Vietnam’s tourism industry is entering a more competitive phase as global hotel operators expand aggressively into a market projected to reach US$38 billion, increasing pressure on airports, infrastructure, and hospitality standards.

According to Michael Piro, Co-Chief Executive Officer of Indochina Capital Corporation, tourism growth is being driven by liberalised visa policies, political stability, and rising investment in tourism infrastructure.

Piro said easier visa access and expanded flight routes have helped increase international arrivals, but warned infrastructure capacity is struggling to keep pace with demand.

“We're already seeing some bottlenecks in certain airports,” Piro said. “For the next wave to develop, we're really going to need to focus on continued infrastructure growth.”

The discussion highlighted how Vietnam’s reputation as a politically stable and safe destination has strengthened its appeal amid global uncertainty. Major investments in bridges, golf courses, festivals, hotels, and sporting events are also reshaping the tourism sector.

“So collectively, the tourism community, the government, and the private sector have come together to really put together quite a fantastic combination of events and infrastructure,” Piro said.

Despite rising international tourism, Piro said Vietnam’s domestic market remains a major stabilising factor. The country’s population of 100 million and expanding middle class continue supporting local travel demand.

“This year we're expected to reach about 25 million international arrivals,” Piro said.

Still, Vietnam faces concentration risks. China and Korea account for more than half of inbound visitors, leaving the sector vulnerable to disruptions in regional travel demand, fuel prices, and airline capacity.

The discussion also examined how Vietnam can shift away from low-margin mass tourism towards higher-value hospitality.

According to Piro, around 75% to 80% of hotel supply remains independent or family-owned, increasing demand for international branding, service consistency, and operational standards.

“What international operators can bring in terms of quality assurance for guests” is becoming increasingly important, Piro said.

Piro said Vietnam’s next tourism phase will depend on whether infrastructure expansion and hospitality standards can keep pace with surging visitor demand without turning the country into a purely mass-market destination.