Vietnam Hospitality Industry Situation Post-Covid

Nora Setiawan

April 29, 2021

Since the COVID-19 outbreak in Vietnam, many businesses have been affected, and hospitality was among the first industries to be hit by. In addition, all categories are disrupted from international hotels, restaurant chains, multinational airlines to smaller family-owned restaurants and accommodation. Hospitality was predicted to be the slowest to fully recover, but it is now seeing a careful recovery in this situation. Thus, this article will let you know about the Vietnam hospitality industry in a Post-Covid situation.

READ MORE: Viettonkin Consulting service to help you expand to Vietnam

Challenge for The Hospitality

Just last year, the pandemic has knocked Vietnam’s hospitality out almost overnight, cruelly depriving one of the country’s industries to be closed down with zero notice. Vietnam has been most promising emerging destinations for luxurious beachside resorts and five-star city hotels, but the outbreak hit its hospitality sector, and it has been an unpleasant outcome since then. 

Moreover, the hotel industry was facing its greatest challenge as the impact of COVID-19  has kept away foreign visitors from the country. For instance, many hotels in major cities such as Hanoi and Ho Chi Minh City, have cut their rates to attract local visitors, but some hotels cannot cope with the situation and decided to close them down.

These recent years, Vietnam has been enjoying impressive tourism growth, but in the first half of 2020, the country recorded drops of 56% and 50% year-on-year in international arrivals and domestic destinations. The average revenue per available room for the hotels also went down by 56% and 64% in both Hanoi and Ho Chi Minh City.

This also has happened across the world with broadly similar dynamics and business consequences. Back then, most western countries were still under lockdown with only a vague hope of reopening anytime soon. However, Vietnam has been more successful than any country with COVID-19 and has partial re-opening restaurants, coffee shops, and hotels. As a result, Vietnam has been given a greater head-start over other countries.

Today, hospitality is seeing a careful recovery and hopes that things will be returning to normal. The sector is slowly coming back, yet owners are still figuring out how long it will take to get back to pre-crisis level. Fortunately, the strategies implemented by restaurants and hotels are slowdowns or closure to cut-costs, retaining key personnel and preparing for re-opening in this Post-Covid situation.

The Vietnam Hospitality in Post-Covid

In the end, Vietnam has controlled the epidemic well, also created favourable conditions for recovery and development of socio-economic activities. According to the World Health Organization, Vietnam is among the few countries with good disease control and has had a right, timely, effective, and low-cost way. 

The positive results in the prevention and management of the epidemic Covid-19 have been highly appreciated by the international community, maintaining the tradition of solidarity, compassion, the resilience of the nation, good nature of our regime, and firmly consolidate the people’s belief in the leadership of the Party and State.

The macroeconomy remains stable, inflation is controlled, great balances are guaranteed, and has achieved a positive growth rate in the context of a severe global economic recession. The annual growth rate is estimated at over 2%, striving to reach about 3%, Vietnam is the country with the highest positive growth rate compared to 5 major economies in Southeast Asia. It is also in the top 16 most successful emerging economies in the world, with many prospects to narrow the gap with the developed countries amidst the Covid-19.

Even after winning the battle, Vietnam hospitality providers realise that those international travellers are not going to be coming back anytime soon, and that pivoting to local tourists to survive would be a better idea. Meanwhile, Vietnamese travellers are wanting to be out of home and are eager to go on a holiday.

One of the country’s most prominent resort brands, Six Senses, is ready to absorb the high-demand for domestic travel. The resorts had remained open throughout the lockdown at low capacity for the guests, but they were hit by tons of local tourists immediately upon the Post-Covid situation.

According to the brand’s local marketing communication manager Ary Arabani, when the travel restriction was lifted in May 2020, the resort was magically fully booked. It was a rather big surprise for them, because they did not expect that the market would react so quickly. The manager also mentioned that the resort’s occupancy raised over 90%.

After lockdown, Six Senses has utilized a marketing campaign involving local A-list celebrities and KOLs to strengthen its brand penetration. In addition, the resorts had a series of promotional offers that hit a market hungry to farewell weeks of living in the fear of pandemic.

In Vietnam’s southern economic centre of Saigon, the city hotels were hit harder by the absence of foreign travellers, riding a hazardous line with high operational costs and a very low volume of local travellers to go around. For instance, the landmark five-star property Caravelle Saigon has deprived the international tourists since the outbreak has begun. 

In the midst of pandemi, Caravelle Saigon has taken a range of measures to cut back on costs, including voluntary leave on 30% salary for some staff and shifting other full-timers to part time, as well as the release of casual staff and unpaid leave for senior management. 

Nowadays, Vietnam’s hospitality industry remains positive, because of the improvement in infrastructure, favorable visa policies and the political will to turn tourism into a key industry. Vietnam has been praised by the international community for its decisive and effective efforts in the containment of COVID-19, which would help the country to enhance its image on the global tourism scene as one of the safest travel destinations once the pandemic is over. Thus, Vietnam’s hospitality can flourish once again.

In conclusion, Vietnam has been successfully fighting the outbreak and now its hospitality industry is seeing a recovery slowly but surely. Moreover, the country expects that it will be getting better in the future and the economy is significantly rising. 

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