Coronavirus Outbreak: Insights Into Vietnam’s Tourism Dependence on Chinese Visitors
A decline in the number of Chinese tourists puts Vietnam tourism and hospitality in crisis.
A friend from my university days who comes from Guangzhou once shared with me, “when it comes to Vietnam, Americans think of war, Japanese think of pho, and we Chinese think of travel.”
For their first time travelling abroad, members of her family chose Vietnam as their first destination. Their understanding of Vietnam was that it is “delicious, healthy, cheap, and close.”
Chinese visitors play a vital part in Vietnam’s tourism industry. According to the Vietnam National Administration of Tourism, Chinese tourists in 2019 accounted for 30% of the total number of foreign visitors to the country. 5 million was the number of Chinese tourists visiting Vietnam last year, a number greater than Hanoi’s urban population.
Given the current China coronavirus outbreak, where Vietnam has temporarily closed the border with China and has cancelled flights between the two countries, we take a look at how Vietnam’s tourism industry is reacting to the sudden change.
The absence of Chinese visitors is leaving the tourism industry in Vietnam reeling from sudden cancellations.
January and February are usually peak tourist seasons because of the Chinese New Year holiday. Yet many restaurants sit empty, hotels are receiving last-minute cancellations, and travel agencies are cancelling tours right before departure dates. Since cancellations are due to the unexpected epidemic, most customers are receiving refunds or deferrals to future dates.
Cities such as Ha Long, Da Nang, Nha Trang and Khanh Hoa rely heavily on Chinese tourists. Therefore, these places are most impacted from the current crisis.
One 5-star hotel in Ninh Van Bay in Khanh Hoa shared with Vietcetera that they have been struggling with the sudden financial loss because flights from China could not take off due to coronavirus travel restrictions. In one morning, the hotel has had to pay back 3.4 billion for room deposits, mostly to Chinese customers.
According to Du Lich Viet’s CEO Tran Van Long, more than 50% of booked tours have been cancelled. He claims that this record has never happened before in the tourism industry. He also shared with us that currently 500 employees have no work as demand continues to drop. Fortunately, they’re not receiving notices in other companies such as the recently announced furlough of 27,000 Cathay Pacific Airlines employees.
In the case of my friend’s family from Guangzhou, they already planned their trip to Vietnam during the Tet Holidays since mid-2019, though they’ve had to call it off because of the threat of infection and discrimination. Even my Guangzhou friend currently studying in Japan couldn’t fly back to China to celebrate New Year with his family.
Has the tourism industry in Vietnam grown too reliant on Chinese visitors?
Mauro Gasparotti, Director of Savills Hotels Asia Pacific, analyzes that the nCoV outbreak has three negative impacts on tourism industry in Vietnam:
- The number of Chinese tourists to Vietnam has decreased significantly because flights from China cannot take off.
- The number of international tourists to Asia has decreased significantly because of the risk of infection.
- The number of Vietnamese tourists has decreased significantly also due to fear of coronavirus spread.
Contrary to the gloomy reality, many tourism experts such as Dr. Pham Trung Luong, former head of Vietnam Tourism Development Research Institute, has shared more optimistic views.
He believes that the falling number of Chinese tourists is an opportunity for the industry to look back at its goals and future development. Vietnam should learn from the lessons of Taiwan tourism when many Taiwanese travel agencies and tour operators went bankrupt owing to the lack of Chinese tourists.
“Vietnam should focus on high spending Chinese tourists. At the same time, we need to improve other markets. For instance, Western Europe and North America. These markets can both generate large volumes of future customers and put less pressure on tourism and social infrastructure.”
Many experts and industry insiders support restructuring tourism sectors to diversify foreign visitors coming to Vietnam in order to avoid “putting all your eggs in one basket.”
Photo: Facundo Arrizabalaga/EPA