The consequences of the COVID 19 epidemic and the rehabilitation strategy of the hospitality business in vietnam

Global tourism has been mostly decimated by the COVID-19 pandemic, and the recovery of tourist spots in underdeveloped nations has been put in jeopardy as a result of theepidemic's more

FOREIGN TRADE UNIVERSITY

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RESEARCH PROPOSAL Subject: Research methodology in

economics and business

Topic: The consequences of the COVID-19 epidemic and the rehabilitation strategy of the hospitality business in Vietnam

Class: KTEE206.1 Khoá: 60

Professor: Dr Phạm Thị Cẩm Anh

Hanoi, October 10 th 2022

Abstract 3

1 Background 4

2 Literature review: 4

3 Research questions, purpose, hypothesis, and objectives: 6

3.1 Research questions: 6

3.2 Purpose: 6

3.3 Objectives: 7

3.4 Hypothesis: 7

4 Research Methodology and Methods: 7

5 Discussion: 8

6 Significance of the Study: 9

7 Contribution of the Study: 9

8 Scope of the Study: 10

9 Limitations of the Study: 18

10 Conclusions: 19

11 Structure of Thesis Report 20

12 References 20

Global tourism has been mostly decimated by the COVID-19 pandemic, and the recovery

of tourist spots in underdeveloped nations has been put in jeopardy as a result of theepidemic's more dangerous waves Although an abundance of studies has been conducted

to calculate the general influences of COVID-19, not much research has been done toevaluate its overall impact on the individual tourism and hospitality industry Meanwhile,during COVID-19, travel agencies and the lodging sector suffered many moreconsequences compared to other stakeholders The impact of the COVID-19 pandemic onthe hospitality industry in Vietnam is a significant concern for the authorities andgovernment, which may require a prompt response in economic policy and financialstrategy to better assist local businesses in overcoming the difficulties during post-pandemic recovery This research aims to study the effects of multiple COVID-19quarantines on the tourism industry in Vietnam, an underdeveloped nation, to investigatehow the tourism sector in a developing nation such as Vietnam, has been harmed as aresult of many COVID-19 outbreaks This research will provide the current knowledgeabout the consequences of the COVID-19 pandemic, which is important not only for theadaptation of firms' methodologies and the transformation of sustainable tourism but alsofor giving insight into best practices that can be adopted and creating exceptionalindications of within-industry homogeneity in how businesses react to disasters

The writers employed a mix of qualitative and quantitative methodologies These methodscan be utilized as a useful approach in social science studies to increase the validity ofresearch findings and meet a specific purpose of tourism research In order to explain thereasons behind quantitative findings, most parts of our study follow the explanatoryapproach, which qualitative research is conducted after quantitative research A criticalreason for the widespread use of mixed approaches in tourism research is to overcome theobjective shortcomings of employing qualitative or quantitative methodologies alone(Fetter & Freshwater, 2015) The study is conducted in a synchronized and methodicalmanner to have a specific, contextualized insight into the hospitality industry in Vietnam

In Vietnam, the whole country has experienced three waves of the COVID-19 pandemic

By collecting and analyzing many sources of secondary data, the research comes to theresults depicting that many tourism-related firms and corporations suffered significantlyfrom the pandemic, and very few of these businesses were able to recover after a longtime of social distancing To be more specific, after the third wave, there is a witness thatthe tourism industry sectors were either facing permanent closure or bankruptcy.Although the degree of the downturn varied among the sizes of corporations andcompanies, all domestic tourism enterprises appeared to suffer a dramatic decline in the

number of clients, tourism revenues, service facilities, and tourist arrivals, as well as jobopportunities.

