Although Vietnam has done a good job in Covid-19 containment and has re-opened the tourism market, the hospitality sector is not expected to fully recover this year.
Mauro Gasparrotti, director of Savills Hotels Asia-Pacific initially expected the hospitality and travel industry to follow a V-recovery as it happened after the SARS crisis in 2003. However, with the global economic impact and evolution of the virus still uncertain, he cannot realistically anticipate full recovery until well into 2021.
As Vietnam still does not allow foreigners to enter the country for tourism purpose, Gasparrotti believes that local demand will be the core market for the next few months.
“Considering the large number of local travellers and Vietnamese outbound tourists arrivals which reached 10 million already in 2018 and now will likely travel within Vietnam, are all great metrics to rely on as a solid re-start”, he said.
The Savills Hotels director said Vietnam would likely follow what happened in China after the virus was contained, which took just six weeks for occupancy to reach 30 per cent after the shutdown, and their market was and is, predominantly local, which all points to local demand in Vietnam leading recovery, especially the younger generations.
He said, “It is the local market that represents the first stage of recovery. Following Vietnamese Government regulations on a social distancing, majority of hotels and resorts in Vietnam have been closed but most are planning to reopen in May with attractive local promotions.
“However, people are likely to remain sceptical about flying and the safety of crowded airports so it may take a little longer to feel comfortable boarding planes, which bumps appeal to driving distance destinations and making the likely short-term winners places like Vung Tau, Ho Tram, Mui Ne, Ha Long, Da Lat and Sapa”, he said.
He added that the second stage of recovery will be from overseas, once flight bans are lifted and connecting countries are considered safe. China and Korea should be first; early affirmative action has resulted in recent and steep reduction of Covid-19 infections, and considering they were already Vietnam’s main international guest source markets is encouraging.
Destinations like Bali and Thailand have expressed interest in welcoming back Chinese visitors as soon as practically possible. If successful, Vietnam could adopt similar polices by re-opening routes from China and Korea which accounted for more than 56 per cent of total international arrivals in 2019.