University of New York in Prague - UNYP ...

University of New York in Prague
                          School of Business

          Bachelor of Business Administration program

                        FINAL PROJECT

Assessing the previous epidemic effects on the Vietnamese tourism industry

  and economy, the implication of COVID-19 for international arrivals.

                                                      Author: Tran Phuong Anh

                                                           Mentor: David Muir

                                    1

Abstract / Executive Summary:

This thesis briefly explores travel and tourism, as well as four notable global outbreaks in the

2000s and what it means for Vietnam in the age of novel coronavirus. The four epidemics

discussed in this thesis are SARS, H5N1, H1N1, and MERS. Each of the epidemics has different

characteristics and influenced different parts of the world in terms of the economies, especially

the tourism industry. Being a developing country, Vietnam has observed fluctuating tourist

numbers during the outbreak years of these epidemics. By understanding these epidemics, a little

insight into the impact of the current coronavirus, COVID-19, is possible. COVID-19 is an

ongoing issue at the time of writing; the thesis aim is to research about the likeliness of tourists

from various nations coming to Vietnam after the outbreak. The research is carried out by

looking into the data of international GDP forecast for 2020 and concludes with some prediction

about the future of Vietnam tourism, which is likely to not open anytime soon in 2020.

Keywords: Epidemic, coronavirus, COVID-19, influenza, tourism, economy, Vietnam

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Contents
I. Introduction: .............................................................................................................................................. 5
II. Research Question .................................................................................................................................... 5
III. Literature Review.................................................................................................................................... 6
   Chapter 1: World’s travel and tourism, their contribution to the global GDP, and the case of tourism in
   Vietnam ..................................................................................................................................................... 7
       1.1 Brief History of tourism .................................................................................................................. 8
       1.2 Financial contribution to the tourism industry ................................................................................ 9
       1.3 The tourism industry in Vietnam .................................................................................................. 12
   Chapter 2: The current state of Vietnam’s tourism and its contribution to the economy ....................... 13
   Chapter 3: Epidemics around the world and the economic setback ........................................................ 15
       3.1 SARS & MERS............................................................................................................................. 16
       3.2 H5N1 Avian Flu & H1N1 Pandemic ............................................................................................ 18
   Chapter 4: COVID-19 and its current implications ................................................................................ 20
       4.1: What is COVID-19 ...................................................................................................................... 20
       4.2 COVID-19 damage at a glance ..................................................................................................... 21
   Chapter 5: Economic setback during the epidemic from the tourism perspective .................................. 21
       5.1 SARS & MERS............................................................................................................................. 22
       5.2 H5N1 and H1N1 ........................................................................................................................... 23
   Chapter 6: Vietnam’s economic damage from the epidemic from the tourism industry perspective ..... 24
   Chapter 7: Implication of COVID-19 damage to Vietnam and prediction for Vietnamese tourism in the
   future ....................................................................................................................................................... 27
       7.1 Current damage of COVID-19 to Vietnam ................................................................................... 28
       7.2 How Vietnam is dealing with COVID-19 ..................................................................................... 28
   IV. Methodology ..................................................................................................................................... 30
       7.3 Data collection and analysis .......................................................................................................... 30
       7.3.2 Findings...................................................................................................................................... 32
       7.3.3 Discussion .................................................................................................................................. 34
   7.4 Hypotheses about the future of Vietnam’s tourism industry............................................................. 35
       7.4.1 Foreign aid and relationships ..................................................................................................... 35
       7.4.2 Domestic product reroute ........................................................................................................... 36
       7.4.3 Likeliness of citizens of other countries and territories coming to Vietnam after COVID-19 .. 36
   IV. Conclusion ........................................................................................................................................ 38
Bibliography ............................................................................................................................................... 40

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Table 1. Summary of 4 epidemics and their impact to the world and Vietnam ........................... 24
Table 2. Countries with high number of tourists to Vietnam, their GDP, GDP per capita, 2020
GDP growth projection and number ............................................................................................. 32
Table 3. Possible scenarios for Vietnamese tourism based on identified obstacles ..................... 39

Figure 1. Worldwide revenue with passengers in air traffic from 2005 to 2020 (in billion U.S
Dollars) ......................................................................................................................................... 10
Figure 2. Total International Visitors in Vietnam ......................................................................... 26
Figure 3. Number of COVID-19 tests per confirmed case, April 19, 2020 .................................. 29

List of Abbreviations
 WHO                        World Health Organization
 UNWTO                      United Nation World Tourism Organization
 MONRE                      Vietnam Ministry of Natural Resources and Environment
 VNAT                       Vietnam National Administration of Tourism
 VOV                        The Voice of Vietnam
 VNS                        Vietnam News
 WTTC                       World Travel and Tourism Council

                                                                         4

I. Introduction:

The outbreak of the current pandemic caused by SARS-CoV-2 (COVID-19) is an unprecedented

event in which the whole world is in a temporary shutdown, and there is no travel (Safi, 2020;

Zontur, 2020). The global pandemic COVID-19 has done significant damage to the world

economy (Adrian, 2020), and the tourism and hospitality sectors in particular (Joan, 2020).

Humans have been traveling since the dawn of time; however, with this outbreak, it is the first

time that a halt to global travel has been imposed. Vietnam is one of the nations with a

developing economy, partly relying on tourism (Hampton, Jeyacheya & Pham, 2018) for

economic growth. The current travel ban, particularly international arrivals (Tuyet Chinh, 2020)

and social distancing between cities and provinces inside Vietnam (BT, 2020), have brought

Vietnam’s tourism to a standstill. In the past, the country and its tourism industry had already

seen some financial damage and social disruption from the previous global epidemics (Lockerbie

& Herring, 2009); therefore, the current outbreak is predicted to damage Vietnam’s tourism to an

unprecedented extent. There are many questions about the final results of the current pandemic’s

effect on the Vietnamese economy. However, for COVID-19, no conclusive data are available

yet, as the pandemic is still ongoing with no signs of stopping. In order to make possible future

projections of this phenomenon and to answer the economic questions, there is a need to

understand previous epidemics and the scale of their damage to the economy.

