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Sunday, July 14, 2024

90% of tourism firms in HCMC suspend operations

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HCMC – Due to the Covid-19 pandemic, 90% of tourism companies in HCMC, including small and medium ones and those specializing in inbound tours, have suspended their operations, according to the HCMC Department of Tourism.

From January 1 last year to March 3 this year, 152 tourism companies had their travel business licenses withdrawn, including 135 international travel ones and 17 domestic travel ones, the local media reported.

Some large private companies have appointed some employees to be on guard at their headquarters, while State-owned ones are operating perfunctorily.

A plunge in the number of tourists has led to a reduction in the number of guest rooms and their prices. As a result, many lodging facilities have reduced the number of employees or even closed temporarily.

In the city, more than half of three-star lodging facilities have suspended their operations. Four- and five-stars ones are operating far below capacity.

In addition, the revenue from lodging services has plummeted 70% against 2019; catering services, 80%; and other services, 68%. The number of laborers in lodging facilities also fell 35% versus 2019.

Providers of tourist transport services are also facing the same fate. Since May last year, their activities dropped 60%-80%. They have sold their vehicles to pay bank loans, maintenance fees and the salaries of drivers.

Some have transported the workers of enterprises and people to centralized quarantine centers.

Therefore, the HCMC Department of Tourism proposed the Government direct the Ministry of Finance to halve the value added tax rate from 10% to 5% in 2021 to reduce the prices of tourism products and services and continue reducing the land rentals for tourism companies this year.

In addition, the Government should ask the Ministry of Labor, Invalids and Social Affairs to consider extending the period to suspend the contribution to the payroll tax for those affected by the pandemic.

Moreover, the minimum working period to be entitled to unemployment allowance should be cut from 12 to three months and the unemployment allowance should be raised from 60% to 80% of the employees’ average monthly salaries subject to the insurance calculation.

The Ministry of Finance should coordinate with the State Bank of Vietnam to propose the Government allow tourism companies to reduce their deposits at banks by 80% to help them maintain their operations.

The HCMC Department of Tourism also proposed the municipal government seek the municipal People’s Council’s approval to use the budget that the city has given to the HCMC Branch of the Vietnam Bank for Social Policies to offer non-collateral loans with no interest for tourism firms facing difficulties.

HCMC currently has more than 5,000 tourism companies with some 31,500 employees. Therefore, the amount needed is nearly VND209 billion.

The department also suggested support policies for public tourist and relic sites and museums to help stimulate the development of the tourism sector after the pandemic is controlled.

Entrance fees to the War Remnants Museum, the Museum of Vietnamese History, the HCMC Museum, the HCMC Museum of Fine Arts and the Cu Chi Tunnels should be exempted from August to the end of this year.

The city has also proposed to pay the salaries of employees and regular expenditures of these five units for five months with a total amount of VND21.7 billion.

The department also expected the municipal government to prioritize Covid-19 vaccines for employees in the tourism sector and speed up the vaccination for all residents to resume tourism activities at the earliest.

In related news, the HCMC Tourism Association on June 15 sent a document to the State Bank of Vietnam, the Ministry of Culture – Sports and Tourism, the HCMC People’s Committee and related units to propose expanding policies to support businesses affected by Covid-19.

Accordingly, Circular 03 of the State Bank of Vietnam needs to be amended and a number of articles of Circular 01 supplemented with more information on rescheduling payments, exemptions and a reduction in the interest and fees.

Commercial banks have considered rescheduling debt payments for another 12 months, but in reality, tourism businesses are having a hard time paying off their debts as the fourth Covid-19 wave is still turning more complicated.

The hardships of the tourism industry, including travel, hospitality, resorts, restaurants and service supply chains have led to a significant impact on other industries such as road transport, aviation, railways and waterways.

Therefore, creating special mechanisms and incentives will help tourism businesses overcome difficulties, while resuming operations will also contribute to creating motivation to revive related industries and fields.

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