(Dan Tri) – Facing a loss of billions of dong every morning when waking up, Tran Trong Kien – Chairman of Thien Minh Group still insists: “Though we may not have hundreds of billions of dong to donate to the Government’s Vaccine Fund For Covid -19 Prevention and Control, we offer accommodations and meals for the doctors who are helping fight the Covid-19 epidemic. If there is a time when it is really necessary, I – a former medical student, will also be willing to be in the field hospitals to support the treatment of Covid-19 patients.”
“During the social distancing period last year, when I returned home from work that night, my little daughter brought 80 millions dong of her New Year lucky money to me and said: “Daddy, if you need money, you can use mine”.
I think it was my responsibility to smile, to be strong, to be firm so that my daughter didn’t have to worry about me at an age that she should only study, play, eat and sleep.” Kien shared with Dantri news.
To Lan Huong: The first time I met you 2 years ago was when TMG was about to launch an airline. The second time was last year, in the midst of the first social distancing. This time is when the world has been facing the Covid-19 pandemic for 18 months, I am very curious to know how a tourism business like TMG has struggled over the past time.
Tran Trong Kien: The whole world’s tourism market completely changed in the first 100 days of the pandemic, it totally never happened like this before. This is such an unprecedented challenge time for not only TMG but also for all tourism businesses in general.
The current number of visitors to zero is almost unprecedented. Even when the SARS pandemic broke out in Asia, our difficulties were only short-lived and we could still find out the solutions, predict the time of market recovery. This is the first time that all of our business activities return to a real zero.
In April 2020, instead of every day TMG’s profit would be around 3-5 billion dong as expected, we lost 1.5 billion dong when woke up in the mornings. The situation was even worse in other travel companies.
Three months after the pandemic began, I talked to a friend who is the president of a leading travel agency with 35 years of experience in the industry, revenue of 500 million USD, profit of 30-40 million USD per year. On December 31, 2019, the company still had $68 million USD in cash. But just a few months later, my friend said that his company would go bankcrupt in the next 2-3 months.
Actually in the past 18 months, despite many difficulties, I still think TMG is luckier than many other travel companies because we have dozens of valuable real estate; additionally, we also receive the support from the reputable shareholders with abundant financial resources such as World Bank and international investment funds.
Since February 2020, having realized that the situation would become harder, we decided to immediately cancel 3 major projects: opening an airline, building a new hotel chain, and renovating the existing hotels.
Furthermore, we raised legal capital, negotiated with banks to create a large amount of charter capital by mortgaging the group’s assets. Before the pandemic happened, we owned a strong financial position with low ratio of loans to total assets and we also had a good cooperation relationship for 26 years with banks, so it was very easy to negotiate with them. Besides, we also cut all unnecessary expenses, the key personnel positions have been willing to be unpaid or reduce their wages.
To Lan Huong: As a chairman of a tourism group which has been most affected by the pandemic, could you smile up when you woke up in the mornings during the last year?
Tran Trong Kien: During the social distancing period last year, when I returned home from work that night, my little daughter brought 80 millions dong of her New Year lucky money to me and said: “Daddy, if you need money, you can use mine”.
I think it was my responsibility to smile, to be strong, to be firm so that my daughter didn’t have to worry about me at an age that she should only study, play, eat and sleep.
I was also responsible for the 2,600 TMG employees and their families. In some ways, they were probably more worried than I was when their income was reduced resulting in their daily quality of life being affected as well. So very quickly, I learned to adapt to the virtual meetings, sitting alone in the office all day without any discomfortable feeling.
Am I worried? Of course yes. But as long as I know that my company will survive for the time being, and as long as I can keep the company’s affairs under control, I still have the spirit and energy to work.
During this pandemic, the first survivors must be the optimistic and energetic ones. I am still young and confident. I built the company with my own two hands when I was 22 years old. Therefore, even the worst scenario happens, I am still confident and ready to rebuild a new project.
To Lan Huong: And what comfort have you given to the people around you so that they can have faith in you?
Tran Trong Kien: Over the past year, I have always chosen to be transparent and fair when talking about company issues to the employees. Both local and oversea staffs participate in weekly virtual meeting with the Management Team in which we update and explain to them the reason for each activity including cancelling projects, cutting costs, staff cutbacks, increasing charter capital, getting bank loans, talking about the methods of how to overcome this difficult time. Indeed, we have been sharing all information transparently with the staffs.
We share the entire action plan, revenue, specific numbers because there are times when the pandemic makes it impossible to predict the long-term future, even for 2-3 months but we want to provide information in a fair way, so that employees can self-assess and decide whether or not to stick with the group.
To Lan Huong: The things that you and your colleagues have done over the past year to protect your business are…?
Tran Trong Kien: Over the past year, we have had to cut our labor in half and guarantee to maintain the salary from 75-100% for the rest. We protect our business by not only balancing financial situation and cash flows but also looking for other opportunities to make money.
TMG was the earliest to switch Ivivu.com from a travel app to selling lunch in 2 weeks after Vietnam’s first social distancing. Thirty-five coders (information technology programmers) had been working all day and night for three weeks to create a new app, while other teams arranged cooking staffs, menus and online sales.
Before the pandemic, 94% of TMG’s revenue came from abroad. But over the past year, TMG’s revenue of 1,000 billion dong has come entirely from domestic market. Additionally, we are constantly seeking new opportunities in difficult circumstances.
This number is only 6% of the revenue we had before the pandemic, but at least there is still something for us to keep our operations going. When the State issued a policy allowing the hotels to serve as quarantine camps with fee, TMG’s hotels was one of the first businesses approved to operate as the isolation area; as such, we could earned 70-80 billion dong revenue from this activity. Accurately, we are doing everything we can to collect every penny to survive.