Relied on official secondary statistics, this result presents the consequences of COVID-19

on the tourist sector in Vietnam The goal is to examine how the COVID-19 pandemic hasaffected the tourist sector, identify the important tourism industries, and assess how muchthe pandemic's waves have hit local enterprises On a scientific foundation, this study willpropose to analyze and develop strategies for dealing with these unfavorable impacts

In conclusion, along with the latest development trend in the industry after COVID-19,Vietnam should prioritize recovering tourism—key to Vietnam's economic sector in thenear future These solutions can be conducted by developing reasonable strategies to build

up a safe tourist environment, sustaining the tourist market, diversifying and improvinghigh-quality tourism products, marketing, and digitalization This study may be regarded

as a helpful resource for tourism researchers and management in developing countriessuch as Vietnam

1. Background

COVID-19 (coronavirus illness 2019) is a disease caused by the SARS-CoV-2 virus thatwas detected in Wuhan, China in December 2019 It is very infectious and has rapidlyspread throughout the world Global tourism has been mostly decimated by the COVID-

19 pandemic, and the recovery of tourist spots in underdeveloped nations has been put injeopardy as a result of the epidemic's more dangerous waves Although an abundance ofstudies has been conducted to calculate the general influences of COVID-19, not muchresearch has been done to evaluate its overall impact on the individual tourism andhospitality industry This research targets to study the effects of multiple COVID-19quarantines on the tourism industry in underdeveloped nations Overall, in Vietnam, thewhole country has experienced three waves of the COVID-19 pandemic

In terms of economic loss among tourism-related businesses, most of these are found intravel agencies and the lodging sector compared to other stakeholders The impact of theCOVID-19 pandemic on the hospitality industry in Vietnam is a significant concern forthe authorities and government, which may require a prompt response in economic policyand financial strategy to better assist local businesses in overcoming the difficultiesduring post-pandemic recovery

2. Literature review:

The COVID-19 pandemic has negatively influenced the tourism and hospitality industry

on a global scale By reflecting on some latest key research, this session aims to deliver a

better understanding of how tourism businesses in a developing country like Vietnamhave suffered economically from the pandemic crisis period.

On March 11, 2020, the World Health Organization (WHO) officially proclaimedCOVID-19 to be a pandemic It was anticipated that the epidemic would have a widerange of sociocultural, political, and economic effects The world's tourism industry isobviously extremely vulnerable to such crises, and the effects on tourist locations will besevere and permanent Evidently, a loss of 1.2 trillion USD in export income was caused

by a large 78% decline in the pace of global visitor visits and the elimination of 120million jobs This suggests that the pandemic will cause massive economic lossesworldwide, especially in places where the tourism industry is the mainstay of the localeconomic structure

The travel restrictions escalated from the Wuhan region epicenter (local lockdown starting

on 23 January) to the majority of countries by the end of March as COVID-19 caseserupted and spread throughout the globe The attached figure depicts nations whoseborders are closed to the movement of non-citizens and non-residents as of March 31,

2020, and countries with partial border closures

There is research claiming that the smaller the size of firms, the more disadvantages ofbeing in danger of closing down or possibly going bankrupt without policy assistance(KTT Nguyen 2020) Therefore, small entrepreneurial businesses are especiallyvulnerable to significant cash limitations in prolonged recessions and crises The lodgingindustry also suffered a dramatic decrease In the first half of 2020, the hotel occupancyrate in Vietnam was at 29 percent, indicating a significant drop from the hotel occupancyrate of 2019 The COVID-19 pandemic disrupted the growth of the Vietnamese tourismand accommodation sector Since the first outbreak in early 2020, Vietnam has recordedaround an 80 percent decline in international arrivals

3. Research questions, purpose, hypothesis, and objectives:

3.1 Research questions:

The issues raised above have brought about the following questions below, which would

be addressed in the course of the study:

1 Is there a causal relationship between a pandemic and tourism?

2 What effects does the pandemic have on the tourism and hospitality industry inVietnam?

3 What are the factors (direct and indirect) related to COVID-19 resulting in changes

in the tourism market in Vietnam?

4 How can the hospitality industry recover after COVID-19? What solutions can thegovernment and authorities provide to help the rehabilitation process?

3.2 Purpose:

This study aims to highlight the impact of COVID-19 on tour operators in Vietnam aswell as explore their strategic responses to the pandemic It intentionally focuses on touroperators because these firms play an important role in tourism development and povertyalleviation in the country The firms are expected to make a major contribution to therecovery of the domestic and international tourist markets

In order to better understand the developments of the tourism industry and supportstronger domestic and international recovery, there is a need to update the data throughsurveys The COVID-19 crisis has changed traveler priorities and resulted in numerousbehavioral modifications To evaluate the financial health of the tourism industry,Vietnam will need to collaborate more closely with private organizations These factors

have motivated our team to involve in the assessment that takes into account manyregional variations and the traits of each category of tourism service businesses Wefocused on size, local and international reach, public versus private ownership, As aresult, the research makes more steps in updating data on both supply and demand in thisindustry.

