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.
As we have already noticed that Vietnam has become a growing destination for foreign investors in Southeast Asia. Despite the manufacturing sector or any other prominent sectors, it turns out the demand for the education and training sector is reaching new heights. The education and training sector is becoming a favorable opportunity for foreign investors to enter the market. Now, you may ask yourself how does it go? Thus, this article provides you with information about Investment opportunities in Vietnam for foreign investors. You can also read here about how Viettonkin Consulting helps your business expand to Vietnam.
Overview of The Education and Training Sector in Vietnam
Vietnam’s young population and the government’s commitment to improving education offers more opportunities to invest in for foreign investors. Since 2000, the government has committed approximately 15%-20% of public expenditure on education, and it has become one of the highest in ASEAN.
Furthermore, the education and training in Vietnam have made many successful achievements in the last 3 decades, it includes forming a unified and diverse national education system in all study and training levels.
According to data from the Statistical Yearbook 2019, Vietnam has more than 15.4 thousand pre-school institutions, 27.7 thousand general education institutions, such as primary schools, junior high schools, and high schools. Also, 237 formal universities, and more than 3.000 vocational education institutions.
In the academic year of 2019-2020, the number of students nationwide has over 5.3 million children enrolled in pre-school, while 17 million students participate in general education, and over 1.5 million students enrolled in educational institutions. This does not include professional secondary schools and colleges that were managed by the Ministry of Education and Training.
Over the past decade, Vietnam has also achieved success to attract foreign investors in the Education and Training sector. Based on data from the General Statistics Office, it shows how foreign investors are optimistic and confident to invest in the education and training sector with large-scale projects in Vietnam.
Back in 2009, Vietnam had 128 projects of FDI in education and training with a total registered capital of 275.8 million USD. Then 10 years later, the cumulative number of projects has quadrupled to 526 projects and the registered capital has increased sharply by 15.8 times, and reached 4.376 million USD.
In 2019, 72 projects were licensed with a total registered capital of 67.4 million USD. Hanoi and Ho Chi Minh City are the most attractive places for investment in this sector. With this huge number of FDI projects in the education and training sector, it gives a lot of opportunities for Singaporean and Southeast Asia investors. Let’s figure them out!
Investment opportunities in Vietnam for Singaporean and Southeast Asia investors
According to a Nielsen consumer survey, parents in Vietnam would rather spend the most on their children’s education, and it could be half of a family’s total expenditure with about 47%. In addition, parents also have more options to get their children to high-quality private schools, rather than going to public schools. With the private schools grew significantly, the requirement of a foreign language also increased, and this could have a positive effect on the job opening for people who speak those certain languages.
Based on Decree No. 135/2018/ND-CP dated October 4, 2018, the regulation helps to simplify the legal requirements, administrative procedures, and increase enrollment quota for Vietnamese students, also boost the percentage of the students to receive foreign education.
When the COVID-19 strikes the world, including Vietnam, it gives impacts on the education and training sector. But in a good way, as the situation prompted the sector seeks to adapt and apply technology to redesign learning and teaching experiences. Many educational technology situations (Ed-tech) are entering the global education market that is estimated at $10.000 billion by 2030.
The social distancing rules also pushed the education institutions to use the technology for their learning and teaching. Virtual conference tools, learning management software, and many other digital solutions are useful to be applied at this time.
For instance, many educational technology companies offer Learning Management Systems (LMS), Open Online Courses (MOOCs), as well as after-school learning and tutoring services. Not only that, Biometrics and Facial Recognition technology, which can scan parts, such as eyes, fingerprints, and facial features can be applied in the educational institutions to identify students, and as well as improve safety on campus.
Smart Classroom Technology can be an alternative to apply technology in the education sector. A digital interconnected space where devices and data come together can spur the imaginative and creative abilities of the students. This technology helps to save costs for educational institutions too, for example, the building with smart sensors that can detect classroom conditions, and it also can adjust power distribution whenever it’s used or not used.
