Doing Business

What Is Vietnam Tourism Going To Be In Post-Pandemic?

Linh Pham

May 26, 2020

Tourism is one of the industries that suffer from the most severe impacts due to Coronavirus pandemic. A lot of statistics have been recorded to illustrate the huge loss of Vietnam tourism. The pandemic has posed a huge threat to the survival of many travel agents because the Vietnamese government suspended the number of domestic and international flights.

Now the prospect of recovery in the post-crisis situation still remains vague to a lot of tourism-related businesses although the pandemic is being controlled well in Vietnam. This article covers some predictions about Vietnamese tourism in the post-pandemic context.

The article’s today is adapted from an article published on on 21st April. 

Tourism was frozen

According to Vietnam National Administration of Tourism (VNAT), it was estimated that Vietnamese tourism got 2 billion VND loss per month, which meant that the industry lost around 7 billion VND in the first quarter of 2020. In particular, in terms of the Chinese market (the biggest market to Vietnamese tourism), the number of visitors dropped 90% – 100% (1.7 to 1.9 million visitors).

With the average expense per each Chinese travelers, Vietnamese tourism lost 1.8 – 2 billion USD. Regarding to the other tourism market, there has been a reduction of 50% to 70% in foreign tourists. Then it was estimated to decline by 2.2 to 2.3 billion USD.

According to Mr. Mauro Gasparotti, General Manager of Savills Hotel in Asia-Pacific area, COVID-19 has affected Vietnamese tourism in three aspects including the number of Chinese tourists, the number of foreign tourists to Asia and Southeast Asia, and the lower demand of domestic travelers. Furthermore, MICE tourism in cosmopolitan cities such as Hanoi and Ho Chi Minh city has been cancelled as well.

International business meetings are delayed or called off, hence the number of business travelers or MICE tourists is reduced considerably. Due to the new policy of banning international tourists and warning domestic visitors, room occupancy in the first three weeks of March dropped dramatically to single digit in many destinations in Vietnam.

In particular, Danang and Hoi An are two attractions affected tremendously because these two destinations were the most popular places in the eyes of Chinese and Western tourists. A variety of properties have an occupancy of below 10% and are considering temporary closure. You can understand more about the tourism industry at Viettonkin’s blog.

Many tourism businesses experienced temporary closure

Tourism Advisory Board (TAB) had conducted a survey on the business operation of tourism businesses under the negative impacts of the Coronavirus pandemic. Regarding the methodology, this survey was distributed to nearly 400 enterprises from 13th to 17th April. Among these participants, 92% of them came from small and medium enterprises (SMEs) with around 100 employees. 

This survey illustrated the undesirable consequences of COVID-19 on the tourism industry in general and tourism businesses in specific. 71% of businesses estimated that their revenue in the first quarter of 2020 declined by 30% compared to the same period last year. Plus, 77% of businesses also predict a decrease of 80% in the year-on-year revenue for the second quarter. Besides, half of the participants (approximately 200 tourism enterprises) said that they would not gain profits in the second quarter this year. 

Vietnam tourism in post-pandemic situation
Vietnamese tourism post pandemic

From the survey, we can understand the current situation of these businesses not only in terms of the revenue but also in the aspect of human resources. The number of staff was cut in a half in 262 companies. Tourism enterprises said that the temporary reduction in employees’ salaries and the number of employees would help companies survive in the post-crisis situation. 

The negative impact of the pandemic was demonstrated by the number of international tourists. The national isolation, the suspension of international flights had squeezed Vietnamese tourism, which caused 7 billion VND loss. In the first three months, the number of international tourists was only 3.7 million travelers experiencing an 18.1% year-on-year decrease.  

Obviously, the pandemic has messed up everything. However, Vietnam has controlled the COVID-19 pretty well, then it’s time for businesses to prepare and implement post-crisis measures. 

What are scenarios for Vietnam tourism after the pandemic? 

Mr. Ngo Hoai Chung, Deputy Director General of Vietnam National Administration of Tourism, predicted two scenarios in case the pandemic will end in June or September.

Scenario 1: If the pandemic is well-controlled in June, the number of international tourists will reach the bottom from April to June, there is barely foreign travelers visiting Vietnam. The number of visitors will gradually recover until the end of this year, however, the growth rate would not be positive as the last year. Predictably, the number of foreign visitors will decline by 70% compared to the last year, reaching around 5.5 million travelers.

Scenario 2: If the pandemic ends in September, the “squeezing” time will be longer and the recovery will rely on MICE tourism and business tourism. The number of international tourists will decline by 75%, reaching 4.6 million travelers. 

Worse, if the pandemic is well-controlled in December, the Vietnamese tourism will witness an 80% year-on-year drop in the number of foreign visitors. 

In his opinion, the government controls the pandemic in June, then the tourism industry can be recovered like the pre-pandemic situation at the beginning of 2021. With a view to going over the COVID-19, 90% of businesses would like to prioritize financial-management measures as well as need a supportive budget from the government. 

All in all, now when the national isolation was lifted up, the space of life is becoming normal again, Vietnamese tourism will be gradually recovered. Although the speed of recovery may be slow, tourism businesses can focus on domestic travelers to boost the demand of Vietnamese customers. By offering discounts, vouchers at resorts, travel agents are able to get engage with the demand of clients after the pandemic. 

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