II. Research Question

A research question is an answerable inquiry into a specific concern or issue, and it is the initial

step in a research project. The 'initial step' means, after you have an idea of what you want to

study, the research question is the first active step in the research project.

                                                   5

This thesis will review previous records and determine the scale of damage of the epidemics on

the Vietnamese economy through an examination of the past epidemics and tourism around the

world and in Vietnam in particular. The range of the damage will be based on the damage to

tourism and the economy. By looking into this evidence, the thesis aims to answer the research

question “How Covid-19 would affect international travel and tourism in Vietnam based on the

GDP setback and other factors?”. Afterward, a hypothesis will be made to predict the situation

with COVID-19.

This thesis will use qualitative methods to review literature via online sources, both academic

and non-academic, to understand the impact of the epidemic on the economy and the tourism

industry in Vietnam.

III. Literature Review

To answer the research question of “How Covid-19 would affect the international travel and

tourism in Vietnam based on the GDP setback and other factors”, there is a need to look for

related literature in term of the likeliness of people to travel during the time of distress, such as

an epidemic and economic setback.

First, travel is dictated by consumer confidence. As such, confidence has become low due to

several reasons, and thus, people will be less likely to travel (Valencia & Crouch, 2008). There

are many factors that can affect consumer confidence, and it is vastly based on the perception of

the events happening around the consumer or the travel destination (Eugenio-Martin & Campos-

Soria, 2013; Valencia & Crouch, 2008). Air travel is known to be most vulnerable when issues

arise (Hosseini, et al., 2010), causing the consumer confidence to drop. For example, domestic

                                                   6

air traffic during the current outbreak has been reduced by 70% worldwide (Frost & Humphries

2020). In past epidemic outbreaks, there were records of negative sentiment towards

destinations, which led to the decline of international arrivals in these areas (Kuo, et al., 2008;

Smith, et al., 2019); and the more threats perceived, the less likely for tourists to travel to certain

countries (Valencia & Crouch, 2008).

Also, GDP and economic damage affected the overall spending habits of citizens and the tourism

sector in the case of MERS in South Korea (Joo, et al., 2019; Jung, el al. 2016). The authors

noted that people would avoid travel, and become more price sensitive. The damage of an

economic crisis on tourism was observed in the 2008-2009 crisis (Eugenio-Martin & Campos-

Soria, 2013). Following this crisis, people are less likely to travel internationally when the

financial situation was compromised. Notably, nations and territories with lower GDP are more

likely to have travel expenses cut (Eugenio-Martin & Campos-Soria, 2013).

In Vietnam, there is currently a lack of travel research during the period of the global economic

downturn; however, as noted by Kuo, et al., (2008) and the data from VNAT (2020), Avian Flu

H5N1 did not affect tourist demand to Asia countries including Vietnam; therefore, the dip of

international arrivals would be likely due to the economic crisis. This thesis would hope fill the

gap in the research of Vietnam’s international tourism during the time of crisis and help with

future research about the country. Each of the chapters below will further examine the

representation of tourism, the epidemics, the economy and COVID-19, and ultimately, how each

of these elements interact with each other in the case of Vietnam.

Chapter 1: World’s travel and tourism, their contribution to the global GDP, and the case
of tourism in Vietnam

                                                   7

Many countries in the world are known as tourist spots. One can simply tell famous landmarks

by looking at pictures, such as the Eiffel Tower in Paris, the Statue of Liberty in New York, or

the Charles Bridge in Prague. This is thanks to the help of improved transportation, from airlines

to cars, as well as the advancement of modern photography and the Internet to bring the images

of these places online. However, for many years in the past, humans have been traveling without

the aid of such technologies (United Nations World Tourism Organization [UNWTO], 1997).

This chapter reviews the basics of tourism, from history to financial contribution.

1.1 Brief History of tourism

Moving between places has been one inherent part of human history (UNWTO, 1997). People in

prehistoric civilizations traveled for food, avoiding potential dangers, and seeking better living

conditions. As humanity grew, travel was mostly for the trade of goods. As ancient world

empires grew in Africa, Asia, and the Middle East, infrastructure necessary for travel, such as

land routes and waterways was created, and vehicles for travel were developed. Traces of leisure

travel have been recorded from ancient times, according to Gyr (2010). During the Egyptian

dynasties travel for both business and pleasure began to flourish, and hospitality centers were

built along travel routes as well as cities to accommodate travelers. During the time of the

Assyrian empire, roads were improved for military purposes, and markers were introduced to

show distances. The Persians then defeated the Assyrians and continued to make improvements

to the road systems by developing the first four-wheeled carriages (UNWTO, 1997). With time

and civilization, roads and means of transportation, as well as pleasure travel, proliferated.

Travel also lead to exploration and sea expeditions, which history has recorded as travel tales to

discover new lands from Marco Polo (Jacoby, 2006; UNWTO, 1997), to Ferdinand Magellan

(Urbina, 2019) and Christopher Columbus (Zunino, 2008).

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In modern times, UNWTO (n.d, cited in Westcott, 2015) has agreed on a modern definition of

tourism as follows: “a social, cultural and economic phenomenon which entails the movement of

people to countries or places outside their usual environment for personal or business/

professional purposes.”. This definition of tourism can be interpreted as the movement of people

to other places, which serve a certain intention. The people who move are called tourists

(Westcott, 2015), and their intentions can be divided into business or leisure. Tourism and

tourists can be classified into domestic (residents of a given country traveling only within that

country), inbound (non-residents traveling to a given country), outbound (residents of one

country traveling to another country). For this thesis, the outbound tourists will sometimes be

regarded as foreign tourists, for example, the tourists who come to Vietnam.

1.2 Financial contribution to the tourism industry

The impact of tourism can be grouped into three main categories: economic, social, and

environmental (Westcott, 2015). While social and environmental are also big issues, this

research does not discuss them in detail; it will focus on the economic impact.

