VietNamNet Bridge – The HCM City Tourism Association
has said it will propose that the government slash VAT, corporate income tax,
and allow delays for tax payments of two quarters in order to help travel firms
to survive their current difficulties.

Nguyen Thi
Khanh, Deputy Chair of the HCM City Tourism Association said the association
proposes the 50 percent VAT reduction and 30 percent corporate income tax
reduction – the same reductions applied in 2009, when the national economy was dwindling due to the global financial crisis which
dealt a strong blow to the tourism industry.

All travel
firms have voiced the same worries about their business performance in 2011. Depending on tour routes, meal prices have
increased 20-30 percent, the hotel room
rate has increased 15 percent, and transportation fees have increased by 40-60
percent.

The cooking
price and service fee increases have led to sharp increases of 15-20 percent in
tour fees for domestic tours, while the tour fee applied to foreigners in Vietnam has
increased by five percent.

As planned,
the cooperation program between airlines and travel firms which aimed to slash
tour fee and attract more travelers will finish after two years of
implementation. Travel firms are anticipating the big difficulties when the
program ends. They have been trying to cut down expenses and accept lower
profits. However, the moves are still not enough to help them overcome
difficulties.

“The
reductions in the number of tourists from Egypt
or Japan
are the typical examples. Meanwhile, the demand of domestic travelers has also
decreased since people are being more frugal because of high inflation,” Khanh
said.

She went on
to say that travel firms hope the number of tourists will be higher on the April
30 holiday, but they anticipate that the number of tourists on the holiday will
be lower than last year.

Travel firms
had an unlucky start in 2011 when they had to cancel a lot of tours to Egypt, Dubai
in February due to political turmoil. The
bad news and uncertainties continued with the earthquake and tsunami in Japan.

Samurai
travel firm said that it plans to serve three groups of travelers who will
leave for Tokyo and Osaka to in the cherry season in April, but a
lot of travelers have canceled tours. The travel firm is trying to persuade
clients to continue their plans, while considering organize tour for a small
group of 7-8 clients.

Thoi Bao Kinh
Te Saigon has quoted Nguyen The Khai, Director of Hoan My travel firm as saying
that the firm plans to organize a tour to Japan for 70 clients slated for the
end of March. However, to date, 16 clients have canceled tours.

“The clients
do not fear the tsunami and earthquake, because these are not the destinations.
They fear radioactive waves,” Khai said. “We have contacted the Japanese
partners, but they simply advise us to keep calm”.

The period at
the end of March and the beginning of April is the highest business season for
the travel firms which specialize in organizing tours to Japan, because it is the cheery blossom season
in Japan.
Therefore, the catastrophe in Japan
has caused headaches for travel firms.

When asked to
comment on the proposal by the tourism association, La Quoc Khanh, Deputy
Director of the HCM City Culture, Sports and Tourism Department said the
department agrees with travel firms. “We know that travel firms are facing
difficulties, and we are trying to find ways to help them overcome their
difficulties and stimulate demand,” Khanh said.

He added that
the department has discussed with the national flag air carrier Vietnam
Airlines on a cooperation plan between the two sides for the upcoming summer.

“Vietnam
Airlines has said it will put forward a program as soon as possible. We hope we
can launch a promotion program in order to stimulate demand,” he said.

C. V