017 and 2019 surveys showed many positive points. With a scale ranging from 1 to 5, corresponding to an assessment from dissatisfied to satisfied (3 is the neutral midpoint), the survey collects data on 5 basic types of services: accommodation, meals, transportation, shopping service, entertainment service, and other services. The average rate of tourists responding was high. In 2017 and 2019, these rates were 85.2% and 88.4% with average scores of 4.11 points and 4.23 points respectively. In 2023, the City Tourism Promotion Center published a report on the attractiveness of Da Nang’s destinations, showing that the highest rated satisfaction index was for accommodation facilities (5.76 points) and the lowest was for food and beverage service (5.08 points).

Although the surveys were conducted using different methods and by different organizations making comparisons difficult, the general finding shows that tourists are basically satisfied with the quality of services provided in Da Nang. The 2023 survey shows that there are still many aspects that tourism in Da Nang must address to truly become a key economic sector of the locality.

Tourist satisfaction with the Da Nang as a destination is demonstrated through world-prestigious titles and awards such as, Asia's Leading Festival and Event Destination in 2016(World Tourism Organization), Top 10 leading cities for meetings in Asia in 2017 (Smart Travel Asia Magazine), Top trends in destination choice in 2018 (booking site Airbnb), ranked 15^th in the Top 52 destinations in 2019 (New York Times Magazine), ranked 1^st  in the Top 10 global destinations in 2020 (announced by Google), Top 25 most popular destinations in Asia, and Top 25 most beautiful beaches in Asia in 2021 (TripAdvisor), etc.

In 2023, Da Nang continued to win many world tourism titles and awards, such as The Top 11 best destinations in Asia in 2023 (CnTraveller Travel Magazine, USA), The most searched domestic destination by Vietnamese tourists in the summer (Booking.com statistics), Ideal Destination for businesses to organize MICE activities (Micenet, Australia), Ariyana International Convention Palace was awarded the Best International Convention Palace in Vietnam (World Luxury Awards, 2023), Sun World - Ba Na Hills continues to be honored as "Asia's Leading Theme Park 2023", and many other titles.

Evaluation of tourism development during the period 2017 - 2023

Firstly, the focused leadership of the City Party Committee, People's Committee of Da Nang City, local governmental agencies, the tourism business community, and local residents have created momentum for the revitalization of the city's tourism sector.

Second, residents' awareness of the importance of tourism has undergone positive changes. Numerous tourism programs and events have become more vibrant than ever. The total number of domestic and international tourist arrivals in 2023 far exceeds the annual plan targets.

Third, tourism products and services have improved, diversified, and enhanced in quality to better meet the needs of tourists. Many tourist destinations have invested in, upgraded facilities, and applied modern technology to ameliorate the interaction with tourists. The technical infrastructure for tourism services has been significantly improved.

Fourth, the city has allocated abundant resources, and encouraging the participation of businesses in providing and serving festive events as a unique new tourism product; vigorously directed to remove difficulties and obstacles to support the rapid progress of investment in key tourism projects.

Despite these achievedments, there are still some shortcomings and limitations that need to be addressed.

First,although effort has been made to remove obstacles for key projects, projects that auspiciously create new impetus for tourism have not yet been truly started; the formation and development of new types and activities for tourism is slow. Some water-based entertainment and recreation products have not developed to commensurate with the city's potential and advantages.

Second, the infrastructure to support tourism development has not been significantly improved, stops to serve inland waterway tourists have not been implemented on schedule, some routes to tourist destinations have not been upgraded, and projects to design new tourist destinations are slowl to be implemented.

Third, many tourism businesses have difficulties recruiting qualified employees; Simultaneously, the high-quality labor force of Da Nang's tourist sector has not recovered after the COVID-19 pandemic as they have swithced jobs or moved to other localities.

Fourth,the issue of waste discharge causing environmental pollution has not been resolved decisively; the phenomenon of soliciting tourists on some routes occurs frequently.

Fifth, there is no particular mechanism or policy to encourage the healthy development of nighttime tourism activities and products.

Causes of the above limitations

Da Nang does not have specific mechanisms and policies for tourism development. In fact, the system of legal regulations related to tourism activities is inadequate and has not kept up with the rapid development of tourism.

Many procedures and regulations have not been adjusted or amended. As a result, the time for examining and approving investment principle approvals for off-budget investment projects is prolonged, especially for large projects.

Digital transformation in tourism activities and local governmental management has not kept up with the industry's development process.

Infrastructure for tourism development is not consistent and synchronous.

4. Solutions for tourism development in Da Nang City in the coming period

Firstly, in the absence of a specific mechanism to develop tourism, Da Nang City needs to focus on prioritizing the development of tourism products and night-time services that are symbolic of the city. At the same time, the city should accelerate the progress of ameliorating the system of technical facilities to ensure uniformity, inclusiveness, and breakthrough.

