Hospitality sector's bookings decline amid coronavirus outbreak fears

The hospitality sector in Vietnam this year will face losses due to the novel coronavirus (nCoV) outbreak, researcher Savills has said.
Hospitality sector's bookings decline amid coronavirus outbreak fears ảnh 1Foreign tourists (Photo: VNA)
HCM City (VNS/VNA) - The hospitality sector in Vietnam this year will face losses due to the novel coronavirus (nCoV) outbreak, researcher Savills has said.

Mauro Gasparotti, director of Savills Hotels APAC, said: “Vietnam is no exception as the country is already experiencing the negative consequences caused by this global pandemic.” 

According to Gasparotti, hotels have been receiving a handful of cancellation requests over the last few weeks by not only group and MICE guests but also independent travellers. 

“The emergence of the new strain of coronavirus has caused three key influences on Vietnamese tourism, all of which will possibly hurt Vietnam hospitality this year,” he said.

The first and most obvious impact will be the expected drop in Chinese travellers who made up the largest proportion of foreign tourists to Vietnam in 2019, accounting for over 30 percent, he said. 

Coastal destinations will face the same issue with destinations like Nha Trang – Khanh Hoa expected to be particularly affected as China is usually the biggest source of arrivals, accounting for more than 70 percent of foreign visitors to the province, according to Khanh Hoa Department of Tourism. 

Main cities like Hanoi and HCM City would also be affected by the slowdown of MICE and corporate travellers as a series of meetings, conferences and overseas trips have been postponed or cancelled due to the ongoing spread of nCov-2019. 

The second impact of coronavirus to Vietnam, according to Gasparotti, is the significant expected decline in global travel 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 Southeast Asia (more than 138 million international tourist arrivals in 2019 with an impressive compounded annual growth rate of 7.8 percent in the past nine years), a steep slowdown will be observed in the upcoming time.

Consequently, destinations like Thailand, Indonesia and Vietnam will be expecting a temporary slowdown in travellers from Europe, Australia, the US and others where leisure groups are more likely to cancel or postpone their trips due to the fear of outbreaks. 

The third impact would be on local demand as people are now more hesitant to travel to crowded places like airports, trains and bus stations and even restaurants and entertainment places to avoid contagious infections. 

The nCoV outbreak in China has already been causing large shocks to global travel and tourism and is expected to further impact the business. The industry has always been notoriously vulnerable to negative events.

A global pandemic has a large impact on overall global demand as well as tremendous influences on specific destinations in both the short and medium term. 

Vietnam has also started to respond by suspending all flights to and from coronavirus-hit areas in China.

Outbound restrictions have been placed on Chinese tourists by the Chinese government to contain the spread of virus, causing a severe loss of tourists 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 room cancellations not only by Chinese tourists but also global travellers who had travel plans to Asia.

"That said, if the outbreak is contained both in Vietnam but also globally, we are positive that a steady recovery 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 originating from affected areas, we strongly recommend to strictly implement safety procedures to protect the safety and health of both customers and staff," Gasparatti said./.

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