In terms of economy, the tourism industry is huge globally, with $9,258.29 billion contributed to

the world’s GDP (Statista, 2020). According to the World Travel & Tourism Council (WTTC,

2019), there are many ways tourism can contribute to the economy. As tourism, as defined in the

above section, is a huge term, it can encompass and affect a lot of different services. Tourism can

contribute to an economy directly and indirectly (WTTC, 2019). For direct impact, there are the

hospitality and travel industries; and indirectly, there are investment and supply chains. Tourism

provides a large number of jobs in different sectors, which improves the rate of employment, as

well as GDP (WTTC, 2019). To clearly understand, some industries tied to tourism can be

broken down as follows:

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1.2.1 Transportation

Transportation plays a large role in the tourism industry, especially air travel (Bieger & Wittmer,

2006) due to its speed, as well as the competitive price. In some cases, air travel is the only

convenient choice to travel around the globe. In 2019, Statista projected the global revenue in

passenger air traffic to be $567 billion (figure 1).

Figure 1. Worldwide revenue with passengers in air traffic from 2005 to 2020 (in billion U.S Dollars)

Source: Adapted from Mazareanu (2020)

Outside of air travel, there are also different types of transportation and services, such as ships,

cars, buses, and motorbikes (WTO, 1997). In Vietnam, the motorbike is extremely prevalent, and

                                                                10

the service fee is generally cheaper than a taxi; therefore, many tourists become accustomed to

this type of transportation through the implementation of services, such as Grab (Thomas, 2019).

Water travel is also one of the popular methods for people with disposable income. In ancient

times, this was the only way to travel to a far-away land (UNWTO, 1997). In recent times, this

translates to cruise ship tours, with lines, such as the Princess Cruises (Princess, 2020).

1.2.2 Hospitality

In tourism, there are many types of accommodation. For example, hotels, which are the most

common type of accommodation. Their categories extend from luxurious, urban, or resort

properties to smaller budget-oriented motels or motor lodges. Most countries have classification

or rating systems for accommodations, particularly between hotels and motels, which help

distinguish the level of service provided to the guests (UNWTO, 1997). Apart from hotels, there

are also home-sharing services, led by apps, such as Airbnb (Gerdeman, 2018), which can be

seen as affordable competitors for the traditional hotel system.

Food and beverage are also one of the main reasons why people travel (UNWTO, n.d), and is

argued to be one of the best strategic elements in destination marketing and promotions. This can

be observed by the import of other nations’ cultural cuisines, seen with Japanese or Chinese food

restaurants throughout the world. (UNWTO, n.d).

1.2.3 Others industries

Apart from direct transportation and hospitality, tourism also contributes to marketing

(UNWTO,1997) and other indirect industries. In the modern age, the most prominent tourism-

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related industries are online apps. These apps would closely follow the steps of a tourist by

providing the necessities required on their trips.

For example, in terms of transportation, there are many booking apps for aviation, as well as

road travel. Lyft in the United States and Canada, Uber around the world, and Grab in South East

Asia are some of the names that directly compete with the traditional transportation systems

(taxi, bus, other local types of transportation).

For accommodation, there are apps to book hotels, such as Trivago and Airbnb, which is one of

the leading apps in home-sharing, as an accommodation experience. These types of services,

which depend on tourism to flourish, have been growing exponentially in recent years.

Generally, transportation and accommodation apps share similar legal disclaimers that they are

not direct service providers, and list themselves as technology enterprises. (Brant, 2016; Lomas,

2019)

From a marketing standpoint, a nation would generally create advertisements about their

countries and spread them throughout the world to generate interest (Riege & Perry, 2000). This

led to platforms that can be marketed to similar online review services to gain traction. For

example, a website, such as TripAdvisor was established as one of the best for reviews. There

are also many types of travel blogs on various sites, each serving the personal interests of the

blogger or the platform and influence the tourist at the same time (Crotts, Mason, & David,

2009).

1.3 The tourism industry in Vietnam

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Vietnam’s tourism industry is one of the nation’s most prominent industries today; however, it

was not the case over 30 years ago for various reasons.

First, after the war involving the United States (US) in the years of 1964 to 1975, (Kurlantzick,

2016) the Vietnamese economy began to falter, and poverty slowly crept in as the US restricted

trade. Secondly, due to the regime at the time, Vietnam only allowed a state-owned economy and

banned private holdings. Slowly, in the 1980s, Vietnam had several economic reform policies,

which was called “Đổi mới”. These policies have improved the Vietnamese economy by

implementing various changes to the economic system. Recently, the GDP of Vietnam

continuously grew at a rate of 5-7.5% per year from 2000 to 2018 (The World Bank, 2020).

The tourism industry in Vietnam was absent for many years from the end of the war until Đổi

Mới in 1986. According to Le Nhat Thuc and Tran Van Hoa (1997), there were 7,000 visitors in

1986, 40,000 in 1987, and 60,000 in 1988, but it rose to 187,000 in 1989. In 1990, the number

fell to 99,721, and since then, it has grown rapidly to 231,973 in 1992, 375,700 in 1993, and

738,661 in 1994. After the normalization with the US in 1995 (State, 2020), Vietnam finally

started to see a flood in the number of tourists after the travel restriction was lifted. The open-

door policy implemented from late 1986, also helped bring foreign investments into the country,

which lead to the growth in the tourism industry. Since then, the interest in tourism to Vietnam

kept growing year-on-year (VNAT, 2005).

Chapter 2: The current state of Vietnam’s tourism and its contribution to the economy

                                                  13

In Vietnam, tourism contributed around 6% of the country’s GDP yearly (Nguyen H., 2019).

With over 18 million visitors from overseas and 85 million domestic travelers in 2019, the

revenue contributed to the economy was around $31 billion (Nhật Nam, 2019). For comparison,

in 2017, there were only 13 million foreign visitors (Mai Hương, 2018). In 2019, GDP in

Vietnam was estimated at $282.37 billion (IMF, 2019 cited in World Population Review, n.d),

which means that the tourism industry contributed approximately 10.97% of the total GDP. Mai

Hương (2018) projected that in 2020 Vietnam would have 1.6 million direct jobs and a total of

around four million jobs related to tourism.

