Hanoi hotels close in droves as coronavirus hits bookings

Pham Thi Hang owns eight hotels in Hanoi’s Old Quarter, but three has stopped operating since the outbreak.

Hang’s targeted customers are middle-aged tourists from China, South Korea and Japan, but as these countries are all combating large numbers of infections, most bookings have been canceled since December.

With revenues plummeting, she has let some of her staff go to reduce costs.

“Income from my hotels reached VND300 million ($13,000) a day before the outbreak, but now I lose about VND180 million ($7,800) a day.”

Hang had to use her dwindling reserves to pay her remaining staff their VND1.5 million ($65) a month in the hope of keeping them on during the epidemic.

Hanoi tourist arrivals in the first two months fell 25 percent year-on-year to 3.56 million, with related revenues falling 32 percent, according to the city’s department of tourism.

The capital has shut down its downtown walking street next to tourist attraction Hoan Kiem Lake to limit the gathering of large crowds, with authorities preparing for different scenarios in case the epidemic advances.

Although Vietnam has not recorded new cases of coronavirus infections in weeks and all 16 patients have been discharged, insiders say fear of contagion will cause severe damage to the tourism industry, which accounts for seven percent of the country’s GDP.

This put hotel owners like Tony Dinh in trouble. Since the outbreak, he has shut down three of his 10 hotels near Hoan Kiem Lake, costing him VND8 billion ($346,500) so far.

His 200 staff are now working 16 days a month instead of 26, with managers’ salaries cut by 20 percent, all to lower costs.

Dinh is making all efforts to find new markets, but with half of rooms empty, he could have to shut down more hotels. “In my 20 years in the industry, things have never been this difficult.”

Other hotel owners are struggling to pay their debts. Quoc Binh, owner of a 25-room hotel in Hoan Kiem, said the present average occupancy of 15 percent does not cover the VND300 million ($13,000) monthly rent.

“We won’t be profitable until the occupancy rate reaches 85 percent. We might have to close the hotel for three months.”

Hanoi last year welcomed 29 million tourists, up 10 percent year-on-year, with related revenues hitting VND103.8 trillion ($4.5 billion), up 34 percent.

The city targets to repeat the 10 percent growth this year, but with limited flights to and from China and South Korea, Vietnam’s two largest travel markets, insiders are concerned there will be obstacles in meeting the goal.

Amid the challenges, Hang in the Old Quarter said she has lost almost 10 kilograms (22 pounds) since the outbreak due to stress and loss of sleep.    

“Worst case scenario – I’ll have to shut down all my hotels and work for a bigger company.”