Vietnam risks losing the budget traveller

The tourism industry remains divided over why tour prices in Vietnam are higher than in Thailand and Singapore. The Vietnam National Administration of Tourism (VNAT) said it would consider whether this would reduce the country’s tourist-pulling power.
VNAT member Vu The Binh said 85 travel agents surveyed had attributed rising tour prices to an increase in hotel room rates and transport costs.
Hotels have also passed the buck, blaming a rise in food and electricity prices for the increase in room rates, while travel agents said rising oil prices and high airfares were the reason for higher tour costs, all of which would adversely affect Vietnam when competing with other countries to attract tourists.
However, Duong Tri Thanh, head of Vietnam Airlines’ passenger marketing department, said airfares from France, South Korea, Japan, Singapore and Thailand to Vietnam were virtually the same as other international airlines.
Flights from Paris to Hanoi or Ho Chi Minh City with Vietnam Airlines cost between E500 to E660, slightly less than other international airlines that charge E600 to E650 from Paris to Singapore or Bangkok.
Nguyen Le Huong, director of Vietravel Hanoi Tourist Company, said transport costs had increased by 22 per cent against last year and all hotels in Hanoi had raised room rates this year.
“One four-star hotel has increased its rates by 30 per cent.”
Huong said this explained why tour prices in Vietnam were higher than Singapore and Thailand as hotels in those countries had adjusted down their room rates to remain competitive.
She said a three or four-star room in Thailand cost around $12, in Malaysia $30 and in Singapore $35 to $40, a few dollars lower than in Vietnam.
In addition, often there were not many four-star hotels in Hanoi and travel agents had to send guests to five-star hotels, which raised tour costs.
Vo Anh Tai, director of Saigontourist Travel Company, said tour prices would continue to rise since hoteliers were changing room rates for the rest of the year and next year amid fears of reduced occupancy.
Participants in a round table meeting on tour prices, organised by VNAT in Hanoi last week, seemed to agree Vietnam should not reduce tour prices to increase its competitiveness over other regional countries.

Tai said high tour prices in Vietnam are not the chief concern when he talked to Japanese travel agents.
What’s more important is to improve the quality of service to match the money tourists spend, said Tai.
Le Dinh Tuan, Furama Resort Danang’s director of sales and marketing, also disagreed with reducing prices.
He said Vietnam should not be compared to Thailand in terms of tour prices and the number of tourists as Vietnam is still in the early stages of developing tourism.
Tuan said Thailand has a well-established tourism industry with an effective strategy - People, Product, Pricing and Promotion - and that’s why they have lower tour prices.
“Vietnam should focus on quality tourism,” Tuan said.
Tuan cited the fact that although Furama’s room prices are high, it still attracts tens of thousands of tourists a year and guests do not complain about high prices because they are offered good service.
“Cheap or expensive, it depends on feeling, not numbers. If tourists do not feel satisfied, they will think the prices are expensive,” said Tuan.
He claimed what’s most important to increase Vietnam’s competitiveness internationally and to intensify promotions instead of reducing prices.
He asked for tourism authorities to contract public relations firms to help market promotional campaigns.
Thanh from Vietnam Airlines agreed, adding that travel agents should have a flexible pricing strategy to meet tourist demand of different levels and seasons.