There are many types of tourism in Vietnam, according to Nguyen (2020). For example, there is

medical tourism, as well as culinary and cultural tours. Considering the related industries

mentioned in chapter one, tourism, in general, brings a lot to the economy.

For the aviation industry, according to a report from Sacombank (2019), the growth of this

industry in Vietnam correlates closely with the growth of the GDP. For 1% of GDP, growth

roughly translates into 1.5 to 2% of growth for this industry. The domestic demand for air travel

is also high due to Vietnam’s current population of 96.2 million people, 15th in the world

(MOLISA, 2019). For the demand for international travel, Vietnam is estimated to have around

ten million people who traveled overseas in 2018, and this number is estimated to grow by

approximately 20% yearly (Đào Loan, 2019).

For other industries, there is a lack of data related to tourism, but one reason Vietnam is gaining

more attention from international travelers could be due to marketing - for example, numerous

titles gained from World Travel Awards (Kiều Dương, 2019). From the main site of World

Travel Awards (2020), some categories that Vietnam won in 2019 are (a) World's Leading

Heritage Destination 2019, (b) Asia's Leading Cultural City Destination 2019, (c) Asia's Leading

                                                 14

Cultural Destination 2019, (d) Asia's Leading Destination 2018 & 2019, (e) Asia's Leading

Culinary Destination 2019. This shows that throughout the years, Vietnam is becoming

increasingly popular as a travel destination for tourists in many criteria, which are closely related

to the industries and businesses, such as food and beverage.

There are also concerns for industries related to tourism, according to Truong (2019). For

example, while interest in Vietnam is growing yearly, infrastructure cannot keep up with the

growth. Airports are reported to be overcrowded during the travel season and function beyond

their capacity. There is also a lack of direct flight routes to popular destinations; therefore,

travelers will need to use road travel, which is still not up to standards (Mai Hương, 2018). Also,

sea and cruise ship travel has gained popularity over the years and has led to other problems -

lack of human resources and seaports. According to Le (2019), a small number of people

working in the tourism industry speak foreign languages fluently enough to meet the demand

from travelers. Further, the hospitality industry is still lacking, with more expensive hotel rates

compared to others in South East Asia (Truong, 2019). Lastly, there are not too many night

activities in the tourism spots (Nguyen, 2020), which tends to correlate with foreign spending.

Vietnam will need to solve these problems for the increasing number of tourists annually.

Chapter 3: Epidemics around the world and the economic setback

Epidemics are understood to be viral infections in mass populations in a small period of time

(CDC, 2012). At the time of writing, the latest epidemic, later recognized as a pandemic, is

COVID-19, caused by the SARS-COV-2 virus (WHO, 2020b, 2020c). There were many

epidemics recorded in the world, and they often caused great disturbance to the affected area. In

some cases, the epidemics grew into pandemics, which are recognized as international outbreaks

of these infections, and led to large numbers of afflicted people and even deaths.

                                                  15

This section names some notable epidemics and pandemics during the 2000s and until today.

There is an observable trend of certain actions being taken during the epidemic; therefore, this

research would feature four epidemics into two groups, as seen below.

3.1 SARS & MERS

SARS and MERS are two epidemics caused by different types of сoronavirus, a virus family that

has some similarities with the one in the current global outbreak. Coronavirus is a family of

positive-stranded RNA viruses (Gallagher & Buchmeiert, 2001), which is known to be highly

adaptive (Memish, Zumla, Al-Hakeem, Al-Rabeeah, & Stephens, 2013). This virus family tends

to have a plethora of different hosts, from mammal to avian. These viruses are observed to have

protein spikes that resemble crowns, hence the name corona (Bradburne, 1970).

SARS originated in Asia (Lam, Zhong & Tan, 2003), while MERS was from the Middle East

(WHO, 2019). Those two epidemics did not grow into pandemics and were successfully

contained; however, they had an infamous fatality rate (Lam, Zhong & Tan, 2003; Siu & Wong,

2004; Killerby, Biggs, Midgley, Gerber & Watson, 2020). For SARS, the Asian governments

were caught by surprise, and they paid immediate attention to stop the spread of the disease

(Caballero-Anthony, 2005). China and Hong Kong were the most severely affected regions,

accounted for 80% of the cases and deaths. China was also notably criticized for late notification

to the WHO (Caballero-Anthony, 2005). By July 5, 2003, the WHO (2003) declared SARS had

been contained, and by the end of the epidemic, there were 8098 cases with 774 deaths, which

was approximately a 9.5% death rate (Lam, Zhong & Tan, 2003). For MERS, the outbreak

started in September 2012, the virus was lacking in symptoms, compared to SARS. MERS was

believed to have been transmitted from camel to human (Killerby, et al., 2020) and the human to

                                                16

human spread was decreasing. MERS was not contained like SARS, as there are more cases

every year. The fatality rate of this disease is around 30% - 40% every time it is researched

(Killerby, et al., 2020; Mermish, et al., 2013; Mobaraki & Ahmadzadeh, 2019). By November

2019, WHO (2019) reported that there are 2494 confirmed cases, 858 deaths, and a fatality rate

of 34.4%. This high fatality rate is possibly the reason for the fear around the current novel

coronavirus; however, the number of cases is quite low compared to SARS.

SARS is believed to have set back the economy in East Asia by $12-18 billion (Qiu, Chu, Mao,

Wu, 2018) or up to $60 billion for the whole Asian region (Caballero-Anthony, 2005). During

this epidemic, private spending reduced, both export and investment were affected due to

negativity, and reduced confidence (Fan, 2003). People were asked to remain at home to avoid

getting the disease. Spreading messages and rumors led to mass panic (Qiu, et al., 2018). Fan

(2003) has noted that there might have been an overreaction to this disease. There was a mistrust

of government information observed in China (Qiu, et al., 2018). As pessimism loomed, firms

were on the verge of bankruptcy (Caballero-Anthony, 2005). At the same time, in retrospect,

Keogh-Brown & Smith (2008) argued that there were few SARS effects on some sectors, even

for countries with the heaviest damage, such as China. The authors believed that the economic

setback lasted for a month.