To Lan Huong: Then after all these efforts, how is TMG’s “health” now? When I met you exactly a year ago, you said his business would stand firm for 12 months?
Tran Trong Kien: We lost VND 300 billion dong in 2020. The loss still stays on in this year, however, it is nothing compared to aviation. Therefore, optimistically I am luckier than many of my friends (laugh).
Last year, I and many others predicted that the pandemic would stop by the end of 2020, but it turned out that the situation was getting worse day by day and after that, we basically could not foresee anything.
But this year, with the best efforts, we have prepared the cash flows for the next 12 months. The good news is that although the epidemic is now more complicated than ever in Vietnam, businesses like us have seen the light at the end of the tunnel. At least we have faith that in the next 3-4 quarters, things will be able to recover and relatively return to normalcy, once the vaccine is widely available around the world.
So even though it’s more difficult now than when I talked to you a year ago, I’m still confident in TMG’s future. While the global tourism industry has changed over the past several months, so has Vietnam’s tourism – there are many tourism businesses that have dissolved, gone bankrupt or switched to other jobs in the past year, but TMG is too big to stop.
We were born for tourism and will have to pursue it to the end. We are confident to have many more new opportunities to elevate our position when the world return to normal like it was in 2019.
To Lan Huong: As the top leader of the company, what is your most important priority during the pandemic?
Tran Trong Kien: I always tell myself to focus on my 6 priorities. Over the past year, my most important and consistent priority has been people. No matter how big the financial concern for a business, it can’t be more important than protecting our employees from the pandemic.
In addition to cutting out projects that are forecasted to be unrecoverable within the next 24-36 months, we have focused on investing in key projects such as remodeling and building a number of hotels in Hoi An, Hai Phong and Hoa Binh. Besides, we continuously upgraded technology platforms and connect TMG’s ecosystem with tourism businesses in the world.
We also get the retained 1,500 employees to make time for learning and training so that they will be fully equipped with more knowledge and skills to come back post Covid-19. The group’s leaders also has set up a fund – from personal contributions – to be ready to support and help the staffs who affected by the epidemic.
Another important priority of mine is to protect and contribute to the community to the best of our abilities. No matter where I live, it’s always been my goal to advocate for the community.
Last year, when the epidemic just broke out, we offered free accommodation at our hotels for the tourists stuck in Vietnam during the national lockdown. We also provided them with cheap meals though we understood that that even if the meals had been sold at high price, they would also haven’t had any other choice at that time.
The group suffered a lot because of Covid-19, so we have been through a really hard time. We don’t have much money to donate hundreds of billion dong to the vaccine fund; instead, we have contributed to the best of our abilities.
Over the past time, many of our hotels offered accommodations and meals for the doctors who are helping fight against the epidemic. We also gave medical equipment to the hospitals of the locals where TMG locates and operates in. Furthermore, thanks to the close relationship with many international organization, I am able to call for more supports from them for Vietnam at this time.
To Lan Huong: How do you evaluate the recent Government’s responses to the epidemic?
Tran Trong Kien: Both TMG and I always hold this point of view: Supporting all the response policies to the pandemic of the Government.
I acknowledge the efforts, the right and timely decisions of the Government to protect the people from Covid-19 in the past 18 months. I agree with their determination to fight against the epidemic, because if we are not resolute, we may have the same case as India’s.
TMG commits to comply with the decisions of the Government although those sometimes have a huge impact on our business activities. In particularly, there are summer promotion packages that were built in February and March and planed to be available from April and May; however, all had to stop due to social distance policy. We understand that the most important thing is to effectively fight against the epidemic and protect people’s health.
We’ve gotten used to it over the past 18 months and have made it a habit to accept happily. With inappropriate policies, TMG will helpfully raise an idea through the most relevant channel at the right time.
Before the Covid-19 epidemic happened, due to a busy work, I was going to resign as the Chairman of the National Tourism Advisory Board (TAB), but in this situation, I think it is necessary for me to stay so that I can share information with the other businesses and also connect them with the Government to find out the most appropriate policies and solutions for tourism.
I also hope that all TMG staffs will be vaccinated, but I advocate not to seek vaccine sources at all costs, including the diplomatic doses. Our staffs will line up to wait for their turn to get vaccinated.
We show our commitment by ensuring the job stability of the employees as well as bringing stability to their life to reduce pressure on the community. If it is impossible to guarantee the life quality of more than 1,500 staffs, it will result in around 6,000 to 10,000 people being affected accordingly.
To Lan Huong: Just supposing in the worst scenario – where tourism couldn’t recover in the next few years and you would lose the achievements you’ve built up over the past 27 years, what would you do?
Tran Trong Kien: The worst thing that can happen to a business is bankruptcy, but having done business will always have that risk, so whoever has joined the game must accept the risk. When the market is bad like now, the risk may be higher, but that does not mean that when the market is good, the risk does not exist.
I started doing business by my own two hands so the worst scenario for me is just coming back to the first day at a start up. If it really happens, I will do it again.
Actually, a few years ago, I thought I made enough money to support myself and my family. But I still have responsibilities for the company and employees as well. I additionally have personal commitments for the community. That’s why even in hard time, I can not stop.
I think I will contribute the most when leading TMG and ensuring the livelihoods of 1,500 people who are working for the group. But on any day, if you see me showing up at the field hospitals as a volunteer to help fight the epidemic, don’t be surprised – because I graduated from Hanoi Medical University and am always ready to contribute to the community when needed.
Thank you for this conversation!