Further to our letter dated February 6th, we would like to continue our congratulations for the Governments handling so far of the Coronavirus situation (COVID-19) and the measure taken. We would like to thank you, your excellency for publicly used our early letter to support argument and immediate and apt policy. As you are aware, we are sure, that the current situation is having a devastating effect on the industry, in Vietnam.
Our initial research shows that hotels have suffered between 20% to 50% decline in occupancy comparing to the same period last year, depending whether in cities (Hanoi and HCMC) or resort destinations (Sapa, Quang Ninh, Danang, Quang Nam, Cam Ranh, Nha Trang and Phu Quoc). As for Destination Management Companies and Tour Operators (HCMC, Hanoi and Ha Long), we are seeing about 50% decline. Meetings, Incentives, Conventions and Exhibitions (MICE) has been a big looser as many major International companies have suspended foreign travel by their employers. Hotel operators in Cam Ranh/Nha Trang have reported China focused hotels occupancy is down by as much as 98%, whereas mixed market hotels have experienced an average 50% cancellation and a 70% fall in future bookings. The strongest performing markets overall are from the UK, Europe and Australia, where future bookings are only down by 20%, USA are 40% down and Russia are 50% down.
Local airlines have been harder hit with flights suspended or significantly curtailed to China, Hong Kong, and Taiwan and with an approx. drop in of 50% in regional bookings and 40% in domestic bookings. One brighter spot is long haul markets where demand has so far fallen only by about 20%.
Tourism sites and main tourism destinations have also suffered. For example, during Tet and on regular days Ha Long Bay was receiving 7000 to 8000 visitors a day but on Monday, February 12th this had reduced to 2300 most of whom were European(1). Shop keepers and market stall holders, in HCMC and other cities are generally reporting falls of 50% in Business with no Chinese, and few Korean or Japanese guests.
During SARS, as many as 400,000 foreign tourists cancelled their tours to Vietnam in 2003 as a result of the SARS outbreak(2). However, tourism industry back then was much smaller and their direct contribution to Vietnam GDP was much smaller (less than 4%). Today, tourism industry is contributing 9.2% to Vietnam GDP and their indirect and induced contribution could be as high as 18% of Vietnam GDP. Also, back then, we could diversify markets geographically and reach out to Australia, Europe and Korea instead of concentrating on Japan(3). Because of that, we believe the impact of the COVID-19 on Vietnam tourism industry will be much higher this year.
(1) VN Express online –Ha Long Management Board
(2) Wilder-Smith 2006
(3) Henderson, 2007
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