Vietnam tourism growing faster than in Thailand, Japan: Agoda CEO

Vietnam grew its share of inbound travel in the first five months of 2023, coming in third behind Japan and Thailand among Asian destinations. It jumped from fifth place in 2019, the last year of pre-pandemic travel. Thailand topped Agoda's list in 2022, but was quickly overtaken by Japan, which reopened its borders in October.

Thailand has welcomed over 11 million visitors this year, already surpassing 2022. With inbound, outbound and domestic travel recovered, Thailand's task is to sustainably grow its tourism industry, which in 2019 accounted for about a fifth of gross domestic product.

"Thailand will always be a great vacation destination... but can you develop more reasons for people to come here?" said Agoda CEO Omri Morgenshtern.

Morgenshtern told reporters on Thursday that while South Korea has sent the biggest group of inbound travelers to Thailand, more Koreans are traveling to Japan and Vietnam. He attributed this to Korean factories that opened in Vietnam in the past two decades, establishing a community of expatriates who spread word about Vietnam back home.

"The more you can bring in investment, business and people... you can also drive tourism over time," said Morgenshtern.

Agoda's operations are based in Bangkok with more than 3,000 employees, about half of its global workforce. Morgenstern, who became chief executive a year ago, said business travel had not yet recovered but saw an opportunity for Thailand to attract tech companies like Agoda and industry conferences away from the likes of Singapore.

"We have an obligation to Thailand to build up the startup ecosystem, teaching and exposing people to different ideas," he said.

Chinese tourists, who once topped inbound Thailand travel, have come in third behind Koreans and Malaysians. Thailand bookings from China have recovered to about 80% of 2019 levels on Agoda's platform, spiking immediately after China's reopening in January but flattening in subsequent months as visa restrictions and airline capacity remained tight. Morgenshtern expects travel from China to close the gap by the end of 2023.

A reopening spike also benefited Japan, which has enjoyed two years of pent-up travel demand since October. Citing New York City as a proxy for a megacity where tourism flattened higher than in 2019, Morgenshtern saw sustainable growth for travel to Japan because of its differentiated offerings.

"Japan is versatile. People come to Thailand for the weather, the beach and the parties, but Japan has Disneyland, cities and business travel," he said.

As for Agoda's business, Morgenshtern sees growth through generative artificial intelligence, which he said would change how travelers search online and streamline back end operations. The latter, in particular, would help the company to improve customer experience and offer lower prices -- a buffer against inflation, currency fluctuation and economic slowdown.

The online travel company was founded in Singapore in 2002 and acquired by Nasdaq-listed Booking Holdings in 2007 as its Asia-Pacific platform. Booking saw record revenue in 2022 of $17 billion, with gross travel bookings worth $121.3 billion.

Source: Nikkei Asia