Hard hit by Covid-19, Vietnam tourism companies go online

The spread of the Covid-19 pandemic in 2020 is an opportunity of natural selection for the tourism sector and forces the industry to quickly change their business model, especially to online platforms, according to the Nhip cau dau tu (Investment Bridge) magazine.

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TST Tourist has invested in online tour booking and payment instead of opening new offices even before the outbreak of the disease. The number of customers in outer provinces who booked tour packages via its website is increasing, according to General Director Lai Minh Duy. 

Travel agencies don’t necessarily have to move to online platform, Duy said, adding they need to consider the conversion from offline to online model reasonably to achieve the highest business results and build the prestige of the company.

Saigontourist, another tour operator, established its online sales office at the end of 2019. Currently, 80% of its marketing activities have gone digital. Sales from its fanpage on Facebook grew sharply and staff for online activities increased by 200% so far. Its online revenue in 2019 reached VND110 billion (US$4.6 million), according to Director of Marketing and Communications Doan Thi Thanh Tra.

The online segment currently generates about 15-20% of total revenue of Fiditour Travel Company. According to its Deputy General Director Nguyen Ngoc An, with the launching of new programs, the company will increase the investment in online activities by 10 times with the aim of making revenue from online segment account for 40% of total revenue by 2023.

Another young travel agency, VietSense Travel, struggled with its traditional model during two years and has now gained good results thanks to going online since 2013. 

The company has built and operated more than 100 travel websites and enhanced online marketing activities and customer care services promotion through social networks. In 2019, revenue from online segment accounted for 90% of total revenue.

According to e-Conomy SEA report 2019 conducted by Google, Temasek and Bain & Company, the online travel market in Vietnam is predicted to increase from US$2.3 billion in 2015 to US$9 billion by 2025. Other travel agencies are making efforts to apply new technology such as virtual reality (VR), augmented reality (AR), interactive and smart travel applications.

However, experts commented that travel agencies need skills and capital to join the online segment and catch up with the new and competitive environment.

Investing in the online segment requires every travel company to heavily invest in capital and skills, according to Bui Viet Thuy Tien, managing director of Asian Trails. Her business has invested several million dollars in its online segment.

Recovery after the pandemic

The expansion of the Covid-19 pandemic is making it difficult for the tourism industry in Vietnam to recover in the second half of 2020, according to industry insiders. Consequently, the goal of welcoming about 20.5 million international visitors this year is highly unlikely. Economists have warned of a severe and prolonged global recession following the pandemic.

The tourism industry in Vietnam over the past 3-4 years has experienced a spectacular growth rate of more than 20% per year. According to many travel companies, after the pandemic they would enhance marketing and sales in order to maintain such the average growth of the whole industry.

According to Nguyen Cong Hoan, general director of HanoiRedtours, tour operators need to update themselves about the disease situation to have a plan for exploiting and recovering the market. 

At the same time, it is also important to learn about the hovernment's business support program and to work with enterprises and associations in the sector to organize stimulus programs after the pandemic.

Chairman of the Tourism Advisory Council Tran Trong Kien recommended that the industry should promote activities through social networks and online channels because more and more people are seeking information online during the pandemic.