Vietnam tourism unlikely to achieve annual targets, but recovery appears promising

A significant decrease

About 133,740 international tourists visited Hanoi in March, down 80 percent compared to the same time in 2019. In the first quarter of 2020, the capital city welcomed about 3.85 million visitors, down 47.2 percent compared to 2019.

Total tourism revenues reached nearly VND15.69 trillion, a 38.8 percent drop. Nearby Ninh Binh Province welcomed approximately 1.47 million visitors, equivalent to only 42.1 percent in the same period in 2019. Total provincial tourism revenues exceeded VND761.33 billion, equivalent to 53.1 percent of 2019 first-quarter figures.

According to the General Statistics Office of Vietnam, the number of international visitors to Vietnam in March 2020 plunged 63.8 percent compared to February 2020 and 68.1 percent compared to March 2019. Overall, in the first three months of 2020, the number of foreign visitors reached 3.7 million, a decline of 18.1 percent compared to the same period of 2019, especially of tourists from major markets. Specifically, the number of visitors from Asia reached about 2.67 million, down 21.1 percent. Some 664,300 tourists came from Europe, down 3.1 percent, about 234,000 American visitors represented a 20.2 percent drop and the number of Australian visitors reached 102,200, down 14.4 percent.

While total retail sales of consumer goods and services in the first quarter grew 4.7 percent to more than VND1.24 trillion, accommodation and food services revenue, accounting for 10.1 percent of the total, dropped 9.6 percent in the first quarter compared to the same period last year to about VND126.2 trillion. Travel revenues were estimated at about VND7.8 trillion, accounting for 0.6 percent of the total revenue, down 27.8 percent compared to the same period of 2019.

The tourism and service industries are facing many difficulties

Favorable recovery expected

The effects of the pandemic cast into doubt the ability of Vietnam’s thriving tourism industry to achieve its annual targets, both locally and on the national level. Hanoi, for example, expected to welcome 31.88 million visitors this year for revenues of VND116.61-120 trillion. Ninh Binh, the host province of “The national tourism year 2020”, is also unlikely to achieve its target of 7.78 million visitors.

According to the World Tourism Organization, the number of global foreign tourists will decline by 1-3 percent this year instead of the 3-4 percent increase forecast in January, just before Coronavirus outbreak. However, the prospects of the tourism and service industries appear bright once the pandemic is stemmed, given the resilience of these sectors.

Mauro Gasparotti, Director of Savills Hotels Asia Pancific, said previous events proved that tourism recovers faster than other industries. In addition, prospects for Vietnam’s tourism industry are favorable because it has a large proportion of domestic tourists, accounting for 82.5 percent of total visitors in 2019, as well as significant numbers from China and the Republic of Korea which appear set to recover from the epidemic than other countries.

In order to compensate for losses and resume business when the pandemic is over, the gorvenment should adopt special policies to support companies in the field of accommodations, tourism and logistics. These should not include debt rescheduling, moratoriums and tax reductions, but also monetary, interest rate and exchange rate policies in line with market developments, while seeking to not only control inflation but also support manufacturing and trade and promote economic development.