Vietnam all set to pull its tourism from depressing mode

Published on : Thursday, May 14, 2020

Vietnam has just 270 cases and zero coronavirus deaths and it has emerged as the first Southeast Asian country to pull tourism from its depressing mode, ahead of major Southeast Asia countries like Singapore, Thailand, Malaysia, Indonesia, and the Philippines that are still facing lockdown.
Now domestic flights have started their operations in Vietnam along with buses and train services, restaurants, and retail outlets, as the country is quite excited to reopen its services since April 23rd. With the government, the Vietnam Airlines is now under discussions to start again some of its international flights in June. Initiations to create reciprocal travel bubbles with China and South Korea are in the works. If this effort turns out to be successful, it will give Vietnam headway over Thailand, for whom the two markets are also key.

Vietnam Tourism Advisory Board, a non-profit comprising industry leaders and stakeholders, has recently requested the government to hold “early bilateral negotiations with source markets that have contained community transition,” vice chairman of the board, Kenneth Atkinson, told Skift.

“[The first bilaterals] are with the markets we need the most, i.e., China and South Korea,” said Atkinson, who is also founder of Grant Thornton Vietnam. “Then Australia, New Zealand, Singapore and Taiwan, although Singapore isn’t looking too great right now with the cases from migrant workers.”

China and South Korea together account for about 55 percent of arrivals to Vietnam, so “they are really critical,” added Michael Piro, chief operating officer, Indochina Capital. Out of 18 million visitors in 2019, six million poured from China and four million from South Korea respectively.

He also explained that such travel corridors will eventually make room for both business and leisure travel. “A lot of manufacturing companies have already shifted to Vietnam from China. FDIs [foreign direct investments] are a mirror of our tourism flows. Chinese and Koreans are our biggest investors; they are also our biggest tourism sources. As those travel bubbles open up, FDIs will start to flow in again and tourism money will start to flow back.”

In 2019, Vietnam experienced a 7 percent rise in foreign investment to $38 billion.

However, Atkinson is realistic that bubble talks may end up bursting. “The model has its challenges. For instance, while Shanghai has contained community spread, how do we ensure that passengers on the Shanghai flight to Vietnam are all from Shanghai?” he said. A second wave of this pandemic, as seen with new cases in China and South Korea, are another improbability in this.

“This year is an election year in Vietnam, similar to the US, and the country wants to show economic growth,” said Piro. “So while Vietnam has been cautionary in dealing with the virus, it’s now more cognizant of economic growth. It will push whatever is necessary to get trade and tourism going again, at least domestic travel first if not international.”

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