The digital transformation trend has been mentioned by the Vietnam Government and tourism businesses for many years. In the context of Covid-19 severely affecting the tourism sector, the topic of digital transformation in tourism has become an urgent issue and is more concerned than ever as a solution to boost tourism overcome from Covid-19. This is also one of the solutions emphasized by the Vietnam Government and the Ministry of Culture, Sports and Tourism to revitalize Vietnam tourism sector in the National Conference on Tourism 2020.

About this topic, Destination Review had the opportunity to talk with Mr. Dao Quang Thuan, Founder & CEO of BedLinker Joint Stock Company about the topic of digital transformation happening in Vietnam’s tourism sector.

Mr. Dao Quang Thuan has over 16 years of experience working for 5-star hotels and resorts in Vietnam with expertise in Revenue Management, E-commerce, Reservations and Sales. Currently, he is also Managing Director of RevMax Consultancy and Chairman of Smart Tourism Club.

FIRST OF ALL, CAN YOU SHARE THE REALITY IN DIGITAL TRANSFORMATION OF VIETNAM TOURISM OVER THE PAST YEARS?

Digital transformation in Vietnam tourism sector has been under a lot of discussions not only in 2020 but also in recent years. However, before Covid-19, digital transformation in Vietnam tourism took place quite slowly for many reasons. One of the reasons is that Vietnam did not have much access to international advanced technologies. The domestic technology solution providers did not really do a good job of “market education” for tourism businesses about how to apply technology or digital transformation to prepare for new opportunities. In fact, at that time, Vietnam tourism businesses operated quite well and were busy with their businesses. This leads to that tourism businesses perceive digital transformation as an attractive and nice-to-have option, not as a necessarily must-do. They do not see the need for an immediate transformation. They put digital transformation into their wishlist to do in the future but have no specific plan for when or how to transform.

Meanwhile, the world witnesses mostly every day at least a new initiative in the application of technology in tourism to enhance customer experiences, or to distribute products and services faster on a larger scale. Global tourism fluctuates and changes every day while Vietnam tourism stands still.  As Vietnam has not yet caught up with world trends, it is difficult to create new initiatives. A few big tourism businesses do see the trends of foreign markets but they do not know how to apply or they try to implement but their execution team is not qualified.

It was not until the outbreak of Covid-19 did Vietnam tourism businesses realize that digital transformation is necessary and urgent. Digital transformation is now more practical than ever, as social distancing measures limit face-to-face contact between people and reduce traveling. Travelers want to access information on online platforms or experience products and services without having to move much. The changes in customer behavior force tourism businesses to change to adapt. At that time, businesses understand the need for digital transformation more than ever. As soon as they take action, a new trend will be created and momentum to push the entire digital transformation system in tourism will be made.

AS YOU JUST SHARED, THE TOPIC OF DIGITAL TRANSFORMATION IS DISCUSSED A LOT RECENTLY AS A SOLUTION TO HELP VIETNAM TOURISM RECOVER AND DEVELOP SUSTAINABLY. IN YOUR OPINION, CAN DIGITAL TRANSFORMATION REALLY CHANGE THE FUTURE OF THE VIETNAM TOURISM SECTOR?

Digital transformation is an inevitable trend and will certainly create a great impact on tourism businesses to maintain their business after Covid-19 as well as make difference to the future of the Vietnam tourism sector. Everyone from the Government to business leaders and practitioners sees the urgency, necessity and values that digital transformation can bring to the tourism sector.

For example, in terms of destination competition, successful digital transformations of tourism businesses will help Vietnam’s image to be more well-known to international travelers. Vietnam will be present globally and become an attractive destination. Hence, the whole tourism ecosystem in the country will receive positive impacts for further development.

IN YOUR OPINION, WHICH PROBLEM OF DIGITAL TRANSFORMATION SHOULD BE MOST CONCERNED IN THE VIETNAM TOURISM SECTOR?

The problem of digital transformation in Vietnam tourism sector does not lie in technology infrastructure or investment, but in the people themselves. The people here include business leaders, middle-level managers and execution teams. Leaders must have knowledge, vision and clear goals to digitally transform their businesses. The subordinate team must have enough knowledge to adapt and implement the transformation and standardization since the previous manual tasks are now operated on technology systems.

In terms of technology or investment, a large business with strong financial resources can build its own technology team while small and medium businesses can completely hire available technology solutions at a very reasonable cost and upgrade the technology infrastructure gradually. There is no need to spend too much money at the beginning. On the current market, there are many domestic and foreign technology solution providers and tourism businesses only need to choose the solution that meets their goals.

IN THE CURRENT CONTEXT OF A STAGNANT TOURISM MARKET, TOURISM BUSINESSES HAVE TO CUT OFF COSTS AND STAFF, IS INVESTING IN DIGITAL TRANSFORMATION IN THIS PERIOD FEASIBLE?

In my opinion, this is the right time to implement digital transformation as businesses have more time. If not now, when tourism recovers, businesses will be busy serving customers and will find it more difficult to implement new technology. This is the time when there is plenty of time for them to research, learn, implement and prepare for the time the tourism market recovers. Moreover, at this time, businesses have less staff so it takes less cost for training and the execution team will be trained more deeply to be able to instruct new staff later.

If a business buys an available technology solution, the cost is only a few million VND – not as much as people often mistakenly assume. In my opinion, the costs of technology solutions now are quite reasonable, not too expensive. Therefore, digital transformation is feasible if tourism businesses determine to implement it.

WHAT ARE THE DIFFICULTIES THAT VIETNAM TOURISM BUSINESSES HAVE TO FACE WHEN IMPLEMENTING DIGITAL TRANSFORMATION?

The first difficulty is how to choose the right technology solution for businesses. To do this, the leaders should determine what their digital transformation aims to and what they want to achieve through it, thereby take advantage of the core strengths of the businesses, understand what they have and do not have in order to find the optimal solution. Choosing an inappropriate solution wastes time, cost and effort to start over. To limit the risk, foreign tourism businesses often hire experts or consulting companies to help them start in the right direction.

The second difficulty is how to help all employees adapt to new technologies. Leaders should have a particular transformation plan, train staff, and build an execution team with expertise. There will be certain difficulties at first because everyone is familiar with the traditional method. Meanwhile, the system applied technology has high standards and is difficult to be flexible like the manual way. Therefore, before applying technology, businesses also need to prepare the standard procedures to change the whole original manual system.

Once businesses have identified the goals for digital transformation, found the optimal solution and prepared human resources, it only takes about 3 to 6 months, depending on the level of adaptation of each business, to operate the new system smoothly.

CAN YOU GIVE SOME ADVICE FOR VIETNAM TOURISM TO IMPLEMENT DIGITAL TRANSFORMATION SUCCESSFULLY?

Digital transformation practitioners like us see a huge gap between the macroscopic perception of digital transformation and the implementation in reality. To narrow this gap, there is a need for organizations to bring practical implementation guidance to each tourism business because many businesses do not know how to start. Vietnam tourism businesses should improve knowledge of digital transformation and have the right perception as well as the right approach to success.

THANK YOU VERY MUCH FOR YOUR HELPFUL SHARINGS!

#Take-A-Sip is a series exploiting new perspectives from experts on striking issues in tourism and travel.

Digital transformation, where should Vietnam tourism businesses start?

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