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Vietnam reopens $17 million tourism market, businesses expected to prosper after 2 years of stagnation

Many large businesses in tourism, accommodations and transport, and five-star hotels and resorts are expected to see a boom after two years of stagnation.

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Vietnam officially opened its doors to foreign travelers on Mach 15, 2022.

According to the Saigon Securities Incorporated (SSI) Research, the tourism reopening will promote revenue growth and improve the profits of businesses in many fields, such as tourism, travel and transportation.

Though strict requirements are still set to ensure safety against the pandemic, with the opening and the gradual reopening by other countries, the outlook for tourism recovery has become clearer.

In a recent move to support the tourism industry, the Government of Vietnam issued a resolution on visa waiver for three years, commencing from March 15, applied to citizens of 13 countries, including Germany, France, Italy, Spain, UK, Russia, Japan, South Korea, Denmark, Sweden, Norway, Finland and Belarus.

According to SSI Research, the number of travelers is unlikely to be as high as in the pre-pandemic period.

According to the Vietnam National Administration of Tourism (VNAT), the tourism industry plans to receive 65 million travelers in 2022, including 5 million foreign travelers and 60 million Vietnamese. The total revenue of the industry is expected to reach VND400 trillion, or $17.4 billion.

It will take time to see how the reopening of the tourism sector is reflected in business results. Meanwhile, share prices have already begun increasing as they always reflect investors’ expectations.

In the last few trading sessions, analysts noted that cash flow poured into shares of business in the aviation, banking, building materials, and real estate sectors.

This is a positive sign for the industry which benefits from the reopening to receive international travelers amid the fall of the VN Index. The stock market is following the world market which witnessed a sell-off which caused share prices to drop sharply.

On March 15, NVT shares of Ninh Van Bay saw prices increase by another 7 percent to VND16,900 per share. However, the trading amount was small and there were few sellers.

NVT, belonging to the tourism and accommodation sector, benefited thanks to the recovery in hotel room occupancy rate from the increase in number of domestic travelers and the expectations for an increase in foreign travelers.

NVT shares have been supported by information that the group of shareholders related to Dong Nai Plastics (DNP) is collecting shares. In addition, there is information that Tasco has decided to set up a subsidiary – Tasco Land – and make an investment in Ninh Van Bay.

The price of VTD shares of Vietourist also increased by nearly twofold over the last 1.5 months, from below VND15,000 per share to VND26,000.

VJC shares of Vietjet Air have increased sharply recently, helping billionaire Nguyen Thi Phuong Thao become richer with stock assets worth $3.2 billion. With the value, Thao is listed among the 950 richest people in the world, according to Forbes.

The VJC price increase reflects investors’ expectations about the prosperity of the air carrier, expected to come with the tourism reopening on March 15.

The noteworthy shares include VTD of Vietourist, VNG of Thanh Thanh Cong Tourism JSC, CTC of Hoang Kim Tay Nguyen Group and TCT of Tay Ninh Cable Car Tour Company.

However, the issuance of shares to increase charter capital may reduce profits to shareholders amid slow recovery. Meanwhile, TCT has had difficulties when competing with Sunworld.

The accommodation sector can benefit thanks to a recovery in hotel room occupancy with the increased number of tourists. The most noteworthy shares include NVT of Ninh Van Bay, DAH of Dong A Hotel Group and OCH of OCH JSC.

The transport sector can also have indirect benefits from the tourism reopening. However, analysts say that the business performance of the enterprises in the sector is being affected by fuel prices.

The shares that benefit include HVN of Vietnam Airlines, VJC of Vietjet, SKG of Superdong Kien Giang, SRT of Saigon Railway Transport JSC, and HRT of Hanoi Railway Transport JSC. 

M. Ha

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