There is little doubt that the past two years have been challenging for the hospitality and tourism landscape, leading to a difficult and long-term decline in income for hotels, restaurants and tourism establishments. As just one example, the percentage of occupied rooms in Vietnam’s accommodation services was about 20% in 2020 and less than 10% in 2021. Given the length of the crisis, it is no longer feasible for hospitality and tourism operations to just “wait out the storm”. Instead, the two-plus year pandemic has resulted in widespread strategies by the industry to adapt or repurpose their business models to suit current conditions. Some of these include diversifying or investing in different economic sectors as well as scaling down or improving existing models to accommodate post-2020 travellers (an example would be redirection of marketing and the implementation of contactless check-ins).
Is there a light at end of the tunnel? Certainly, if one adopts a long-term viewpoint and takes into account the spectacular growth of the Vietnam’s hospitality and tourism industry prior to Covid-19. Between 2011 and 2019, the number of international visitors increased from approximately 6 million to 18 million, heralding an annual double-digit growth. There is little doubt that Vietnam is a beautiful country and a very attractive and exotic destination for many overseas visitors. In addition, the prosperity of the Vietnamese economy and the growth of the middle class had seen the explosion of domestic tourism, with 80 million domestic tourists in 2018. Although plummeting with the rest of the tourism sector in 2020-21, domestic tourism shows promise for the future as the newly minted Vietnamese middle class have a strong appetite for travel (aided by affordable air transport amidst the growth of low-cost domestic air carriers).
At the moment (January, 2022), however, the hospitality industry in Vietnam remains problematic, even for well-funded multinational hotel chains, providers, airlines, and tour-operators. Government intervention, such as a limit in the number of guests and safety protocols, have added to the challenge of overall market disruption. As such, while there is definitely hope for the future, entities operating in the Hospitality and Leisure industry must make wise decisions and seek to adapt to the present circumstances.
In times of both prosperity and uncertainty, it is critical to have an experienced legal advisor to help your business avoid and find solutions for any legal challenge on the horizon. The attorneys at Corporate Counsels have over a decade of experience in the Hospitality and Leisure industry in Vietnam, providing advice to a wide range of clients including hotel owners and investment groups, financial lenders, tour operators, restaurants and vendors servicing the industry.
A key advantage possessed by the Firm is its cross-disciplinary experience that allows us to provide holistic and sustainable solutions for our clients. For instance, Corporate Counsels has extensive experience in the banking and real estate fields that has assisted investors and foreign and domestic businesses in obtaining equity financing and establishing and expanding their hospitality operations. Furthermore, the Firm is able to provide guidance regarding a realistic business plan and corporate structure, suggest technological solutions (such as digital transformation, contactless technology and automation), and offer advice on employment and labor issues, taxation, franchising and licensing, data protection, intellectual property, government regulation, commercial contracts, acquisitions, and environmental issues amongst many others. Due to the diversity of this experience, Corporate Counsels has in-depth knowledge of the customs and practices of the industry and comprise an experienced and trustworthy team of business advisers who are competent to handle the legal and business needs of their hospitality clients.
Corporate Counsels provides guidance and advice to Hospitality and Leisure clients on a wide array of matters, including:
- Business operations and strategy;
- Business reorganization;
- Commercial contracts;
- Corporate and financial strategy;
- Construction and real estate;
- Corporate structures;
- Data protection and intellectual property;
- Digital and Fintech solutions;
- Employment and labor;
- Environmental issues and regulation;
- Financing and lending;
- Franchising and licensing;
- Pandemic regulation compliance and strategies;
- Regulatory compliance;