The worst is yet to come for Vietnam's tourism

Vietnam may have seen an over 50% decline in the number of tourist arrivals over the past five months due to Covid-19 but the situation is only expected to worsen, as the crisis has been forecast to reach its peak in the next few months, 

 with even large travel companies finding it tough to survive.

Cruise ships are docked at Saigon Port in HCMC. Vietnam has effectively contained the Covid-19 pandemic but its tourism industry is recovering at a slow pace – PHOTO: DAO LOAN

After several months of trying to sustain its staff and preparing for a rebound, a travel group has changed its plan as the tourism market is only worsening. Last week, the group’s CEO decided to lay off 200 employees at its hotel in the Mekong Delta.

“I know it will be hard for them to find a new job but this is the last resort because we will have no work for them in the next six months,” he explained.

Many travel companies, hotels and restaurants have been shut since the Covid-19 pandemic broke out in late January 2020, while companies that are still operating are struggling because the domestic travel demand is recovering modestly and the country is still closed to international tourists.

“We have tapped our reserve fund to support the staff but it is now exhausted. We are planning to terminate the labor contracts of some employees for them to enjoy unemployment allowances,” said Nguyen Son Thuy, director of Indochina Unique Tourist.

“In March, I expected the tourism market to rebound in July or August, but now I don’t know when the crisis will end,” he added.

Many travel companies said their reserve funds have been exhausted and predicted that the tourism crisis will reach its peak in the third quarter of 2020. They will have to suspend operations or fire a large number of employees, similarly to the situation witnessed in March and April, and even large companies will be affected.

“The trouble began in April and has only intensified. From July until the end of October, many travel companies, even large ones, will go bankrupt. This is a burden on the economy,” stated Tran Trong Kien, chairman of the Tourism Advisory Board.

Speaking to The Saigon Times, some travel companies said they are pinning all their hopes on the upcoming four-week-long summer vacation. They hoped revenues from the vacation would help them pay fixed costs such as office rentals, electricity and water bills and salaries of the staff.

Nguyen Ngọc An, deputy general director of Fiditour, admitted that while the company has received bookings for tours to Danang, Hoi An, Quy Nhon and Phu Quoc, bookings for tours to other attractions remained modest.

“Most bookings for the summer vacation this year have come from enterprises and not families like previous years,” he noted.

Data of the Ministry of Culture, Sports and Tourism indicated that some 95% of inbound tour operators in the country have suspended operations in the first half of 2020. Due to the impact of the Covid-19 pandemic, the number of international tourist arrivals and domestic tourists to Vietnam has dropped by some 50% and 58%, respectively, over the past five months.SGT

Dao Loan

 
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