Coincidentally, while not being the root of the disease, MERS’s economic damage was most

visible in South Korea (Hussain, 2019). Once again, the spread of information led to many

unconventional actions by the South Korean government. Schools were closed, public events

were canceled, and tourism halted. The food sectors lost 10% in production, entertainment

                                                 17

dropped by 8.6%, and the export was also affected (Smith, Machalaba, Seifman, Feferholtz, &

Karesh, 2019). This translated to a $10 billion loss, which was around 0.1% of GDP growth in

2015 (Hussain, 2019).

Based on this information, there are a few trends to be spotted: (a) a vague spread of

disinformation lead to hysteria, (b) disagreement between scholars about reactions to the

epidemic and (c) lack of research about the nature of the economy, and the disease (Lee &

McKibbin, 2004)

3.2 H5N1 Avian Flu & H1N1 Pandemic

H5N1 Avian Flu was one of the frequently reoccurring and dangerous epidemics in Vietnam.

According to the Vietnamese General Department of Preventive Medicine (VNCDC, 2015),

H5N1 is an influenza virus classified into type A, which is the deadliest type due to its ability to

spread among people. The virus is also divided into subtypes based on two different proteins.

They are hemagglutinin (H), which have 16 different types and neuraminidase (N), which have

11 different types. These can potentially form various different influenza combinations, which

can become pandemics. VNCDC (2015) stated that the different forms of influenza type A had

been globally recorded, and caution should be exercised when dealing with this type of

influenza.

The most notable trait of H5N1 Avian Flu was the damage to the poultry population (Bloom, de

Wit, Jose 2015). The virus was transmitted through the trade of poultry amongst different types

of markets (Pfeiffer, Otte, Roland-Holst, & Zilberman, 2013) and from one nation to the next, as

well as to a small portion of wild birds (Ripoll & Wilkinson, 2019). This led to some government

                                                 18

overreaction by culling the wild bird population (Smith, et al., 2019). Animal transmission to

humans was also possible through the acts of raising and preparing poultry (Ripoll & Wilkinson,

2019). A trade ban was one of the measures to stop the spread of the disease; however, it had a

massive negative impact on the Asian countries in which one third to half of the population’s

livelihood relies on the export of livestock. For example, in Thailand, poultry production was a

large part of the economy (Pfeiffer, et al., 2013). This resulted in a loss of 50% of the export

market for Thailand (Ripoll & Wilkinson, 2019). Hong Kong also banned all wet markets, which

worsened the economic situation for poultry traders (Ripoll & Wilkinson, 2019).

Similarly, to H5N1, H1N1 is also influenza, but it was a new one with new genes (Ripoll &

Wilkinson, 2019), which spread from swine; it was first reported in Mexico (Hosseini, Sokolow,

Vandegrift, Kilpatrick, & Daszak, 2010). Due to this, the direct damage was to the swine farming

industry. In Mexico, the outbreak of the interspecies transmission was due to the interaction with

farm animals (Ripoll & Wilkinson, 2019). As the human-to-human transmission was stronger

than in the case of H5N1, H1N1 became a pandemic much quicker. In the US, the CDC (2009)

reported 43,771 cases of the virus as of July 24, 2009. Later, the CDC (2019) estimated that there

were 60.8 million cases worldwide, and 151,700 - 575,400 people died in the first year of the

virus. Due to the large volume of air travel, it only took three weeks for H1N1 to spread globally

(Hosseini, et al., 2010). International travel was also compromised, especially tourism in Mexico

(Sparke & Anguelov, 2012). In both the H5N1 and H1N1 outbreaks, consumers were also

wearier of consuming poultry and pork, despite the fact that it’s safe to consume well-cooked

meat (Ripoll & Wilkinson, 2019). This led to a decrease in sales of these animals and resulted in

a loss of $27 million in the trade from Mexico in 2009 (Smith, et al., 2019).

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Chapter 4: COVID-19 and its current implications

As we have learned from the above chapters, in the case of a pandemic, there are massive

disruptions in many nations. While writing this, COVID-19 went through many different phases

and caused political turmoil. At the start, from January to February, it was only considered to

become the next pandemic according to the WHO and different governments (2020a). By the

middle of March, the WHO (2020c) declared COVID-19 as a global pandemic. By April 2, the

number of cases has surpassed one million (Feuer, 2020). By April 15, the cases hit two million

worldwide, with over 100,000 deaths (Brown, 2020). As of April 25, there are over 2.9 million

cases and over 200,000 deaths (Worldometer, 2020).

4.1: What is COVID-19

COVID-19 is caused by a virus similar to SARS and MERS, which is in the coronavirus family

(WHO, 2020b). COVID-19 first emerged in China back in December 2019, where Wuhan was

the most affected city, which resulted in a lockdown of the city, as well as many other regions in

China. There is no conclusive data about COVID-19 yet; however, compared to other diseases, it

seems to spread at a much faster rate, based on the available day-to-day data from Johns Hopkins

University (JHU, 2020)

There is also no official death rate, as each nation reports deaths differently (Courage, 2020).

Using the data of April 25, the death rate based on the total cases, and the current deaths

(Worldometers, 2020), is around 6.9%. This is by no means conclusive, as countries have not

currently agreed on the unified way of calculating.

                                                 20

4.2 COVID-19 damage at a glance

Currently, COVID-19 has grown substantially and appeared in many countries and territories.

The most damage is from the loss of population, which is over 200,000 as of April 25, 2020

(Worldometers, 2020). From an economic perspective, COVID-19 affected all industries

(International Labour Organization, 2020). No one can really estimate the true damage; however,

many researchers have used models and scenarios to predict, one of them predicted about 2.2

million deaths in the US (Rogers & Molteni, 2020).

