One-third of Thien Minh Group’s hotels have been closed since the last days of March 2020 due to Coronavirus while the others limit themselves to 50% capacity. Additionally, the operations of travel agencies and cruises are also being suspended.
“Just a few months ago, when making plans for 2020, no one could imagine a crisis like this to the tourism industry. The number of visitors to our hotels has increased by 10% in early February but the situation definitely changed now.” Kien mused in a late-night interview with The Saigon Times after his constant meetings with partners and colleagues.
You had an early feeling that businesses would greatly be affected by Covid-19 in 2020. What would make you think that? Is it the sensitivity of a medical or of a businessman with over 20 years’ experience in tourism?
Both of them I think. Before the Lunar Year 2020, some schoolmates at Hanoi Medical University told me about a virus that caused flu-like symptoms and the death rate would be nearly similar to SARS 2003.
Because I was a student at Medical University, I am often curious and interested in the diseases that affect the community. It was then followed by a flood of bad news in which prominently Wuhan City in China was quarantined in order to stop the spread of the epidemic. By the 3rd of Lunar New Year, it was my feeling that the epidemic would have a great influence on the business environment in the new year. The Covid-19 indeed has caused an unprecedentedly extreme decline in smokeless industry history.
Besides, my friends updated me on the disease prevention of the Centers for Disease Control and Prevention of the United States. Perceiving such documents and also realizing the disease status became widely shared within the community, I promptly issued some policies in which prioritizing the safety of employees and customers by the hygiene measures. This early and right action is useful to help prevent staff and visitors from infection during an outbreak.
The experience gained in my tourism career is also helpful for the current situation. Since the SARS 2003, I have learned that everyone will be afraid of traveling due to the length of disease and an increase in the number of people infected. In fact, most American customers have postponed their journeys into March 2020 since early February to see how things are going. The market certainly started changing as expected.
Does this mean that Thien Minh completely holds the initiative in Covid-19, sir?
Not really. The crisis caused by Covid-19 happened so quickly and unexpectedly that neither global nor domestic enterprises could respond. We are also among those businesses which haven’t been ready for such challenges.
The entrepreneurs always have a contingency plan for situations but no one is ready for a double crisis like this. Epidemics greatly reduce tourism-related habits including traveling, meeting, communicating, and visiting since social distancing is becoming the new normal to contain the transmission of the coronavirus. The travel demand hence will be unavailable or repressed at least for the next 6 to 12 months. Additionally, people tend to less purchase because no money earned during the disease. It will be similar to the financial crisis.
I don’t think that anyone could foresee this crisis in the plan for 2020. Actually, we were a bit confused at the beginning but soon we regained composure and took action in time to prepare for the pandemic as well as the possibility of reducing guests in 2020.
I spoke “soon” because of some countermeasures taken in early Feb 2020 and the number of visitors to Thien Minh Group’s Hotels still increased by more than 10% over the same period last year. In Feb 2020, our revenue growth rate was over 13%. However, all scenarios could not account for the level of dispersion and the serious impact on the tourism industry, making all markets closed as at present.
Do the mentioned countermeasures include saving costs and suspending some of the projects, sir?
The countermeasures can be changed according to the actual situation. Since the end of January 2020, I informed the employees about the disease and steps to prevent it. On the last day of that month, when the epidemic in China became worse, I requested to have various measures ready to deal with the decline of potential businesses, including cash improvement and assuring safety for employees and customers.
On 1st Feb, although Chinese is not our key customer, I delivered a message of non-discrimination against Chinese tourists and called people to be humane in every situation. That message then applied to all markets.
In the quarterly meeting on 9th February, the board of directors approved the measures prepared for a pandemic and the possibility of a decreased number of guests in 2020. We immediately decided to stop three investment projects, simultaneously approach banks for additional working capital and corporate bond issuance. The Board also agreed to increase legal capital in 2020.
As at present, we temporarily suspend or slow down the empty businesses and simultaneously continue to implement the keys projects such as technology development, hotel repair, and renovation. Specifically, the high-end resort TUI BLUE NAM HOI AN still opens as expected in March and ready to welcome guests when the Covid-19 ends.
How is the effectiveness of those measures, sir?
These decisions made betimes helping our employees to be mentally proactive for the upcoming troubles.
Moreover, for those plans that require a lot of time to carry out, we need to prepare as soon as possible. For instance, thanks to the early discussion, shareholders agreed to increase capital by half of the proposed amount of US $10 million since March 2020. It is more difficult to make a decision of raising the capital at the present time.
To my way of thinking, the biggest challenge now is that no one can accurately predict the evolution of the disease, so how to cope with it is really an issue. Therefore, the passage through crisis indeed requires composure, courage, knowledge, and humanity in leaders, in addition to strategies, assets and especially cash.
The rapid decline of demand at a large rate, from 80-90% in a very short time, surely makes many people feel unsafe for investment. However, if the business owns clear strategies, excellent resources and confidence in the market’s recovery, it’s not a bad choice to drastically go into an investment at present.
In my point of view, this is a crisis of knowledge, wisdom, and belief. So, I believe that businesses will recover differently depending on the quality of the executive board after the outbreak ended.
What is the key for businesses to overcome this crisis, sir?
I would say that the key includes belief in the recovery of the market, certain resources as well as strong supports of partners and investors. More specifically, it is required to have appropriate policies from banks, contractors…to continue implementing investment projects during this difficult period.
Besides, it’s a requirement for leaders to be humane, sensitive and understanding. In particular, humanity will make the biggest difference among businesses. Humanity does not regard the retention or dismissal of employees. I think, when there is no more revenue, it’s better to give employees a break to find other opportunities, by reasonable manners for them to understand and have enough time to arrange.
Humanity is reflected in what is given priority during difficult times. The health and safety of employees and customers must be a top priority in any business during the epidemic. It’s when to implement the proper financing plans to assure that everyone can “live” and leaders must have a proper decision for each specific plan.
May you evaluate how the market looks like after the Covid-19?
It’s my belief that our habits and consumption will be completely changed by Covid-19. Accordingly, marketing approaches and strategies, product positioning will be also much more different.
One of the most important changes is that businesses will have other priorities in product development in which the first concern must be for the health and safety of their customers.
Source: The Saigon Times
