Investment & Finance

Coronavirus epidemic paralyses tourism industry

SGI

The sudden and virulent spread of the Coronavirus epidemic is seriously affecting many trade and businesses, including the tourism industry. Foreign tourists have decreased in vast numbers and countless domestic tourists have canceled tours, following warnings by countries across the globe.

During the epidemic, the tourism industry must find ways to retain tourists. Photo: VIET CHUNG

During the epidemic, the tourism industry must find ways to retain tourists. Photo: VIET CHUNG

Travel related businesses are now all suffering huge financial losses and are unable to cope in this very difficult situation for an even unforeseeable future.

Hotel room capacity down 20%

In Vietnam, the worst affected are localities visited by a large number of Chinese tourists in recent years, such as Nha Trang City and Khanh Hoa Province. Since the outbreak of the Coronavirus epidemic, the number of Chinese visitors have decreased significantly. Mr. Nguyen Thanh Vu, Director of the 4-star ISENA Hotel in Nha Trang, said that the tourism industry in the coastal city has never seen such a dire situation before, when room capacity in several hotels has fallen to a mere 20%.

In recent years, too many hotels were constructed after seeing a surge in Chinese visitors, but now with fears of the epidemic, hotels are faced with near zero occupancy. For hotels specially created to welcome Chinese customers, such as the ISENA hotel, there is still hope that domestic or Eastern European tourists may fill this void. The hotel is providing best quality services to its resident guests, as well as following all precautionary measures against the epidemic, to reassure their guests.

Not only is the tourism industry, hotels and restaurants suffering after the breakout of this coronavirus epidemic, but all other businesses that sell their goods and products to Chinese tourists are losing out on their daily income as the Chinese tourist is known to spend lavishly on shopping and luxury items. According Mr. Pham Van Ngoc, Director of Viet Tin crocodile skin fashion, in 2019, the company had six retail outlets for fashion accessories in shopping centers in Nha Trang and Ha Long (Quang Ninh) with sales of about VND 30 million per day in one shop alone. However, these days, Viet Tin is thinking of reducing the number of retail outlets and increasing on online sales and focus on boosting production for larger export orders.

The impact of the nCoV epidemic has also swept across many localities with tourism becoming less dependent on Chinese visitors, such as in Ho Chi Minh City. According to the Department of Tourism in Ho Chi Minh City, the number of inbound foreign visitors in Ho Chi Minh City during the Tet Lunar New Year decreased by about 15%, and Chinese tourists alone decreased by 25-28%. After the spread of the epidemic, many domestic tourists canceled tours to localities such as Da Nang, Nha Trang, Hanoi, and Phu Quoc.

Fears of the deadly spread of the coronavirus also caused many Vietnamese tourists to cancel many outbound tours to Korea and Taiwan, which was a severe loss for travel businesses, because when a tour is cancelled at the request of a customer, the tour company has to refund 100% of the deposit. On the other hand, if associate partners in foreign countries and airlines make deposits, and if a tour company cancels the tour without an official dispatch of suspension from the host country, it will still be fined in accordance with the signed contract. Currently, many travel agencies are trying to negotiate with their partners but have not received the money back yet, while they have to pay large amounts of cash back to customers here, and some businesses even have to use personal money to refund their customers.

Previously, some outbound tours to Europe and the US were also affected, and businesses had to cancel air tickets with transit in Taiwan, and buy fresh tickets to return passengers to Vietnam on direct Vietnam Airline flights, or via transit in Singapore or Dubai. Cancellation fee of tickets becomes the responsibility of the tour company completely, not the customer. Mr. Nguyen Minh Man, Head of Communications and Marketing Department of the TST tourist company, said that with the current situation the first quarterly business results of most travel businesses have dropped sharply. For TST, right after the Tet Lunar New Year, they had to adjust business plans and are currently updating according to the nCoV epidemic situation every day.

Attempts to lure back tourists

From the perspective of a manager, Mr. Le Van Hoa, Deputy Director of Department of Culture, Sports and Tourism in Khanh Hoa, all festivals draw a vast number of tourists to Nha Trang and Khanh Hoa, which now have completely stopped under the direction of the Government and the Ministry of Culture, Sports and Tourism. However, the interest from visitors to Nha Trang is still huge, especially European and American visitors. Mr. Hoa believes if the locality had shown good response in tackling the present epidemic, such as at the Khanh Hoa Provincial Hospital for Tropical Diseases, and if even one case of the Coronavirus had been cured there, the image of this tourism culture city would have been strengthened and tourists would feel much safer.

If we proactively and calmly respond to the current Coronavirus epidemic, foreign visitors will soon return and even domestic tourists will begin to travel within the country.
-Mr. Nguyen Minh Man, Head of TST Tourist department of marketing and communication.
In Ho Chi Minh City, which is one of the major tourist city of Vietnam, the Department of Tourism is constantly updating information on the nCoV epidemic situation, issuing directives and documents to businesses. Specifically, on 4 February, the Department of Tourism issued a plan to prevent nCoV epidemic in the field of tourism. One of the tasks and solutions proposed by Mr. Bui Ta Hoang Vu, Director of the Department of Tourism, was to research and seek out other tourism markets, thus limiting the influence from the Chinese tourism market. The Department is organizing training for travel businesses to learn how to prevent outbreaks to ensure the safety of travelers. With positive and drastic actions, the city's tourism industry hopes tourists will feel secure.

Talking about the efforts of businesses in this difficult time, Mr. Nguyen Minh Man said that the travel businesses have carefully advised customers on insurance, safety for travel, and redirecting travelers appropriately. Currently, the Tourism Authority of Thailand, Japan, and Korea have specific information to reassure visitors when coming to these countries. Regarding inbound tourism, TST has recently welcomed a group of 200 guests from Thailand, so this market is almost as vibrant as before.

From an optimistic viewpoint, many travel businesses think that this is an opportunity to show their best skills and ability to tourists. Le Phuong, manager of the Grand Minerva Hotel in Hanoi, said the room capacity at his hotel was still over 60%, and on some days even went up to 80-90%. He says that the challenges are facing everyone, but this is also an opportunity for hotels to prove their service capabilities, show their skills in handling tourists better and provide the maximum safety to each traveler. He believes that a touch of human warmth will have a significant impact on tourists at this time and as long as they feel safe and cared for they will feel the same as they do in the comfort of their own homes. Therefore, disinfecting measures must be implemented thoroughly, along with attentive care from the hotel staff, which all will help visitors feel more comfortable.

Translated by Hoa Nam

Thanh Dung-Thai Ca

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