This year in September, Vietnam - Singapore Investment Promotion Conference which was held online, has successfully attracted the participation of nearly 500 enterprises from more than 80 Singapore business associations. At the online conference, Deputy Minister of Planning and Investment Tran Quoc said, the investment cooperation between Vietnam and Singapore is complementary to support each other.
Moreover, foreign investment data from the Ministry of Planning and Investment shows that, from January 1 to September 20, 2020, the foreign investment in the education and training sector has reached 78.89 million USD, it was up nearly 58% over the same period last year.
There are many opportunities to invest in the education and training sector in Vietnam, with a lot of young population who are skilled in digital literacy, can actually create a new world of education. Singaporean investors are also named as “the giant investor” that are pouring large capital in investing in the education and training sector this year in Vietnam.
In addition, MS English 2 Pte.Ltd from Singapore, a subsidiary of Myanmar Strategic Holdings Ltd holds 100% capital, and has acquired Wall Street Company Limited in Ho Chi Minh City. The representative of Myanmar Strategic Holdings confirmed to the Investment Newspaper that the acquisition of Wall Street English has completed in July 2020.
In conclusion, the education and training sector in Vietnam is enticing for many foreign investors, especially from Singapore and Southeast Asia. As it can create more opportunities for both domestic and international workers, yet develop the world of educational technology in Vietnam.
The hospitality industry and hotelier across the globe is generally the first to get impacted by the outbreak, and it seems likely to last to recover.
Since UNWTO declared that the coronavirus is an international health emergency, the hospitality industry and hotelier is having a nightmare. The tourist destinations that are traditionally visited by Chinese travellers are the worst affected. Destinations like Singapore, Mumbai, Dubai, Kuala Lumpur, and Indonesia are all impacted.
All the hotels booking are being postponed or some are cancelled for within this month. Hotels in Indonesia also got badly impacted due to the outbreak. Many hotels are temporarily closed down.
Detik.com reported from the Deputy-Chairman of The Indonesian Hotel and Restaurant Association (PHRI), Rainer H. Daulay, listed in 826 hotels nationwide, have been forced to close operations during the COVID-19.
The national hotel occupancy rate plunged by 40%, and it has a significant impact on the continuity of the hotel industries. As the hotels usually have a large number of employees, some hotels in Batam and Bali have asked their employees to take time off at the moment, because of no visitors at all.
As quoted from Katadata.co.id, The Deputy-Chairman of The Indonesian Hotel and Restaurant Association (PHRI), Yusran Maulana mentioned, “they are doing that for the limited time if in April, they still have no visitors, it is a disaster.” “The fasting month is also coming soon”, as he added.
The impaction on the hotelier will take a longer time, and they indeed need to do something in order to survive. But, what should they do during this outbreak?
What The Hotelier Should Do To Survive at The Moment?
Bali is well known as a tourist hotspot, but it is now reported making adjustments to respond to the coronavirus impaction, including temporarily suspending operations.
The Bali Hotel Association (BHA) acknowledged that over 100 four-star and five-star hotels and resorts in Bali are now temporarily closed for at least one month. In addition, the hotels that are still open now have less than 10% occupancy rates, while most restaurants have cut their operational hours.
Meanwhile, some hotels are still seeking their potential customers, and are rolling out cheap promotions for long-term stays. LV8, a hotel located in Canggu, is offering a one-month stay that is starting from IDR 8 million (US$481). The hotel’s normal daily rate ranges from IDR 800K until IDR 1 million.
The solution can attract those who are staying in a Kost. In Indonesia, kost means a room to rent, while you are working or studying in a different town as your hometown. However, LV8 offers a one-month stay to attract those who are currently staying in a kost.
As quoted from Liputan 6, some five-star hotels also offer the best deals package. They offer a Work From Hotel package starting from IDR 800K to 7 days stay, or you can have a one-month stay for IDR 3 million with the facilities, such as swimming pool, laundry, and room cleaning 2 times in a week.
