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Vietnam hotels hibernating amid COVID-19 pandemic, longing for recovery

Vietnam hotels hibernating amid COVID-19 pandemic, longing for recovery

Tuesday, December 29, 2020, 13:15 GMT+7
Vietnam hotels hibernating amid COVID-19 pandemic, longing for recovery
Hotels in Ho Chi Minh City endure slow days due to border closures.

Since the first COVID-19 outbreak, Vietnam’s hospitality sector has experienced nearly 300 days of hardship due to social distancing measures applied to prevent virus transmission.

Decades after Vietnam’s economic reforms (Doi Moi) in 1986, this is the first time that hotel investors in the country have been plunged into a crisis as signs of recovery have yet to materialize.

Some hotels in Vietnam have accepted enduring meager revenue while others have put up their properties for lease or sale.

Located a dozen steps away from the iconic Ben Thanh Market, T.T. Hotel on Ly Tu Trong Street, District 1, Ho Chi Minh City used to welcome flocks of international visitors all year round.

Contacted by Tuoi Tre (Youth) newspaper recently, the hotelier sadly informed that the facility had been closed.

Since the beginning of 2020, this hotel has shared the same fate as more than 2,000 lodging facilities in the city – thirsty for both domestic and international customers.

Its financial pressure was impossible to withstand while the five-year contract was about to end.

Tran Kim Loan, 71, said her financial income dried up for almost one year as the renter of her eight-story building was struggling with lofty challenges.

To share the difficulty, she accepted a rate of VND50 million (US$2,170), only half of the initial rental before slashing the ratio further to 40, 30, and then 20 percent.

As the renter just depended on a bridal dress shop occupying the building’s first floor, they had to end the lease eventually.

A dozen of hotels in HCMC’s District 1 endure slow days due to border closure.

A dozen hotels in District 1, Ho Chi Minh City endure slow days due to border closures.

Contracts terminated

Loan said she and her husband poured their hearts and souls into this hotel, which was constructed in 1998, when Vietnam’s tourism started blossoming.

Two years later, it became one of a few quality hotels in the area serving international tourists.

During 15 years under the couple’s management, the hotel was chosen by American pilots, Japanese doctors, and foreign experts when they visited Vietnam.

As they grew older and their children moved abroad, Loan and her husband leased out the building, hoping the renter “could take care of the business as wholeheartedly as we had.”

The hotel has run well in the past five years with frequent customers coming back.

As the pandemic hit the business, Loan took back the hotel with 19 rooms and decided to give it a facelift while waiting for the pandemic to be over.

“Some people have come to take a look but no leasing deal has been made," said Loan.

"I want to renovate the whole building and set a new rental price later.

"But I think it will be a long time before we can lease it again.”

Situated by the intersection of Le Thanh Ton and Le Minh Xuan Streets, among the busiest in the southern city, A.S. Hotel was in the same plight as it was forced to stop operating six months ago.

Painted in white, the hotel’s façade is covered by a huge poster that reads 'For Lease.'

A hotel in HCMC’s District 1 is defunct and is being repaired

A hotel is defunct as the premise owner has it repaired in District 1, Ho Chi Minh City.

In March, owners of a three-star hotel in Tan Binh District, Ho Chi Minh City told Tuoi Tre that they offered free lodging to frontline doctors with fees covered by an international bank.

It was also the last time the seven-story building still operated as a hotel.

COVID-19 turned the hotel with 54 rooms, two conference halls, and a restaurant into a building for lease, along with space for a bridal dress showroom.

Working at the hotel for more than a decade, Nguyen Van Phat said the number of guests was always stable before the pandemic with 60 percent of the customers being international visitors, bringing profit from about VND1.2 billion ($52,083) to VND1.6 billion ($69,443) per month.

During the pandemic, less than 10 rooms were booked even amid a peak season.

Owners had to close the hotel, furlough workers, and lease the building.

