Hanoi (VNS/VNA) - The strong recovery of tourism hashelped businesses in the industry prosper. However, risks such as economicrecession, high interest rates and interest expenses still affect corporate profits.

The oldest hotel operator in Hoi An – Hoi An Tourism and ServiceJoint Stock Company (HOT) - recorded a sharp increase in revenue and profit. Inthe second quarter, HOT achieved revenue of 23.3 billion VND, 2.7 times higherthan last year. Profit after tax reached 720 million VND in the first half ofthe year while in the same period last year, it lost 11.69 billion VND.

HOT's business activities recovered strongly after three years oflosses (2020-2022). It suffered consecutive net losses of more than 61.3billion VND. At the end of 2022, the company's short-term debt exceeded currentassets by 22.8 billion VND.

HOT stock was forced to cancel listing by the HCM Stock Exchange,because of losses for three consecutive years. On April 27 this year, eightmillion HOT shares left the HoSE. On May 12, this stock was traded again on theUPCoM, but liquidity plunged.

Owning the most luxurious resorts in the market, Ninh Van BayTourism Real Estate Joint Stock Company (NVT) also announced its profit in thefirst six months of this year, with profit after tax of 7.2 billion VND, whilelast year's loss was 12.9 billion VND. NVT said that in 2023, domestic tourismhad shown many signs of recovery.

Profit erosion

Thanh Thanh Cong Tourism Joint Stock Company - TTC Hospitality(VNG) recorded a 31% decrease in profit after tax compared to the same periodlast year, to 7.79 billion VND. In the same period last year, the business madea profit of more than 11.3 billion VND.

This enterprise explained that in the context of the globaleconomic recession, sharply increased interest rates and corporate income taxexpenses were the main factors that reduced profits.

VNG has a hotel system with the brands TTC Hotel, Imperial Hoteland three resorts, including TTC Resort - Ke Ga, TTC Resort - Ninh Thuan andTTC Resort – Doc Let. In addition, the system also includes two conferencecentres, two amusement parks and six large restaurants.

In the first six months of this year, the business achieved aprofit of 1.1 billion VND, just equal to nearly 50% of last year. The sharpincrease in interest expenses has affected TTC Hospitality's profit. In sixmonths, the business paid 72.5 billion VND of loan interests, 20 billion VND higherthan last year. The short-term interest of loans that businesses are payingfluctuates between 8.5 - 12.7% per year, interest rate of long-term is 8.5 -15.78% per year.

Liabilities also increased by more than 256 billion VND comparedto the beginning of the year, mainly due to increased long-term debt./.