3.3 Objectives:

The main objective of the study is to examine the impact of the COVID-19 pandemic andthe decline of Vietnamese tourism, in order to estimate the time it will take for Vietnam toget its tourist sector back to its pre-COVID performance

Below are the specific objectives:

1 To examine the causal relationship between the COVID-19 lockdown and thedownturn of the tourism sector in Vietnam

2 Estimate the short-term and long-term effects of the COVID-19 pandemic ontourism in Vietnam

3 To examine the long-run relationship that exists between COVID-19 and tourism

4. Research Methodology and Methods:

To accomplish the data collection aims, a mixed method approach was used in this study

to collect both qualitative and quantitative data More precisely, qualitative data enabled

researchers to quantify the effects of COVID-19 on the tourism industry of the case studyunder consideration, while quantitative data allowed researchers to gain in-depthinformation about stakeholder attitudes and beliefs about the pandemic's impact on theirbusiness operations The research design included two main phases The first stage beganwith developing a framework for qualitative data gathering, whereas the second stagefocused on quantitative data collection Accordingly, the research team then developed aset of questions for the in-depth interviews, suitable for the research setting in Vietnam.

Quantitative research:

Analysis for this study was done using secondary data The research question “What arethe factors (direct and indirect) related to COVID-19 causing changes in the Vietnamtourism market?” was developed as the study's first step in conducting the secondaryresearch The secondary data set was then found, assessed, and a conclusion wasprepared The General Statistics Office of Vietnam provided the majority of the reviews,journal articles, and reports used in the study (GSO) Additionally, websites and newsarticles were used to gather secondary sources of data Using the journal articles anddifferent reports the researcher had access to, a literature review was carried out as thefirst step of the analysis process The reports' statistical information was then used toconduct a more thorough analysis of how the coronavirus has affected the travel andtourism sector Consequently, using the information at hand, a descriptive analysis of thetourism sector and its related industries was carried out

Qualitative research:

Given that the COVID-19 pandemic is still complicated on a global scale, and itsinfluence on socioeconomic and environmental elements still seems to be unclear,qualitative research via focus group discussions and interviews is thought to bereasonably appropriate for revealing crucial aspects that can go further than the simpledescriptive statistics of quantitative research Individuals were interviewed to getqualitative data They are tourist specialists and personnel with excellent professionalcredentials who can provide comments to ensure openness and impartiality in researchmaterial

In terms of participant selection and recruiting, criteria were created to choose a suitablelist of possible participants who were tourist company managers The first intervieweewas picked at random from the list, and the remaining interviews were recruited using asnowball sampling method

5. Discussion:

In Vietnam, the COVID-19 outbreak creates a massive halt in the tourism industry.According to the Central Disease Control of Vietnam (CDC), in 2021, with theemergence of the Delta variant, COVID-19 cases in Vietnam increased rapidly in bothnumbers and severity As 2021 ended, the total number of COVID-19 cases in Vietnam

was over 2 million, causing about 34,500 deaths Per 1 million people, Vietnam ranked143/224 nations in the number of cases, 130/224 in deaths, 26/224 in deaths per casesratio, at 1,8% With timely and decisive policies from the government and the CommunistParty, Vietnam was considered one of the most excellent countries in dealing withCOVID-19 As a result, the country was able to bounce back from the pandemic and beready to serve international tourists in no time At the end of 2021, Vietnam hassuccessfully implemented their vaccination program, with over 144 million doses carriedout; 78% of the population is vaccinated, with 66% fully vaccinated (2 doses) Thevaccination percentage of Vietnam even surpassed those of the world’s most developedcountries, namely the USA

As borders were closed, especially in China where hundreds of thousands of tourists flood

to Vietnam every year, in addition to many governments imposing travel restrictions, thetourism industry suffers a deep decline among many other industries The COVID-19outbreak created critical challenges for the global tourism sector The available data inGSO has estimated a 97,8% decrease in international tourist arrivals in the first 5 months

of 2021 for a total of 81,000 tourists, with a 40% reduction in tourist arrivals in May Thetotal revenue from international tourists in the first 5 months of 2021 reaches 180 milliondollars Regions that suffered the most were Khanh Hoa, with an 85,6% decrease in thenumber of international tourists, and Quang Nam, at 68,4%

