Vietnam at a glance: What’s new?

Phu Quoc island will open from 20 November as a pilot program for fully vaccinated tourists on charter flights.

Since March 2020, Vietnam’s border has been largely closed, except to allow the entry of repatriates, diplomats, foreign investors, and experts under certain quarantine rules. From 3Q, it has started to relax border restrictions as daily cases stabilize, but the pace is rather cautious. Since August, the country has halved its centralized quarantine requirement from 14 to 7 days for fully vaccinated visitors. 

However, unlike Thailand, which has opened the entire country to 63 low-risk places from 1 November, Vietnam will open only five tourist destinations, including Phu Quoc island, Danang, Quang Nam (where Hoi An is), Khanh Hoa (Nha Trang beach town) and Quang Ninh (Halong Bay) from November as part of its first phase of a tourism revival. In particular, Phu Quoc island will open from 20 November as a pilot program for fully vaccinated tourists on charter flights. Having attracted 670k tourists with USD18bn receipts in 2019, this island aims to receive 5k arrivals between December and March 2022 (Straits Times, 23 October).

In the second phase, tourists will be allowed to travel among these five areas from January 2022, suggesting that the first-stage opening will only be sealed routes. The last phase will see a full re-opening of mass tourism, but the authorities have denied recent reports of a June 2022 timeline, sounding cautious that it will need to monitor vaccination progress and the pandemic situation. While it is encouraging to see Vietnam’s first steps towards targeted re-openings, uncertainty prevails in times of pandemic, and a successful tourism revival will depend on multiple factors.

The first consideration is border rules. Mr. Yun Liu, Economist, The Hongkong, and Shanghai Banking Corporation Limited said this means not only that Vietnam’s border restrictions matter, but that outbound countries’ border controls matter equally. For example, a lack of Chinese tourists implies that the expected short-term boost may be limit ed, as mainland China still has strict border controls, with a minimum 14-day hotel quarantine, plus additional days of home quarantine/self-monitoring, depending on local rules. 

Meanwhile, how the pandemic evolves is also important. While Vietnam’s daily infections have fallen dramatically by 70% from their peak of 170k in mid-August, there are signs of surging cases again. On a 7-day moving average basis, daily cases have been rising by around 5k of late, a rapid 50% increase compared with just two weeks ago. While cases are still concentrated in the southeast region (e.g. Dong Nai, Binh Duong, and HCMC), which are not included in the tourist pilot program, lingering COVID-19 risks may cultivate risk-averse sentiment for both tourists and local authorities.

Apart from rising infections, Vietnam’s low vaccination rate is the other part of the equation. While the country, with a 30,4% full vaccination rate nationwide, still lags behind regional peers, it has ramped up its vaccination pace since 3Q, prioritizing key tourist destinations and industrial hubs. All tourist destinations, except for Quang Nam and Danang, have fully vaccinated at least 80% of their populations. Mr. Yun Liu said how to facilitate domestic movements while limit ing potential virus risks between these five areas and the rest of the country would remain to be determined.

In addition, Mr. Yun Liu said further efforts to resume international flights would be needed to boost tourism. Flights have been largely canceled since the beginning of the pandemic and, even after the most recent lockdowns are gradually lifted, there is still a long way to reach pre-pandemic levels. Over the past time, HCMC received 32 flights from China and 21 from Korea, equivalent to only 20% of the December 2019’s levels (Figure 10). That said, this cloud has a silver lining in that

Vietnam has rushed to accept vaccine certificates from 72 economies and develop new airline routes to attract alternative sources of tourists. From November, Vietnam Airlines is set to launch its first non-stop regular commercial flight to the US, while Bamboo Airways will introduce direct flights to the UK from January 2022. The country’s Ministry of Transport is also preparing a plan to resume international flights.