Investment & Finance

Entire tourism industry in dire straits

Saigon Investment
(Saigon Investment) - The unrelenting Covid-19 pandemic has caused havoc across most businesses. Even the once formidable tourism industry is now finding it hard to make ends meet, with long time workers now moving away to other pastures. The future of the entire tourism industry is clearly looking very bleak, gloomy and most unpredictable.

The Golden Bridge on Ba Na resort, Da Nang, also fell because of Covid-19.

The Golden Bridge on Ba Na resort, Da Nang, also fell because of Covid-19.

Attempted comeback

The Tan Suu Lunar New Year this year will perhaps remain in memory as a time when people working in the tourism industry had to close shop early for the Tet holiday season. Two months before Tet, when there were no new cases of infection in the community, the many businesses that had been hit in the previous year, tried desperately to revive and make a comeback. However, the sudden emergence of the new variant of coronavirus caused all plans and attempts to fail.

Businesses were abruptly forced to cancel or postpone tours to areas hit by the pandemic once again. Even those parts of the country that remained unaffected by the new coronavirus variant were hesitant to accept outside visitors. Customers asked tourist companies to refund their trips because of fear and concerns about the disease. Although the refunds were made to the customers, the payments to many service providers is possibly lost forever. As one director of a travel company shared that as most of the flight tickets were distributed in lure of promotional products in the future, it is difficult to collect a refund, as airline industry too is facing as much difficulty as the travel industry. All across the country the tourism industry is now feeling a marked sense of gloom and defeat.

When the Covid-19 pandemic suddenly erupted across the globe in February 2020, the tourism industry was one of the first industries to be impacted negatively, and it took this hit hard. From March 2020 up until now, Vietnam's tourism industry has not yet recovered or opened its doors to international visitors. The industry then moved to focusing and reviving domestic tourism, by offering attractive country wide tours.

By the summer of 2020, when the pandemic in Vietnam seemed to have been contained a great deal, the tourism industry launched many promotional and stimulus programs for domestic tourists. Some businesses that once only focused on international visitors now began looking at domestic tourism to overcome their difficulties. However, at the end of July 2020, when Da Nang was hit by multiple cases of the virus, domestic tourism once again fell back. So many businesses related to tourism have since found it difficult to survive and have moved to selling other items such as foods and masks, and many former workers have taken up other jobs.

The sudden and rapid spread of the Covid-19 pandemic has put the tourism industry in a seriously difficult situation. Speaking to Saigon Investment, Mr. Phan Dinh Hue, Director of Viet Circle Travel Company, said that the tourism industry in 2021 is very difficult to forecast. At least from now until the middle of the year, most businesses will have to wait and see what the situation will be like.

Although the State has been offering a lot of support, tourist enterprises are still in a difficult crisis, and support from the State has not been reaching the right people. With resources now exhausted, most businesses can no longer maintain office premises and employees are having to look elsewhere for work. Mr. Hue said that in the present scenario even the most enthusiastic people, who always saw the positive side and made great efforts to make their businesses successful, are now extremely pessimistic about the future, and it will surely take many years for the tourism industry to get back on its feet again.

Mr. Nguyen Quoc Ky, Chairman of Board of Directors of Vietravel company, spoke with the press on his concern, expressing his worry on whether there would still be a tourism industry existing if the pandemic is not contained soon. Mr. Ky also affirmed that although the tourism industry has been the most severely affected by the pandemic, but until now, there has not been any proper bailout package for tourism related businesses.

Uncertain future

The tourism industry faces many challenges in the future, even after the pandemic is brought under control. The first problem will concern human resources. After the pandemic began to spread, many experienced employees moved to different occupations, but they maintained hope that they would soon return to their jobs. However, as the pandemic continues to rage on with no end in sight, their hopes are beginning to fade, and most of these workers will move to invest their talents elsewhere, in other fields.

Without people with experience, the tourism industry will find it difficult to get back on its feet. Mr. Phan Dinh Hue feels that many other industries with machines can replace people, but the smokeless industry cannot do the same because only human beings can offer that personal touch in the hospitality industry that relies heavily on courtesy and direct interaction with customers.

This was evident during the Tan Suu Lunar New Year, when many tourism businesses faced many difficulties in recruiting personnel. Even large enterprises where only able to recruit 50% of their employees back to their jobs. Now with the third outbreak of the pandemic, even more qualified and experienced travel professionals will quit the industry. Over the last few years, Vietnam's tourism industry has perpetually faced problems due to insufficient and weak personnel, despite a period of strong development. So after the pandemic finally ends, the human resources situation in the tourism industry will face a crisis, and businesses will have to prepare for such a shortage, when it finally looks towards reviving once again.

The tourism industry has been the most severely affected by the pandemic, but until now, there has not been any proper bailout package for tourism related businesses.
-Mr. Nguyen Quoc Ky, Chairman of Board of Directors of Vietravel
The tourism industry will face many challenges in the future, as now businesses are too weak, having been forced to leave the market. Many who have switched to other fields and to selling other products, may not want to return to the same industry after the pandemic finally ends. When the third wave of the pandemic broke out again during the Lunar New Year, the Ho Chi Minh City Tourism Association sent a document to the Ministry of Culture, Sports and Tourism, proposing that ministries have policies to support businesses in this time of need. This document included recommendations for businesses to take advantage of zero interest rate preferential loan packages to help retain employees and accelerate recovery; prolong the time to repay bank debts; allow businesses and employees to delay payment of social insurance until end of June 2022; and at the same time adjust regulations on unemployment insurance benefits in 2021.

Another challenge the tourism industry will face in the future is dealing with a new psychology of customers, who will insist on safe means of travelling both domestically as well as internationally. The tourism industry now has to look at an ever changing scenario post pandemic, and remain alert and vigilant to unknown and uncertain threats, even as it continues to face these challenges while continuing to fight for revival and reestablishing itself once again. 

Thanh Lâm

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