The Vietnam Tourism Association has launched a nationwide tourism recovery program to kick off early October with tours to low-risk green zones. But the epidemic still causes challenges to the industry. An in depth interview with Dr. Nuno F. Ribeiro – Senior Lecturer and Research Cluster Lead, RMIT Vietnam – reveals the new normal of tourism and timeline for a broader reopening to international tourism in Vietnam.
– What should the tourism industry prepare to return to a normal business if HCMC and other provinces are allowed to resume business after 30 Sep?
The tourism industry in Vietnam is extremely proactive, and it has been preparing for at least partial reopening since the government indicated that it would occur. I do not think we will “return to normal”. Instead, I think the tourism industry should prepare to live with “the new normal” of tourism, where covid-19 is a reality to be dealt with, to be kept under control and make sure it does not excessively impact tourists’ experiences.
With that in mind, there are some specific steps that the tourism industry can take to ensure the success of Vietnam tourism in the months and years ahead.
First, and most importantly, ensure that all the health and safety measures and precautions have been taken. This means complying with government directives, only allowing guests that have been fully vaccinated for at least 14 days, ensuring all staff are 100% double vaccinated, increase cleaning and disinfecting routines, minimize contact between guests, and overall provide a safe and healthy environment for guests to enjoy the tourism experience.
Second, it is critical to have well-qualified, trained staff in place before reopening. After months of redundancies, the attraction and retention of qualified personnel to work in the tourism industry is key. Furthermore, staff should be trained in health and safety, and staff training should focus on service quality. In the tourism industry, we do not sell hotel stays or resort packages – we sell experiences, and quality experiences are impossible to deliver without qualified, trained, and empowered staff.
Third, ensure the stability of the supply chain and make sure there are enough supplies so that tourism operations can run smoothly. It is incredibly important that tourism businesses have good logistics, and the tourism and hospitality supply chain is not disrupted – materials, supplies, food and beverage, amenities, etc. are critical for the good functioning of the hospitality industry. Without a robust supply chain, the success of any reopening efforts will be difficult if not impossible.
Fourth, it must make sure there is good communication and concerted efforts between all stakeholders in the tourism industry, which also include the government and the general public. Sharing of information, abiding and implementing concerted efforts and policies are going to be critical. It is extremely important to have open and honest dialogue and cooperation between all stakeholders in the tourism industry, including government, airlines, hotel owners and operators, travel agents and tour operators, advisory boards, and promotional entities. All stakeholders should be involved in the process of reopening from the beginning and allowed to provide their input.
And lastly, prepare for the unexpected and have a solid risk management strategy. There is a certain element of uncertainty in the reopening of the tourism industry after September 30, and while we certainly are confident that all will go well, we should still be prepared for any eventuality, such as new outbreaks, shortage of staff, additional regulations, or complicated travel and transportation procedures.
– Do you think the price of tourism services will increase due to the higher cost of epidemic prevention activities? If the price increases, will it be good enough to attract tourists when the economy is struggling?
I think it is a possibility, but I do not think it will happen industry wide. It is possible that it may occur in the luxury or resort segment, where guests have higher discretionary income and are willing to pay for additional services, such as private villas, individual transportation, or specific epidemic prevention amenities (e.g., covid-19 tests). We must keep in mind, however, that as tourism reopens, competition among tourism businesses will be fierce for the increase in tourism demand that will no doubt occur. This demand will come primarily from the domestic market, which traditionally is averse to sudden price increases. Furthermore, tourism businesses should remember that while indeed there will be an increased appetite for travel, especially in the leisure travel market and VFR (visiting friends and relatives) market, this period of partial reopening to tourism activities is a golden opportunity to a) capture new customers and markets and b) build loyalty among existing tourists. This will not be achieved with price increases, and the tourism industry knows that. So, I think we are more likely to see a slight decrease in prices, coupled with value-added experiences. For example, hotels may provide free transportation (abiding by health and safety regulations), room service at no charge, more amenities, or discounted excursions. Tourism businesses that are smart enough to provide unforgettable experiences to tourists while charging a reasonable price will develop loyalty among their guests, and their return rate will increase. This will pay enormous dividends and generate greater profits in the long run. Repeat business is the key to success in tourism and hospitality. Thus, I think tourism businesses should adopt a long-term strategy and keep prices reasonable or even discounted instead of giving in to the temptation of increasing them due to higher demand.
