Thanks to a rapid, all-hands-on-deck government response, Vietnam has largely been spared the death and despair from the Covid pandemic that many other nations have dealt with. The country closed to international travel, rolled out a well-organized quarantine program, and launched clever public health campaigns on Youtube. GDP growth slowed, yet not entirely. The nation was one of only three in Asia to see its economy expand. For some sectors, the past 18 months have been surprisingly normal. For others, unfortunately, the economic toll has been devastating.
Currently, Vietnam finds itself in the midst of a relentless fourth wave. Most of the nation has been forced into varying degrees of lockdown, and once bright hopes for a return to near normality have been dashed, leaving both the tourism and aviation industries holding on for dear life.
From Phu Quoc in the southern Gulf of Thailand to Sapa in the mountainous north, tour and hospitality groups have gone bankrupt at a dizzying rate. According to a report from the Ho Chi Minh City Tourism Department, a staggering 90% of small to mid-sized inbound tour operators have closed shop. The Vietnam Tourism Association reports that of the 2.9 million individuals working in the tourism sector, 2.6 million are now out of work.
In a bid to save the floundering industry, several destinations have resorted to desperate marketing measures. Authorities in Ha Long Bay, a UNESCO Heritage site, have waived the entry fee for the remainder of the year in hopes that domestic tourists will return to the cruise ships which currently float idly and empty at the docks. Earlier this month, 500 ship owners sent a message to authorities warning of impending bankruptcy.
In Danang, a central Vietnam coastal city fringed by the Annamite Mountains, deserted hotels offer rooms anywhere from 30%-90% off. Nevertheless, due to the current outbreak, demand remains scarce.
The aviation industry is no better. Sector-wide, revenue has collapsed 80% year over year. Airlines continue to hemorrhage cash and some may be on the verge of collapse. State-owned Vietnam Airlines announced a Q1 loss of more than US $200 million. Privately owned Bamboo and VietJet are reportedly restructuring their businesses to stay afloat. In a bid to fill row upon row of empty seats, last month some airlines began offering tickets, pre-tax and fees, for less than a dollar. It’s unclear if any of the promotions have helped.
While most of the western world seems to be turning the corner from the dark days of the pandemic, Vietnam’s fortunes have recently trended in the opposite direction. Local newspapers report more than a hundred positive test results a day, a minuscule number by most nation’s standards, yet a frightening figure for a country that had stayed ahead of the virus for so long. A vaccine program has recently been launched, but the timeframe remains unclear. Hopefully, at some point soon, the country opens up again to foreigners; however, until then, it looks like the tough times for the travel and tourism sectors will continue.
