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Expat businesses hit hard by extended COVID-19 school shutdown

This article first appeared on Tuoi Tre

Out-of-work English teachers have led to an unseasonal drop in sales at businesses across Hanoi. As the coronavirus school shutdown enters its fourth week, many English teachers are feeling the pinch with pay cuts resulting in lower than expected spending on discretionary goods and services.

“We are getting paid 50 percent for the first two weeks in accordance with whatever our schedule is, so it depends on how many classes you teach,” says Regan Brown, an English teacher from the U.S. “But for the second two weeks they are only giving us 25 percent of our pay.”

Brown has been working in Hanoi for almost two years. She says she has savings to rely on but it is making her think more carefully about where she spends her money.

“I have been trying really hard to stick to local places. Eat typical Vietnamese food, more ‘banh mi,’ [Vietnamese baguette] and less takeaway Joma,” she said, referring to Joma Bakery and Cafe, which sells Western cakes and coffees.

The price of a standard Joma coffee starts at about VND45,000 (US$1.94), more than double the VND20,000 ($0.86) it costs for the Vietnamese version.

It is just one of many businesses in the hospitality sector having been adversely affected by the extended school break.

Lamont Wynn, co-owner of Turtle Lake Brewery in Tay Ho, says the brewery has also experienced a slump in revenue.

“I don’t think the overall virus has affected people going out but I have noticed a drop-off,” he says. “And some regular customers, that might come through, that are teachers, absolutely [are spending less].”

“It’s almost totally fiscal,” Wynn says. “There doesn’t seem to be much concern about the virus at all… Last night we had 200 people in here… So we’re still getting the numbers through the door… People are still going out.”

“That’s definitely true,” says Brown. “We’re all bored. The whole expat community is about going out because there is really nothing else to do. We definitely can’t afford to travel and we don’t want to sit in the house any longer, so what else do you do?”

Wynn estimates about 70 percent of Turtle Lake’s clientele is made up of English teachers. This is similar to many businesses in the local area.

Known as an enclave of foreign expats, many Tay Ho businesses serve Western food and drinks well above local prices that cater to Western tastes.

With thousands of English teachers out of work, the Turtle Lake Brewery is not alone.

“Everyone is feeling it,” Wynn admits. “Businesses all over Tay Ho.”

Auscham Vietnam’s executive director Simon Fraser agrees.

“The service industry — hospitality, tourism, food and beverage businesses with big workforces — has been the hardest hit,” he says.

AusCham, or the Australian Chamber of Commerce, operates networking events in both Ho Chi Minh City and Hanoi.

Fraser says members have been contacting the business group looking for advice on how to navigate through the extended uncertainty.

“We’ve had inquiries from the business community as to how they can mitigate the impact of a prolonged shutdown on their employees,” he reveals. “We’ve been referring those on to specialists in the area.”

But Fraser says, in general, AusCham members are not too concerned. In fact, many, he adds, can see a lot of opportunities.

“Maybe, they think, if we get in now there will be an upsurge when the coronavirus passes,” he speculates. “Maybe it’s a good opportunity while Chinese investors are preoccupied… to enter the market. I’m not sure. But whatever it is, people are moving ahead with their plans.”

The coronavirus school close-down began on February 3 and has now been extended to at least February 29.

Including Tet, this has meant that many schools have been closed for five weeks and it has been suggested that it should be extended right up to the end of March.

If this is the case, the impacts on local businesses could be dire.

“I think everyone is really hoping that it will end soon,” says Brown. “One month is doable but if it’s still uncertain into March then I think that’s when people are going to start bailing.”

To survive the tough operating conditions many businesses have moved to heavily discount their products and services and have rolled out a number of special offers.

This is to the benefit of not only the out-of-work English teachers but other expats, locals, and tourists alike.

Whether this will be enough to see these businesses through this tough time, however, is, as yet, unclear.

In the face of an extended school break, the risk of permanent damage to the expat business community is very real. But the reality is that there is not much that anyone can do other than keep moving forward and hoping for the best.

As Wynn puts it: “Business must go on… And so should school.”

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