Secondly,amending and adjusting administrative procedures for tourism development investment projects is beyond the authority of the city government, so to overcome this type of limitations, Da Nang should:

(i) Maximize the advantages and resources of relative industries and sectors to increase the value of tourism products, meeting the needs of development and integration; Implementing the goal of Resolution 08-NQ/TW to truly make tourism a key economic sector, a driving force to promote the development of the economy and to improve socio-economic and environmental efficiency.

(ii) Innovate inter-sectoral coordination activities in the value chain of tourism products; gradually forming a regional coordination mechanism for tourism development, meeting the requirements of tourism development cooperation.

(iii) Promote the development of creative tourism products based on the values of other industries and fields to develop thematic tourism products.

(iv)Concentrated and targeted investment to create a boost and spillover for tourism development with neighboring localities.

Thirdly, innovate methods and measures of domestic and foreign tourism promotion in a focused, professional, and effective manner; Strengthen the application of modern technology, especially in providing information, communication, and tourism promotion for foreign visitors.

Strongly innovate methods of thinking and social management based on learning from domestic and foreign experiences to develop night-time economic activities that comprehend market principles, while effectively handling risks, and negative consequences from night-time economic activities.

Businesses proactively link and connect with domestic and foreign partners to seek tourist sources and develop new products and services; Learn to design policies on refunds, cancellations, and tourist support policies in case of unfortunate medical incidents.

Fourthly,create a center for night-time economy and high-end tourism services includingfestivals and events, special art performances, duty-free shopping for high-end brands, and a cuisine center. The core attraction is the cultural and entertainment park located southeast of the Memorial, the international fireworks festival complex, the walking street along Han River, the Light River project, the International commercial and entertainment center, etc.

Exploit and develop inland waterway tourism (marina); Orient a network of water sports and entertainment activities on the Han River (from Thuan Phuoc bridge to Tien Son bridge); and invest in piers and boat wharfs connected to destinations.

Orient to form a non-tariff commercial urban area at the end of Hoang Van Thai Street.

Invest in developing high-end tourism service areas with resort and entertainment ecosystems, health care tourism destinations (beauty clinics, resorts, nursing homes,...); Organize tourism activities combined with conferences, seminars, events, and exhibitions integrated with nature; Focus on the cluster of eco-tourism resorts and high-end resort real estate with views towards the western mountains along Ba Na - Suoi Mo road.

Fifthly, Son Tra Peninsula is oriented as a high-end, super-luxury ecological resort center and spiritual destination to exploit cultural and historical relics and characteristics of the sea - mountains - forests. Son Tra Peninsula is the heart, the green lung of Da Nang City. Therefore, tourism activities here need to be strictly controlled in scale and type; ensuring balance between biodiversity conservation, sustainable development to protect natural landscapes, ecological environment, and ensure national defense and security.

Invest in high-quality eco-tourism areas associated with the western mountain and forest ecosystem, including large-scale eco-tourism complexes combining relaxation, entertainment, and high-end health care; ecotourism combining experiential activities and adventure sports in some areas such as Luong stream, Khe Mun, Gieng Troi (Hoa Bac)...; Ecotourism combines sightseeing, culture and history learning at the top of Hai Van Pass (Hai Van Quan relic), Khe Ram, Nam Song Bac, Co Tu ethnic village in Ta Lang - Truong Bi (Hoa Vang)... Develop tourism along the southern bypass route of Hai Van Tunnel and the sea-view route along the slopes of Hai Van Quan Mountain with an orientation to build unique, characteristic architectural works at the mountainside with beautiful sea views.

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Received: April 8, 2024; Revised: April 19, 2024; Approved for publication: May 2, 2024.

1. According to the orientation stated in Resolution No. 08, tourism is expected to contribute over 10% of the GDP. Therefore, if it is a determining criterion, Da Nang City's tourism must contribute at least 10% to the city's GRDP.

2. Traditional handicrafts of Non Nuoc Stone, Tuong Performance Art of Quang, Bai Choi Art in Da Nang, Cau Ngu Festival in Da Nang, Nam O Fish Sauce Making Profession, Avalokiteśvara Ngu Hanh Son Festival.

3. Statue of Bodhisattva Tara, My Son E1 Altar, Tra Kieu Altar, Ganesha and Gajasimha Statue, Dong Duong Altar.

4. In 2016, the proportion of jobs in the tourism sector in Da Nang City is only 4.84%.

5. In the article, the authors use an approximate extrapolation method with the assumption that the average spending level of one tourist is calculated as Total revenue from tourism/ Total number of tourists.