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Will Vietnam Emerge as a Major Competitor to Indonesia for the Lucrative Australian Holiday Market

Did you know that Indonesia has been the preferred holiday destination for Australian travelers in Southeast Asia since 2008-09, surpassing Thailand? However, recent trends indicate that Vietnam is poised to become a formidable competitor for the lucrative Australian holiday market, particularly in terms of new hotel and resort construction.

Wtaer puppet show in Vietnam ( Media from WiX )
Wtaer puppet show in Vietnam ( Media from WiX )

In 2019, Indonesia held the distinction of being Australia's third-largest departure market for all purposes of travel. Moreover, it has consistently ranked as the top choice for Australian holidaymakers in Southeast Asia. This trend is expected to continue for the next five years, even as Indonesia's overall travel ranking is projected to drop to sixth place in 2023.

Over the past decade, the number of Australian holiday trips to Indonesia has experienced significant growth, increasing from 442,000 in 2009-10 to 788,000 in 2019-20. This translates to a Compound Annual Growth Rate (CAGR) of 6%. In contrast, Thailand witnessed a decline in Australian holiday trips during the same period, dropping from 307,000 to 273,000, with a negative CAGR of -1.2%.

However, Vietnam has been making strides in attracting Australian tourists, particularly through the development of new hotels and resorts. This suggests a shift in preferences among holidaymakers, as Vietnam's tourism infrastructure expands to meet the growing demand for quality accommodations. With its diverse landscapes, rich culture, and affordable offerings, Vietnam presents an appealing alternative to Indonesia for Australian travelers seeking exciting holiday experiences.

As Vietnam continues to invest in its tourism industry, it may soon present a significant challenge to Indonesia's dominance in the Australian holiday market. Travelers looking for new adventures and unique experiences may increasingly turn to Vietnam as their destination of choice within Southeast Asia.

Whether this emerging competition between Indonesia and Vietnam will impact the preferences of Australian holidaymakers remains to be seen. Nonetheless, the growth and development of Vietnam's tourism sector highlight the dynamic nature of the Australian outbound holiday market and the evolving tastes and preferences of travelers.


About Writer

Ross Woods is a seasoned hotel investment advisor with over 30 years of global experience in hotel asset management, portfolio management, and hotel advisory services. Known for his collaborative-based consulting style that integrates a high level of strategic and analytical expertise, his “smarts” are sought by clients to solve complex issues, make better decisions and realize the highest risk-adjusted investment returns. His clients include banks, private investors, REITs and hotel management companies in the United States, South East Asia, Australasia, Europe, and Dubai.



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