The stock market has plummeted (Funakoshi & Hartman, 2020), oil futures for May were

reduced to unfavorable valuations (Domonoske, 2020). A lockdown was implemented around

the globe, and the economy halted with many people becoming unemployed, and many

businesses shutting down (Tooze, 2020).

Social issues were also appearing worldwide, as the dissatisfaction between people and the

governments grew (Kluth, 2020)

From these points, it seems that COVID-19 would damage more than just the economy and

tourism.

Chapter 5: Economic setback during the epidemic from the tourism perspective

The economic damage from an epidemic is undeniable. This is largely due to tourism and world

travel being restricted in such cases. This chapter will review the damage to tourism from the

epidemics during the 21st century.

Essentially, the economic damage is the most visible when epidemics affect travel, either by

restrictions or by negative sentiment. According to UNWTO (n.d), the WHO has not advised for

                                               21

travel restrictions in any past outbreaks of all four examined epidemics, only reduction of non-

essential travel during the time of the outbreak. One observable fact is the comparison of SARS-

COV-2 and previous epidemics in terms of travel restrictions. A global restriction of this type

has never happened in the past. Therefore, the economic setback from the new virus could

outweigh all of the previous ones.

5.1 SARS & MERS

Globally, the outbreak of SARS claimed around 774 lives out of 8096 infected cases from 27

countries/areas, mostly in China, Hong Kong, Taiwan, and Singapore (WHO, 2004). During this

time, the transportation industry was largely damaged due to WHO’s advisory to postpone non-

essential travel to SARS-affected areas. Asian tourism, which mostly involved infected areas,

was thus badly affected by the outbreak of SARS in 2003. The epidemic reduced the

competitiveness of the affected countries by damaging the destination marketing activities and,

thus, gives rise to a reduction in international arrivals (Caballero-Anthony, 2005; Lam, Zhong &

Tan, 2003). As travel restrictions got serious, the damage is larger due to a lack of spending. For

example, at the peak of the epidemic in May 2003, Hong Kong’s aircraft flight volume was

down by 49%, and the hotel occupancy rate was only 17% (Lam, Zhong, & Tan, 2003).

Singapore and China also stopped most of their flights. 6,600 flight staff from Singapore Airlines

were put on unpaid leave. China lost about $3.5 billion in tourism earnings, while Malaysia lost

about $1.7 billion (Keogh-Brown & Smith, 2008).

On the other hand, WHO recommended no official travel restriction during MERS; hence, the

outbreak in Korea was caused by a traveler returning from the Middle East (Joo, et al., 2019).

                                                22

During this time, international travel to Korea plunged by 60% compared to the prior year.

Ultimately, the Korean government lost $10 billion and had to spend more on marketing tourism

in subsequent years (Smith, et al., 2019). Saudi Arabia’s tourism industry was also impacted by a

loss of $5 billion a year due to the travel ban from other governments.

5.2 H5N1 and H1N1

For H5N1, the impact on tourism was not as inherently visible, compared to the overall

economic and food security impact (Kuo, et al.,2009). First, Avian Flu, which was deadly (Kuo,

et al., 2009), but its human-to-human transmission was weak (Bloom, de Wit, Jose 2015), hence

the lack of spread through aviation routes in the case of H1N1 (Hosseini, et al., 2010). Second,

for Avian Flu to impact the tourism industry, it has to generate negative sentiment, similar to the

case of SARS (Caballero-Anthony, 2005). The media did portray the Asian countries as such, by

linking the possibilities of human-to-human transmission, and ultimately, led to negative images

of the affected countries (Kuo, et al., 2009). Further Kuo, et al. (2009)’s analysis found that for

each additional outbreak of Avian Flu, there would be a negative of 67 international arrivals

from the empirical result, and 147 from the model result. There were 1,137 outbreaks in

Thailand, according to the authors; therefore, by using these numbers, the estimation of

international travel loss was about 76,179 to 167,139 arrivals. This was the same case for all

other affected countries.

For H1N1, Mexico was the most notable nation with damage of $2.8 billion to tourism, and loss

of one million tourists in 2009 (Smith, et al.,2019). Caribbean countries also rely on tourism as

the main source of GDP; therefore, the outbreak was bad news for those countries (Smith, et al.,

2019).

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Chapter 6: Vietnam’s economic damage from the epidemic from the tourism industry
perspective

This chapter reviews Vietnam as the case study to answer the research question of whether the

international travel would continue after the pandemic.

With tourism being a significant contributor to the Vietnamese economy, all the observable

setbacks from the world can be seen within Vietnam. This section will review the situation in

Vietnam during the past epidemic outbreaks from the 2000s until today. Table 1 provides an

overview of the four epidemics mentioned in this thesis.

Table 1. Summary of 4 epidemics and their impact to the world and Vietnam

                                                            24

The first notable epidemic outbreak in Asia during the 2000s was SARS. The World Travel and

Tourism Council (2003, cited in Kuo, et al. 2008) estimated that approximately three million

people in the tourism industry lost their jobs during the outbreak of SARS in heavily affected

countries, such as Hong Kong, Vietnam, Singapore, and China. In terms of the economy, $20

billion worth of GDP was lost. While the Vietnamese government did contain the SARS

outbreak and was among the first to successfully do so (Roos, 2003; WHO, 2003), the sentiment

from the tourists was still low, which lead to a 7.6% slower growth in terms of the number of

tourists in Vietnam, compared to 2002 (Hạc, 2019). The fear of SARS during this period affected

the tourism industry in Vietnam severely; however, looking back on the data, the loss soon

bounced back into gains in the subsequent years.

The Avian Flu, or as it is called in Vietnam, the A(H5N1), begun in December 2003 in the

poultry population, as well as human, and caused an approximate 1.8% loss in GDP (FAO,

2017). However, it seems that this pandemic was globally not perceived as dangerous; therefore,

the number of visitors in Vietnam did decrease but continued to grow year-on-year from 2004 to

2005. According to VNAT (2005), there were around 3.4 million foreign visitors in 2005, and

only around 100,000 travelers did not choose Vietnam due to the fear of H5N1. Using Kuo et al.

