Tràng An scenic landscape complex in the northern province of Ninh Bình. After three years of stagnation due to the COVID-19 pandemic, Việt Nam's tourism industry is accelerating its recovery. VNA/VNS Photo

HÀ NỘI Experts forecast a positive outlook for travel stocks after two years of being battered by the COVID-19 pandemic. However, Vietnamese tourism businesses still have to face many difficulties and challenges.

Positive first quarter

After three years of stagnation due to the COVID-19 pandemic, Việt Nam's tourism industry is accelerating its recovery. According to the General Statistics Office, in the first five months of this year, the number of international visitors to Việt Nam was estimated at nearly 4.6 million, 12.6 times higher than the same period last year.

Of the total of nearly 4.6 million international visitors to Việt Nam in the past five months, visitors coming by air accounted for 88 per cent; by road accounted for 10.9 per cent; by sea 1.1 per cent.

With the overall positive developments of the industry, a series of travel companies on the stock market announced very positive profit growth in the first quarter of 2023.

Statistics from Nhadautu.vn showed that most travel businesses have achieved an increase in revenue in the first quarter of 2023 compared to the same period last year.

In terms of net profit, the data shows that 7 out of 11 companies reported increased net profit.

The strongest increase was seen in Bến Thành Tourism Service Joint Stock Company (BTV) and Vietourist Tourism Joint Stock Company (VTD).

BTV recorded a net revenue of VNĐ138.4 billion in Q1, up more than 46 per cent. The company's gross profit reached VNĐ30.9 billion, an increase of nearly 1.9 times. As a result, BTV's net profit reached VNĐ5.8 billion, up 123.1 per cent.

VTD also recorded a 17.5 per cent increase in revenue thanks to the decrease in cost of goods sold by nearly 30 per cent, the company's profit increased by nearly 119 per cent to VNĐ17.5 billion.

One of the companies that recorded a decrease in profit was Đông Á Hotel Group Joint Stock Company (DAH). It earned a revenue of VNĐ6.4 billion, an increase of nearly 229 times. However, after deducting costs, DAH's profit after tax decreased by 95.5 per cent to VNĐ995 million.

The reason was that the revenue from financial activities of DAH in the first quarter of 2023 was only VNĐ13 billion, a decrease of VNĐ20 billion compared to the first quarter of 2022.

Besides DAH, three other companies also recorded negative net profit growth, namely Saigon Tourist Transport Joint Stock Company (STT), Thành Công Tourism Joint Stock Company (VNG) and Tây Ninh Núi Bà Cable Car Joint Stock Company (TCT).

Long-term outlook for travel stocks

On the stock market, tourism stocks have all had positive movements since the beginning of this year, such as Vung Tau Intourco Resort JSC, up 15 per cent, Vietourist Tourism Joint Stock Company (VTD), up 14.56 per cent, Đầm Sen Water Park Corporation, up 12.45 per cent, Saigon Railway Transport JSC (SRT), up 8.7 per cent and Vietnam Travel and Marketing Transports Joint Stock Company (VTR) up 2.81 per cent.

Experts say that in the context of slowing spending demand, foreign tourists tend to look to Việt Nam and Thailand - countries with low costs but still ensure tourism experiences. In addition, the arrival of more tourists from China after the country reopens will contribute to boosting the tourism and service industries in Southeast Asian countries, including Việt Nam.

However, Việt Nam's tourism industry will face some challenges. Deputy Director General of Việt Nam National Administration of Tourism Hà Văn Siêu listed them as inflationary, exchange rates, rising interest rates, climate change, natural disasters that continue to develop abnormally and that the visa policy of Việt Nam does not have many advantages compared to other countries in the region.

Nguyễn Quốc Kỳ, Chairman of the Board of Directors of Vietravel Group, said that Việt Nam's tourism still has some problems with visa policies, VAT policies, and promotion of foreign tourism offices.

Kỳ also pointed out other obstacles, such as transportation and aviation problems as well as the lack of advertisements for festivals and events in the country.

With many challenges and difficulties ahead, tourism businesses in 2023 all set quite "conservative" business plans.

Vietravel sets a revenue target of VNĐ6.1 trillion, an increase of 58 per cent compared to 2022. But net profit is estimated at only VNĐ8.71 billion, equivalent to a decrease of nearly 23 per cent.

According to Vietravel, this plan is quite challenging in the context that tourism and aviation are considered the fastest recovering industries, but are most affected by external factors, from government policies and market trends.

Similar to Vietravel, Đông Á Hotel Group Joint Stock Company (DAH) also set a net profit target of VNĐ20 billion in 2023, nearly half of that in 2022.

Saigon Railway Transport JSC (SRT) targets a total revenue of VNĐ1.8 trillion, an increase of 112.3 per cent compared to 2022. However, with the expected increase in transportation operating costs and some other expenses, SRT sets a net profit target of only 600 million. VNS