ASEAN Nations Compete to Win Chinese Tourists as Vietnam Overtakes Thailand, Boosting Regional Tourism Growth: Here’s More To Know

Southeast Asia’s tourism landscape is undergoing rapid transition as countries from Vietnam, Thailand, and Malaysia all the way to Sri Lanka and Cambodia intensely compete for Chinese tourists’ attention. Chinese tourism slowly returning into form post-pandemic and being the primary force behind nations’ economy, stakes are higher than ever before. This competition has ushered in a string of tourism strategies as countries unveil massive campaigns, increase air connectivity, and offer visa-free or simplified visa entry as they compete in luring the lucrative Chinese tourist market.

In what was hailed as a dramatic about-turn, Vietnam beat Thailand in Chinese visitor numbers for the first time in early 2025, in what was seen as a turning point in the region’s tourism industry. Figures recently reported by Vietnam’s National Administration of Tourism (VNAT) indicate that 1.6 million Chinese holidaymakers had visited Vietnam during the first quarter of 2025, but only 1.3 million had come in the same period in Thailand. This is a significant about-turn, as in 2024 Thailand had hosted almost twice as many Chinese tourists as had Vietnam.

This sudden drop in Chinese tourists into Thailand, triggered by safety concerns following the highly publicized kidnappings of Chinese TV actress Xing Xing in January, has accelerated this shift. At the same time, Vietnam’s tourism diplomacy, comparative affordability, and convenient geographic location have seen it gain popularity with Chinese tourists seeking culture as much as sunshine and beaches.

The Changing Tide of Chinese Tourism in Southeast Asia

The battle for Chinese tourists is not only about numbers but also about the quality of the experience offered. Thailand has long been a favorite among Chinese tourists due to its vibrant nightlife, beautiful beaches, and a reputation for hospitality. However, several factors have worked against Thailand in recent years, most notably the decline in visitor numbers linked to safety concerns, especially the kidnapping case that shook the Chinese community.

In contrast, Vietnam has been rapidly gaining ground, capitalizing on its geographical proximity, affordability, and a streamlined approach to tourism promotion. The shift in preferences can also be attributed to broader regional changes, including a greater focus on digital innovation and simplified travel processes. Vietnam’s government has invested heavily in both promoting the country’s rich cultural heritage and its natural beauty, such as pristine beaches and mountainous landscapes, which appeal to the growing number of Chinese tourists seeking both relaxation and adventure.

Another important factor in Vietnam’s rise is the mutual visa-free travel agreement between China and Vietnam, allowing greater ease of movement between the two countries. The establishment of a cross-border QR code payment system to facilitate financial transactions has also made it easier for Chinese tourists to spend money while in Vietnam, further cementing the country as a favorable destination.

Vietnam’s Strategy: “Tourism Diplomacy” and Aggressive Marketing

Vietnam’s tourism authorities have implemented an aggressive “tourism diplomacy” strategy that has proven successful in attracting Chinese visitors. One of the key components of this strategy is an extensive promotional campaign launched in China, coupled with direct flights to popular tourist destinations such as Hanoi, Ho Chi Minh City, and Da Nang. For instance, VietJet, a Vietnamese low-cost airline, inaugurated its new route between Ho Chi Minh City and Xi’an in late April 2025, providing greater connectivity between the two nations.

The government’s promotional campaigns, which emphasize Vietnam’s affordability, natural beauty, and rich history, have resonated with Chinese travelers, especially in light of the domestic economic slowdown in China. As more Chinese citizens opt for more affordable international holidays, Vietnam’s relatively lower travel costs have given it an edge over its competitors, including Thailand.

The ability to cater to both budget-conscious and luxury tourists has also played a pivotal role in Vietnam’s tourism resurgence. For example, Pham Ha, CEO of Lux Group, a luxury cruise provider, stated that Vietnam’s appeal to high-spending Chinese tourists lies in the country’s luxury offerings, including high-end shopping, world-class cuisine, and five-star hotel experiences. As a result, Vietnam is positioning itself as not only a budget-friendly destination but also a premium one for wealthy travelers seeking luxury and exclusivity.

Thailand’s Struggles to Regain Chinese Tourists

Despite Thailand’s efforts to recover from the challenges of 2024, including offering visa-free entry for Chinese tourists and launching promotional campaigns, the kingdom has faced a significant drop in Chinese arrivals. The decline of 24% in year-on-year arrivals during the first quarter of 2025 is a direct reflection of the growing competition from neighboring countries like Vietnam, Malaysia, and even Indonesia.

The Thai government has acknowledged these struggles and is actively working to recover its market share by focusing on safety, implementing stricter tourism regulations, and enhancing the travel experience. Thailand’s Tourism Authority (TAT) has ramped up marketing efforts, particularly in second-tier Chinese cities, but analysts warn that unless safety concerns are fully addressed, Thailand may continue to lose ground to its more nimble neighbors.

Moreover, Thailand faces the challenge of differentiating itself from Vietnam’s offerings, especially since Vietnam is positioning itself as a more affordable and equally attractive option. While Thailand remains a strong competitor, it will need to innovate its approach to regain its status as the go-to destination for Chinese travelers in Southeast Asia.

Malaysia’s Growing Efforts to Attract Chinese Tourists

Malaysia has also made significant strides in attracting Chinese visitors, especially through increased air links and campaigns targeting both affluent and budget-conscious travelers. Malaysia, like Vietnam, has focused on improving its visa facilitation and has worked to enhance its air connectivity, ensuring that cities like Kuala Lumpur, Penang, and Langkawi remain easily accessible to Chinese tourists.

The Malaysian government has actively worked to develop niche tourism markets, such as eco-tourism, shopping, and cultural tourism, to differentiate itself from other regional competitors. Malaysia’s mix of modernity and cultural diversity appeals to a broad range of Chinese tourists, and with strengthened relations between China and Malaysia, the country has become an attractive option for Chinese travelers.

While Malaysia is still lagging behind Vietnam and Thailand in total Chinese tourist arrivals, its focused efforts and strategic positioning could see it become a more prominent player in the ASEAN tourism battle in the coming years.

The Long-Term Impact on ASEAN Tourism

There will be greater competition for Chinese tourists as ASEAN countries will be investing increasingly in their tourism sectors. There will be greater reliance on Chinese tourism as it will spur further innovation, better services, and greater connectivity throughout the region. Countries will be forced to diversify their tourism products and cater to various groups of travelers in order to ensure long-term sustainability.

Vietnam’s successes are a favorable omen that the ASEAN nations are falling into line with the shift in preferences of Chinese tourists and are aware of the necessity for both luxury and economy options. Thailand, Malaysia, and others will do likewise and will make safety features, innovation, and special promotional drives priorities in anticipation of recovering and expanding their market share in the Chinese tourist market.

With ASEAN states competing for Chinese tourists, the ultimate effect will be a very diversified and highly competitive region-wide tourism market that will be favorable for travelers as they will have greater options, better services, and wider access to exotic and unusual attractions.

References:
Vietnam National Administration of Tourism, Tourism Authority of Thailand, Malaysian Ministry of Tourism, VietJet, Lux Group

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