Tourism sector aims to retrieve lost ground

Foreign visitors at an information center in Ho Chi Minh City Friday. Tourism arrivals have dropped sharply of late, prompting authorities to launch a huge promotion campaign targeting across the board price cuts. A large scale promotion campaign to try and staunch the sharp decline in visitor arrivals will need a concerted, cooperative and proactive effort by all stakeholders, industry officials say.

The primary thrust of the campaign, set to be launched on January 1 and run until September 2009, will be to effect across the board cuts in prices and improved service quality. This would be vital to the nation’s ability to cope with the competition posed by regional countries, said Nguyen Manh Cuong, deputy head of the Vietnam National Administration of Tourism (VNAT). The campaign announcement comes in the wake of a 22 percent drop year-on-year in the number of foreign visitors last month, and a statement earlier this month by Minister of Culture, Sports and Tourism Hoang Tuan Anh saying that the sector would face zero growth or even worse next year. The tourism sector employs more than 10 percent of country’s workforce. Cuong noted that although Vietnam was not as good as its neighboring countries in promoting tourism, the upcoming campaign could at least help the local sector overcome current difficulties, which are compounded by stiff competition from neighboring countries. Thailand, for instance, has launched a 1.9-billion-baht (US$54.86-million) public relations campaign called “Apologies Thailand” in an attempt to woo tourists back to the country following the recent political crisis. Vu The Binh, a senior official at VNAT, noted Thailand has cut hotel prices to as low as $25 per night and even offered 100,000 free air tickets to bring back tourists, which means Vietnamese tour operators would face very harsh competition. Binh asked local businesses to work together to make the campaign work, instead of waiting for other companies to lower prices first as they often do. He said VNAT has chosen leading travel agencies and hotels to take part in the campaign and they have pledged to cut prices to attract more tourists, especially those from Vietnam’s main tourism markets. The national tourism agency said a website on the campaign will also be created where visitors can find links to websites of participating tour operators. Deputy Minister of Culture, Sports and Tourism, Tran Chien Thang, said the ministry has proposed the government to halve the value added tax for travel agencies, hotel and restaurants to 5 percent so that they can lower their prices. The ministry has also requested the introduction of a visa-on-arrival system and VAT refund scheme for tourists. Many agencies and hotels said it was not too difficult to slash prices by about 30 percent. Some of them started doing it a few months ago, but with modest results. On Thursday, 30 hotels in Ho Chi Minh City agreed to cut room rates by at least 30 percent next year to support the campaign. A hotel manager, who wished to be unnamed, said it would be a huge success if cutting prices by 20 percent could increase occupancy rates to 80 percent from 50 percent. Binh said national flag carrier Vietnam Airlines would offer 30-50 percent discounts on its fares to help lower tour prices and many businesses providing related services have also registered for the campaign. Nguyen Van Tran, general director of APEX Company, said with the price cuts by hotels and airlines, travel agencies could offer cheaper tour packages to tourists. Tran said his working group, which focuses on the Japan market, would begin to advertise tour packages at new prices to their partners in January. Prices would be about 30 percent lower than at present, he said. Luu Nhan Vinh, director of the Vietnam Tourism Company in Hanoi, said once the campaign is launched, VNAT needs to ensure that registered companies really cut their prices to maintain its credibility. If companies advertised their products at lower prices but did not keep their promises, tourists would lose faith, Vinh said. Saigontourist Company Director Vo Anh Tai said there are always people who want to travel, but amid the economic slowdown, they will not accept to pay prices that have not been lowered. La Quoc Khanh, deputy director of Ho Chi Minh City Department of Culture, Sports and Tourism, said if the marketing works well in main markets including Japan, Australia, Western Europe, South Korea and China, the tourism sector could attract 80 percent of the visitors it needs. Local retailers have also expressed their enthusiasm for the campaign. Dinh Thi My Loan, general secretary of the Vietnam Retail Association, said all association members want to cooperate with businesses in the tourism industry. They would meet to discuss detailed plans for this “meaningful cooperation,” Loan said, adding that local retailers are well aware of the current situation and would accept lower margins to offer the best prices to customers. Source: TN, Agencies