The economy's many sectors, especially the hospitality and air travel sectors, whichsupport the tourism industry, may also be impacted by the downturn of the tourism sector

In the Lunar New Year holidays of 2021 alone, the airline sector’s total revenue suffered

a dramatic drop of 80%, while Vietnam Airlines alone lost well over 200 million dollars

in the first 5 months of 2021 Private airlines such as Vietjet Air and Bamboo Airwayshad to sell some of their properties to maintain their operation Meanwhile, the occupancyrate for the hospitality sector in all of 2021 was only about 10%

6. Significance of the Study:

There are very few studies on the effects of COVID-19 on the global tourism industry as awhole and specifically the Vietnamese tourist industry in literature at this time There was

a dearth of research on the impact of COVID-19 on economic growth, and it waschallenging to find a significant study that addressed the problems the tourism industrywas facing as a result of the pandemic However, the impact of COVID-19 on the tourismindustry has been documented in numerous reports by UNWTC, WTCC, and UNCTD

As a result, the primary contribution of this study to the body of literature is the addition

of new and significant relationships between the COVID-19 pandemic and the globaltourism sector, which is the area of literature that receives the least amount of attentiondue to the lack of data

7. Contribution of the Study:

The research provides deeper perceptions into recovering tourism activities and offershelpful suggestions to government officials, scholars, and tourism firms to reinvest in thetourism industry to set it back to a normal position The researcher's conclusions would bevaluable for governing bodies and policymakers in Vietnam to help the tourism-basedeconomy grow back to its pre-COVID performance

8. Scope of the Study:

As a result, very few small-sized business enterprises could survive after the waves of thepandemic, and it was likely that the small business firms in this study would really shutdown According to a study by Kalogiannidis (2020), prolonged lockdowns may put smallfirms in danger and make bankruptcy a real possibility In addition, even small enterprises

in European nations that profited from their nation's sound financial policies experiencedfinancial trouble; very few of them were able to sustain repeated and protractedlockdowns (Garca et al 2020; Parikh 2020) When tourism demand plummeted as a result

of the pandemic's repeated waves, this is called the domino effect, which also had indirecteffects on other tourism-related business sectors

Due to supply chain disruption and preexisting impediments, the tourist managers in thisstudy were not overly optimistic about the post-crisis rebound Moreover, measures such

as restricting movement, canceling flights, and closing tourism businesses had animmediate impact and significantly reduced supply and demand for domestic andinternational tourism services This industry also employs the majority of low-paid andunskilled workers, most of whom are women In many underdeveloped countries, workersare now faced with drastic and severe reductions in working hours It is reported that thepandemic could bring significant salary reductions and the risk of losing jobs for manuallabor The sectors which have employees that are most prone to layoffs include retail, andfood and beverage service

Almost all firms in the sub-sector that provides accommodation and food services,whether the enterprises are large or small, have vulnerably suffered from COVID Indeed,the costs incurred by the crisis COVID-19, including costs associated with preventivemeasures and process changes, can be much higher for the business industry Theresources are often limited so they often face an abundance of difficulties when trying toaccess capital Firstly, businesses in the pandemic environment are faced with a number

of financial challenges, such as the expense of leasing space, paying employee salariesand benefits, and dealing with debts and past-due loans In reality, the majority ofbusinesses operate out of rented space These leases are typically for one year, two years,

or even five to ten years, and firms are typically required to put down a deposit or pay therent in advance over a period of time However, because both the tenant and the landlordare affected by the Covid-19 outbreak, it is challenging for businesses to reach anagreement to end the lease or lower the rent Businesses are also required to fire workers,but they must uphold the legal rights of those fired A trade-off for small enterprises ishaving to halt operations in order to stop and manage the outbreak Businesses often lackthe reserve funds necessary to pay employees' wages and benefits because they are unable

to generate income while incurring significant costs Businesses that are permitted tooperate during the quarantines are forced to reduce costs by cutting employee pay andsocial insurance contributions Many businesses have a strategy in place to reduce costs,