Da Nang is a highly attractive destination for both domestic and foreign tourists. Not only being bestowed by the nature with its charming scenery and boasting synchronous investment and breakthrough thinking of the local government, Da Nang also leaves a mark in the hearts of every visitor by the sincerity and warmth of local dwellers here. However, the complicated and unpredictable developments of COVID-19 have adversely affected tourism industry- one of the Da Nang spearhead economic sectors- for nearly two years. It is high time to fully assess the COVID-19 impacts and come up with strategic solutions to revive the Da Nang tourism market in the new normal.

Da Nang businesses registered to join forces for the restoration of Da Nang tourism in the new normal on October 28. Photo: PHUC AN

Many difficulties and challenges

It can be said that never before has Da Nang’s tourism industry faced such great challenges, heavy damage and prolonged effects as currently since the outbreak of COVID-19.
More than 90% of the local businesses have temporarily closed, the source of visitors was almost zero at times, and the loss of revenue through the coronavirus surge has been estimated at more than VND50,000 billion.

According to a recent survey by the Da Nang Tourism Development Promotion Fund, as of February 2021, more than 43% of businesses had laid off 70 - 100% of their employees. This rate is equivalent to the first survey in October 2020.

Besides, 53.7% of the enterprises were forced to let more than 50% of their employees take time off/rotating leave, up 14.3% ass compared to the survey in October 2020 (39.43%). 39.3% of the enterprises allowed employees to take unpaid leave and receive unemployment insurance.
In order to streamline the apparatus to a minimum to ensure optimal operation of the enterprise, the percentage of full-time employees has decreased.

The 2020 survey results also showed that no enterprises recorded growth in revenue in 2020. 82.9% of the enterprises recorded loss in 2020, only 8 enterprises reached the break-even point, (accounting for 7.2%), and more than 21.6% of the enterprises lost more than VND10 billion (mainly in the group of medium and large enterprises).

All small businesses (accounting for 27.9%) suffered from loss of about VND 1 billion in 2020.
Out of nearly 90% of the surveyed businesses that had resumed their operations, 62.2% suffered more losses than initially expected due to the outbreak of the disease and natural disasters in the fourth quarter of 2020.

In 2021, according to predictions made by 46.4% of the businesses, there would be a decrease of more than 75% in revenue as compared to 2020.

, up to 25% of the businesses were afraid of the risk of bankruptcy. Only one units still held a belief in revenue growth.

In addition, the total investment poured in facilities and equipment at accommodation establishments, tourist attractions and transportation services is estimated at US$3.2 billion (equivalent to VND73,000 billion), but most of these sites cannot operate in light of the COVID-19 surge.

Flexibility needed to find solutions

Although the pandemic situation has been controlled and the vaccine coverage rate is high now, but with the complicated developments and the risk of spreading new strains of SARS-CoV-2, the Da Nang tourism industry needs to be flexible with urgent solutions sought to resolve current problems.

First, the city leaders and functional local agencies should create favourable conditions for tourism businesses to access support packages adopted by the national and municipal governments, especially financial-credit packages, thus helping them avoid operation suspension, dissolution, bankruptcy.

In addition, there should be breakthrough mechanisms, adapting to the new normal to restore the source of both domestic and foreign tourists in the context that Da Nang is one of the five Vietnamese localities or have been selected to welcome back international tourists with vaccine passports on a trial basis.

Also, the municipal government-adopted solutions to restore and develop Da Nang tourism must be put into practice.

Second, it is necessary to take the leading role of large enterprises, airlines and travel agencies in opening services and creating breakthrough products so as to attract travellers.

Given the current situation, it is difficult for the market to recover spontaneously, but it needs the guiding role of the State management agency and the cooperation among the business community to quickly restore the source of visitors and ensure safety against the pandemic.

Third, focus should be on promoting joint activities with other localities. For instance, it is a good idea to partner with the neighbouring province of Quang Nam to launch online products for the ‘Vaccine passport’ pilot programme, so as to be on par with other destinations such as Thailand, Singapore and Cambodia, and link with Ha Noi, HCM City and some localities in tourist exchanges.

It is highly recommended that Da Nang promote linkages between service providers, airlines, and travel agencies to create strong enough alliances to attract high-quality tourist markets with high safety and quick recovery such as Republic of Korea, Japan, China, Taiwan (China) and Southeast Asian countries, in addition to domestic travellers.

Fourth, it is necessary to promote communication and tourism promotion about a safe, friendly and hospitable destination image on the basis of tech apps in market promotion such as the Online Travel Market model, pilot the use of smart travel cards, organise more virtual fairs, tours and livestream programmes (directly broadcast on social networks) and support businesses to promote digital transformation.

Fifth, heed should be paid to diversifying local tourism products by developing many new boat tour routes, connecting urban experiences with rural ecological communities, build up tours to cultural, historical, spiritual sites and organise on-site tourism programs such as picnic activities, community-based tourism and trekking tours).

Also, plans should be mapped out to promote beach, golf, cuisine, agri-tourism, eco-tourism, MICE tourism to serve diversified guests and support the formation of a start-up ecosystem for the creation of new tourism products.

The Da Nang Department of Tourism has till date announced a three-phase roadmap for welcoming back international guests. Phase 1 began in November 2021 with the selection process for authorized service providers to serve international guests. Phase 2 will begin in January 1, 2022 with the expansion of the scope of international tourists by connecting destinations through regular charter and international commercial flights.

Foreign guests can participate in tourism programs to visit 5 localities, namely Da Nang, Quang Ninh, Quang Nam, Khanh Hoa, Kien Giang which have been given green light by the national government during phase 1.

Viet Nam will fully open to international tourists in Phase 3 and the starting time of which will be based on the COVID-19 situation and the assessment of the two previous phases.

Dr. NGUYEN HUU NGUYEN XUAN - Dr. CAO TRI DUNG
Da Nang University of Economics
Translating by A. THU