Business Business

16/03/2020 - 08:18

COVID-19’s economic impacts:

Enterprises trying to overcome difficulties

Due to the impact of the COVID-19 pandemic, the business community of Thua Thien Hue - the sector indirectly affected by the pandemic - is going through a difficult time. The turnover of many businesses decreased by 20-50% over the same period.

Many businesses are affected by the impact of COVID-19 (Photo: Producing squid sushi for export at Hue Fisheries Development Joint Stock Company)

Tourism industry facing major difficulties

In Thua Thien Hue, COVID-19 affects most industries and sectors, especially tourism, trade, transport, imports and exports, etc.

According to the report of the Department of Planning and Investment, in February, the total damage value of the tourism industry was estimated at over VND 41 billion; passenger transport decreased by 2.1%, goods carriage decreased by 12.5% over the same period; taxi companies' revenue dropped by 30%; the number of passengers using busses was reduced by 50%; Railway industry is estimated to reduce 25% of revenue ...

Deputy Director of the Department of Tourism Nguyen Van Phuc shared: The tourism industry is facing the biggest difficulty ever. The number of visitors from Asia and Europe is decreasing in the coming time. "We have to think of the scenario that there would be no international visitors coming to Hue or to Vietnam," said Mr. Phuc.

"The number of visitors has decreased considerably, up to 30-40% over the same period," said DMZ Travel JSC’s Director Le Xuan Phuong.

Mr. Phuong also said that if the epidemic situation persists, in 3 months, about 30% of the enterprises will face problems. By the end of the year, there would be many businesses calling for sale and incorporation. DMZ currently has nearly 200 employees and the company are "managing" to take care of this workforce.

“Perhaps the business will use financial reserve funds to help employees – those who have accompanied the company so far. However, there should be solution, as we would not be able to provide help all the time,” said DMZ Travel JSC’s Director.

VKStar - a business company in the field of cultural tourism with the “great” Ao Dai show is also "struggling" because of the pandemic. VKStar’s Director Nguyen Lan Vy said worriedly: “Previously, we received 300-500 guests a day, now there are only a few dozen guests, and even in recent days, there are not enough customers to start the show. VKStar may have to close the show until the pandemic stops.”

Chairman of Hue Association of Enterprises, Duong Tuan Anh, said that enterprises were "facing mounting difficulties" due to COVID-19. Beside the revenue being reduced, businesses also had to spend a lot on prevention of pandemic: disinfection in companies and units; providing masks, hand sanitizer for workers, purchasing infrared thermometer, spending on preventive medicine for customers ...

However, some "fortunate" companies have increased their productivity such as enterprises producing medical equipment, antiseptic pharmaceuticals, herbal medicine, cajuput oil, or online businesses, online education...

The ability of overcoming difficulties coming from internal resources of enterprises

At this time, what businesses are waiting for is the timely entry of relevant ministries to support businesses to overcome the negative impacts of COVID-19.

According to Mr. Le Xuan Phuong, DMZ is looking for solutions to attract customers, stimulate demand as well as to cut down costs and allocate human resources suitably. All departments are currently focused on services such as customer care, finding new customers ... to help the business survive.

“It is necessary to have experts predicting the situation in the coming time, since then, businesses would be able to manage their financial resources to make appropriate strategies. Associations also need to organize discussions in order to share, analyze and solve problems for enterprises,” Mr. Phuong proposed.

"We look forward to being supported with tax reduction, debt rescheduling and orientation for enterprises, especially with tourism businesses having a change of direction in the future," Ms. Nguyen Lan Vy expected.

In order to help tourism businesses, a series of measures against the pandemic have been implemented by the provincial Department of Tourism, calling businesses to participate in stimulating tourism, in which, focusing on promoting domestic tourism. Up to now, there have been more than 30 hotels, restaurants and transportation companies registering to participate.

An “emergency” fund should be prepared

At the Conference on Solutions for Enterprises during the COVID-19 pandemic (February 29), Economic expert and business strategy developer, Tran Sy Chuong, proposed that at this time, associations and businesses had to sit together to share information, considering their own necessities and whoever can respond to "the call" for help from the other. For the province, it is necessary to prepare an "emergency" fund. This fund is from the provincial budget (from trivial purposes, insignificant investment) and it should be ever ready so that when businesses need it, it would be "pumped" to save them.

"We are gathering the stimulus programs and sending them to the Vietnam National Administration of Tourism, Vietnam Airlines and some other aviation units to ‘spread’ the program to every region. Currently we are connecting various provinces including Hue, Da Nang, Quang Nam, Quang Binh to create ‘Safe and friendly Central region tourist destination’ with unprecedented sale prices," Deputy Director of the Department of Tourism Nguyen Van Phuc Thong shared.

In order to solve the problems for enterprises, together with the active participation of central ministries and branches, the provincial People's Committee conducted working sessions with departments and branches to come up with solutions for difficulties in the pandemic time; The State Bank of Vietnam (SBV) - Thua Thien Hue Branch also sent documents to agencies, departments, propaganda on the media to let residents and businesses know about specific policies.

According to Vice Chairman of the Provincial People's Committee Phan Thien Dinh, there will be general macro policies such as inspection, examination, tax exemption and reduction ... However, the ability of overcoming difficulties must come from internal resources of enterprises. The help from the State is fairly relative. It would not be the major support, especially direct financial aid.

“Enterprises need to focus on business administration, building realistic scenarios to take the initiative in passive situation, rearranging new products suitable for the market, building strategies to cope with the pandemic ... reinforcing better defenses to overcome difficulties,” Mr. Dinh said.

Story, photo: Lien Minh