Tourists visiting Ngoc Hoang Pagoda in Ho Chi Minh City’s District 1

The local tourism sector has been hit hard by the economic downturn as foreign tourists tighten their belts, tour operators said.

At the time when they considered visiting Vietnam, tour package prices offered by local travel agencies were surging, due to high hotel and restaurant prices, he said.

As a result, they might have chosen other countries to visit, he said.

Meanwhile, the number of customers canceling trips had increased recently since the global financial crisis unfolded, Vinh told Thanh Nien.

TransViet Travel Company estimated the number of its foreign customers this year would fall by 40 to 50 percent compared to 2007, with the biggest drop occurring among Asian tourists.

Vu Duy Vu, deputy general director of Saigontourist Company, said he expected a 20-to-30 percent drop in the number of its foreign customers next year. According to the company, its customer base comprises mainly well-off tourists from the US and Europe.

Foreign tourists have also started forgoing luxury services to save money.

Huyen Thanh, director of Wildlotus Adventures Company, said many tourists didn’t want to stay in five-star hotels anymore, choosing lower-ranked hotels instead.

“The economic recession has forced foreign tourists to cut their spending and the difficult situation can last until the end of 2009,” VnExpress newswire quoted Hanoi’s Melia Hotel spokesperson Dao Viet Nga as saying.

Some regular customers of Melia Hotel in Hanoi have switched to less expensive hotels, Nga said.

Statistics released by CB Richard Ellis Vietnam showed that the occupancy rate of some five-star hotels in Ho Chi Minh City in the third quarter this year was approximately 61 percent, a decrease of about 16 percent compared to the same period of 2007.

A little too late

Seeing tour operators make less bookings, some four- and five-star hotels began lowering prices a few months ago.

But it was a little too late because local travel agencies’ foreign partners had already advertised tours for 2009 to the US and Europe markets by then.

Saigontourist’s Vu said travel agencies had to try their best to keep their tour package prices as low as possible, which also meant they sometimes had to accept losses.

Most agencies said they will not launch new tours at the end of this year, usually the tourist high season in Vietnam. Instead, they will focus on promoting low-priced and short term tours, for example, to Da Lat or Nha Trang.

He said the biggest problem that local travel agencies faced was setting tour prices because of rise and fall of air fares, hotel prices and domestic transport costs.

Huyen Thanh said tour operators couldn’t offer customers the best prices because they have to include a margin to allow for sudden price hikes in related services.

If hotels and airlines only lowered their prices for a short period, all the efforts of travel agencies to develop the tourism industry will be in vain, Vu said.

An official of the Vietnam National Administration of Tourism (VNAT), who did not wish to be named, said there was currently no cooperation between tourism businesses on prices.

The official said the time was right for them to “sit together and cooperate” to benefit their own businesses, the sector and the country.

Nguyen Manh Cuong, deputy head of VNAT, said the global economic crisis had affected the tourism sector, so the target of receiving 4.8 million-5 million foreign tourists this year may not be reached.

Cuong said he expected only 4.3 million-4.35 million foreign visitors, or a 3.5-4 percent increase on last year. In 2007, the number of foreign tourists visiting Vietnam was 16 percent higher than the previous year.

“Product quality is the biggest problem of Vietnam’s tourism and many tourists have complained that we don’t have a wide range of products,” Cuong said, noting a plan to reform the sector had been created and would be implemented at the beginning of next year.

Vietnam’s tourism industry pulls in revenues of US$3 billion a year. The country targets about 6 million tourists and $4-4.5 billion revenue by 2010, according to VNAT.

Source: TN, Agencies