Coronavirus outbreak hurt tourism, hospitality

By Dat Nguyen   February 4, 2020 | 07:59 pm PT
Coronavirus outbreak hurt tourism, hospitality
Tourists wear masks on a city tour bus in Hanoi. Photo by VnExpress/Vo Hai.
Vietnamese tour companies and hotels are concerned revenues could slip as the new coronavirus slashes the number of Chinese tourists.

Nguyen Cong Hoan, deputy director of Hanoi Redtours, said his company had canceled 15 tours to China during the seven-day Lunar New Year (Tet) holiday last month due to the novel coronavirus (nCoV).

This has cost the company VND7 billion ($300,000), with a further 30 tours already canceled in the next two months, he added.

Leading tourism firm Vietravel has canceled trips for about 1,000 visitors to Vietnam in the same period. Huynh Phan Phuong Hoang, deputy director of the company, estimated the firm would lose tens of billions of dong (VND10 billion = $430,000) in costs for pre-booked visas and services. The company has canceled all Chinese tours to Vietnam until end March.

Saigon Tourist Marketing and Communications Director Doan Thi Thanh Ha said the company has canceled plans for 500 tourists to travel to China during the Tet holiday, and is working on refunding them or switching to another destination.

Da Nang-based Hava Travel CEO Nguyen Minh Xoang said it usually operates three charter flights a week bringing 600 Chinese tourists from Wuhan, China to Da Nang. But all trips have been canceled since Wuhan became the epicenter of the deadly 2019-nCoV, which will cut into company revenue this year, he added.

Many Vietnamese localities including travel hotspots like Nha Trang Town and Da Nang City in central Vietnam and the China-bordering province of Quang Ninh in the north have ordered tour companies to stop accepting Chinese customers to limit the spread of the nCoV.

The Civil Aviation Authority of Vietnam has suspended flights to and from China starting Saturday, except for a limited number to repatriate the remaining Chinese tourists in Vietnam, and vice versa.

With Chinese tourists accounting for almost a third of total visitors to Vietnam last year, industry insiders are concerned the nCoV epidemic would cut revenues drastically.

In Khanh Hoa Province, where Chinese tourists accounted for over 70 percent of total visitors last year, Le Van Son, deputy chairman of Nha Trang – Khanh Hoa Tourism Association, estimated hotel room occupancy in the area could fall by up to 45 percent.

"Provincial tourism will be hit severely by the new coronavirus."

Vinpearl Resort Nha Trang reported a rise in the number of Vietnamese and international customers during Tet, though number of Chinese visitors fell by 50 percent year-on-year.

A resort representative said the Chinese tourist number could fall by over 90 percent in the coming days.

In Hanoi, over 12,800 hotel bookings have been canceled, according to the city’s tourism department. Over 7,600 travelers have scrapped their tours to the capital, while 6,000 Vietnamese terminated their plans to visit mainland China and Taiwan.

Director of Hanoi Department of Tourism Tran Duc Hai said tourist attractions across the city have seen customer numbers drop 30-50 percent.

The situation is similar in other localities. In Da Nang, the number of foreign tourists during the Tet holiday fell 15 percent year-on-year, while in HCMC, the drop was 12 percent, according to local tourism departments.

Chinese tourists seen in Ho Chi Minh City. Photo by VnExpress/Thai Phuong.

Chinese tourists in Ho Chi Minh City. Photo by VnExpress/Thai Phuong.

Strategic shift

Experts and industry insiders say the virus outbreak could be an opportunity for Vietnam to restructure its tourism sector by focusing on customers with deeper pockets.

Pham Trung Luong, former head of the Institute for Tourism Development Research, said Vietnamese tourism has been focusing on quantity in recent years and has become heavily dependent on Chinese tourists.

Vietnam needs to focus on high spending Chinese tourists, and prioritize other markets such as Europe and North America where customers are willing to pay more, it was added.

Tu Quy Thanh, CEO of Lien Bang Travelink, which serves a large number of Chinese tourists, said the nCoV outbreak is an opportunity for Vietnamese companies to filter its customers.

"Chinese visitors bring in good figures in quantity, but not in quality. The markets of Western Europe and other developed countries are more sustainable," Thanh said.

Vietnam welcomed 18 million visitors last year, up 16.2 percent year-on-year.

The country has confirmed 10 cases nCoV infection as of Wednesday morning. Globally, the death toll from the epidemic has reached 492, with 490 dying in mainland China, one in the Philippines and one in Hong Kong.

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