Tourist firms seek loan-interest payment delay

The Ministry of Culture, Sports and Tourism (MCST) has proposed several urgent measures to the Prime Minister to support travel firms, including an extension on loan interest payments until December 2021.

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According to the Vietnam National Administration of Tourism (VNAT), travel firms are in serious difficulties. Tourism transport firms have nearly closed because of no clients, while 95 percent of travel firms have suspended their operation.

Tourist firms seek loan-interest payment delay

Accommodation service providers, hotels and resorts in Hanoi and HCM City have a low room occupancy rate of 10 percent. The coronavirus epicenters, including Da Nang, Quang Nam and Quang Ngai, only receive guests who are specialists and those put in quarantine.

In Khanh Hoa, Kien Giang, Binh Dinh and Quang Ninh, and resort tourism centers, the room rate occupancy rate is just 3-5 percent. Other localities report an occupancy rate of 10-20 percent.

In general, accommodation facilities are operating at a moderate level. Nearly all workers have taken unpaid leave, and only a limited number of staff still go to the office to maintain equipment.

MCST has proposed applying new electricity prices for tourism accommodation facilities equal to the prices that production enterprises are enjoying. The prices will be valid for 2020 and following years.

The ministry has proposed lowering VAT from 10 percent to 5 percent in 2020 and 2021.

The government has released Resolution No 16 on reducing the corporate income tax rate by 30 percent. However, the solution is insignificant to tourism companies because most small and medium enterprises cannot make a profit now.

Regarding the policies for laborers, the ministry proposed extending the payments for retirement and death insurance premiums, and payment for trade union fees for enterprises affected by Covid-19.

 

It has also proposed simplifying the procedures for tourism companies to more easily access the government’s VND62 trillion support package.

As for fiscal and monetary solutions, MSCT asked to allow tourism companies to delay payment of bank loan interest until December 2021. As tourism companies don’t have revenue at this moment, they cannot pay interest to banks.

Travel firms have reported big losses. Thien Minh Group incurred a loss of VND242 billion in H1 and it estimates a total loss of VND500 billion for the year 2020. Meanwhile, its Kite Air airline project still cannot take off.

Hu Tho Tourism JSC reported an accumulated loss of VND144 billion in H1, while Saigontourism took a pre-tax loss of VND180 billion.

According to Nguyen Tien Dat, director of AZA Travel, 90 percent of tourism companies continue their ‘hibernation’. If the situation does not improve, a number of travel firms will go bankrupt. 

Ngoc Ha