Vietnam Reopens for International Tourism

Vietnam on March 15 fully reopened for international tourism after almost two years. However, when the date arrived, there was confusion as entry procedures, visa requirements, etc were not released by the relevant government agencies.

Nevertheless, more details were subsequently released.

As of May 15, Vietnam dropped all COVID-19 testing requirements for international arrivals as per Official Dispatch No. 416/CD-TTg after a significant decrease in the number of cases.

The development is in line with Vietnam’s strategy of opening up and recovering its economy. It is also in line with several countries opening up their borders to boost their markets and GDP.

The dropping of testing is a welcome relief to tourists, business travelers, and airlines looking to recover after years of losses.

Most recently, Vietnam suspended medical declarations for all arrivals from April 27. However, tourists entering Vietnam should also have medical or travel insurance that covers COVID-19 treatment with a minimum liability of US$10,000.

Travelers are also asked to follow all pandemic protocols such as wearing face masks and disinfecting their hands.

Deputy Prime Minister Pham Binh Minh has also asked relevant government agencies to restore immigration and visa procedures as before the pandemic. This also means that citizens from 80 countries can now apply for an e-visa for a stay of up to 30 days. The government’s e-visa website is open for visa submissions. The government also reiterated its stance to treat foreign and domestic tourists the same.

In addition, business visas for business travelers have also resumed without the need for prior approval from the local people’s committee.

Prior to this, the government issued visa exemptions for citizens of 13 countries including Germany, France, Italy, Spain, the UK, Denmark, Russia, Japan, South Korea, Norway, Finland, Belarus, and Sweden.

The news is welcoming particularly for tour operators who have suffered significant losses. Vietnam received more than 18 million visitors in 2019 compared to just 157,000 foreign arrivals in 2021 due to border closures.

Vietnam has also resumed direct flights to several destinations such as the US, Singapore, Thailand, the UK, and Australia which will help boost the economy and people-to-people ties. The easing of entry procedures and visas will allow businesses and tour companies to plan trips and will further contribute to Vietnam’s growing economy.
 

What’s open and what’s not

Almost all business activities have been allowed to reopen with pandemic prevention measures. These include offices, industrial parks, export processing zones, high-tech parks, barbershops, museums, weddings, supermarkets, convenience stores, restaurants, public transport (taxis, ride-hailing, and buses), and flights. Businesses that are not allowed to reopen include bars, spas, karaoke and massage parlors, movie theaters, nightclubs, and in-person dining though these may differ in different regions.

Pandemic prevention measures

While there are some variations throughout the country most businesses require employees to have at least one dose of a COVID-19 vaccine to return to offices. Businesses are also required to test their employees every seven days. Residents in Ho Chi Minh City have been asked to use the VNEID and Y te HCM mobile apps to declare their health and destinations prior to going out. Apart from these, businesses have to ensure social distancing, hand sanitizers, and hygiene conditions at the workplace while employees have to wear facemasks, maintain distancing and ensure pandemic prevention measures at all times.

Business challenges after the fourth wave

Vietnam’s fourth wave has been brutal on businesses and residents alike. Not only big businesses but several small and medium-sized businesses and individuals saw lost earnings as residents were required to stay home and only allowed to go out for emergencies.

Factory closures and supply chain disruption

To continue operating, most factories and manufacturers were required to implement a ‘three-on-site’ policy which means workers eat, sleep and work on-site, or the one route-two destinations policy, where workers are transported from their residence or dormitory by company vehicles to the worksite. Businesses found this process difficult to implement with such short notice as they had to arrange for living arrangements on site. This also added to costs. Besides, even with this policy, many workers became infected, forcing businesses to halt production.

Due to such factory closures, apparel company Everlane said it faced four to eight weeks of delays. Nike cut its forecast citing 10 weeks of lost production in Vietnam. This comes as western markets such as the US and Europe face increased demand for products during the busy holiday period. Contract manufacturers in Vietnam manufactured 51 percent of total Nike brand products in 2020. Further movement restrictions of goods and stringent testing of truck drivers and employees further amplified the situation with goods stuck at ports, factories, and warehouses.

This has further accentuated supply chain issues and potential delays. It may take another five to six months to resume full production. Even Apple has stated that delivery times of its new iPhones are likely due to factory closures in Vietnam.

Manufacturers rethink production, diversify

Vietnam benefitted from the US-China trade war where several businesses relocated or diversified their production in the country. The latest lockdown, however, resulted in some businesses diversifying away from Vietnam. Most recently as per Nikkei Asia, Apple put the production of some MacBooks and iPad on hold due to supply chain issues. In addition, it has started manufacturing its AirPods 3 in China rather than Vietnam. As per an AmCham survey in August, 20 percent of US businesses moved some production out of Vietnam, while Eurocham stated around 18 percent of its members also moved production. To tide through the crisis, several businesses cut orders due to capacity constraints and backlogs.