Governments no longer ask should we encourage tourism – but, rather, how fast can the tourism industry grow? Yet, traditional policies of growth have proved unable to cur- tail the concurrent growth of socially undesir- able industries and environmental degrada- tion in most high-tourist destinations. The Vietnamese Government has targeted the tourism sector in its economy for strategic foreign direct investment (FDI). We provide some suggestions on how a centrally directed economy can maintain sustainable tourism – and, what kinds of FDI it should try to attract to do so. Experiences in similar and related markets and industries in Asia provide indi- cations of the policies necessary to develop a sustainable, socially and ecologically desir- able tourism industry through appropriate balancing of key stakeholders’ goals. First, we define sustainable development in the context of tourism and indicate its relevance for Viet- nam. Next, we analyse some economic and social costs and benefits associated with tourism; we also interpret recent governmen- tal policy’s influence. Finally, we provide policy recommendations for the future of sustainable and economically viable tourism development in Vietnam.