Vietnam Surges as China’s New Favorite Destination, Leaving Thailand Behind

This summer, Hu Jia and her family skipped Thailand’s famous beaches and temples, opting instead for a two-week adventure in Vietnam amid growing Chinese concerns over safety in Thailand.

Traveling from Hanoi to coastal Danang on a luxury sleeper bus, Hu, 33, and her family fell in love with the country’s “natural and untouched” charm. “If I get the chance, I’ll definitely come back,” she said, noting their trip cost just under $3,000.

Hu is among a new wave of 3.5 million Chinese tourists fueling Vietnam’s record-breaking tourism year, helping the country surpass Thailand as the top destination for mainland travelers. Fears over scams and the high-profile kidnapping of a Chinese actor in Thailand earlier this year have driven arrivals from China down roughly 35%.

Vietnam’s boom is reshaping Southeast Asia’s multibillion-dollar tourism industry. Analysts estimate Thailand could lose $3.5 billion in revenue, which is now flowing to Vietnam and other neighbors. The shift is largely driven by a growing segment of independent Chinese travelers seeking authentic experiences over traditional tour packages.

“For this new group of Chinese travelers, Vietnam offers something fresh,” said Subramania Bhatt, CEO of China Trading Desk. “Many visitors feel Vietnam is more off the beaten path and authentic.”

Vietnam has recorded nearly 14 million foreign arrivals this year, with Chinese visitors posting a 44% year-on-year increase through August. Malaysia is also seeing a surge, with a 35% rise in mainland tourists and airline seat capacity from China up almost 50%, aided by visa-free entry and a weaker ringgit.

To attract tourists, Vietnam has invested in new festivals, like paragliding and hot air balloon events in Quang Ninh, while cities like Danang have embraced Mandarin signage and staff fluent in the language. Boutique operators and hotels are pivoting to cater to independent travelers willing to spend more for unique experiences.

The shift has encouraged high-end tourism as well. At the Mercure Nha Trang Beach Hotel, nearly half of bookings are from Chinese visitors, while luxury restaurants in Danang serve wealthy tourists paying hundreds of dollars per meal. Tourism retail sales have soared 51% through August, with analysts projecting a record 22.6 million arrivals this year—eclipsing the 2019 high of 18 million.

Meanwhile, Thailand’s tourism industry faces a slump. Chinese arrivals have dropped sharply, contributing to a 7% decline in overall foreign visitors through August. Rising prices and lingering fears from the abduction of actor Wang Xing continue to deter first-time travelers from China. Thai hotel revenues are projected to shrink by 4.5% this year, with occupancy rates dipping.

Despite the challenges, there is hope for recovery during Thailand’s peak winter season. “Bangkok is still ranked the most revisited destination in Asia on our platform,” said Damien Pfirsch, Agoda’s chief commercial officer. “A turnaround in Chinese travelers could help the industry bounce back.”