Vietnam - Experts say teamwork among sectors key to tourism growth

The three-day Independence Day holiday at the beginning of this month saw a wave of local tourists rushing overseas with short tours organized by Vietnamese travel companies.

Fiditour, one of the country’s leading tour operators, said 2,500 customers bought trips to foreign countries like Thailand and Singapore, while only 2,000 chose local tours.

The trend isn’t surprising.

According to local tour operators, many foreign tours are often offered with discounts. In Thailand, vacation packages with free shows and fruit garden trips have become increasingly popular.

A six-day summer trip to Thailand was offered at VND7.1 million (US$340), including all necessary services, around 30 percent cheaper than a tour from Ho Chi Minh City to Hanoi, travel agencies said.

Viet Media Travel Company said in the first eight months, it provided foreign tours to 30,000 customers, while its local tours attracted only half that number.

Local tours are subject to price hikes due to increases in fuel prices, airfares, and inflation, tour operators said.

However, experts said the fact that Vietnam is losing its competitiveness to other countries isn’t because of prices, but because there is no cooperation between tourism and other industries. They say that if the tourism industry can cooperate with other sectors and related government agencies, the problem of high input costs could be eased.

Robert Tan, a Singaporean business consultant, said tourism is a chain of services, meaning that it cannot develop by itself, but has to rely on cooperation with other industries like transport, trade, and culture. Cooperation among travel firms is also necessary, he said.

Tet, Vietnam’s Lunar New Year, is an important and unique holiday with a variety of activities, but local tourism operators have failed to cooperate with cultural agencies to develop it into a “special tourist product” like what companies in Thailand have done for their traditional festivals, Tan said.

Nguyen Minh Quyen, director of Ben Thanh Tourist, said the lack of cooperation between the government and travel companies is also to blame for the lack of activities for foreign tourists in Vietnam.

“Of course, travel companies have to be responsible for the problem,” Quyen said. “But their resources are restricted; they still need support from the government.”

He said that travel companies needed financial support to cover any losses they might incur when they open new attractions slated to become profitable later.

“Thailand can conduct many programs because they have the cooperation of many industries, and they have government support and strategies,” Quyen stressed.

Phan Dinh Hue, director of Viet Circle Travel Company, agreed. He said that in many other countries, tourism, as a main income source, usually enjoys lower taxes compared to other industries.

But in Vietnam, tourism businesses do not receive any tax incentives, Hue said.

Meanwhile, a representative from a travel company who wished to remain unnamed admitted that there was also a lack of cooperation among travel companies themselves.

In 2009, the tourism authority initiated a campaign involving many travel agencies, hotels, and transport service providers, pledging to slash prices by 30 to 50 percent for foreign travelers. But as time went by only a few stayed with it, said the representative.

“Big companies have no need to cooperate with small ones, and small ones fear that they will be taken over by large firms,” he said. “Local travel companies need to join hands if they want to tap big markets.”

Hue also said plans to develop Vietnamese tourism need to be made with long term strategies, and the Vietnam National Administration of Tourism should act as the contact between companies and agencies.

Still underdeveloped

According to Hue, the growth rates of international arrivals to Vietnam in recent years were quite good, mainly because the country is a new destination.

“Tourists come here because they are curious. But, the low rate of returns shows that Vietnam isn’t attractive enough,” he said.

Hue warned that Vietnam tourism will likely face the “middle-income trap” usually mentioned in economics. The term refers to a phenomenon where countries can transit from low income to middle income, but cannot carry on to high income.

Local tourism will grow very slowly for some time and barely move to the next level if current problems are not solved, Hue said.

One of the biggest challenges to Vietnamese tourism – bad traffic – hasn’t been dealt with for years.

Tan said in tourism, transport and accommodation play key roles, but in Vietnam, due to traffic jams, transport takes too much time, despite short distances between attractions.

Tran Van Long, general director of Viet Media Travel Company, said the time tourists spend in vehicles for a road tour in Vietnam accounts for some 70 percent of the tour’s time. Only resort tours and those that use planes can save time. But during peak time like holidays, road transport still plays a main role, he said.

“At the moment, it’s hard to shorten transport time, because it depends on traffic infrastructure,” Long said.

Doan Thi Thanh Tra, a representative from Saigontourist, also blamed bad traffic for hindering travel companies’ promotional efforts.

At meetings with their partners, local travel companies usually have to explain why it may take two to three hours for a distance of just 100 kilometers, according to Tra.

“Tourists are tired of transport problems, while tour operators have to find many ways to avoid rush hours, like looking for destinations with fewer traffic jams, letting tourists use vespas and cyclos in cities, or taking them to the airport earlier than planned,” she said.

Hue also said at the latest International Travel Expo, held in HCMC last week, a US travel company executive complained about local traffic, saying that it took him one hour to travel less than three kilometers within the city downtown.

Another concern, according to Tan, is that Vietnam tourism’s environment hasn’t improved at all, and is in fact getting worse with an increasing number of cases of tourists being robbed and harassed on the streets.

Poor promotion

While Vietnam’s tourism is struggling to overcome challenges, it also fails to effectively promote its good sides to foreign tourists.

Akihiro Iizuka, vice chairman of Americantours International, one of the US’s largest tour operators, told Thanh Nien there is very little information available about Vietnam’s tourism.

He, in fact, couldn’t find enough information for his market analysis speech delivered at the International Travel Expo, although the country is one of the ten major markets that his company is targeting, Iizuka said.

Vietnam has all the necessary conditions to attract American tourists, but the number of tourists so far is still under expectation – just some 273,000 arrivals over the first seven months, he said.

According to Iizuka, one of the main reasons is the inadequate promotion of Vietnam tourism in the US. Of particular note, a representative office for Vietnam tourism is yet to open there, he said.

He said in recent years the Vietnam National Administration of Tourism chose international channels like BBC World News and CNN for promotion strategies with the hope of approaching the North American market, but that strategy didn’t make financial sense given the country’s limited budget for tourism promotion.

Instead, Vietnam should improve tourism promotion by organizing road shows in major US cities, attending tourism fairs, and providing more information online, Iizuka said.

Vietnamese travel companies also need to approach big foreign travel agencies, because they are a great source of customers, he added.

Dang Bao Hieu, marketing manager of Focus Travel Company, said another shortcoming is that Vietnam always uses the same promotional and marketing strategies to target tourists from all markets, be it in Europe, Japan or South Korea, without making any adjustments.

Tourism products should be tailored for each target market, he said.

Vietnam’s tourism earned nearly US$5 billion last year with 28 million local tourists and five million foreign arrivals. Tourism authorities aim to attract 10 million foreign arrivals and 40 million local tourists as of 2020.

Foreign arrivals hit nearly four million in the first eight months, up 18.3 percent from the same period last year.

By N.Tran Tam, Thanh Nien News

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