VN tourism supply chain disrupted by Covid-19

In a recent talk, directors of two travel firms, one based in Hoi An and the other in Da Nang, complained that their capital has been ‘buried’ in supply chains since the epidemic outbreak.

Nguyen Son Thuy, director of Indochina Unique Tourist, said before the epidemic outbreak, his company left a deposit worth tens of billions of dong to book accommodation and transport services for its tours in 2020.

VN tourism supply chain disrupted by Covid-19



“We want to get back the deposits to improve our working capital, but we have been refused,” Thuy complained.

He said Indochina Unique Tourist’s partner is Mercure Bana Hills French Village in Da Nang City. The hotel refused Thuy’s proposal to return the deposits, saying that it will only make a refund in June as stipulated in the contract.

Thuy tried to persuade the hotel to accept the proposal, saying that parties should concede in such conditions. However, the hotel replied that it faced difficulties because of the epidemic and that Thuy will have to pay a fine if he wants to withdraw money immediately.

In a recent talk, directors of two travel firms, one based in Hoi An and the other in Da Nang, complained that their capital has been ‘buried’ in supply chains since the epidemic outbreak.

“Our cash flow is frozen, partially because partners refuse our proposals to return deposits back to help settle difficulties caused by Covid-19,” he said.

 


It is also impossible to get back the deposit money from airlines. “They (airlines) only accept to delay bookings to 2021,” Thuy said.

Meanwhile, Nguyen Ngoc Anh, director of Omega Tours, said his situation is better than Thuy’s. “I have a deposit of VND3-5 billion. If they refuse to pay, I will be affected,” he said.

Anh advised Thuy to hire a lawyer to settle the case.

Le Tan Thanh Tung, deputy general director of Vitours, affirmed that Anh and Thuy are not alone.

In normal conditions, the units in tourism supply chain, including travel firms, airlines, accommodation service providers and excursion points, cooperate smoothly with each other to serve travelers and share profit.

But since Covid-19 broke out, the links of the chains have been disrupted. Since there is no client, no one can collect money. The units in the chain all try to keep deposit money and prioritize to settle their problems.

According to Tung, the deposits at airlines represent the biggest amounts of money for travel firms.

“I know some travel firms have to leave a deposit of VND5-10 billion. Airlines agree to delay bookings to the next year. However, travel firms have to pay principal and interest every month,” he said.

In general, travel firms have to pay deposits in January if they want to book services for summer tours.

Kim Mai 

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