Foreign OTAs dominate Viet Nam's lucrative online travel market

Monday, May 01, 2023 14:10

Tourists in Hoi An. Foreign businesses dominate the online travel agency channel in Viet Nam. — VNA/VNS Photo

Foreign businesses dominated the online travel agency channel in Viet Nam, according to The Outbox Company's Most Loved Ranking, which surveyed Vietnamese travellers' preferences and awareness in Q1/2023.

The top online travel agents (OTAs) in Q1 are international brands in the travel sector, such as Traveloka,, Agoda, Expedia and There are no domestic OTAs platforms among the top choices of Vietnamese travellers.

Traveloka has experienced tremendous growth thanks to effective campaigns during Tet (Lunar New Year) 2023, with more than 40 per cent of travellers selecting it in Q1, which is 10 per cent more than the second-ranked

One of the main reasons domestic customers prefer foreign OTAs is that they have a head start of about 20 years, with extensive experience in online transactions, global operations and established brand names with a solid reputation and strong financial backing.

For example, Indonesia-based Traveloka is a unicorn startup valued at US$1 billion or more. is based in Amsterdam, Netherlands. Agoda is headquartered in Singapore, and Expedia owns and operates travel fare aggregators and metadata search engines based in the US. is an international online travel agency based in China.

Hard to compete

According to a report by Google and Temasek, Viet Nam's online travel market is a lucrative industry that may reach US$9 billion in scale by 2025.

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

Viet Nam's tourism consumption trends have undergone significant changes in the past decade due to the emergence of digital technology.

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

Large hotels report that 40-60 per cent of their total revenue comes from OTA channels, primarily foreign OTAs.

Since tax regulations in Viet Nam do not yet bind foreign online exchanges, they have more financial resources to invest in marketing, advertising and offering discounts to their partners, creating a significant competitive advantage.

The Private Economic Development Research Board acknowledges a tax inequality between domestic tourism and travel service businesses and foreign OTAs, as the latter do not have representative offices in Viet Nam. This disadvantages domestic OTAs when competing with foreign OTAs on pricing.

The founder of Gotadi Ngo Minh Duc believes that Viet Nam's tourism industry needs to build a community and product ecosystem and adopt smart policies to dominate the market.

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

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