The Work From Hotel package is actually how the Eden Hotel in Kuta, Bali attracts the potential customers, and the package is available for only 10 rooms. Hence, the hotel operations will go on track and at least, can pay their employees.
Another hospitality management does food delivery for those who stay at home. The Waringin Hospitality Hotel Group is offering a food delivery service with an affordable price for those who do not have time to cook.
The hotels that under the group are, Luminor Hotel Jemursari Surabaya, Luminor Hotel Sidoarjo, Luminor Hotel Purwokerto, and Hotel 88 ITC Fatmawati Jakarta. The hotels have the home catering starts from IDR 15K - IDR 40K. They offer the food delivery service everyday from 10.00 - 20.00 for those who are in Sidoarjo, and free shipping with minimum purchase IDR 100K.
The solution on how the hotels give the cheap promos are somehow working quite well. As some of them offered a variety of packages to support those who work from home, by providing food delivery and long-term stay at the hotel.
The Government Policy in Helping The Hospitality Industry
The Indonesian Government prepares the policy to ease the burden on the hospitality industry and hotelier workers who lost their jobs due to this pandemic. According to a spokesperson for the Maritime Affairs and Investment, the government will find new temporary jobs for them, while waiting for the hospitality industry to recover.
Jokowi has ordered his staff to prepare a number of economic stimulus for the business, especially in hospitality industries that are affected by coronavirus. In addition, Jokowi is also providing the social protection program launched by the government.
On the other hand, some hotels are transformed into residences for medical workers, but it is somehow considered as inappropriate as the hotel and the hospital function are so different. However, as long as the hotels want to work together with the Ministry of Tourism and Creative Economy, they can do it. These hotels are Novotel Cikini, Mercure Cikini, Ibis Style Jakarta Sunter, Ibis Senen, and Swiss-Belhotel Pondok Indah.
The support for fighting the coronavirus is also coming from RedDoorz. They have the latest program, Red Heroes provides 102 rooms for free, that are available at RedDoorz Plus Near Plaza Blok M and RedDoorz Plus @Thamrin. The chosen location is based on the closest 2 referred hospitals of COVID-19, which are RSPAD Gatot Subroto and RS Cipto Mangunkusumo.
Other than RedDoorz, the accommodation network OYO Hotels and Homes Indonesia are making one of their hotels to become a residence for medical workers. Country Head OYO Hotels emphasized the facilities are expected to be a solution amid the concerns of those workers who should keep their distance from their families and friends.
Apart from the government’s help, the hotelier should do more rolling out the cheap promos. Such as, those hotels that have been throwing out the promo for long-term stay is working. People might be attracted to work from hotels since they cannot go travelling at the moment. However, the hotels need to set standards of cleanliness, such as sanitizing each room, frequent hand washing for the employees, and of course clean the rooms. They also need to have a business continuity planning in motion to help them recover from this crisis.
Dubbed as the smokeless industry, the hospitality industry has gradually proved its position in the structure of the economy as it continuously grows over the years and has provided plenty of opportunities for job seekers. In spite of high demand, it causes many obstacles for restaurants and hotels to find talented personnel because the supply is not enough to meet. Thus, how to make your restaurant and hotel impress the good candidates and make them dedicate their abilities to your unit? The following article will be helpful to you on this issue.
About Hospitality in Vietnam
In recent years, Vietnam's tourism is on the pace of growth with impressive growth figures. According to the latest statistics of the World Tourism Organization (UNWTO) in 2017, Vietnam ranked 6th among the 10 fastest-growing tourist destinations in the world and ranked first among Southeast Asian countries. Each year, the average tourism industry in Vietnam welcomes more than 14 million international visitors.
