Domestic Tourism to Bounce Back as Social Distancing Eases

For the past three months, the Covid-19 pandemic has rocked many major economic sectors, especially tourism and travel. More than 20% of businesses have stopped operations, 40% shutting business locations to wait for new development and 90% witnessing revenue decline, estimated at billions of US dollars. Markets, segments and development strategies needed to maintain and develop tourism are topics of concern for many businesses.

Domestic market will develop most after the pandemic

The government lifted the social distancing order from 0:00 on April 22. The domestic tourism market is forecast to develop most after this time. Localities, suppliers and hotels are simultaneously offering stimulus packages to meet increasing entertainment needs of travelers after a long time staying at home to prevent the disease contagion. Short-day, weekend tourism products of competitive and attractive prices interest tourists more.

Mr. Duong Hong Tuan, trainer at Vietiso Company, said that some forms of domestic tourism are highly developed such as individual tourism and group travel. This will be a trend in the near future as it is becoming more popular in the world. In addition, experience tourism and medical tourism will be a matter of interest for many travelers.

Mr. Vu Van Tuyen, Director of Travelogy, a co-consultant for European tourism projects in Vietnam, said that the domestic tourism market will, however, face many restrictions and difficulties, both subjective and objective, after the epidemic. The regulation that coaches and airplanes cannot carry more than 50% of their capacity will result in very high service costs. In addition, not all localities are ready to reopen their tourist areas immediately, as they will apply many measures to protect citizens and tourists such as distancing, no crowding and other preventive measures.

“Currently, popular tourist destinations in Vietnam such as Da Nang, Nha Trang, Phu Quoc, Mui Ne and southern resorts are safe and prepared to welcome guests. Tourism businesses are working to welcome domestic tourists. They must introduce good, distinctive products to attract more customers,” he recommended.

When will inbound tours bounce back?

Unlike the domestic market, foreign visitors to Vietnam (inbound market) will not be able to respond quickly in the near term even though Vietnam has the best disease prevention in the world. The Government may soon announce the end of the epidemic and allow inbound tourists to Vietnam, but many countries will have to do it later. Most tourists will not be ready to travel during this time, especially to countries where the epidemic outbreak occurred. Tourism experts forecast that foreign tourists will not come back to Vietnam until the end of the third quarter or the fourth quarter of 2020. Thus, inbound companies will return to normal operation in the first quarter of 2021.

Mr. Tuyen said tourists will tend to choose resorts for health and social safety, but inbound travelers are often different: They want to be safe on the one hand and they like new experiences on the other hand. Therefore, community-based tourism will thrive. For example, tourists will choose countryside tours and homestay tours. A survey conducted by Travelogy in inbound tourist markets such as France, Canada, Belgium, the United States and Switzerland showed that up to 40% of respondents will choose upmarket tours and willingly pay much for their tours after the epidemic. More than 40% want to opt for experience tours.

Another branch of inbound tourism is business travel. MICE tourism is forecast to revive slowly because of quarantine fears after arriving in the country where the epidemic occurred or transiting through countries where the epidemic also occurred. Especially, meetings, incentives, conferences and exhibitions (MICE) tours will be limited because it usually takes at least half a year or one year to prepare. So, this activity will be difficult in 2020.

Many inbound travel companies are now reportedly preparing to launch stimulus programs and combos. However, according to Mr. Vo Van Tai, Director of Vietsens Tourism Company, tour discounts are not the optimal choice because transport costs are increasing and service prices are unlikely to be reduced. Service providers have not opened all products and services, so the discount will make it more difficult for tour operators and restrict inbound travel companies from selecting service providers after the pandemic.

Travelogy Director Tuyen said that inbound businesses suffered heavy economic losses in two quarters. They should join hands to launch product and destination marketing. They should opt for spreading the image “Vietnam is an attractive and friendly destination” rather than a discount-based stimulus because Vietnam has prevented and controlled the epidemic very effectively. The discount will not fully satisfy the high demand of inbound travelers who are often selective about the quality of products and services.

Covid 19 is like a powerful whirlwind that blows up companies’ business development efforts. In a crisis, there is always an opportunity for businesses that know how to seize it. Travel businesses need to develop specific strategies for short-term and long-term purposes to attract customers.

By Giang Tu, Vietnam Business Forum