Vietnamese travel businesses struggle with Covid-19 again

The Covid-19 pandemic has again dampaned the recovery efforts of Vietnam's tourism industry in the past three months. After the short-lived rebound of domestic tourism thanks to promotion programs, many travel companies said that the wave of cancellation and refund requests due to the complicated situation of the disease is wreaking havoc on them.

Hoi An ancient town, Quang Nam province is one of the most favorite tourist destinations in Vietnam. Photo: PLO

Travel businesses face losses

Due to the disease, nearly 21,000 guests of Vietravel have canceled tours or asked for changes to departure dates. The travel agency estimated that the initial damage caused by the Covid-19 pandemic in July amounted to VND88 billion (US$3.8 million), a representative from Vietravel told Zing.

Another tour operator, Top Travel, is facing difficulties related to cash flows, according to Nguyen Thi Hoat, executive director of the company. Many customers are delaying the payment of the remaining expense amount of the tour due to the disease. When making a contract, the company usually only takes 50-80% of the tour value. 

The resurgence of the pandemic is posing difficulties for a great number of businesses in the tourism sector. As spending is tightened, some customers took Covid-19 as an excuse for late payment. “Previously, we had to advance 20-50% of the expenses of the tour to pay our providers,” Hoat told Zing.

Beam of hope  

Danang beach city. Photo: Zing

After social distancing measures were removed late in April, the domestic tourism industry strongly revived between June and early July thanks to the increasing number of travelers. According to the Vietnam National Administration of Tourism, hotel room occupancy in mid-June reached 60% by mid-week and up to 90% by the end of the week.

In the whole country, the number of domestic tourists in June was estimated at 7 million, twice the figure in May. In Danang, the Department of Tourism recorded more than 450,000 visitors in June, up to 85% from May.

In the short uptick period, travel companies began to see beams of hope after the stagnation in the first months of the year. Vietravel sold 5,300 tours within the framework of Ho Chi Minh City Tourism Festival 2020.

Meanwhile, Top Travel recorded dozens of departures every day. All the ten offices of the company operated at full capacity. Flamingo Redtours received about 200-300 bookings per day.

However, the resurgence of Covid-19 coinciding with the high season of domestic tourism is making many companies reeling.

If this epidemic reemerges 1-2 months later when the peak of domestic tourism is over, the situation of travel companies would be less dire, said Hoat.

Experiences from the last time help Vietravel face the second wave of virus infections more calmly. As soon as a local infection was reported in Danang, the company reorganized their operations and adjusted all product segments immediately, CEO of Vietravel Nguyen Quoc Ky said. 

Although preparing for many scenarios, travel companies said that the market will be tougher in the rest of 2020.