While Vietnam hasn’t been hit has hard by COVID-19 as some of its neighbors, it has disrupted the country’s growing tourism sector and presented businesses with challenges. The Vietnamese economy’s exposure to the Chinese market has been big concern.
According to a paper from the Carnegie Endowment for International Peace written by Trinh Nguyen, a Hong Kong-based senior economist at Natixis, 17 percent of Vietnam’s total economy is exposed to trade with China. This total is higher than any other country in Southeast Asia.
The Vietnamese government is already planning to issue several incentives to help support the economy in the short term including a number of tax breaks. However, many firms are confident the situation in the country will turn around once the situation has passed.
Several Vietnamese developers have launched tourism-focused projects in the last few years which means they could be impacted by the COVID-19 crisis, but this won’t be felt for long. A representative of Sun Group, a leading resort developer, told Vietnam Insider that demand for its properties is expected to return quickly once the epidemic is controlled.
An estimated 60 percent of Sun Group’s clients are domestic visitors with local tourism expected to recover faster than international arrivals. And while most international routes to and from Vietnam have been cancelled or now run on a limited scheduled, some airline operators are already eying new air routes to attract passengers from potential markets, such as India, once the situation has improved.
Another idea being floated is the creation of demand stimulus programs for all international markets and new programs when the conditions become favorable, according to Tran Trong Kien, Chair of the Tourism Advisory Board (TAB). It was added that both western Europe and North America would be priority markets for this potential program.