*Policy consultation article on Da Nang Newspaper by author group: Dr. Nguyen Huu Nguyen Xuan and Dr. Cao Tri Dung - the University of Economics - the University of Danang in order to contribute solutions and policies for Da Nang city government in an effort to recover the city's tourism industry after the Covid-19 pandemic.
Da Nang city is an attractive destination, quite famous for domestic and foreign tourists. Not only favored by nature for its charming scenery or 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 the people here. However, the complicated and unpredictable developments of Covid-19 have caused Da Nang's tourism industry to struggle for nearly 2 years.
Businesses registered to respond and accompany to recover and develop Da Nang tourism in the new normal period on October 28.
Photo: PHUC AN
It is time to fully assess the impacts and come up with strategic solutions to plan the development as well as revive the Da Nang tourism market in the new normal.
Many difficulties and challenges
It can be said that never before has the Da Nang tourism industry faced such great challenges, heavy damage, and lasting effects as the period since the outbreak of Covid-19 until now. More than 90% of businesses are temporarily closed, the source of visitors is almost zero at times, the loss of revenue through epidemics is estimated at more than 50,000 billion VND.
According to a survey by the Danang Tourism Development Promotion Fund, by February 2021, more than 43% of businesses had to lay off 70-100% of their employees. This rate is equivalent to the first survey in October 2020; 53.7% of enterprises were forced to let more than 50% of their employees take time off/rotate leave, up 14.3% compared to the survey in October 2020 (39.43%); 39.3% of enterprises allow employees to take unpaid leave to 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, while the proportion of senior personnel (investors, board of directors) has increased nearly doubled (from 11.1% to 23.1%) and the ratio of 1-10 full-time employees increased to 16.3% compared to before Covid-19.
The survey results also showed that no enterprises recorded growth in revenue in 2020. 82.9% of enterprises lost in 2020 and only 8 enterprises broke even (accounting for 7.2%); more than 21.6% of enterprises lost more than 10 billion VND (mainly in the group of medium and large enterprises). All small businesses (accounting for 27.9%) lost about 1 billion VND in 2020.
When domestic tourism showed signs of flourishing again from the summer, by the end of 2020, out of nearly 90% of surveyed businesses that had returned to operation, 62.2% of businesses suffered more losses than initially expected due to the outbreak of the disease and natural disasters in the fourth quarter of 2020. In 2021, 46.4% of businesses predict that revenue will continue to decrease by more than 75% compared to 2020. Notably, up to 25% of businesses are afraid of the risk of bankruptcy. Only one unit believes in revenue growth. Only about 11.9% of businesses said they could hold their capital until the end of 2021. In addition, the total investment in facilities and equipment at accommodation facilities, tourist attractions, trains, and cars is estimated at 3.2 billion USD (equivalent to 73,000 billion VND), most of which cannot operate due to the impact of Covid-19.
Be flexible and actively find solutions
Although the epidemic situation has been controlled, the vaccine coverage rate is high, 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 and actively give urgent solutions to current problems.
Firstly, it needs more attention and drastic direction from city leaders, functional departments, agencies, and sectors in creating favorable conditions for tourism businesses to access support packages of the Government and Da Nang, especially the financial-credit packages, which helps businesses avoid closing, dissolution, bankruptcy. In addition, there are 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 five localities in the country selected to pilot the "Vaccine passport" program for international tourists; implement the tasks according to the conclusion of the Standing Committee of Da Nang City Party Committee at the Seminar "Solutions to recover and develop Da Nang tourism" organized by the City Tourism Development Promotion Fund and the Department of Tourism on April 1, 2021.
Second, it is necessary to take the leading role of large enterprises, airlines, and travel agencies in opening services and creating breakthrough products to attract customers. With the current situation, it is difficult for the market to recover spontaneously, but it needs the guiding role of the State management agency and contribution of the business community to quickly create new domestic and foreign tourist flows that return to the locality actively, helping recover the source of visitors and ensuring safety against the epidemic.
Third, focus on joint activities to quickly coordinate resources to create advantages in-market products and increase efficiency in customer exploitation promotion. In particular, it is necessary to cooperate with Quang Nam province in the formation of online products for the pilot program "Vaccine passport", which can compete with large receiving markets such as Thailand, Singapore, Cambodia, etc.; linking with Hanoi, Ho Chi Minh City and some localities in the orientation of exchanging guests; linkages between service providers, airlines, and travel agencies, creating strong enough alliances to locate customer sources, create products, and target promotion into high safety and quick recovery tourist markets such as domestic tourists, customers from the markets of Korea, Japan, China, Taiwan (China), Southeast Asian countries, etc.
Fourth, it is necessary to promote communication and tourism promotion about a safe, friendly, and hospitable destination image on the technology application in a market promotion such as modeling implementation research "Online tourism exchange" (model online tourism market) to support tourism businesses to connect, transact and organize online purchase and sale of tourism services with customers; piloting smart travel card; researching online tourism surveys, organizing virtual fairs, virtual tours, livestream programs (directly broadcast on social networks) to introduce tourism products and guide businesses on smart tourism activities through digital technology; support businesses to promote digital transformation.
Fifth, developing and diversifying tourism products for the destination by investing in more new and novel river cruise routes, connecting urban experiences with rural ecological communities, combining more locations related to culture, history, spirituality to create an attractive tourist route; building and organizing on-site tourism programs (picnic activities, community tourism, Hoa Bac, Hoa Vang trekking tours, etc.), building product groups of marine, golf, food tourism, agri-tourism, eco-tourism, MICE tourism to serve guests; promoting and supporting the formation of a start-up ecosystem for the creation of new tourism products, anticipating the trend of small group tourism, family group tourism, tourism with increased experience and creativity, etc., after Covid- 19.
Last October, Da Nang implemented a plan to recover tourism activities in the new normal situation, under the motto: "Proactive - adaptive - flexible to effectively recover tourism and ensure safety for tourists, tourism workers, and the community”. Accordingly, Da Nang organized to welcome domestic tourists in two stages: restarting tourism service activities in the city from October 2021 (phase 1) and deploying to serve inter-regional tourists from November 2021 (phase 2). Implementing the plan to welcome international guests in 3 phases: pilot international arrivals under package tourism programs, through charter flights and regular international trade from November 2021 (phase one); expanding the scope of welcoming international tourists, connecting destinations through regular international commercial and charter flights from January 2022 (phase 2); fully reopening to the international tourist market (phase 3).
Along with the proactive, safe, and flexible adaptation of the State management agencies, the companionship and cohesion of businesses in the new normal state, it is hoped that the Da Nang tourism industry will have the first solid recovery steps in the stable development roadmap in the coming time.
Read in Da Nang newspaper: https://baodanang.vn/channel/5433/202112/lam-the-nao-de-phuc-hoi-du-lich-da-nang-3897563/
Dr. Nguyen Huu Nguyen Xuan and Dr. Cao Tri Dung (the University of Economics, the University of Danang)
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