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Hotel business recovers faster than expected


Mr. Nguyen Duc Quynh, Chairman of Ho Chi Minh City Hotel Association. Da Nang and General Director of Furama Resort Danang, discussed the challenges in the recovery process of the hotel business after the Covid-19 epidemic subsided.

Vietnam has opened up to international tourism since mid-March and domestic tourism has also entered the peak season. With these two motivations, how far has the hotel business in Da Nang and the whole country recovered compared to the time before Covid-19 epidemic?

Mr. Nguyen Duc Quynh: The hotel industry witnessed a rapid recovery, which was beyond everyone’s expectations. If previously everyone assumed that tourism would recover in 2024, now we are confident that Vietnam’s tourism will return to the 2019 mark in the final months of 2023.

The hotel business in Da Nang and across the country recovered strongly, especially the beach resorts recovering faster than the hotels in the city. We estimate that, for beach resorts, the level of recovery can be up to 80% compared to 2019.

The occupancy rate of the hotel at this time until the end of the summer can reach 50-70%. Besides, Vietnam is one of the fastest recovering countries in the world in terms of domestic aviation. This is an encouraging thing.

With such positive signals, have hotels in Danang fully reopened and what is happening allows hoteliers to be more optimistic for the rest of the year? or not?

Mr. Nguyen Duc Quynh: Up to now, in Da Nang city, the rate of hotels that have reopened is 70%, specifically 850 out of 1,200 hotels.

As for the hotel business, we are fully optimistic for the summer 2022 period. However, from September onwards – when the domestic tourist season ends, as well as the unsuitable season for sea tourism for provinces from the North to the Central, we are not confident for the last months of the year when flights from other countries have not completely recovered, international tourists are still hesitant about long flights.

China – the largest market in Vietnam (accounting for 50-90% of international visitors in some major tourist destinations) has not been opened, which is a very worrying thing. South Korea – the second largest market (accounting for 4.6 million visitors in 2019) – has only just begun to return and is currently only equivalent to about 20% of the number of Korean visitors to Vietnam compared to 2019.

In summary, we look forward to the reopening of international flights, especially from the large MICE (meeting – incentive – convention – exhibition) markets so that we can have more visitors by the end of 2022.

Mr. Nguyen Duc Quynh: The two largest international tourist markets, China and Korea, have not really opened, which is a concern

Which hotel segment is recovering fastest and which is slower, and why?

Mr. Nguyen Duc Quynh: The 4-5 star hotel segment is making a very strong comeback because the number of tourists who go to the beach in the summer comes back very quickly and the usual 4-5 star hotels have better locations than the hotels with 3 stars or less, this is a very fast recovery market share.

In particular, when 4-5 star hotels have offered much better preferential prices compared to 2019, even if the price may be as low as the previous 3-star hotel, domestic tourists have had the opportunity to experience 4-5 star hotels. However, this is also a big obstacle for 3-star hotels to reopen.

On the other hand, we are surprised at the recovery of MICE tourism of Da Nang in particular and the whole country in general because usually retail customers, vacationers recover first, then the MICE market.

But right after opening, we received a lot of large groups of guests from March to June. In particular, during the summer of July, August, we continued to receive many requests for the  large group of guests. Therefore, the MICE market has recovered very quickly.

As you said, hotel room prices are at a very low level compared to the time before the epidemic when 4-5 star hotels even sold for the same price as 3 stars before the epidemic? Is there a fierce competition between hotels to win guests, leading to a sharp drop in hotel room price or for some other reason?

Mr. Nguyen Duc Quynh: It can be said that the current room price of hotels is only 70% compared to 2019. This is not exactly a competition between hotels, but it is a price suitable for domestic tourists. When the number of international visitors has not yet returned much, it is necessary to offer an appropriate room price for Vietnamese delegations.

Right after opening on March 15th, there was price competition between hotels, but up to now, hotels compete with each other in terms of service quality, as well as priority benefits for the guests.

We also hold discussions to raise awareness about the quality of our services and facilities, to attract guests with quality, with impressive experiences, not with price.

Can hotel room prices increase again and approach the price before the Covid-19 epidemic and why?

Mr. Nguyen Duc Quynh: It could be 2023, when direct flights have been reopened and international tourism has been restored. Currently, the sources of Vietnamese tourism mostly rely on the domestic market, so room prices cannot be raised.

One of the big challenges for hotels and the tourism industry when reopening is the lack of human resources because many people have changed jobs during the epidemic. Do hotels in Da Nang face this situation and if so, how will it affect service quality as well as hotel management and operation?

