International visitors shopping at Ben Thanh Market, Ho Chi Minh City.

The first six months of the year have been tough for the global tourism industry in general and Vietnam’s tourism industry in particular. With the global economic crisis and the A/H1N1 virus, foreign visitors coming to Vietnam dropped by 70 % during May and June.

Tourism experts said international tourism numbers will slump further if the swine flu epidemic continues to spread around the world.

International visitors decrease sharply

International tourists coming to Vietnam from Asia have been a large component of the sector in recent years, but even these key markets, such as China, Japan, Singapore, Malaysia, South Korea and Taiwan (China) have dropped off, with numbers falling between ten to 70 %.

The last two months, which has seen the A/H1N1 flu virus arrive in Vietnam, has been particularly bad, causing Asian visitor numbers to drop even more sharply.

The number of Japanese visitors using Vietnamese travel agencies has decreased by 70 % compared with the same period last year.

Many tourism agencies specializing in Japanese visitors have had to cancel tours, which were booked two or three months ago due to the spread of A/H1N1 virus.

The effect has been made worse as tourism agencies do not know how many Japanese visitors will come to Vietnam in July, as they generally book tours to two to three months in advance.

B.T. My, a tour guide for Japanese visitors, usually leads tours everyday but is currently only taking a tour once a fortnight. With the short fall in numbers, she is now giving tours in Japan for Vietnamese. 

Occupancy also has fallen significantly at high end and large hotels in Ho Chi Minh City, some are running at around 50 % or lower

At the current time, high end hotel’s room rates decreased by 30-40% compare with last year.

With the situation, Vietnam’s tourism industry is finding it difficult to achieve the target of 4.5 million foreign visitors this year. They may welcome more than 3.2 million visitors instead, a decrease of around 20 % compared with last year.

Improving Vietnam tourism’s growth rate

According to a report by the operator in audit and business advisory services Grant Thornton Vietnam on hotel business in 2008, high end hotel room occupancy in Vietnam is at its lowest level for four years.

Despite a large fall in demand, many hotel rooms have actually increased in cost due to taxes, inflation and increases in electricity and water. Some hotels around the country have increased their room rates to be 30 to 40 % higher than countries in the region.

In response, Vietnam’s tourism industry began a nationwide programme to promote domestic tourism, as well attracting more foreign visitors.

After four months, the programme has had some success, such as raising competitive standards across the country and bringing together tourist companies, tourist destinations and relevant government agencies.

The United Nation’s World Tourism Organisation (UNWTO) forecasted that the service sector, which contributes ten % of global GDP, will overcome negative impacts of global recession by 2010.

According to estimates, international tourist numbers will increase from the current 900 million to more than one billion in 2010, and may increase to 1.6 billion by 2020.

The improvement in tourism is most observable in Asia-Pacific region.

In order to take advantage of this improvement in the region, Vietnam needs to build a sustainable sector within the next two years. (SGGP)