Virus Corona - large shock to global and Vietnam tourism

Mr. Mauro Gasparotti said, global pandemic has much larger impact to overall global demand as well as tremendous influences on specific destinations in both short and medium term. At the time this article is written, several airlines around the world have reduced or cancelled flights to and from China, including Air Canada, American Airlines, British Airlines, Cathay Pacific, etc.

Vietnam has also started to respond by suspending all flights to and from coronavirus-hit areas in China. On the other hand, also outbound restrictions have been placed on Chinese tourists by Chinese government to contain the spread of virus, causing a severe loss in several countries due to China’s status as the world's largest outbound tourism market. The virus outbreak has resulted in a wave of tour and rooms cancellations not only by Chinese tourists but also global travellers who had travel plans to Asia.

Vietnam is no exception as the country is already experiencing the negative consequences caused by this global pandemic. According to Mauro Gasparotti, hotels have started to receive a handful of cancellation requests over the last few weeks by not only group and MICE guests but also independent travellers. Mr. Gasparotti mentioned “The emergence of coronavirus has caused three key impacts on Vietnam tourism, all of which would possibly hurt Vietnam hospitality this year.

The first and most obvious impact would be the expected drop in Chinese travellers who made up the largest proportion of foreign tourists to Vietnam in 2019, accounting for over 30%. Coastal destinations would face the same issue with destination like Nha Trang – Khanh Hoa expected to be particularly affected as China was the biggest source of arrivals accounting for more than 70% of foreign visitors to the Province, according to Khanh Hoa Department of Tourism. Main cities like Hanoi and HCMC would also be negatively affected by the slowdown of MICE and corporate travellers as a series of meetings, conferences and oversea trips have been postponed or cancelled due to the ongoing spread of coronavirus.

The second impact of coronavirus to Vietnam is the significant expected decline in global demand to Asian countries which will likely be perceived to be at higher risks of coronavirus compared to other destinations. After a few years of significant growth in international arrivals to South - East Asia regions (more than 138 million international tourist arrivals in 2019 with an impressive CAGR of 7.8% in the past nine years), a steep slowdown would be observed in the upcoming time. Consequently, destinations like Thailand, Indonesia and Vietnam would be expecting a temporary slowdown in travellers from Europe, Australia, United States, etc. where leisure groups are more likely to cancel or postpone their trips due to the fear of outbreaks.

If the outbreak will be proven to be contained both in Vietnam abut also globally, we are positive into a steady recover in the second half of the year and tourism industry will be once again a strong growing industry for Vietnam. For Hotel and Resorts, especially the properties serving large number of clients originated from affected areas, we strongly recommend to strictly implement safety procedures to protect the safety and health of both customers and staff.