The Covid-19 epidemic is also an opportunity to restructure the tourism market

The Covid-19 epidemic is also an opportunity to restructure the tourism market


TAB has just sent the Prime Minister a letter estimating the damage that Vietnam’s tourism industry has been facing due to the Covid-19 epidemic. From the point of view of a travel businessman who experienced the SARS in 2003, could you please share the positive effects of this epidemic?

In my opinion, there have been 4 positive things that have happened during the epidemic. First of all, solidarity and sharing activities have appeared more and more in the community. Any action and statement lack of goodwill such as mentioning the discrimination against a certain group or fabricating inaccurate information have all been opposed by the community.

Next in order, people tend to create a new habit of wearing masks in crowded areas or actively separating from the community when being sick, stop drinkings and eating wild meat during the current outbreak of disease…This does make us a better person and a better society.

Thirdly, we have seen the importance of being more drastic in diversifying tourism markets and minimizing risks. It will take us lots of time to reach the target markets such as Europe and Australia. Tourists from these countries will not immediately increase a few million in just one or two years.

Lastly, the Government is making much more effort and clearly recognizing the key role of the tourism industry on the people and the economy. Currently, the authorities have made great efforts to minimize the damage of the epidemic to the tourism industry since the overall economy is negatively impacted by it. As such, the Government will place due importance on tourism with more appropriate policies and give priority to sustainable development.

A letter from the Ministry of Planning and Investment to the Government proposes to speed up several large infrastructure projects such as high-speed North-South railway, new highway to Mekong Delta region, airports…which would be beneficial for the tourism industry.

Furthermore, I found that the colleagues in the Company have been staying healthier by running after work or during days-off instead of gathering for drinks, karaoke or massage as before.

The estimated damage for tourism is extremely high, how accurate is this?

It would be much higher since the given figures are estimated just basing on the direct costs while the economy is not only directly but also indirectly affected.

For instance, airline tickets, hotels, restaurants, entrance fees are directly while activities of trade, shopping, and retail are indirectly affected. Transparently, the damage to the economy will be higher than the current estimate. It is 2.5 times higher in accordance with the world’s calculation.

What is the reaction of the other tourism businesses?

The leading companies are absolutely not happy with the disease, however, they are not too worried because they have obtained enough experience and resources. They are focusing on the feasible works; making plans for the different situations to know how to return quickly when the disease is over.

In my view, the SMEs would be more psychologically affected. For that reason, TAB prioritizes solutions for this group in the proposal to the Prime Minister. We do not think that the stimulus package should be given directly to the large enterprises because this will distort the market.

This is not a serious problem for the big companies but for SMEs- an important sector of the tourism industry, they are facing difficulties and need help.

In particular, it is possible to immediately reduce VAT for tourism-related businesses from 10% to 5%. Extend the tax payment period from 6 to 12 months without penalty. This tax payment extension could be applied for VAT payment of Q4, 2019 and Income Tax Payments of FY2020.

I trust these will positively impact all businesses in the industry, especially SMEs which need the frequent cash flows to operate in the next 2 to 3 months, and otherwise, they must be closed. I know some of them had to cut up to 70% of their staff from this week. In the next 2-3 weeks, the employees will also automatically resign from work if they have nothing to do.

What are the scenarios for the tourism industry of Vietnam and other countries during and after the nCoV?

We proposed to the Prime Minister four scenarios for industry and Government actions.

In the worst scenario, the situation is very serious when the Government declares many affected areas and the disease has spread in many communities with over 1000 confirmed cases. With this situation, it is recommended to close all tourism sites.

However, the current situation in Vietnam is not that bad. The epidemic is still under our controlled with only a few areas and cases affected.

It is necessary to focus on protecting people, visitors and communities from the epidemic by the prevention activities and secure safety at the highest level of those who are visiting Vietnam. It is also required to avoid the excursions in the epidemic areas and ensure the accommodations are always safe and clean.

The biggest problem right now, besides the fact that the disease can spread quickly, the future threat is also difficult to predict. Therefore, we highly think that the immediate support from the Government is essential, especially to SMEs.

What are the specific solutions from now until the disease is over?

Looking at the history of the SARS 2003, Vietnam would be one of the fastest countries in the world stopping the spread of disease, even faster than China. When the weather is turning warmer in May and June, the epidemic will be better controlled and repelled. We divide the solutions into 3 phases:

The first phase is from now until Vietnam announces the end of the epidemic. In addition to fighting against the epidemic, we need to focus on domestic markets, remote markets (UK, Europe, and Australia) and new non-epidemic markets like India and stimulate demand in those markets. .

The second phase is when Vietnam stops the epidemic and the whole world is also out of the epidemic. At this time, we have to focus on promoting the domestic and the remote markets

The final stage is when the epidemic is globally stopped. Accordingly, it needs to boost promotions in China and Northeast Asia…

Almost no Chinese tourists visiting Vietnam recently and also in the next few months. What is the most appropriate treatment given to them?

Once the epidemic is repelled and announced to completely stop, the market is going to open again and we need to have the proper stimulus policies. When China announces the end of its epidemic, Thailand, Japan, the Philippines, and Indonesia will certainly also try their best to attract tourists from this country. Vietnam needs to prove its name as a high-value and friendly destination. Those are things we are absolutely able and required to do.

Do we have any other policies for other markets?

The first oversea tourism office of Vietnam was opened in London, the United Kingdom on February 18th. If it works successfully, it will be replicated in other markets such as Australia and New Zealand. Furthermore, we have proposed to add these countries to Vietnam’s visa waiver list. The number of tourists from such markets to Vietnam should be at least on par with Thailand.

Currently, Vietnam welcomes about 300,000 British visitors, 250,000 German travelers while the numbers of those visiting Thailand are 1 million and 1.2 – 1.5 million. At least we have to reach that 1 million mark. Then there is a need for new markets like India and the Middle East.

TAB has made many recommendations to the Government to remove difficulties for the tourism industry. Which one is the most urgent?

All of them are needed and able to do immediately. However, visa exemptions should be given priority. This stimulus policy is not new but simple and inexpensive. Additionally, tax and inspection reduction, speed of licensing process and infrastructure construction…are mainly to facilitate businesses.

In my experience, this is also a chance for us to restructure the tourism market and turn difficulties into opportunities.

Compared to SARS in 2003, how do you feel about the recovery of Vietnam’s tourism market after epidemics?

The most difficult thing is that no one can predict, people can have their own evaluation. To my way of thinking, we should be ready for the worst situation in which the disease can last until the next year. How to live with it? Hopefully, the epidemic won’t be that bad and it will be controlled better in summer or vaccinated.

Source: Cafef