Believing that the health crisis would soon pass, Andy Truong made a bet by closing all his six bridal dress showrooms and using three houses as mortgaged assets to take out bank loans for renting the whole building.

He has to pay the monthly rental fee of VND1.2 billion, not to mention a six-month deposit, although he was offered a 50 percent rental reduction in the first three months.

His initial plan of subletting the building turned out to be a failure as no contract has been signed.

A hotel in HCMC now turns to be a wedding dress showroom.

A hotel now becomes a wedding dress showroom in Ho Chi Minh City.

“Everything went wrong. Even the wedding service industry has plummeted this year,” he said.

Struggling to survive, Truong has opened a coffee shop in front of the building.

“If the situation gets worse, maybe I have to end the lease agreement ahead of time,” he said.

Hibernating tourism sector

Hanoi’s central streets, which used to be packed with tourists, have remained silent since the first COVID-19 outbreak.

From Hang Be to Cau Go, pieces of paper are hung on closed doors announcing temporary closure or electricity service cut, with the unpaid amount as modest as VND24,000 ($2) for a month.

Dang Duc Thuc, owner of a renowned hotel on Hang Be Street, said his family has been running the business on their own land since the 1990s.

Hit hard by COVID-19, he had to furlough 75 percent of his staff.

Nearly all of his customers this year are Vietnamese people introduced by some acquaintances, who are offered a huge discount on room rates.

A hotel in HCMC’s District 1 is on lease.

A hotel is for lease in District 1, Ho Chi Minh City.

According to a hotel owner in the Old Quarter, most local hoteliers rent whole buildings at high costs to run the business.

During the pandemic outbreak, they have to terminate contracts and accept losing all initial investments in decoration.

Thuc’s brother is also leasing a building, yet he has not received any payment in the past six months.

As the hospitality industry has witnessed an unprecedented crisis, he cannot do anything but wait for the pandemic to be over.

Nguyen Son Thuy, director of Indochina Unique Tourist Co. Ltd. in Hoi An City, Quang Nam Province: I have to find jobs for my employees

After several years of working as a public servant, I quit my job to run my own business.

In 2011, I established a travel agency and built a villa on the coastal street of Cua Dai, amid Hoi An’s tourism boom.

My villa is small compared with other accommodation bases in Hoi An.

During the first outbreak, some people remained optimistic that middle-class service providers like us could survive anyway.

The reality is that it has left no one unaffected.

Nguyen Son Thuy,  director of Indochina Unique Tourist Co., Ltd, is seen in this supplied photo.

Nguyen Son Thuy, director of Indochina Unique Tourist Co. Ltd., is seen in this supplied photo.

My villa still welcomed groups of Western and Australian tourists at first.

Despite falling profits, we never thought of closing it.

As the government shut down all international commercial flights, our doom began.

We shifted to the domestic market. After the first outbreak, we opened the villa again, offering special deals to attract vacationers.

It was fully booked during weekends again.

However, we have lost hope since mid-2020 when the second outbreak hit Da Nang City. Now, we live in anxiety and despair day after day.

This year, we have struggled to seek a way out and the entire hospitality sector has been defeated.

It hurts me so bad seeing my employees having to work as a builder or server at coffee shops just to make ends meet.

I told them to find other jobs and come back when the pandemic ends.

A few days ago, I saw a recruitment notice for an accountant position at a resort in Da Nang, offering a monthly salary of VND6 million ($260).

Having a connection with the resort’s director, I introduced my employee to him.

In the coming days, I will meet some acquaintances to see whether there are vacancies for other staff.

I hope that COVID-19 can be brought under control as soon as possible, like a prediction by the World Health Organization (WHO).

Although all international tours have been canceled, our foreign partners are still ready to reconnect and bring tourists back to Vietnam, once international flights are resumed.

The streets of Hoi An City are empty in this photo taken on November 29

The streets of Hoi An City are empty in this photo taken on November 29, 2020.

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