(2009) figures mentioned in chapter five, Vietnam had 2397 outbreaks in the poultry population,

which translates to 160,599 to 352,359 loss in international arrivals. It seemed that the

government data at 100,000 losses was quite close to the empirical calculation, but too low when

compared to the model prediction. Regardless of whether the numbers reflect the real number,

this was still a substantial loss for Vietnam’s tourism. However, based on the actual growth of

international travelers, which was on an upward trend from 2004 to 2005 (VNAT, 2005), the

                                                 25

main damage of H5N1 was on the food security and poultry farming side, which led to the

culling of over 45 million poultry and cost $118 million (Coker, 2011).

Figure 2. Total International Visitors in Vietnam

Source: Adapted from VNAT (2020)

During the H1N1 outbreak (figure 2), the number of international arrivals slowed down quite

significantly. H1N1 came after the global financial crisis (Hạc, 2019); thus, the dip in the number

of visitors was expected. However, 2009 still recorded a higher number of international tourists

in Vietnam compared to 2003, which could mean that the demand to travel to Vietnam was still a

growing trend. Thúy Nhung (2009) stated that the number of international arrivals in 2009

dropped by 18.8%, and compulsory quarantine was implemented for anyone with high body

temperature, which leads to less confidence from the international tourists. The tourist companies

combated this by creating incentive tours at a discounted price. VNAT (2009) reported that the

number of international only arrivals improved by August 2009 and acknowledged the damage

                                                    26

from the financial crisis, as well as the negative sentiment created by H1N1. Together with the

Minister of Health, VNAT (2009) announced ways to combat H1N1 influenza during the year.

This helped sustain the tourism industry, and by the end of 2009, the confidence of international

tourists had been regained, based on the growth of international arrivals (figure 2).

During the MERS outbreak from 2012 to 2015, growth was slightly stunted before continuing to

grow from 2016 to 2018. During this time, the government only monitored and issued policies

for possible cases of MERS while advising citizens not to travel to Korea (Ministry of

Transportation, 2015).

In retrospect, based on the available data, while the number of tourists has the tendency to

decrease during a crisis or an epidemic, the overall trend of data still indicates a lively bounce

back for the tourism industry in Vietnam. The data from Vietnam also indicate the huge demand

from international travelers year on year, and suggests that epidemic and pandemic might not

have heavily damaged the tourism industry, as a slow period would be followed by an influx of

traveler in the next period (figure 2).

Chapter 7: Implication of COVID-19 damage to Vietnam and prediction for Vietnamese
tourism in the future

As the new coronavirus unfolds its damage globally, Vietnam will continue to suffer damage in

the tourism sector. This chapter details the current damage to Vietnamese tourism and

methodology to analyze the data and makes a hypothesis for the future of the tourism sector in

this country.

                                                 27

7.1 Current damage of COVID-19 to Vietnam

As mentioned in chapter two, Vietnam had a large number of overseas tourists, at 18 million in

2019. However, as of March 10, Vietnam halted visas from many countries (Nikkei, 2020) and

partially closed the border with China (Straits Time, 2020). This would damage the tourism

industry massively due to the fact that most foreign tourists traveling to Vietnam are Chinese.

As the pandemic unfolded, Vietnam closed the border on March 22 (VGP, 2020) with an

unknown date of reopening. Vietnam also had limited domestic travel through social distancing

measures (U.S Embassy in Vietnam, 2020). By issuing a travel ban and social distancing, there is

no tourism activity, which completely halted the whole sector.

Vietnam also closed down all non-essential services, including restaurants, gyms, bars, and

barbershops (Nguyen, 2020) before halting tourism; therefore, the disruption to business and

society is severe. There is no final report on the damage; however, by early April 2020, 35,000

enterprises went bankrupt or closed business (Enternews.vn, 2020).

7.2 How Vietnam is dealing with COVID-19

Vietnam is known for its absence of COVID-19 related victims, as of April 25, 2020. This

information attracted attention, given Vietnam’s border with China.

Vietnam had experience with SARS and was among the first countries to successfully contain

the virus (Roos, 2003; WHO, 2003). With COVID-19, the government ensured transparency

(Sullivan, 2020) by reporting every coronavirus case on all media outlets. Limiting travel also

helped contain the virus and limit spreading. Vietnam was among the first to close its borders

with China, and consider fighting the virus as a war; the government prepared mass quarantine

                                                28

camps for citizens and tourists, as well as a mandatory quarantine for people from affected areas

(Reed & Chung, 2020). The CDC’s representative also highlighted that Vietnam is truthful about

actual numbers (Sullivan, 2020). International publications, such as DW in Germany

(Ebbighausen, 2020), also noted and praised Vietnam for the efforts in both marketing and its

virus-fighting effort. However, the publication also noted the financial issues in Vietnam caused

by the virus.

Figure 3. Number of COVID-19 tests per confirmed case, April 19, 2020

Adapted from Our World in Numbers, 2020

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IV. Methodology

The method used in this thesis is the quantitative method of content analysis (Erlingsson &

Brysiewicz, 2017) and case study (Beeton, 2004). Content of previous researches about

consumer’s confidence in travel after past epidemic and the data of the current world economy

will be examined to find a link between economy and the likelihood to travel internationally. As

found in the literature review, when the economy goes down, international travel will be

negatively affected. The case of Vietnam, as presented in chapters six and seven, will also be

used as evidence to support with the discussion and conclusion.

7.3 Data collection and analysis

In order to carry out the hypothesis about the future, I will compile and compare the data of the

nations who tend to travel to Vietnam. The data was gathered through a secondary statistical

database of websites from (1) the IMF (2020), which have the data of the projected GDP of 2020

for most nations and territories; (2) previous GDP data from Worldometers (which have data

from World Bank, 2020); (3) the number of international arrivals, both in total and by nations

from the database of Vietnam National Administration of Tourism (2020). In detail, the GDP,

the projected GDP growth due to COVID-19 damage, and the number of visitors of each country

to Vietnam will be examined. The choice of the nations is based on their contribution to Vietnam

tourism, sorted by the number of international arrivals. Using this data, I will discuss the

likeliness of the countries from each continent to resume their travel to Vietnam by consulting

with the literature on the Internet about the travel data of tourists in Vietnam, as well as journal

articles found through Proquest database, to make a hypothesis about the Vietnamese

international tourism industry after COVID-19.

