Vietnam Business Channel

China’s coronavirus will cause Vietnam’s travel industry to lose $6 ~ $7 billion USD


Vietnam tourism officials are projecting that the Wuhan Coronavirus in China will cause $6 ~ $7 billion USD in losses to the Vietnamese travel industry during the February to April period as international travelers stay away from the Southeast Asia region and Chinese citizens decrease their overseas travel.

China is Vietnam’s third largest tourism market and accounted for more than 30% of the 18 million international travelers who visited the country in 2019. While the majority of Chinese travelers visit Vietnam on “zero-dollar” tours, and spend very little money on activities that are not controlled by Chinese, airlines, hotels, ground transportation companies and others in the tourism supply chain benefit from their visits.
Officials are now estimating that two million fewer Chinese will visit the country and that this loss will result in $2 billion USD of immediate, lost tourism revenue this year.

Nguyen Cong Hoan, Deputy Director of Hanoi Redtours, said his company had canceled 15 tours to China and this has cost the company $300,000 USD in lost revenue and that another 30 tours would be canceled. Another travel industry official, Huynh Phan Phuong Hoang, Deputy Director of Vietravel, said that his company would lose more than $500,000 USD in revenue for pre-booked visas and services.

In addition to direct revenue from airlines and hotels, provincial tourism in areas such as Da Nang, Nha Trang and Quang Ninh will also experience losses to their attractions, entertainment, food & beverage and retail sectors.

Strategic shift

Travel industry experts point say that the loss of the Chinese group tourism market can be a blessing in disguise, as it will force Vietnam tourism officials to focus their marketing on other markets, which generate higher revenue per person.

These experts point to the fact that visitors from Australia, Europe, Japan, South Korea and the United States spend significantly more on their vacations in Vietnam than Chinese group travelers do and that the country should focus on diversifying its markets so that it will be less reliant on a single country for its tourism growth.

Pham Trung Luong, former head of the Institute for Tourism Development Research, said Vietnamese tourism has been focusing on quantity in recent years and has become heavily dependent on Chinese tourists.

Pham said, “Vietnam needs to focus on high spending Chinese tourists, and prioritize other markets such as Europe and North America where customers are willing to pay more.”

Tu Quy Thanh, CEO of Lien Bang Travelink, which serves a large number of Chinese tourists, said
"Chinese visitors bring in good figures in quantity, but not in quality. The markets of Western Europe and other developed countries are more sustainable,"




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