Vietnam - Tour fee reductions cannot help attract travelers

VietNamNet Bridge – The summer travel season kicked off one month ago, when travel firms launched attractive tours with promised attractive discounts. However, despite the great efforts by airlines and travel firms to stimulate the demand, the number of travelers who have booked tours so far remains modest.

After the gloomy May holiday travel season, travel firms put a high hope that the situation would be improved in the summer travel season, especially when the tour fees would be slashed with the cooperation of air carriers.

However, it seems that people still keep indifferent to the information about the demand stimulus program.

The year 2011 witnessed the boom in the tourism demand in summer, when the number of travelers increased by 30 percent, far beyond the expectation of travel firms. However, things are quite different now. One third of the summer travel season has elapsed, while travel firms still cannot see any significant increases in the number travelers.

Analysts have attributed the low demand to the economic downturn which has forced people to cut down expenses on tourism and other luxurious needs. Instead of booking tours, travelers nowadays tend to organize tours themselves, while they only order transport and hotel services.

After the global economic crisis in 2008-2009, Vietnamese travel firms, which previously focused on exploiting foreign markets, have been trying to target domestic travelers by developing domestic tours. Their efforts have led to the annual growth rate of 25-30 percent in terms of number of tourists in the last few years. Especially, in 2011, travel firms served 30 million domestic travelers.

According to Vu The Binh, Deputy Chair of the Vietnam Tourism Association, the domestic tour market segment remains very potential for travel firms to exploit. Vietnam has the total population of 90 million people, while it has 30 million travelers a year. Meanwhile, China has 1.3 billion people, but has 1.2 billion domestic travelers. Especially, the turnover from domestic tours brings 70 percent of the total turnover of the industry.

However, due to the unreasonable provisions of the tourism law, travel firms have been facing big barriers when trying to develop domestic tours.

Pham Duc Hoa, a senior executive of Saigontourist, said on Saigon giai phong, that the unhealthy competition has led to the quiet summer travel season this year.

Since travel firms try to slash tour fees to scramble for travelers, they can only provide low quality services. This has resulted in travelers turning their backs on low cost tours, because they believe that low cost tours mean low quality tours.

Phap luat TPHCM newspaper has quoted its sources as saying that in the last two months, May and June, only 500,000 travelers could enjoy the preferential tours with fee discounts, organized under the demand stimulus program.

Tran The Dung, Deputy Head of the taskforce on domestic tour demand stimulus team, said on Thoi bao Kinh te Saigon on June 18 that of the 19 travel firms joining the demand stimulus program, only five can book cheap air tickets for their clients.

To date, the national flag air carrier Vietnam Airline and Vietjet Air have joined the demand stimulus program. The former one began offering the 40 percent price discount in May 2012. With the airfare reduction, travel firms have designed the new tours which are 30 percent cheaper than normal tours.

Also according to Dung, the problem lies in the Vietnam Airlines’ requirement to book tickets several months in advance, which proves to be impossible for travel firms, because travelers always book tours just some days before the departure time.

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