Tourists visiting Tam Chuc temple, Ha Nam province, during the Tet holiday (Photo: VNA)In its recently released fourth-quarter business result, Dong A Hotel Group (DAH) reported bullish results, despite damage from the pandemic to tourism activities.
The company’s net revenue was over 377.5 billion VND (16.6 million USD) in the fourth quarter of last year, while in the same period last year it was just 4.5 billion VND.
Therefore, DAH posted a profit after tax of 24.7 billion VND, after losing 31.5 billion VND in the fourth quarter of 2020.
Dong A said that the surge in revenue was driven by its restructuring of operations and expansion into other business sectors. This helped the company offset losses from the tourism business.
At the annual general meeting of shareholders held in mid-May 2021, the Board of Directors of the company asked for shareholders' opinions on expanding into construction, ground filling and building materials. The change clearly had a positive impact on the company's business activities in 2021.
Thanks to restructuring in the second half of 2021, the company’s profit after tax reached 39.1 billion VND last year, while it lost more than 33.1 billion VND in 2020.
In the first six months of last year, Dong A was still under the negative impact of the COVID-19 pandemic, with its profit just being 465 million VND.
Recently, as part of the restructuring, it announced a suspension of business of Dong A Nha Trang Co., Ltd. from January 16 to December 31, 2022, due to inefficient operation.
Hoi An Tourist Service JSC (HOT) also witnessed some outstanding performances in the fourth quarter of 2021. Even though it still record a loss of 3.1 billion VND during the period, the loss declined by more than 4 billion VND compared to the same period of 2020.
The company said that, with the goal of reducing losses, in 2021, it has switched to attracting Vietnamese citizens from abroad to repatriate, who have to be quarantined to prevent the spread of COVID-19, at two affiliated hotels. This helped the company’s net revenue in the fourth quarter of 2021 jump by 170 per cent year-on-year to 8.1 billion VND.
Hoi An Tourist also strengthened monitoring measures and cuts costs, reducing losses from business activities. Profits from the liquidation of fixed assets at its branches also reduced the loss of the whole company.
Therefore, for the whole 2021, the company posted a loss of just 20.8 billion VND, down from the 2020’s loss of 25.1 billion VND.
Similarly, Ben Thanh Tourist Service Corporation (BTV)'s losses in the last quarter of 2021 fell by 44 percent on-year, thanks to a cut in general, administrative and sales expenses, down 34 percent and 41 percent, respectively.
Statistics of Fiinpro showed that in 2021, tourism and entertainment is one of the three industry groups with the lowest growth in the stock market, up only 6.3 percent. This figure is much lower than the 36 per cent gain of the market benchmark VN-Index.
On the liquidity front, the trade of travel and tourism stocks was even quieter, as most stocks were not traded or traded in a small volume. Most small-cap travel and tourism stocks are on the warning list because of negative profit after tax in 2020.
The gloomy performance on the stock market is also in line with the heavy impact of the COVID-19 pandemic on this industry group. The financial statements of the fourth quarter of 2021 of listed tourism companies show that many businesses are still making losses due to the severe devastation of the COVID-19 epidemic.
The general picture of the industry is still very pessimistic and many businesses are struggling to find solutions to adapt and increase revenue.
Experts from KB Securities Vietnam JSC (KBSV) said the restaurant service and tourism industry is expected to recover in 2022, though maybe not to pre-pandemic levels.
The industry, recently, also sees more positive signals, thanks to the reopening of internal and international flights. This not only helps the tourism industry recover but also many other sectors, especially businesses with foreign experts.
In addition, domestic tourism has resumed since the fourth quarter of 2021, corresponding to the Google Mobility index inching up from the low at the end of last September.
Right before the Tet holiday, the National Assembly approved a programme for socio-economic recovery and development in 2022-2023, while the Vietnam Tourism Association has sent a dispatch to Prime Minister Pham Minh Chinh proposing some solutions to restore international tourism.
With these solutions, listed tourism companies are expected to recover. Therefore, travel and tourism stocks may be active again.
Currently, travel and tourism stock prices are traded at low levels. This will be an opportunity for investors, especially long-term investors, to invest in with expectations of the recovery of the industry in the near future./.
VNA
