Tourism Services Adversely Affected by Pandemic

11:19:49 AM | 17/4/2020

First-quarter operating results released by the Ministry of Planning and Investment showed that the service industry, including accommodation, catering and traveling, is hardest hit by the Covid-19 pandemic. Vietnam’s service growth reached only 3.27%, lowest in the same period in 2011-2018 and lower than the overall economic growth. Notably, the country’s tourism revenue was estimated at VND7.8 trillion (US$333 million), accounting for 0.6% and declining 27.8%.

Serious loss

Data from the Vietnam National Administration of Tourism (VNAT) showed that the tourism industry plummeted in the first quarter due to the impact of the Covid-19 epidemic. In March 2020, international visitor arrivals to Vietnam were fewer than 450,000, lowest in more than 10 years. In Hanoi, tourist arrivals reached 321,000 in March, down 87.4% from a year ago. Particularly, international arrivals to the city slumped 80% while domestic tourist arrivals tumbled 90%. Tourism revenue dived 83% from a year-earlier period to VND1,585 billion (a drop of VND7,714 billion).

In the first quarter of 2020, tourist arrivals to Hanoi totaled 3.85 million, down 47.2% year on year. Total tourism revenue was VND15,687 billion in the quarter, down 38.8% (VND9,938 billion). The average occupancy of hotel rooms was only 43.06%, down 26.16% from the same period in 2019.

In March, among the 10 biggest tourist markets of Vietnam, only arrivals from Russia increased by 4.9% against March 2019 to 72,000. However, Khanh Hoa province, the biggest receiver of Russian tourists in the country, still suffered serious losses due to the decline in tourists, hotel closures and unemployed tourism workers. According to the Khanh Hoa Tourism Department, the Covid-19 pandemic caused about 17,100 tourism workers to lose their jobs, of which the accommodation sector saw a decline of about 15,000 (accounting for 30% of workers in the sector), the travel sector witnessed 2,100 people unemployed (a drop of 60%). Transport service providers stopped operating 1,780 vehicles. A series of downtown and suburban hotels in Nha Trang City are on sale.

The number of international tourists to Ho Chi Minh City was estimated at 117,000 in March, down 84.23% year on year. International visitor arrivals to the city were only over 1.3 million in the first three months, fulfilling 14.49% of the yearly plan in 2020 and down 42.26% from the same period of 2019. Data from the HCM City Statistics Office showed that the city’s tourism revenue reached VND554 billion in March, down 64% from February and 77.4% from March 2019. In the first quarter, the city’s tourism revenue was forecast at VND4,505 billion, down 39.9% on year. This is one of the industries hardest hit by the Covid-19 pandemic.

Like the travel sector, accommodation and catering services in the city also witnessed a year-on-year revenue decrease of 30.3% in the quarter, projected at VND19,793 billion. The March value reached VND2,943 billion, down 59% from February and 68.4% from the same period of 2019. This industry has also fallen into a severe recession and witnessed negative growth.

The HCM City Tourism Department said that the total tourism revenue was estimated at VND3,496 billion in March, down 65.26% year on year. The sector fetched only VND25,591 billion from January to March 2020, fulfilling 18.28% of the full-year plan and down 26% from the same period of 2019. The sector was anticipated to lose nearly VND10 triillion in the first three months of 2020 from a year earlier.

Solutions

In the face of the severe damage caused by the pandemic, which may last long and cripple the tourism economy, tourism authorities and agencies have discussed measures to respond to the Covid-19 epidemic.

Mr. Tran Duc Hai, Director of the Hanoi Tourism Department, said, from now until the end of this year, the department will continue to instruct local tourism businesses, organizations and individuals to ensure safety in the fight against the epidemic, working out solutions to deal with business losses and risks during and after the epidemic. The department will also promote destination construction and improve destination quality; formulate a scheme to enhance the quality of local key tourist sites. In the long term, it will promote investment into technical facilities, develop complete and high-quality tourism products, accelerate the construction progress of high-class tourism sites, destinations and hotels.

On April 8, the HCM City Tourism Department also sent Document 463 to the Ministry of Culture, Sports and Tourism and the Vietnam National Administration of Tourism to propose urgent tasks and solutions to remove difficulties in tourism business, ensure social security and respond to the Covid-19 pandemic. In addition, the department proposed the ministry report to the Prime Minister for using the World Bank's emergency support package to launch the support program. Specifically, first of all, the support will go to institutional reforms and administrative reform in the tourism field; assist the program to boost information technology application in tourism sector like building an electronic data interchange model for tourism companies to serve administration by relevant authorities, building solutions to develop the tourism industry, and offer operating software for businesses and tourist accommodation facilities. Besides, it will support training programs, foster tourism human resources and enable tourism stimulus programs.

According to the Khanh Hoa Tourism Department, if the plague is contained soon, it will focus on promoting communications with the topic “Live safe” and “Safe Vietnam”, in which it affirms that Vietnam in general and Khanh Hoa in particular is a safe destination for tourists. At the same time, it will launch international and domestic stimulus programs and address difficulties for businesses affected by the Covid-19 epidemic.

Some other provinces such as Ba Ria - Vung Tau have also proposed plans to develop localized community tourism products to 2025 by creating community-based tourism products. Tra Vinh province has also put forth plans to prevent and control the epidemic for tourist accommodation facilities in three southern provinces.

By Giang Tu, Vietnam Business Forum