–What would you comment on the regulations on travel routes among provinces that will cause difficulties for the tourism industry? What is the effective solution to solve this problem?
There are good reasons for these regulations. They are being put in place with the health and safety of everyone in mind. I think the government is to be commended for implementing these regulations and being proactive about minimizing the potential negative effects of the pandemic. I agree it is better to be safe than sorry, even if it may cause some inconvenience. And I think that the tourism industry understands this – it’s filled with smart people who know that it is in the interest of everyone (including the industry itself) to abide by these regulations. It is better to reopen slowly and cautiously rather than risk an increase in epidemic outbreaks and the consequent impact on the healthcare system.
Concerning travel routes in so called “green zones” it certainly makes sense in theory. Ideally travel should only occur between provinces that have successfully controlled the epidemic. And tourists should travel via routes different from those for, say, routes marked for cargo and business, so that disruption to people’s ordinary lives is kept to a minimum. Certainly, there will be challenges to the tourism industry regarding transportation and logistics, but I think that with careful planning and adoption of a solid strategy in conjunction with province authorities, tourism businesses can overcome this with minimal disruption to the tourists’ experience.
While we want to be as safe as possible, we also want to make sure that tourists have the best possible experiences. We want to avoid quarantining tourists or other drastic measures that may cause tourists to re-think if it is worth travelling at all during this period. We all want the reopening of Vietnam to tourism activities to be successful and profitable for everyone.
– When tourism is opened, what customer segments should this industry target?
First and foremost, the industry should focus on the domestic market. Specific market segments that are particularly appealing at the present time are leisure travel, VFR (visiting friends and family), and nature-based tourism. Corporate travel would also be a good customer segment to target, but at a later stage. Lastly, the tourism industry should be reminded that there is a sizable expat population living in Vietnam, with a substantial amount of discretionary income and an even greater appetite for travel. With Thanksgiving, Christmas, and Tet on the horizon, and with expats all but prevented from travelling abroad to their home countries, the expat market is a great market segment with a good return on investment ratio and high return rates, provided that the tourism experiences they are sold are crafted to their taste.
–Should the tourism industry consider promoting luxury resorts or five-star hotels to domestic tourists?
Absolutely! The amount of discretionary income that Vietnamese families are willing to spend on travel and tourism has not ceased to increase – on par with the economic development of Vietnam and consequent raise of the standard of living – and increasingly the Vietnamese are willing to allocate more and more of their travel budget to stay at more upscale hotels and resorts and have unforgettable experiences. Furthermore, people have been inside their homes for so long, with no opportunities to travel, that they have developed “travel hunger.” Domestic tourists have developed a hunger for travel, and this pandemic has also made them realize that they should pursue different experiences and perhaps spend a little more money during their holidays. This of course may translate into increased demand for luxury resorts and five-star hotels, as domestic tourists will be looking for higher levels of service, added luxury, and unforgettable experiences. We must not forget, however, that luxury and star ratings are not necessary synonyms with service quality. We can have just as much quality in a luxury five-star resort as we can in a homestay. It is all related to expectations, service delivery, and perceptions of value. If the tourism industry (at all levels and star ratings) delivers services and experiences that meet or surpass expectations, we have quality, which in turn translates into customer satisfaction and repeat business. If it doesn’t, we do not, and customers will not return. It’s that simple. The tourism industry should also be mindful of perceived value – if a tourist is planning to stay at a luxury resort which costs a lot more than staying at three-star hotel, for example, the tourist’s expectations will be higher, and the pressure on the resort to provide a great experience will also increase.
– When is the right time to open tourism to foreign tourists given Phu Quoc and Ba Ria – Vung Tau are being considered to reopen soon and FDI business associations are looking forward to a safe and sustainable reopening way?
The broader reopening of Vietnam to international tourists should be done in stages. First, if the reopenings of Phu Quoc, Vung Tau, and other pilot destinations are successful, I think the second quarter of 2022 would be a good time to begin a careful reopening of Vietnam to international tourists from select countries, i.e., countries that have successfully controlled the epidemic, to specific provinces/destinations, such as Da Nang, Nha Trang, Hoi An, Sapa, and Ha Long. This should be done slowly and safely, and with carefully controlled numbers. In a second stage, assuming the first stage was successful and if we continue to enforce all the necessary health and safety measures, we can look at the last quarter of 2022 for a broader reopening to international tourism in other provinces and destinations in Vietnam.