Foreign visitors visit a market in the Mekong Delta.

The world economic crisis and high domestic inflation is hitting Vietnam’s tourism industry, which is not expected to meet a target of welcoming five million international tourists this year.

Culture, Sport and Tourism Minister Hoang Tuan Anh said this year was set to be the first year since 2003, when inbound tourism plummeted as a result of the Severe Acute Respiratory Syndrome outbreak, that Vietnam’s tourism sector could not meet its annual target.

National Administration of Tourism figures show last year Vietnam received 4.5 million international visitors. So far this year, 3.7 million international visitors have arrived in Vietnam, with around 339,600 international visitors arriving in November.

While the number of tourist arrivals in the first eight months of the year was up against that last year, since September the number of international tourists has been reduced.

The total number of foreign arrivals from January to August was more than three million, up 6.9% year-on-year. In the month of August, the number of foreign visitors was 4.8% lower than that in August 2007.

Ho Chi Minh City is also feeling the pinch. The number of international tourists to the city increased 3.7%  this year against that last year. In 2007,  the number of tourist arrivals increased by 14%.

From January to November, Ho Chi Minh City welcomed 2.6 million international arrivals. The city is expected to receive 2.8 million international arrivals for the year, short of its target of 3 million international arrivals.

Over the last two months, Ho Chi Minh tour companies have experienced a 20-30% decline in business compared with the same period last year.

While the economies of the US and many European and Asian countries are struggling, some countries in northern European have not been so badly affected by the global economic woes.

"Due to the economic slowdown, many travelers from key source markets for Vietnam have changed their mind, taking domestic trips rather than traveling overseas," Anh said.

Saigontourist said the number of inbound visitors also decreased by 20 to 25%. Saigontourist said the number of customers now booking trips to Phu Quoc and Phan Thiet and traveling Cambodia overland was stable.

Vietnam and Cambodia are expected to sign a document allowing Vietnamese citizens to travel to Cambodia without needing a visa.

Local tour companies say this will help their businesses as they will be able to run more promotions for tours to Cambodia.