Hanoi (VNS/VNA) - Foreign businesses dominated the onlinetravel agency channel in Vietnam, according to The Outbox Company's Most LovedRanking, which surveyed Vietnamese travellers' preferences and awareness inQ1/2023.

The top online travel agents (OTAs) in Q1 are international brandsin the travel sector, such as Traveloka, Booking.com, Agoda, Expedia andTrip.com. There are no domestic OTAs platforms among the top choices of Vietnamesetravellers.

Traveloka has experienced tremendous growth thanks to effective campaignsduring Tet (Lunar New Year)2023, with more than 40% of travellers selecting it in Q1, which is 10% morethan the second-ranked Booking.com.

One of the main reasons domestic customers prefer foreign OTAs is that theyhave a head start of about 20 years, with extensive experience in onlinetransactions, global operations and established brand names with a solidreputation and strong financial backing.

For example, Indonesia-based Traveloka is a unicorn startup valued at 1 billionUSD or more. Booking.com is based in Amsterdam, Netherlands. Agoda isheadquartered in Singapore, and Expedia owns and operates travel fareaggregators and metadata search engines based in the US.

Trip.com is an international online travel agency based in China.
According to a report by Google and Temasek, Vietnam’s onlinetravel market is a lucrative industry that may reach 9 billion USD in scale by2025.

However, this market is dominated by foreign online travel agencies (OTAs),which account for 80% of the market share, leaving Vietnamese OTAs like Gotadi,VnTrip, Ivivu, and Chudu, respectively Mytour.vn and Vinabooking with only asmall percentage of transactions.

Vietnam’s tourism consumption trends have undergone significant changes in thepast decade due to the emergence of digital technology.

Online payment methods, such as credit and debit cards and e-wallets, havereplaced cash and are now more commonly used. Additionally, booking servicesfor airline tickets, hotels and other travel arrangements through smartphoneapplications have significantly increased. These developments have facilitatedthe growth of online travel agencies (OTAs), both foreign and domestic.

Large hotels report that 40-60% of their total revenue comes from OTA channels,primarily foreign businesses.

Since tax regulations in Vietnam do not yet bind foreign online exchanges, theyhave more financial resources to invest in marketing, advertising and offeringdiscounts to their partners, creating a significant competitive advantage.

The Private Economic Development Research Board acknowledges a tax inequalitybetween domestic tourism and travel service businesses and foreign OTAs, as thelatter do not have representative offices in Vietnam. This disadvantagesdomestic OTAs when competing with foreign OTAs on pricing.

The founder of Gotadi Ngo Minh Duc believes that Vietnam’s tourism industryneeds to build a community and product ecosystem and adopt smart policies todominate the market.

Vietnamese tourism businesses must link and transform digitally to create anecosystem of Vietnamese people with smart service providers, smart users, andsmart destinations, no longer losing at the "home field", Duc said./.