A hotel in HCM City. Many hotels in major cities have cut tariffs dramatically or closed as the COVID-19 pandemic continues to impact tourism. — Internet photo

HCM CITY – The hotel industry is facing arguably its greatest challenge as the impacts of COVID-19 keep away foreign visitors from the country.

In major cities like Hà Nội and HCM City, many hotels have cut their rates sharply to attract local visitors, with many others, unable to cope, even closing down.

Social media is abuzz with the fact that the Sofitel Metropole Hà Nội has cut tariffs to surprisingly low levels.

Some online fan pages selling tourism vouchers like www.avoucher.com.vn have advertised that until the end of October it is only VNĐ990,000 per person per night at the hotel.

Việt Nam News found a rate of VNĐ2.66 million (US$110) (including tax) for two guests for a night this weekend on the Agoda app.

According to Agoda, this is 52 per cent down from normal at this time of the year.

On the same day, the tariff at Hotel de l’Opera Hanoi – Mgallery was down from the usual VNĐ11.5 million ($500) to VNĐ2.15 million ($90).

A report on vietnamnet.vn said many four- and five-star hotels in the capital have knocked their rates down by 70-80 per cent, including all top names like Hilton, Metropole, Daewoo, and Pullman.

Hanoi Daewoo Hotel has launched a promotion campaign offering a discount of 74 per cent in all booking apps, which pushed the rate down to VNĐ1.4-1.8 million.

The situation is similar in HCM City.

In District 1, the heart of the city, many hotels have closed without saying when they will reopen.

In a report, property consultancy CBRE said COVID-19 triggered lockdowns and travel restrictions on a global scale, sending the tourism and hotel sectors into virtual hibernation mode throughout the first half of this year. 

After enjoying impressive tourism growth in recent years, in the first half of this year Việt Nam recorded drops of 56 per cent and 50 per cent year-on-year in international arrivals and domestic travellers trips, it said. 

By the end of March, the Government suspended all international flights to prevent the spread of COVID-19, and thus foreign arrival numbers tumbled by 99 per cent year-on-year in the second quarter, it said. 

The average revenue per available room (RevPAR) for hotels in the first half went down by 56 per cent and 64 per cent in Hà Nội and HCM City. 

RevPAR for the country overall dropped by 55 per cent.

Occupancy rates reached the lowest point in April, when nation-wide social isolation was imposed, before slowly recovering in May and June when local tourists started to hit the road again. 

However, as HCM City and Hà Nội’s four- and five-star hotels rely strongly on foreign guests, occupancy rates only improved by 1 - 1.5 percentage points each month. A full recovery, mainly subject to global containment of the pandemic, seems more unpredictable. 

The third quarter is unlikely to see much improvement from previous ones since Việt Nam has faced a second wave of COVID-19 starting in late July, and some parts of the country have imposed social isolation to contain the spread. 

Nguyễn Trọng Thức, associate director of CBRE Hotels Vietnam, said: “In 2020-21 the hotel industry is expected to be in defensive mode with intermittent fluctuations in performance until a vaccine or widely available treatment for COVID 19 can be developed.”

However, while COVID-19 seems set to have far-reaching and dramatic implications on the hotel landscape of tomorrow, the long-term outlook for Việt Nam remains positive, thanks to imminent improvement in infrastructure, favourable visa policies and the desire to turn tourism into a key industry.

Việt Nam has been praised by the international community for its decisive and effective efforts to contain the pandemic, enhancing its image on the global tourism scene one of the safe travel destinations. – VNS