Vietnam eases coronavirus restrictions and the tourism industry tentatively reopens

As Vietnam tentatively relaxes coronavirus restrictions, tourism and hospitality businesses across the country will be hoping for a surge in domestic travel to compensate for the absence of international visitors.

Vietnam has been ahead of the coronavirus fight since first reports from Wuhan hit in January. School and border closures, contact tracing, quarantines, public education and a culture that rises to national challenges, meant the country was able to begin relaxing coronavirus restrictions last Friday - ahead of most in the region and the developed world. The major cities, Hanoi and Saigon, and provincial areas, have taken small steps towards resuming a semblance of normal life, but what's next for the travel industry?

© Mark Bowyer - Ho Chi Minh City is reopening

Vietnam's achievements in fighting the coronavirus have not received much international attention, but with under 300 cases diagnosed, no deaths and a carefully executed national campaign, last Friday the country began to tentatively reopen.

While nobody would predict Vietnam or any country is is out of the pandemic woods, it's an impressive milestone.

While Vietnamese are set to enjoy a return to some mobility and many tourism sites have announced plans to reopen in the coming days, the rewards of the country's early progress in battling the coronavirus will not be realised in the international tourism space for some time. There are no plans to resume regular international flights yet and arrivals will continue to be subject to 14 day quarantine.

So while Vietnam has avoided the worst scenarios of the coronavirus crisis, the international tourism industry faces a grim wait. And while many may have weathered the first storm, a protracted closure of international arrivals will cause more tourism and hospitality businesses to fail.

Most tourism companies haven't seen revenue for 6 weeks and many have been struggling all year. Airlines, with their massive overheads, have seen their operations and revenue slashed. Hotels have been near empty for months and many have closed. Smaller businesses like cafes and restaurants have pivoted to delivery to survive the crisis.

Even if Vietnam builds on its successes to date, there seems to be little prospect of any resumption of international tourism arrivals for months. That leaves an industry built for both large and fast-growing domestic and inbound tourism in recent years, squabbling over the domestic market.

Vietnam's domestic market has been an impressive driver of tourism growth in recent years. It dwarfs the International market in numbers, though not average spend. In 2019, Vietnam received 18 million international guests while domestic travellers racked up an enormous 80 million journeys - just under one journey for everybody in the country of 90-plus million. Summer destinations for the domestic market like Hoi An, Nha Trang, Quy Nhon, Phu Quoc, Da Nang and Ha Long Bay will be hoping the 2020 season can bring some relief from the year’s challenges. A strong domestic tourism rebound combined with the simultaneous closure of outbound tourism, will provide some buffer for local tourism businesses during the global slowdown of the coming months.

The domestic market will face its own challenges as the coronavirus economic slowdown dampens domestic demand. And some tourism businesses and destinations are better tailored to the tastes of the domestic market than others. Some will struggle to make the transition.

Vietnam has proven itself a world leader in the competent management of the coronavirus so far. But as those who work in the tourism industry consider heading back to the office, new challenges lie ahead.