Tourists visit a beach in Da Nang city during the Tet holidays (Photo: VNA)On February 15, Vietnam officially reopened international flight routes. Theplanned reopening of tourism activities in March has brought positivesignals on the strong recovery of the country’s tourism industry in 2022.
In addition, on February 17, at the seventh ASEAN Economic Community (AEC)Dialogue, all participants emphasised the awareness of mutual recognitionagreements in the tourism sector and the need to accelerate the reopening toresume tourism activities post COVID-19. They also affirmed that deeperintegration will further boost the financial and tourism sectors of the region.
Responding to the above positive news, tourism stocks surprised themarket.
Statistics showed that on February 17, many stocks went to a hard ceiling,with VTD, OCH Hospitality & Service JSC (OCH), CTC, Dong A Hotel GroupJSC (DAH), VNG and NVT, hitting the ceiling prices. In addition,Superdong Fast Ferry Kien Giang JSC (SKG) jumped by 2.6 percent.
Closing the session on February 18, DAH and NVT recorded ceiling prices for asecond straight session. The rest were up in a range of 0.6 - 6.8 percent, suchas VTD up 6.8 percent; OCH rising 4.1 percent, and CTC up 3.2 percent.
Tourism stocks have not received much interest from investorsdespite witnessing good business results and high dividend payments.The reason is partly that the trading volume is small, resulting in lowliquidity.
Moreover, during the last two years, COVID-19 clouded the industry’s outlook,making tourism stocks less attractive.
However, the recent strong rallies on bright prospects show that they arepromising stocks in the post-pandemic era.
Data showed that in the first two months of 2022, demand among internationaland domestic tourists tended to increase remarkably.
Nguyen Chau, CEO of Oxalis Adventure, said that the number oftourists booking tours in March and April had reached more than 80 percent.Many accommodation facilities were fully booked on April 30, which is anational holiday, while others were preparing to welcome guests in thesummer, Chau added.
He raised concerns about the shortage of human resources working in the tourismindustry after the pandemic, affecting the recovery of the industry.
In the past two years, the COVID-19 pandemic has destroyed the tourismindustry, casting a gloomy outlook on the industry’s general profit.
Hoang Kim Tay Nguyen Group (CTC) said that its profit after tax in 2021 wasnegative, as its revenue in the fourth quarter of last year plummeted by nearlyhalf over the same period of 2020 to only 34.7 billion VND (1.5 million USD).The company explained that the outbreak of the disease had greatly affectedoperations, especially hotel and restaurant businesses, while expenses stillhad to be allocated.
Similarly, Ninh Van Bay Travel Real Estate (NVT) continued to record a fourthconsecutive quarter of losses, reporting a loss of 65.1 billion VND in 2021.Its total accumulated loss now is approximately 708 billion VND, accounting for78 percent of the company’s charter capital which is 905 billion VND.
Meanwhile, Thanh Thanh Cong Tourist (VNG) also said that its holding companyposted a loss during the period. However, thanks to the restructuring ofthe investment portfolios of its subsidiaries, the company still recordeda consolidated profit after tax of 1.2 billion VND.
Vietourist Travel (VTD) and Daseco (DSN) are othercompanies applying the same strategy of increasing profits offinancial investment activities to offset losses in the core businesses.
In 2021, Daseco saw its net revenue reach 25.2 billion VND, down more than 70 percentcompared to 2020. Running business below cost has caused the enterprise toreport a gross loss of 1.5 billion VND, while in the same period of 2020 itrecorded a gross profit of 51 billion VND.
The highlight in its business results in 2021 was financialrevenue tripling to nearly 41 billion VND, which mainly came from transferringof securities. Therefore, it still reported a profit after tax of more than 24.2billion VND, down 41 percent over 2020. This was also the lowest profit ofDaseco since 2008.
Economic experts say that tourism plays an important role in national economicdevelopment, which is considered one of the three key economic sectors,contributing positively to the growth of the economy as a whole.
However, the ongoing pandemic has had a strong impact on the Vietnameseeconomy, and tourism has been hit hard. Flight bans, travel restrictions andtourists’ concerns over the pandemic have caused many hotels, restaurants andretail chains in tourist destinations to be deserted, and tourism revenueplunged./.
VNA
