Vietnam tourism floored again by Covid-19 pandemic

Nearly 10,000 customers of Hanoi Redtours have canceled or delayed their travel plans for the rest of the year after Vietnam started recording daily double digit increases in Covid-19 cases in August, said Nguyen Cong Hoan, deputy director of the company.

"The second wave of Covid-19 cases is another blow to the tourism industry after many companies have been mostly inactive in the first half of the year," he said.

Hoan’s company, like many others in the tourism industry, started recording rising revenues from May to July thanks to surging domestic travel demand as Vietnam went over three months without any community transmission. Industry insiders expected August to be the best performing month of the year.

But all that changed late last month when Da Nang City, a tourism hotspot, began recording an increasing number of cases with authorities unable to trace their origins. Since then, Vietnam has recorded 405 community transmissions in 14 cities and provinces including Hanoi and HCMC, and 17 patients have died.

Hoan said that many deposits the company has put down with airlines and hotels will likely be lost. Plans to invest in new products and recruit staff have been suspended, and the company has seen 15 percent of employees leaving for other jobs.

"We expect revenues to fall 70 percent from last year, and losses are likely."

My Khe Beach in Da Nang City is seen deserted on July 28, 2020 as authorities impose social distancing measures in the city to curb the spread of the novel coronavirus. Photo by VnExpress.

A similar situation can be seen at Vietravel, one of the largest tourism companies in the country. Nearly half of its staff have quit to find new jobs due to the pandemic impacts. About 20 percent of staff are still under contract but have been staying at home, and the second wave of Covid-19 cases means they are less likely to be called back to work.

About 50-60 percent of Vietravel customers have canceled their trips amid the worsening Covid-19 situation, many of them demanding a full refund.

"We were stunned by the second blow," said chairman Nguyen Quoc Ky. His company has only been fully operating for about four months this year due to the pandemic, and even if activities resume in the last three months of the year, it would be difficult to achieve the year’s targets with only seven months of work.

"Even surviving would not be easy," Ky said. Vietravel reported a first-half loss of VND80 billion ($3.4 million), down from a profit of VND30 billion ($1.3 million) in the same period a year ago.

Other tour companies are facing similar challenges. Saigontourist has seen 95 percent of customers in Hanoi alone, 13,000 people, canceling trips this month. For Vietrantour, the figure is nearly 3,000 customers.

Company leaders are working on plans to survive the pandemic. Vietravel is reorganizing its operations to focus on destinations that have not been impacted by the resurgence of cases so far. Instead of cutting all services as it did in the second quarter, the company tries to maintain services with safety measures.

Hanoi Redtours have been offering customers other travel options such as traveling to a resort 50 kilometers away from Hanoi instead of flying to the central region where risks of contagion are high.

As large groups cancel travel plans, Hoan said his company is focusing on family customers and offering them services at five-star hotels in the capital city where safety measures are strictly imposed. This is one of the ways in which the company is trying to maintain its cash flow in the troubled times.

In the best case scenario that Vietnam once again contains the spread of the virus, tourism activities won’t likely resume until October, Hoan said.

Vietnam’s revenues from tourism in the first seven months fell 55.4 percent year-on-year to VND11.1 trillion ($479 million), according to the General Statistics Office.

In the first six months, the number of domestic tourists fell nearly by 50 percent to 23 million, the Vietnam National Administration of Tourism reported.