Tourism firms hibernate as Covid-19 fight rages

By Dat Nguyen   March 26, 2020 | 04:44 pm PT
Tourism firms hibernate as Covid-19 fight rages
Tourists ride bicycles in Hoi An Town, central Quang Nam Province on March 18, 2020. Photo by VnExpress/Xuan Tan.
Vietnamese tourism companies are virtually in hibernation mode as the novel coronavirus slashes travel plans and, in turn, their revenues.

It is hard to imagine a tour company conducting no tours, but that is what happening to Hanoi Redtours these days. Hanoi Redtours has been in business for more than two decades and has never experienced anything like its present inactivity.

Nguyen Cong Hoan, deputy director of the company, said that all ongoing tours and bookings have been canceled this month, even though the company has been offering discounts of up to 50 percent to attract customers amidst the pandemic.

"We are hibernating, and no one knows when this period will end."

The company had targeted a first quarter revenue of VND120 billion ($5.1 million), but the accomplished figure was around VND50 billion ($2.1 million). Its six-month target will also be missed, Hoan said.

"We’ll soon have to cut down staff salary and working hours."

Vietnam’s tourism industry as a whole is facing one of the most uncertain, challenging times as the Covid-19 pandemic wreaks havoc around the world.

Within the country, after recording 22 days straight without any new cases, Vietnam has been recording a second wave of patients since March 6, dominated by Vietnamese and foreigners coming from the U.K, the U.S. and the E.U.

This has resulted in the closing down of most tourist destinations in the country. Phu Quoc Island, the largest in the country, has suspended receiving foreigners, while bars and most other entertainment facilities in Ho Chi Minh City and Hanoi have been shut down on authorities’ orders.

Small and big hotels have shut down, and more than 100 of them have offered to become quarantine zones.

Tourism employees therefore have no jobs. The social media these days is filled with stories of tour guides and hotel staff being out of work.

"I have to move back to my hometown with my parents. My Chinese and Japanese language skills are now irrelevant," wrote one user who also offered to sell fruits from his family garden to get some money.

[Caption] Foreigners leave an alley on Bui Vien Street, District 1, Ho Chi Minh City on March 15, 2020 after a Latvian tourist staying here tested positive with the novel coronavirus. Photo by VnExpress/Quynh Tran.

Foreigners leave an alley on Bui Vien Street, District 1, Ho Chi Minh City on March 15, 2020 after a Latvian tourist staying here tested positive with the novel coronavirus. Photo by VnExpress/Quynh Tran.

Others are taking any job available, including ride-hailing and delivery, to pay the bills while waiting for the situation to improve.

Over 1,000 employees of leading tourism firm Vietravel have been staying at home in recent weeks with just their basic salary because they have no work.

Hoang Duc Huy, CEO of Hanoi-based TransViet Group, has written to all staff, announcing the company’s plan to enter a hibernation mode, with some staff being reallocated to work in farms, while others will remain unemployed until the outbreak is contained.

"This is unprecedented for the company in 24 years of existence," he wrote.

HCMC-based tourism firm VietCircle has let most of its staff work from home with salary cuts. CEO Phan Dinh Hue said: "Like others in the industry, we have to use our contingency funds to cover costs in order to survive the difficult time."

The tourism sector accounts for 7 percent of Vietnam’s GDP, but if indirect contributions, such as its impact on retail and food and beverage industry are included, the figure is closer to 14 percent, according to a report by investment fund VinaCapital.

It said that the plummeting number of tourists could knock down one percentage point from GDP growth this year, taking it to a seven-year low of 5.52 percent.

But some tour companies are trying to keep themselves active. Nguyen Quoc Ky, CEO of Vietravel, said that company leaders have been meeting regularly to discuss plans to reboot the business after the pandemic.

"We are working to restructure the company and digitize all business, something we did not have time to pay attention to before."

Most industry insiders, however, anticipate more difficult days ahead as the Vietnamese government takes drastic measures to contain the virus.

Starting March 21, everyone entering Vietnam must be quarantined for 14 days, and international routes carrying foreigners must be suspended, Prime Minister Nguyen Xuan Phuc has ordered.

Most local airlines have already suspended international routes, and the country has suspended entry for all foreign nationals starting March 22.

Although these moves can be seen as a knockout blow for the tourism industry, with losses estimated at $7 billion this year, Hoan of Hanoi Redtours is optimistic about a post-pandemic recovery.

"We are working on new tourism products. We’ll come back stronger."

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