Tourism industry in dilemma

SGI

One industry that has suffered the most serious damage after the sudden eruption of Covid-19 epidemic, from its epicenter in Wuhan province in China, has been Vietnam’s tourism industry.  

Tan Son Nhat Airport drastically reduced arrivals and departures during the epidemic time.

Tan Son Nhat Airport drastically reduced arrivals and departures during the epidemic time.

Tourism in Vietnam continues to face heavy losses as the epidemic is spreading across several countries, especially South Korea, Japan and Europe, leading to total cancellations of tours, flights and international travelers.

Hit hard

On 25 February, the Vietnam National Administration of Tourism issued an Official Letter 75/TCDL-LH on measures to prevent the spread of the Covid-19 epidemic, requesting all departments of tourism and related enterprises to closely monitor the situation of the spread of the epidemic in South Korea and in some other markets that send across groups of tourists to Vietnam.

The official letter recommended that international travel businesses must suspend taking tourists to Deagu City, Gyeongsangbuk-do Province and other epidemic stricken areas, and also restrict travel to areas marked by local authorities. At the same time, not to welcome tourists coming into Vietnam from such epidemic infected areas as well.

At present, both arrival and departure of tourists has dropped sharply because of the Covid-19 epidemic fear in many countries. Many travel businesses have announced cancellation of tours in March, even extending into April to ensure safety for travelers. TST tourist agency said they have stopped all tours to South Korea that have a departure schedule for March and April.

For the Japanese market, the company is still holding seats for the Cherry Blossom Season tour in late March and early April, but has a backup plan with the aviation industry and other partners to cancel the tour, in case of an emergency. Saigon Tourist has also canceled all tours to South Korea in March, while some other businesses have moved tours to Japan, South Korea, Iran and other epidemic stricken regions to a later date.

In recent years, Vietnam has seen a surge in tourists from South Korea and Japan. In 2019, Vietnam welcomed 4.3 million South Korean visitors, ranking second after Chinese visitors. Therefore, when the number of tourists from this market plummeted, the damage to the tourism industry has been enormous.

Now with the epidemic spreading across Europe, the US, and in Iran, visitors from many markets have also decreased. Mr. Vu The Binh, Vice Chairman of the Vietnam Tourism Association, estimates that the number of visitors to Vietnam in February and March decreased by 60%, while domestic tourists decreased by 80%.

According to preliminary calculations by the Department of Tourism in Ho Chi Minh City, which is the largest tourism hub of the country, in February alone the tourism business lost about 60% of revenue. Many companies are now going in for cost cutting by laying off personnel and adjusting salaries of employees. Enterprises in related fields such as restaurants and hotels are also seriously being affected as a result of decline in tourism.

Stimulus program for tourism

On 21 February, the Vietnam Tourism Association announced a coalition to stimulate the Vietnamese tourism industry to overcome the Covid-19 epidemic situation. Many localities, aviation businesses, travel businesses, restaurants and hotels joined in this alliance. Participating units committed to a minimum discount of 20% and a maximum of upto 80%.

According to information from the Tourism Association, during the epidemic period, the alliance will focus on two main tasks, namely, professional fostering of the management team of key employees of an enterprise and building and creating new tourism products. During the epidemic decline period, it will focus on implementing tourism restoration in safe areas. By the end of the epidemic phase, the focus would be to launch an entire new system, one that will be a breakthrough in tourism development.

Also on 21 February, Ho Chi Minh City announced a stimulus program for tourism in Vietnam and for Ho Chi Minh City specifically. Ho Chi Minh City Tourism Association received registration from tourism businesses with committed discount price of 25% to 50%, from aviation 50%, and from road and railways 40%. With the participation of many businesses, road tours in the stimulus promotion group, designed by the City Tourism Association, decreased by 15% to 18%.

The sudden and rapid spread of the Covid-19 epidemic has put the tourism industry in a difficult situation, as no one knows when the epidemic will pass and when the industry will be able to get back on its feet or launch appropriate products to once again stimulate growth in the industry.
-Mr. Phan Đinh Hue, Director of Viet Circle Travel Company.
Enterprises also had stimulating tours ready to offer immediately during and after the epidemic, marking priority destinations for the tour program, with criteria for safe areas, attractive stimulus prices, covering localities such as Binh Dinh, Phu Yen, Mekong Delta, and the Central Highlands.

Many large travel agencies, such as Saigon Tourist and Vietravel, also offered many great discount programs on this occasion. Vietravel has launched a package of immediate crisis measures, with discounts of upto 40%, domestic tours from VND 299,000, and foreign tours starting from VND 2.9 million.

Most businesses believe that in the current situation of an epidemic, to stimulate tourism, whether during or after the epidemic, it is also necessary to target domestic visitors. International visitors need time to plan, and are unable to make immediate travel plans. In addition, we also have to compete fiercely with other countries in the region in attracting visitors soon after the epidemic ends, one formidable rival being Thailand.

In recent years, domestic tourism has grown strongly. In 2019, domestic visitors reached 85 million, and spending also increased rapidly year by year. Mr. Phan Dinh Hue, Director of Viet Circle Travel Company, said that Vietnamese tourists are the ultimate destination tourists at this time. The discount program will soon impact domestic guests. But Mr. Hue also noted that in the context of serious epidemic fears, we should be organized in small groups, for short-term and to localities and areas not yet affected by the epidemic.

However, it is extremely difficult to lure customers in the current epidemic situation because of warnings against visiting crowded places. Even airlines that are constantly launching promotions, and offering discounts, are failing to draw passengers to travel on many routes, despite discounts of even upto 40% to 50%, which are also making many people question the quality of the service.

Translated by Kristine

Thai Ha

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