Reinvigorating Vietnam’s tourism after COVID-19

Tourism is among the industries that have been hit the hardest by the coronavirus, or COVID-19, epidemic. How has the Vietnam National Administration of Tourism (VNAT) taken actions to minimise damage and provide solutions?

Vice chairman of Vietnam National Administration of Tourism Ngo Hoai Chung

As the outbreak is impacting every economic sector, the Vietnamese tourism industry estimates a $2 billion loss a month, which means in the first quarter of 2020, we may lose $7 billion.

Encountering such heavy losses, VNAT has proposed to the government a number of solutions to overcome difficulties and limit our dependence on the Chinese tourist market, which has long accounted for over 30 per cent of international tourists to Vietnam but is now in serious decline.

The first solution is to restructure the market. In addition to traditional Northeast Asian market, we are paying more attention to India – a market with a massive population and many cultural similarities to Vietnam. The Southeast Asian market is also an important target, as in recent years the number of visitors from this region has seen a very strong growth rate. Last year, the number of Thai tourists to Vietnam increased by 4 per cent.

The second move is to promote the country’s image, its brands, destinations, and high-quality products through Vietnamese tourism promotion activities and campaigns to attract visitors. Furthermore we prepare to develop stimulus packages to increase tourist arrivals to Vietnam immediately after the outbreak.

The third solution is to increase links between aviation and tourism, because 80 per cent of tourists come to Vietnam via flights.

Recently, the VNAT has signed a co-operation agreement with Vietnam Airlines and Vietjet to support and co-ordinate marketing and advertisement and create favourable conditions for tourists coming to Vietnam.

Along with caused damages, the epidemic is also an opportunity for the country’s tourism businesses to focus on the restructuring of their products towards being more suitable for the new markets that we are targeting. In addition, we advise to review and better train human resources and improve the service quality of each business.

Another solution we have planned is to enhance links between localities and tourism businesses and develop new products and types of services to timely meet demand.

How can businesses be supported for improving the quality of tourism services and infrastructure to expand markets?

We have proposed that the government exempt VAT for tourism businesses and allow late payments of corporate income tax until the end of this year. This policy brought positive results to the industry during the SARS epidemic, and is also now approved by the government.

Secondly, we have also proposed to the government to issue lenders’ credit packages and credit loans with preferential interest rates as well as to restructure debts, reduce loan interest rates, and debt rescheduling in order to assist businesses and investors in tourism.

We have also submitted to the prime minister a proposal for a complete visa exemption in 2020 regarding tourists travelling on all-in-one package tours to Vietnam.

In parallel with the restructuring, expansion, and opening of new markets, it is necessary to enhance promotion of Vietnam’s image. The VNAT has asked for more budget to carry out tourism promotion programmes.

During the epidemic, Vietnam is emerging as one of the safest countries to travel, with a minimal number of infected cases in the country and no deaths so far.

What are the plans to promote tourism and draw in more high-end travellers?

Each group of customers has their own tastes and needs. We also base on those to guide localities in restructuring products to be compatible with the preferences of each tourist group. Chinese tourists, for example, prefer going to Nha Trang and Danang because they are keen on coastal tourism with urban areas. Meanwhile, Europeans prefer eco and cultural tourism.

In recent years, the Indian middle class has grown very rapidly, leading to an increase in their demand for traveling abroad. However, the number of Indian visitors to Vietnam has been limited because the two countries did not have a direct aviation connection.

This year, India’s IndiGo airline opened direct flights to Vietnam, in addition to Vietjet’s direct route to India. It is expected that we will see an explosion of Indian customers in the near future. However, there are currently only a few major cities in Vietnam which can satisfy the specific and distinctive demands of Indian guests, which we will have further plans to address.

Vietnam’s tourism industry is also focusing on other projects such as comprehensively developing rural tourism as a product to attract tourists. Rural areas in Vietnam are suitable to develop tourism thanks to their favourable natural conditions, cultural identity, and cultivation processes which are suitable for ecotourism.

In addition, Vietnam offers preferential conditions to develop golf tourism, attracting higher paying visitors who often have long and high-quality stays. The VNAT has directed the Vietnam Tourism Association to establish the Vietnam Golf Tourism Association and proposed to the government to supplement and adjust the planning of golf courses in Vietnam, aiming at efficiently exploiting golf as a tourism product.

These are new product lines that are being prioritised by the VNAT to diversify tourism and reach new key tourist markets. This will both secure the scale of Vietnam’s tourism industry and act as a solution to overcome the destructive consequences of the epidemic as well as revive the industry.

How will communication campaigns to stimulate domestic tourism be implemented after the epidemic is controlled?

Whenever the tourism industry faces difficulties with the international market, the domestic market is always a savior. The VNAT has inherited lessons drawn from previous crises and applied to the current period with the desire to minimise damage.

We have ordered tourism businesses and localities to conduct epidemic combating, prevent COVID-19 from spreading within tourist spots, and halt taking tourists to risky areas. Businesses are suggested to lower the service prices while localities can reduce entrance fees or offer free visits to historical and cultural sites at certain times to encourage domestic tourism. Localities also need to reduce budget revenue to join hands in attracting tourists and withstand this gloomy period.