Tourism businesses continue to struggle amid economic downturn

By Tu Nguyen   December 20, 2023 | 08:26 pm PT
Tourism businesses continue to struggle amid economic downturn
Foreign tourists take a boat tour in Tam Coc, Ninh Binh during the rice harvest season, 2023. Photo by VnExpress/Le Hoang
Though the tourism industry achieved its targets in 2023, it still faces challenges amid the economic slowdown, forcing many businesses to cut staff and scale down operations.

Hoang Van Duong, owner of Duong Restaurant in Huyen Alley in Hanoi, has laid off his manager, assistant manager and others and only retains essential staff.

The menu has also been abridged, he said.

Nguyen Van Tho, who used to own four restaurants specializing in serving foreign tourists in Hanoi, Hue and HCMC before the pandemic, closed them because of lack of customers.

Late last year he reopened the two in Hanoi but those in Hue and HCMC remain closed.

"European customers coming to the restaurant only number 50% of pre-pandemic levels," he said, adding that he had to reduce prices.

Hoang Tien, owner of a business offering inbound tourism, said the number of European visitors is currently less than 60% of pre-pandemic levels.

Due to the lack of customers, he reduced his sales staff from six to two to cut costs.

The situation is likely to remain gloomy in 2024 due to global uncertainties.

A group of Brazilian tourists canceled a tour with his company because of concerns about aviation safety due to the Israel-Hamas war.

Data from the Vietnam National Authority of Tourism shows that in the first 11 months of this year Vietnam received more than 11.2 million foreign visitors, 1.5 times the target of eight million.

But it was only 62% of the 2019 figure, the peak year for tourism, of 18 million.

Accommodation facilities at major tourist destinations also faced difficulties this year, according to data from Mustgo, a booking platform with 2,000 hotel partners in the country.

During the five-day Reunification Day and May Day holidays (April 29-May 3), hotel occupancy rates in Phu Quoc were only 60%.

During the peak summer travel season occupancy rates at four- and five-star hotels on the island was 40-50%.

In Da Nang, the occupancy rate at three- and four-star hotels on weekdays is 60%.

The situation has been the same in places like Nha Trang and Quy Nhon.

Due to low demand, flights from Da Nang, Nha Trang and Can Tho to Phu Quoc have been suspended.

Phuong Bui of Mustgo’s research and market development department said people have reduced spending on travel due to the economic slowdown, but airfares have steadily increased, forcing many people to switch to foreign travel to cut costs.

This caused the number of domestic tourists at many destinations to decrease significantly from 2022, and with the number of foreign tourists not recovering to pre-pandemic levels, the tourism industry is in dire straits.

Phan Dinh Hue, a tourism expert in the Mekong Delta, said Vietnam's statistics might not be accurate, pointing out for instance that a foreign visitor arriving at a locality and visiting five destinations is counted as five visitors.

The inaccurate statistics partly cause tourism businesses to work out wrong investment strategies.

When looking at the "achievements" of the tourism industry in 2023, Tho wondered "how it was so good" when he and others are struggling to daily survive.

In 2019 China had been Vietnam's biggest source of tourists with 5.8 million arrivals.

But in the first 11 months of this year only 1.5 million Chinese visitors came, or 28.8% of pre-pandemic levels.

Recent surveys have found that Vietnam is no longer the top choice for Chinese tourists, who now prefer Singapore to other Asian destinations.

According to the Asian Tourism Development Institute, tourism authorities need to find ways to promote domestic travel, better manage prices and create more attractive products to diversify travel experiences for foreigners.

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