At Bai Dai Beach in Cam Ranh City (Photo: VNA) “The market in 2021 is expected to be broadly similar with most of 2020, atleast until borders reopen to leisure and business trade. Hotels have adaptedby considerably reducing operating costs to establish lower breakeven points.The good news is that several destinations are still performing at acceptablelevels,” Mauro Gasparotti, Director of Savills Hotels APAC, said.
Performance in December and January was positive for destinations like Phu Quocor Vung Tau, which have the essential appeals to both local leisure travellersand year-end company trips. In addition, over the past few months there hasbeen very encouraging growth of MICE demand in city hotels. Some city hotelshave used promotions, such as “staycation” packages, or F&B deals tonurture local demand, which have supported performance, he said.
According to Gasparotti, the market is in a slow recovery. Local demand, evenif delivering a strong rebound, has not proven steady enough to support hoteland resort performance. Weekends have been acceptable, but weekday demand islow. Most hotels, by cutting costs, have tried to find lower operationalbreakeven points, and only a few will be able to see a decent result for 2020. Expectationsfor 2021 are positive but mainly focused on the third quarter and fourthquarter when travel restrictions are anticipated to be eased, with corporateguests and independent travellers from neighbouring countries able to returnand partially support the hotel and resort market.
The recent outbreaks of COVID-19 in Hai Duong and Quang Ninh have seenpreventative measures reinstated across the country. Van Don InternationalAirport was closed after 10 security personnel were found to be infected.
In many localities, containment measures are back, with greater focus onhygiene, mask wearing, washing hands, urging limitation of unnecessary travel,and restrictions of social gatherings, according to Savills.
Hanoi has ordered events and festivals celebrating Tet to be cancelled whileauthorities in Ho Chi Minh City immediately raised public awareness following aconfirmed infection connected to Hai Duong.
There has been an immediate impact on the hospitality business with severalcancellations across the country, not only in the affected destinations butanywhere with access via an airport. Prior to these local transmissions, theindustry was anticipating increased travel demand during and after the Tet holiday,which would have been a good start to the year, however, the situation haschanged everything, Gaspoarotti said.
Travel interests are diminishing in a mist of uncertainty with air traveldemand dropping 15 percent immediately after the news release. Tan Son Nhat InternationalAirport estimated a sharp drop of 26.5 percent in air passenger traffic overthe Tet holiday compared to last year. Online flight search demand to Da Nang andHCM City during this “peak period of the year” dropped 35 percent and 34 percentweek-on-week respectively, according to OTA Insight.
"Some companies immediately enforced travel restrictions, with requests tolimit attending events or large gatherings. This has directly affected MICEbusiness in city hotels, where several conferences have been put on hold ordelayed. Drive-to destinations have also been affected by weekendcancellations,” Gasparotti said.
The resurgence of local COVID-19 transmission once again demonstrates itsimmediate impact on the tourism industry. Travel agencies and hotels are nolonger surprised with “the unexpected” but this happening right before the Tet holidayhas hurt public travelling interests, he said.
"With the Government speeding up vaccine testing and imports, I hope thesituation is soon under control. Hospitality is highly vulnerable to adverseeffects. It will only be when people feel confident and safe enough to travelwill recovery truly be underway,” Mauro Gasparotti added.
COVID-19 has caused significant disruption to the Vietnam tourism industry. In2020, international arrivals of just 3.8 million were down 78 percent comparedto 2019, while the 56 million domestic travellers were down 34 percent.
Performance of hotels and resorts slumped, with many forced into temporaryclosure. Occupancies and average daily rates (ADR) both dropped, resulting inrevenues being down 70 percent compared to 2019.
In Hanoi, average occupancy was 32 percent in 2020 compared to the average of80 percent in 2019, while in HCM City, it dropped from 72 percent to 23 percent.The average occupancy of 62 percent countrywide in 2019 collapsed to just 24 percentin 2020.
According to a report on the real estate market of the Ministry ofConstruction, the number of licensed tourism and resort projects nationwidefell sharply in the third quarter with 47 percent from the previous quarter.
There were almost no changes in number of licensed projects in the North andthe South. However, those projects in the Central region increasedsignificantly, adding 37 projects, about six times higher than the previousquarter.
The Central region is also the region with the most resort projects in thecountry, with about 18,600 serviced apartments and 6,100 tourist villas underconstruction./.
VNA
