Sunday, July 14, 2024

Vietnamese tourism prep for full recovery with caution amid labour concerns

Vietnam’s tourism industry is well prepared to welcome more visitors, however, companies remain cautious in their business outlook due to the uncertainty caused by the absence of key markets and labor shortages, said local tourism businesses at the four-day Vietnam International Travel Mart in Hanoi.

According to news published in Xinhua, Vietnam’s domestic tourism experienced impressive growth last year, serving 101.3 million locals, 168.3 percent higher than an official target and above the previous peak of 85 million in pre-pandemic 2019, according to the Vietnam National Administration of Tourism.

During 2020-2022, Vietnamese holidaymakers turned their attention inwards, exploring the treasure trove of travel opportunities at home rather than venturing abroad, said tour operators. However, the pandemic has also left an impact on travel habits as local tourists want to be well-protected. They are traveling in smaller groups and to the places closer to their home, Ly Truong Xuan, marketing manager at Hanoi-based Vietnamtourism told Xinhua.

He was cautious over a four-fold surge in the number of COVID-19 cases over the past week, with the capital of Hanoi recording the most cases.

Besides, soaring transportation costs, especially airfares, which greatly add to travel expenses, would make domestic tourists think twice before booking trips, the marketing executive added.

Vietnam is slated to raise the fare caps on domestic airlines by an average 3.75 percent in the second half of this year after the Civil Aviation Administration said fuel prices, among other expenses, have been eating away at local airlines’ profitability.

Despite a cautious outlook, the domestic tourism market has rebounded strongly, as the government statistics revealed that total sales at retailers and service revenues in the first three months were higher than an annual expansion of 12.6 percent in the same period in pre-pandemic 2019.

Restaurant and accommodation revenues during the January-March period totaled 6.84 billion U.S. dollars, up 28.4 percent from a year ago, while tourism revenues more than doubled from a year earlier to nearly 289 million dollars, said the General Statistic Office.


Regarding the international market, 2022 saw some growth compared to the tough years of the pandemic, but the results failed to either reach the target or measure up to pre-pandemic levels.

Vietnam’s tourism peaked in 2019, when the country welcomed 18 million international arrivals, earning more than 30.2 billion U.S. dollars, according to the General Statistics Office. Since COVID the numbers of foreign tourists plunged to 3.8 million in 2020, which shrank to 157,300 in 2021. Last year, the Southeast Asian country received nearly 3.7 million arrivals, around 20 percent of the pre-pandemic levels despite being one of the first Southeast Asian countries to fully reopen its doors to foreign visitors.

However, Vietnam’s tourism recovery is expected to accelerate considerably after recording tepid growth from key markets, especially China.

“We have prepared to roll out several packages to entice visitors, but the number of Chinese visitors booking experiences in Vietnam is still lower than the corresponding period prior to the pandemic,” said the marketing executive with Vietnamtourism.

Chinese tourists make up a vast portion of the total arrivals in Vietnam, and their higher spending power provides a significant boost to the destinations they choose to visit, he said.

As Chinese tourists return in greater numbers, they will play a crucial role in the recovery of the tourism industry, said Duong Thanh Phuong, chief executive of 5-star Annova Hotel in Vietnam’s south-central province of Khanh Hoa. Khanh Hoa, among the country’s most popular tourist destinations, welcomed over 2.5 million Chinese tourists, making up more than 70 percent of the coastal province’s international arrivals in 2019, statistics from the Department of Tourism showed.

Local tourism companies at the annual Vietnam International Travel Mart said they embraced the opportunities brought by Chinese tourists to position themselves for long-term growth in the increasingly competitive travel industry.

As the world’s largest tourism market, it will take some time for China to get back up to its full capacity, said the hotel chief executive, forecasting of a full rebound from Chinese tourists by the end of this year.

Labour shortages is another concern that is holding back recovery as the country is on track to welcome more tourists, targeting to receive 8 million foreign arrivals and earning about 27 billion U.S. dollars in revenue this year.

Vietnam’s tourism sector is among the world’s hardest-hit as the country saw almost one third of all job losses occur in the industry, according to the International Labor Organization. During the pandemic, airlines, tour operators, hotels and restaurants let go of staff who then decided to leave the sector for good, said the National Administration of Tourism, adding that 44 percent of workers with 5-10 years of experience and 90 percent of those with graduate degrees moved into other areas less affected by the pandemic.

After the pandemic, companies had little time to scale up their capacity before a rush of interest from both domestic and international markets.

Staff shortages are forcing owners of hotels, bars, restaurants and travel agencies in Vietnam to offer better pay for full-time workers responsible for multiple tasks, recruit more seasonal semi-qualified or unqualified workers and cut services, local media reported. It requires the recruitment of full-time devoted workers, not part-time simple positions, with a focus on training to equip them with field experience, since services quality holds the key to the sustainable growth of the industry to draw high-spending and long-stay visitors, said the hotel chief executive.

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