Community-based tourism (CBT) is a form of tourism that seeks to engage the host community through tourism planning, development, and management. In Vietnam, CBT development commonly focuses on supporting some selected pioneered families in a village to renovate their existing traditional houses to offer visitors accommodation, culinary, and sightseeing services. Consequently, most benefits generated from CBT belong to those pioneered families; inequality and competition in the village are promoted; common agreement on resource management, and strategic development are neglected. This CBT model is commonly referred to as the “CBT homestay”. To mitigate the limitations of the CBT homestay, in 2021, the Action on Poverty (AOP) in Vietnam introduced an alternative CBT model called “CBT Village-stay”. The CBT village-stay focuses on transforming a village into a good place for people to live and to visit by engaging and empowering the entire community in all stages of CBT village-stay development, including planning, development, operation, management, and regulations. Several groups, including management and advisory boards, sales and marketing, accommodation, food and beverage, tour guide, transportation, etc., have been established to provide professional management and quality services to visitors and to create more employment opportunities for local people, especially women and people with disability. A Community Fund is created for donations from local service providers, philanthropists, and corporates then re-distribute to other people in the community. The study explores the perspectives of the host community and local government in a CBT village-stay supported by AOP about the transformation from a CBT homestay to a CBT village-stay. Drawing on two focus-group discussions with ten residents and one in-depth individual interview with a local government leader, the data analysis indicated that the local people and government are satisfied with the CBT village-stay because it increases income, local ownership, social inclusion, governance, gender equality, and employment opportunities.