- Green Growth
- Your Consultant
|Like a Phoenix Rising from the Ashes, illustration photo|
Casually walking around the Hoan Kiem Lake, taking in a breeze of fresh air while enjoying delicious ice cream – these activities were impossible during the weeks of the national lockdown in the capital city of Hanoi.
Saturday, April 25 was the first weekend day when people in Vietnam were beginning to resume those kinds of leisure activities around the central lake that were practically eradicated for more than three weeks following the serious development of the pandemic.
With the exception of that one begpacker couple that could be seen singing and asking for money next to the ice cream shop at the north-west end of the lake, most people you could meet on this weekend were locals, finally being able to go out again and enjoy themselves.
Even though there were mostly just these locals, hopes are high now that the pandemic is slowly going away, after leaving a barren tourism landscape across the country. If so, we might soon see some international visitors joining in the weekly pho di bo (pedestrian street) activities that were once happening around the lake and hopefully come back soon.
Like a virus that can infect and shut down a computer almost immediately, the coronavirus has taken its toll on Vietnam’s tourism and hospitality sector in the blink of an eye, leaving little options for quick recovery.
During the first quarter of this year, hotel occupancy rates in Ho Chi Minh stood only at around 50 per cent, nearly 30 per cent less than the year before. A report by Savills Vietnam stated that it is also unlikely for the sector to recover within the second quarter. The report further mentioned that around 90 per cent of all tourism-related businesses, such as restaurants, bars, and other venues had to seize operations for the time being, leading to losses of more than VND10 trillion ($425 million) in tourism revenues in Ho Chi Minh City alone.
Across the nation, almost 400 companies participated in a survey in mid-April by the Tourism Advisory Board. Accordingly, a shocking 90 per cent of them said they would need government loans to overcome the devastation that the pandemic had caused.
Danang’s My Khe beach is normally packed with tourists but had been closed as part of the nation’s social distancing campaign. With just some loudspeakers reminding people to stay away from each other and wear face masks, the deserted beach is currently more reminiscent of a desert than a holiday destination.
Vietnam’s tourism sector contributes around 10 per cent on average to national GDP, according to the World Bank. However, not just hotels, restaurants, and sightseeing venues are affected by the heavy toll the pandemic is taking. Countless small- and medium-sized businesses, shop keepers at normally highly-frequented streets, transport businesses, and many others suffer under the outbreak.
With such a significant impact on one of the most important economic sectors, people could think it would break a country’s spirit. But Vietnam would not be Vietnam if it was throwing in the towel just now.
RISING FROM THE ASHES
“We need to learn to adapt to live with the pandemic,” Vietnamese Prime Minister Nguyen Xuan Phuc said.
“We must not let it destroy our economy or our country. We need to put our people’s lives first and continue to take drastic measures to control the disease.”
Despite the so far very successful containment campaign by the Vietnamese government, the prime minister urged people not to go out and celebrate just yet, reminding them that it is too early to declare victory over the virus. Instead, the country is moving forward under the slogan “live together safely,” meaning that most people can return to work but have to continue to be cautious and follow safety and hygiene measures.
As domestic flights are also picking up pace again, there is a silver lining for domestic tourism visible now. Each of the local authorities is working on action plans for economic recovery, including for the tourism sector which was brought to its knees during the last months.
In order to support local business, Hanoi’s officials said they would simplify business loan applications to ease the burden that is currently lying on many companies’ shoulders.
However, as most countries around the world are still more than busy coping with COVID-19, international tourists may still have to wait until the third or fourth quarter before coming back to Vietnam.
Meanwhile, in order to deal with the situation, Danang’s Tourism Association has asked the local authorities to issue more preferential policies for tourism companies including land lease fee reductions for hotels and resorts for two years, as well as delays for tax payments and reductions for admission fees at some historical and cultural relic sites.
The association said it would also host a mass promotion campaign in foreign markets in the second quarter, including Russia, India, and Australia, as well as prepare to reschedule tours from China, Japan, and South Korea after the pandemic has eased in these regions.
Following the prime minister’s Directive No.11/CT- TTg dated March 3, the Ministry of Culture, Sports and Tourism is planning to promote Vietnam’s tourism at the national level and collaborate with localities to promote domestic tourism while developing new tourism packages to attract international tourists after the pandemic is under control.
Commenting on the country’s capacity for domestic tourism, investment manager Andy Ho from VinaCapital Vietnam Opportunity (VOF), said “The travel industry in Vietnam will continue to grow as domestic travellers have fully embraced the convenient and inexpensive options to fly, while international visitors will eventually return, resulting in both surging tourism and direct investments.”
In an interview with Citywire, Michael Kokolari, chief economist at VOF, said that “there are a few reasons to believe that the impact of COVID-19 on Vietnam’s economic growth in 2020 will be worse than most expect.”
According to the Vietnamese Ministry of Health, on 28 April, Vietnam had just 270 confirmed cases with 222 of them already been recovered and no fatalities so far. Experts say that the decisive and rapid containment measures taken by the government as well as the participation of people in the country have helped to keep the number of infections this low, making Vietnam a shining example across the region and the world.