                                                  30

Based on the data from the General Statistics Office of Vietnam (2019), Vietnam had many

international arrivals in 2019. For each continent, there will be a few chosen nations for the

purpose of this thesis, the choice of these nations will be weighted by (a) the total number of

arrivals to Vietnam in 2019 if higher than 50,000, based on the data displayed on Vietnam

National Administration of Tourism website (VNAT, 2020); and (b) the number of confirmed

cases of COVID-19 higher than 1000, from Worldometer.info (Worldometers, 2020). Nations

and territory with low numbers of cases but with high arrivals are included. Based on these

criteria, the choice of nations for analysis are:

Asia:

Thailand, China, Taiwan, Korea, Indonesia, Philippines, Japan, Cambodia, Malaysia, Singapore,

Laos, and Hong Kong.

Europe:

Spain, Italy, Russia, Germany, United Kingdom, France, Netherlands, and Sweden.

America:

The United States and Canada.

Oceania:

Australia.

Based on the criteria above, these countries are those that contributed the most to the tourism

GDP, which is the main focus of the research. These countries and territories are sorted into the

table below, which shows their GDP compiled by World Bank (2017, cited in Worldometer,

2020), except for Taiwan, which the data set was taken from Country Economy (2020); predicted

                                                    31

GDP growth of 2020 due to COVID-19 (IMF, 2020), and the number of confirmed COVID-19

cases.

7.3.2 Findings

For data gathering, with the criteria mentioned above, the results are presented in table 2. Most

countries are observed to have their GDP projection to be negative.

For analysis of the literature and the case of Vietnam, as seen in previous epidemics, and the

current COVID-19 situation, there are a few observable trends of international traveling. From

the literature, generally the sentiment to travel is affected by the overall state of the economy.

For Vietnam’s case, international arrival was growing strong year on year after every outbreak.

However, this mean previous cases did not seem to reflect the current situation, due to no global

travel restriction being implemented (UNWTO, 2020), as well as Vietnam’s own drastic

movements which led to the shutdown of tourism and related sectors (Nguyen, 2020; VGP,

2020). Moreover, the economic damage of COVID-19 is massive globally. Therefore, the current

case of Vietnam would be an entirely unique and unprecedented situation where it resembles

both a highly spread pandemic and an economic crisis situation.

Table 2. Countries with high number of tourists to Vietnam, their GDP, GDP per capita, 2020 GDP growth projection and number

                                                            32

33

7.3.3 Discussion

Overall, the GDP situations of most countries and territories, which contribute to the Vietnamese

tourism economy, are projected to be negative. This would affect the GDP per capita, and

ultimately affect the disposable income of the citizens. In Vietnam, the average foreign visitors’

spending was estimated at $900 per trip (Das, 2019). This may be a substantial amount of money

for Asian countries, except Singapore, which has more than $10,000 in GDP per capita. For

Australia, European and American countries, this number is not high compared to their GDP per

capita; however, there is a wave of unemployment, which could affect disposable income. The

EU (2020) reported that the unemployment rate of the European region is at 7.3% as of April

2020. Based on the literature, this would mean this region will be less likely to travel outside of

their country (Eugenio-Martin & Campos-Soria, 2013)

The total cases of COVID-19 per country are also one factor of dispute. The current literature

seems to not have a united stance on the lethality of the pandemic. There is criticism of case

reporting, as each country has a different way of recording this data. There are some cases, such

as countries in South East Asia, which have a low number of cases; one of the countries is Laos,

although this could be due to the fact that not enough tests are being conducted (Hasell, et al.,

2020). As long as the numbers are not well adjusted and reflect the current situation, these

nations would pose a threat to other nations when allowing infected citizens to travel. The death

rate may be up to debate; in Italy and the USA, for example, all deaths during the coronavirus

pandemic are considered death by COVID-19. Deaths indicate that the population of these

countries is reduced, and this means that the number of people who may be interested in

traveling to Vietnam will be cut short, depends on the final number of deaths.

                                                 34

7.4 Hypotheses about the future of Vietnam’s tourism industry

COVID-19 was unpredictable in its spread just a few months ago, but now, based on the

available data, it will have an effect worldwide for many foreseeable months. In this grim

situation, there are some steps that the Vietnamese government might do.

7.4.1 Foreign aid and relationships

In 2019, there were 125 countries interested in investing in Vietnam (VNS, 2019). Based on the

available data from VNS (2019), the nations with the most FDI investment in Vietnam were

South Korea, followed by Hong Kong, Singapore, Japan, and China. As COVID-19 is still

spreading, there is no end of this epidemic in sight, and these nations are all affected badly by the

virus. China is currently recovering according to its press; however, for Japan, Singapore, and

South Korea, the situation is still developing. Each of these nations has different ways of dealing

with the pandemic, and there is no available measurement to know their effectiveness, at least

until the pandemic has subsided. However, it is quite clear that the economic damage from the

pandemic is substantial to these countries. This means that it is possible that foreign aid and

direct investment in Vietnam will be significantly reduced; there will be fewer people traveling

to Vietnam out of economic interest or for business in the short term. The tourism industry is

unlikely to recover this year, as the virus has not shown slowing down, which means that the

travel ban will not be lifted anytime soon.

On the other hand, Vietnam is one of the nations with a working test kit, and is willing to offer

this to the European Union (EU). In March, Hanoi has sent 4,000 test kits to Italy, one of the

nations which were badly affected by the virus during this period (VNS, 2020; VOV, 2020).

Many countries from Europe and Africa have shown interest in this test kit, and if Vietnam can

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