Mr. Nguyen Duc Quynh: It must be said that the shortage of personnel is a common problem of the whole industry, not only for hotels in Da Nang.

In terms of quality, in translation, incumbent personnel must be part-time, so it is difficult to ensure expertise, long-term anti-epidemic work also limits service and communication skills. Students also lose the opportunity to practice, the long gap after graduation makes them self-deprecating, less willing to pursue their major. This directly affects the service quality as well as hotel operation management.

Therefore, with incumbent staff, hotels need to organize regular training sessions, coaching and improving service skills. For students, besides the formal training of the school, it is necessary to have the opportunity to have soft skills training, practical experience at work, due to the lack of friction and friction with the profession during the last 2 years of Covid-19.

The Danang Hotel Association is well aware of the shortage of both quantity and quality of personnel, so it has regularly organized online courses on services and market information. The association also signed cooperation agreements with vocational schools to bring in hospitality experts to teach, as well as re-train hotel staff.

In Da Nang, a unit that has been doing very well in this program is the IBH Hospitality Training Academy. The tripartite cooperation between regular schools, IBH academy and hotels like Furama Resort Danang, has brought about practical teaching courses, supplementing soft skills such as: leadership skills, trainers and behavior on the table… and programs for interns and students.

The Danang Hotel Association cooperated with the Da Nang City Labor Union to organize a training course on professional housekeeping and reception for 57 staff members working at 22 hotels and accommodation business units in the city

Are there any changes in the needs of tourists today and what do hotels need to do to adapt to these changes (if any)?

Mr. Nguyen Duc Quynh: Green tourism is a current trend when tourists’ awareness of the importance of the environment to their lives is increasing. This affects the behavior of choosing a tourist destination as well as during the guest’s stay.

Besides, it is the trend of resort tourism (Wellness tourism), when health becomes one of the top concerns of tourists.

As such, hotels need to invest and develop green-environmentally friendly experiences, as well as health care services, to meet the increasing needs of tourists.

In terms of technology, hotels also need to apply digital technologies to reduce visitor contact and waiting time such as digital check-in and pre-check-in, using chatbot technology (automatic customer consultation software).

Vietnam has opened up to international tourism, but now is not the peak period for international visitors to Vietnam, but usually in winter. So far, is there any signal that international visitors will return to Vietnam in large numbers in the upcoming high season? And where will be the main international tourist market for Vietnam in general and Da Nang in particular in the coming peak season?

Mr. Nguyen Duc Quynh: Up to this point, the signals that international tourists to Vietnam are still very cautious.

Although the number of tourists exploring Vietnam’s tourism has increased, the number of international visitors to Vietnam cannot be certain partly because the flight route is not widespread, and secondly, foreign tourists are still hesitant to go far (long-haul) but often they still choose resort destinations closer. Direct flights are not yet connected to distant points.

Regarding the main international tourist market, we should focus on markets with direct flights to Vietnam right now. And especially, markets are ready to come to Vietnam such as the Indian market. The Korean market, Japanese market should also focus. Moreover, it is necessary to be prepared in terms of services, facilities and personnel when China tourism opens to the outside world.

What needs to be done by the Danang government as well as the Vietnamese tourism industry to promote tourism to recover faster?

Mr. Nguyen Duc Quynh: All activities to promote Vietnam’s tourism before the epidemic need to return and strengthen more strongly.

The Da Nang government is extremely active in marketing promotion for markets as well as investing in tourism services and supply partners for the tourism industry extensively.

The Routes Asia event on June 6-9th, 2022 with 550 leaders and delegates from major airlines, airports, suppliers, and international travel agencies taking place in Da Nang has helped the destination. This company has the opportunity to cooperate and develop new routes.

In the near future, leaders of Da Nang will also lead a tourism promotion delegation to organize roadshows in India, Malaysia and Singapore. The Center for Tourism Promotion also works closely with partners in tourist destinations to Da Nang such as Korea, Japan, etc.

Da Nang Tourism Association is very active in inviting groups of fam trips (travel programs for travel agencies to learn about destinations) and participating in activities to improve the quality of tourism products, creating new products and actively participating in the activities of the Danang tourism industry.

We hope that the Da Nang government can partially support the travel and hotel businesses to participate in more international tourism exhibitions and tourist roadshows in destinations so that they can build relations with international tourism partners.

Thank you Sir!

Source: The leader

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