Vietnam

Travel companies are bullish on the outlook, but challenges remain

Travel companies are bullish on the outlook, but challenges remain







It is located in Chang An Scenic Area in the northern Ninh Binh Province. After three years of stagnation due to the COVID-19 pandemic, Vietnam’s tourism industry is recovering at an accelerated pace.Vietnam Airlines/Photos of Vietnam Airlines

Two years after being hit by the COVID-19 pandemic, experts in Hanoi predict a positive outlook for tourism stocks. However, Vietnam’s tourism industry still faces many difficulties and challenges.

positive first quarter

After three years of stagnation due to the COVID-19 pandemic, Vietnam’s tourism industry is recovering at an accelerated pace. According to statistics from the General Statistics Office, in the first five months of this year, the number of international tourists in Vietnam was close to 4.6 million, 12.6 times that of the same period last year.

Of the nearly 4.6 million international tourists who came to Vietnam in the past five months, 88% came by air; 10.9% by road; and 1.1% by sea.

With the overall positive development of the industry, a series of listed travel companies have announced very positive profit growth in the first quarter of 2023.

Statistics from Nhadautu.vn website Data show that in the first quarter of 2023, most tourism companies achieved year-on-year revenue growth.

In terms of net profit, the data shows that among the 11 companies, 7 achieved growth in net profit.

The largest increases were recorded by Bến Thành Tourism Service Joint Stock Company (BTV) and Vietourist Tourism Joint Stock Company (VTD).

BTV’s net income in the first quarter was VND 138.4 billion, an increase of more than 46%. The company’s gross profit reached 30.9 billion VND, an increase of nearly 1.9 times. As a result, BTV’s net profit reached VND 5.8 billion, an increase of 123.1%.

VTD’s revenue also rose by 17.5 percent as the cost of sales fell by nearly 30 percent, and the company’s profit rose by nearly 119 percent to VND17.5 billion.

One of the companies whose profits fell was Đông Á Hotel Group Joint Stock Company (DAH). It earned VND 6.4 billion in revenue, a nearly 229-fold increase. However, after deducting costs, DAH’s after-tax profit fell by 95.5% to VND995 million.

The reason is that DAH’s income from financial activities in the first quarter of 2023 was only VND 13 billion, a decrease of VND 20 billion compared to the first quarter of 2022.

In addition to DAH, three other companies also recorded negative growth in net profit, namely Saigon Tourist Transportation Joint Stock Company (STT), Thành Công Tourism Joint Stock Company (VNG) and Tây Ninh Núi Bà Cable Car Joint Stock Company (TCT).

The long-term outlook for travel stocks

In terms of the stock market, tourism stocks have shown positive movements since the beginning of the year, such as Vung Tau Intourco Resort JSC up 15%, Vietourist Tourism Joint Stock Company (VTD) up 14.56%, Đầm Sen Water Park Corporation up 12.45%, Saigon Railway Transport JSC (SRT) rose 8.7 percent and Vietnam Travel and Marketing Transports Joint Stock Company (VTR) rose 2.81 percent.

Against the backdrop of slowing consumer demand, foreign tourists tend to turn their attention to countries such as Vietnam and Thailand that are lower in cost but can still guarantee a tourist experience, experts said. In addition, the arrival of more Chinese tourists after China’s reopening will help boost tourism and service industries in Southeast Asian countries, including Vietnam.

However, Vietnam’s tourism industry will face some challenges. Hà Văn Siêu, deputy director of the Vietnam National Administration of Tourism, listed them as inflation, exchange rates, rising interest rates, climate change, natural disasters continue to develop abnormally, and Vietnam’s visa policy does not have much advantage compared with other countries. other countries in the region.

Nguyễn Quốc Kỳ, Chairman of the Board of Directors of Vietravel Group, said that there are still some problems in Vietnam’s tourism industry in terms of visa policies, value-added tax policies, and promotion by foreign tourism bureaus.

Kỳ also pointed to other obstacles, such as traffic and aviation issues and a lack of advertising for festivals and events in the country.

Faced with many challenges and difficulties, tourism companies in 2023 have formulated quite “conservative” business plans.

Vietravel has set a revenue target of VND 6.1 trillion, a 58% increase over 2022. But net profit is estimated at only VND 8.71 billion, equivalent to a drop of nearly 23%.

According to Vietravel, the plan is challenging in a context where tourism and aviation are considered to be the fastest recovering sectors but most affected by external factors such as government policies and market trends.

Similar to Vietravel, Đông Á Hotel Group Joint Stock Company (DAH) has also set a net profit target of VND 20 billion in 2023, almost half of 2022.

Saigon Railway Transport JSC (SRT) is targeting a total revenue of VND 1.8 trillion, an increase of 112.3% compared to 2022. However, due to the expected increase in transportation operating costs and some other expenses, SRT set a net profit target of only 600 million.virtual navigation system



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