Vietnam’s tourism industry struggling

Posted on October 24, 2012

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In this difficult economic time, many Vietnamese continue to prefer saving money over splurging on tours. This means that although Vietnam’s tourism companies are continually implementing sale promotion programs, they rarely achieve their profit goals.

Vietnam’s refusal to upgrade its tourism services such as hospitability training and poor facility management will continue to hobnob for a long foreseeable future.

Mai Thi Ngoc, who works at Ha Noi Vang Tourism Company in the capital city, says that in past years, her company’s employees were often very busy in the first 6-7 months, especially during holidays like April 30 (South Vietnam Liberation Day) and May 1 (International Labour Day) as well as the summer.

“This year, we did not have much business during the holidays. The number of clients was only 40 per cent of what it was in 2011. Only tours to other countries seem to attract clients; domestic tours just don’t cut it anymore. We have had to sack 50 per cent of our employees, and the remainder are struggling to find clients. During this difficult economic time, reducing prices is not a magic solution for tourism enterprises,” she says.

When the market was still “hot”, the instant a tourism enterprise declared that it would launch a sale promotion, a lot of clients rushed to it.

But these days, even when tourism companies advertise prices cut down by 30 to 40 per cent, clients remain indifferent.

On Facebook, a group of young people has established an “Association for people who don’t know where to travel”. Many gave such comments as “That place has poor service”, “That tourism area is not interesting” and “We have been there too many times”. A choice for many young people is du lich bui (go traveling as backpackers).

For many travel agencies, the lack of clients poses a serious threat.

Luong Duy Doanh, deputy director of New Star international traveling company, says his company has seen vastly fewer clients compared to the same period last year.

“While the country still faces a bad economic situation, people are trying to save every penny, so their spending for pleasure will be limited,” he says.

Nguyen Tuan Anh, head of marketing unit of Thuan Anh Tourism Company, says his company faces the same shortage of clients.

“Currently, many families, especially public employees, travel themselves rather than go on organised tours to save money.”

In the past, many traveling companies paid attention to international markets only. Today, as the global economy faces a crisis, they have turned to domestic clients.

Deputy chairman of Vietnam Tourism Association, Vu The Binh, says domestic clients still have more potential for tourism companies.

“Our population is nearly 90 million, but there are only 30 million tourists a year. This means the tourism industry still cannot fully take advantage of the domestic market,” he says.

Some tourism companies have resorted to working together. For example, Saigontourist issued 50 domestic tours to popular places such as Phan Thiet, Da Lat, Nha Trang and Phu Quoc, including tours with prices reduced by 30 per cent for families who registered to visit Da Nang, Hue, Ha Noi, Ninh Binh, Ha Long or Sa Pa.

Director of Viet Da Travel Company Dinh Van Loc says his company co-ordinated with other agencies to establish the “Central Viet Nam Heritage Way” tour, with prices reduced up to 49 per cent.

“Although we are trying every method we can think of to boost tourism, the tourism market will not be hot again soon, because most people these days prefer to save their money for essentials,” he says grimly.

This year, the tourism industry hoped to receive 6.5 million international visitors and serve 32 million domestic tourists.

However, Vietnam has so far received more than 3.83 million foreign tourists, reaching 59 per cent of the annual target, and served nearly 20 million domestic tourists, or 60 per cent of the target. So, in the last months of the year, if the tourism sector does not have a breakthrough, it may not reach its goal.

A programme to boost domestic tourism was successfully implemented in 2009 and 2010, thanks to which the number of tourists participating in these tours increased remarkably. To help the tourism companies, Vietnam Airlines agreed to participate in a tourism promotion programme for 2012 initiated by HCM City’s Tourism Association. Since May, the airline has reduced its ticket prices by 40 per cent. Also, with the help of restaurants, hotels and sightseeing places, 19 tourism companies participating in the program have declared that their tour prices are now reduced by 30-35 per cent.

Vietnam Airlines is not the only aviation firm to help boost tourism. Vietjet Air has also committed to provide more people with access to cheap tours.

Nguyen Thi Khanh, deputy chairwoman of HCM City’s Tourism Association, says the association appreciates the enthusiastic participation of aviation firms and tourism companies.

“People will have more opportunities to buy cheap tours if more aviation firms provide cheap air tickets. We will monitor the tours’ quality so that people feel confident that they are getting a proper tour,” she says.

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