The process of integration into the ASEAN Free Trade Area (AFTA) and the World Trade Organisation (WTO) will help Vietnam quickly develop tourism industry. Reality shows that the increasing number of international tourists to the country has raised its earnings from US$2.834 billion in 2004 to US$3.07 billion in 2005.

However, in recent months, there has been a sudden drop in the number of visitors to Vietnam. For example, Vietnam welcomed around 350,000 international arrivals in January but only 274,000 visitors in June, a decrease of 74,000 - most of whom were from the French and Chinese markets. Therefore, it is not easy to attract visitors in the long run. A Thai director said frankly “I have visited Vietnam for several times and gone to some beautiful places. It is a pity that Vietnamese tourism products are still far from being compared to Thai ones. Vietnam has many beautiful sites but they have not been fully tapped”.

One of the shortcomings is that Vietnam does not have any representative office to promote tourism in foreign countries. Thailand has 17 rep. offices, the Philippines 17 and Cuba 12. Moreover, Vietnam’s market research and exploitation work is still very much in its infancy. There also remains a lack of cooperation between State agencies and business communities. The budget for tourism promotion activities is limited and improperly managed.

Hanoi's funding for tourism promotion in the 2001-05 period was VND1,250 per tourist, while HCM City’s spending on this activity was about VND2,000 per tourist. The State budget for tourism promotion activities in 2005 was VND15.6 billion.

It is important to exploit historical relics and areas of natural beauty, but efforts to preserve and upgrade them are not given due attention. Visitors have complained that on the beautiful beaches in Ha Long Bay, Cua Lo and Sam Son, rubbish is strewn around everywhere and that Cam Ly waterfall in Da Lat is seriously polluted.

Vietnam currently has approximately 6,000 guesthouses and hotels with more than 130,000 rooms in total. However, the number of luxury hotels, ranging from one star to five stars, account for only 17 percent, and the number of rooms in these upmarket hotels makes up 37 percent of the total rooms in service. The tourism sector also lacks professional tour guides, who are fluent in foreign languages and is not yet able to launch different recreation programmes as well as adventure and discovery tours.

Craft village tours have not been exploited effectively. The slow development of the Bac Ninh craft village project is a case in point. In 2004, the Bac Ninh Department of Trade and Tourism chose Dong Ho painting village as a site for craft village tourism development which quickly led to the opening of dozens of tours to the northern province.

However, not long after that, many tourists refused to come back there. One of the main reasons is the failure to develop craft villages in the fullest sense of tourism culture. Poor preservation of relics and environmental pollution combine to make visitors feel less interested in the area.