As a result, hospitality in Vietnam has also achieved remarkable performance. According to the 2018 Asia-Pacific (STR) hotel performance report, revenue per total number of rooms (RevPER) in Ho Chi Minh City increased by 5.1% to approximately USD 82.06.
Along with the rapid growth of the service industry, the hospitality and tourism system in Vietnam is increasingly receiving long-term investments from leading local and international corporations, which has demonstrated the strong potential of the hotel industry to prepare for leaps in the near future.
Unfortunately, the Vietnamese hospitality is on the edge of the shortage of workforce. This issue requires hotels’ owners to have specific strategies to attract and retain employees, ensuring the quality of hospitality service is as good as possible.
Essential strategies to attract and retain staffs in the hospitality industry
1. Building a professional working environment in your hospitality business
a. Recruitment and Training process
First and foremost, the professional work environment that leaders hope to show has to be shown in the recruitment process. Strict and apparent recruitment can boost the value of the hotel itself and make the candidates aware that they have to try their best with new roles. The total recruitment process is summarized in the following image:
Professionalism comes from well-training for new employees. Staff would feel like they're being cared for, seeing the high security of the job. Several tips are recommended for the purpose of training and development: developing a roadmap for career development or personal development and training; allowing training ideas from low to high as well as from the management level down; researching training methods, whether from business or outsourcing.
b. Hospitality management system
A smart hospitality management system is also a factor that shows professionalism. There is currently a variety of management software that can support you with a large number of jobs during the operation of a hotel. If staff can approach that software, they will find it more comfortable and put all of their passion to work.
2. Creating opportunities for personal growth
No employee likes to do a job and stay in the same positional these years. Everyone wants to be devoted and recognized with the ability to advance in their careers. As a result, managers in hotels should provide candidates with promotion opportunities so they determine the goals and positions they will achieve in the future if done well and endeavor to pursue them. In this way, everyone has a goal to strive to help the performance and quality of work become better. In order to obtain this purpose, hotels’ leaders should build a complete evaluation system to exactly assess the employees’ abilities. Since then, leaders can determine the appropriate development directions that satisfy their staff.
3. Strengthening the promotion of the hotel image when posting job vacancies
Not only restaurants, hotels, but most other businesses when posting job postings only focus on job descriptions and salaries but forget that candidates are attracted to many other factors. Meanwhile, most candidates tend to choose their ideal working environment as a specific reputation and position in the market. In addition, the attractive factors are the event activities at restaurants, hotels, culture in the working environment, bonuses, ... So when posting a job recruitment, you should wrap up the job description and spend a small part to promote the image as well as the operation of the hotel to show candidates that the environment here is really good for candidates to attract them.
4. Providing reasonable treatment
a. Regular recompense
Of course, if staff only work and receive monthly income, it certainly leads to the day they find the job so boring and the owner likely pays no attention to their contribution to the hotel’s operation. When employees strongly perceive that managers support them, they often express greater satisfaction with their job and exhibit a greater commitment to the organization. Thus, the owner should never ignore the value of recompense and encouragement. Do you know what employees often talk about their companies? These are salaries and perfect treatment that leaders give them. It can be denied that recompense is the core factor in the strategies of retaining staff.
b. Making a good relationship with staff
In any work environment, the relationship between leaders and their subordinates is absolutely important to the success of the whole team. No one can endure an atmosphere of intense pressure work or constant reprimand. Particularly, the characteristics of hospitality staff is to always show a friendly and polite attitude towards guests. Therefore, in order to ask employees to show a professional and caring working attitude, the leaders themselves also need to show fairness, create an enjoyable working atmosphere to avoid putting pressure on employees.
In addition, you can understand about the hospitality in Vietnam by reading through this article.
To sum up, facing the challenges of the shortage of workforce in hospitality, the hotels’ leaders may consider these strategies above and build up your own strategies to attract and retain talented employees. For Vietnam with abundant human resources, this is actually a potential market creating an opportunity for hospitality leaders to develop a strong workforce.
