Tourism businesses plead for continuing assistance
Dire statistics for the first half of 2021 point to tens of thousands of tourism businesses in Vietnam facing the risk of permanent closure if the sector does not receive timely financial support policies.
Tourism business units introduce Quang Ninh tourism programs.
Contrary to previous outbreaks of coronavirus since the pandemic began, the latest outbreak beginning right at the start of the key summer tourist season has caused even heavier losses to tourism businesses.
Last year the tourism industry was somewhat still able to exploit the domestic market while the international tourism market remained completely motionless. But now, with the pandemic situation still prevalent in many localities, the status of the tourism industry is heading in a reverse direction.
According to statistics from Ho Chi Minh City Department of Tourism, 171 related businesses applied to withdraw their business licences in the first half of 2021. Travel revenues in many businesses are currently only about 30 per cent compared to the same period last year.
Around 95 per cent of travel agents in Hanoi have also stopped operating, and the number of employees who quit or terminated their labour contracts is equivalent to over 12,100 people.
Up to a tenth of member businesses, equivalent to 1,000 tourism businesses in Danang, have been dissolved, while the rest remain close. The total number of tourism workers who have stopped working or quit their jobs so far is nearly 32,000 people, accounting for 62.5 per cent of tourism human resources, based on figures from the Danang Tourism Association.
Many tourism businesses lament that even though they have no revenues, they are still under pressure to pay fixed costs such as salaries, insurance, and tax. Most tourism businesses are itching for financial support for preferential loans to restore operations.
A representative of one tourism business said, “Policies to support cash flow now need to be faster before the business really dies.”
In a document sent to the Ministry of Planning and Investment, the Ministry of Culture, Sports and Tourism proposed to supplement a number of policies to support the tourism sector in the coming time, including a proposal to allow travel businesses to reduce the deposit amount by 80 per cent over two years to have capital to maintain operations.
According to the provisions of Decree No.168/2017/ND-CP, travel service businesses are required to have a deposit of $4,300-$21,700. This amount will be refunded when the business terminates travel services.
Some leading localities in tourism such as Hanoi, Ho Chi Minh City, and Danang have issued separate support policies for businesses and employees operating in the tourism sector.
Ho Chi Minh City Department of Tourism proposes a solution to use the city’s budget to support credit in the form of unsecured loans with zero interest rate for tourism businesses.
The purpose of the programme is to provide financial support so that tourism businesses can maintain their operating apparatus and retain employees.
According to the department, the city currently has 5,000 tourism groups operating with about 31,500 employees. With a zero interest rate and 50 per cent regional minimum wage support for three months, the loan sum to pay employee salaries is up to $9 million.
“These recommendations were issued before the latest outbreak of COVID-19 with complicated developments. The struggling tourism businesses are now almost paralysed, bankrupt, and unable to repay their debts. Meanwhile, the opening time to welcome international visitors is still unclear,” said Nguyen Thi Khanh, chairman of the Ho Chi Minh City Tourism Association.
In addition to the zero interest loan package, the city’s tourism department also proposes to consider supporting the training of tourism human resources in 2021 from the city’s budget. It is expected that 20 training classes for managers and direct workers at travel, restaurant, accommodation, and tour guide services with a cost of about $52,000 will be held in the upcoming time.
It was also argued that some tourist attractions, museums, and monuments in Ho Chi Minh City should be free to visit from August to the end of the year. The city will support around $913,000 to pay salaries for employees and regular expenses at these attractions to offset the revenue from tickets. The city, however, is currently undergoing strict social distancing protocols, with no end date yet in sight.
In order to support tourism businesses to alleviate some of their difficulties, the equivalent department in the capital of Hanoi has also proposed to reduce land rents and electricity prices, as well as supporting the unemployed tourism workforce.
Meanwhile in Danang, the city People’s Committee is studying that each employee in the tourism sector could borrow a maximum of VND100 million ($4,350) for a period of 3-5 years with an interest rate of 7.92 per cent per year in the form of an unsecured loan. Borrowers are those who have a lawful permanent address in Danang with the purpose of borrowing to create jobs and expand business.
The loan period is estimated based on the time it will take for the tourism industry to recover, and for the workers to have jobs and income to repay the loan.
Cao Tri Dung, chairman of the Danang Tourism Association, said that currently the number of workers who had registered for loans was nearly 2,000 and the association was still receiving more registrations.
Besides financial support, large-scale tourism promotion programmes and tourism fairs are also being prepared. Some localities have gradually eased welcome activities, allowing tourist areas, monuments, scenic spots, and many other services to welcome local tourists and foreign expats back.
Tourism sector socialises vaccine programme
The Vietnam Tourism Association (VITA) has called on local tourism associations and businesses to contribute to the COVID-19 vaccine fund and register for vaccinations.
After sending a written request to local associations, member businesses, and tourism-related groups to register to participate in the socialisation of the vaccine programme, many registered to contribute funding for vaccination for nearly 81,000 people.
Vu The Binh, vice chairman of VITA, said that based on the number of registered people, the association will request the Ministry of Health to allow tourism enterprises to contribute funds to vaccinate their employees and their families.
“The participation of businesses in the vaccine socialisation programme will contribute to speeding up the process of herd immunity, repelling the pandemic, and reducing the burden on the state budget to vaccinate the entire population. We also call and mobilise tourism businesses to actively support the government’s COVID-19 vaccine fund,” Binh said.
The fourth wave of COVID-19 infections in Vietnam has caused disruptions to most sectors once again as the country was preparing for the tourism season.