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COVID-19 outbreak could cost Vietnam $4 billion in lost tourism in just 3 months

February 24, 2020 | 10:22

Vietnam's tourism industry is already taking an economic hit due to the coronavirus (COVID-19) outbreak.    

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A shopkeeper at Ben Thanh Market in Ho Chi Minh City, Vietnam, checks her phone. Photo: Kate Taylor/Business Insider

While the World Tourism Organization says it is too early to estimate the full impact of COVID-19, the respiratory illness caused by coronavirus, Vietnam's department of tourism told Business Insider earlier this week that the outbreak "is expected to cause huge damage to Vietnam's tourism industry in the short and medium term."

"In three months, the estimated direct damage to Vietnam's tourism industry could reach between $3 and $4 billion," a representative for the country's department of tourism said in an email.

Vietnam's tourism industry has seen remarkable growth in recent years. According to the department of tourism, more than 18 million international travelers visited Vietnam in 2019, up 16.2% from 2018.

Chinese tourists typically make up more than 30% of all international tourists in Vietnam. With China barring tourists from traveling abroad and Vietnam prohibiting the entry of travelers from areas that have been hit by the coronavirus outbreak, that figure has plummeted.

Vietnam is also losing potential visitors from other countries that are newly concerned about traveling in Asia, according to the department of tourism. Some domestic travel within Vietnam has also been restricted.

Stephen Wyatt, the country head of real-estate firm Jones Lang LaSalle Vietnam, told Business Insider that coronavirus has already had a "dramatic" impact on the tourism industry in Vietnam.

"We've been talking to a number of the hotel groups and their numbers are down quite significantly — 30%, 40%, 50%, 60% down on year-over-year figures," Wyatt said last week.

Ultimately, many businesses in Vietnam are bracing for the impact of the coronavirus. While the Vietnamese government has not lowered its economic growth target for 2020, former Vietnamese government adviser Le Dang Doanh told Business Insider that it is unlikely that the country will remain unaffected.

"The government still keeps the growth target unchanged," said Doanh, who served as a member of the UN Committee for Development Policy from 2016 to 2018. "But I think the GDP growth rate of Vietnam's economy in 2020 should be reduced by ca. 1% from the 6.9% target, maybe to around 6.0-5.9%."

As of Friday, there have been 16 confirmed cases of COVID-19 in Vietnam, according to the World Health Organization. There are more than 76,000 confirmed cases worldwide in 27 countries./.

VNF/Business Insider