HCMC travel firms cornered by airline discount offer

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Tourists visit a famous bridge in central heritage town of Hoi An.

Ho Chi Minh City tour operators say a plan initiated by national carrier Vietnam Airlines to reduce tour prices by 30 percent requires concessions they cannot afford to give.

Many of the companies that agreed to be part of the campaign says the 40 percent fare discount offered by the carrier is very welcome, but asking them to cut tour prices by 30 percent in return is not feasible.

Under a deal signed late last month between Vietnam Airlines and 19 members of the HCMC Tourism Association, airfares would be discounted for travel agencies that can cut their own prices for tours from Ho Chi Minh City to Hanoi, Hai Phong, Da Nang, Phu Quoc and Da Lat.

Tran The Dung, deputy director of The He Tre Company, said a big tourism firm earns a maximum profit of 20 percent on each tour, so a 30 percent cut is too much.

"We can cut prices by a maximum of 13 percent, no more," Dung said.

An experienced tour guide said tour operators used to earn profit margins of up to 30 percent but many of them have reduced their prices because of the economic slowdown, so it was hard for them to make further cuts.

"A 30 percent discount right now is a big challenge for travel agencies," the tour guide said, preferring to remain anonymous.

Ton That Hoa, general secretary of the HCMC Tourism Association, also said the required discount is beyond the capacity of tourism firms who are having trouble persuading hotels and restaurants to join in the price cuts.

These facilities said they have registered their prices with local authorities since the beginning of this year and it's impossible to change them now, he said.

"In Hue, for instance, they only promised to offer discounts to only one of every ten customers in a tour instead of everyone. This solution does not help much," Hoa said.

Some facilities in the UNESCO heritage towns of Ha Long and Hue have even raised their prices for the summer.

Hoa said the firms are also worried about unstable petrol prices. When fuel prices surge, the prices of many tourism services will follow suit and it would get even harder for them to cut tour prices.

The promotion package is planned to last until the end of the year.

While HCMC travel agencies are struggling to smooth out its cooperation with the national carrier, their counterparts in Hanoi have successfully made use of the carrier's discounts on newly-developed routes to the south-central and Mekong Delta regions.

Their 30-40 percent discounts, which will last through the summer, are the biggest tourism promotion by Hanoi firms since 2009, according to a recent statement on the government website.

Nguyen Cong Hoan, director of Hanoi Redtour, said his firm is taking customers to Tam Ky, Quy Nhon and Phu Yen instead of the traditionally more popular neighbors Da Nang and Nha Trang.

The customers can enjoy the reduced prices while saving themselves from the crowd, he said.

"The prices of hotels and restaurants in these emerging destinations are also more reasonable than those at large cities. A four-star resort in Phu Yen only charges as much as a three-star one in Nha Trang," Hoan said.

Mai Thanh, head of the domestic tourism department at the Hanoi branch of leading tourism firm Saigontourist, said the company has launched several different tours from Hanoi to the Mekong Delta.

Customers on these tours used to pay VND10-11 million (US$479-527) each, but now the price is only around VND7 million ($335), Thanh said.


Vietnam's government has warned firms to be careful in joining "tourism clubs" that have not been authorized to represent travel agencies.

The Vietnam National Administration of Tourism, in statements issued on April 27 and May 2, asked local authorities to check the operation and legitimacy of the Vietnam Tourism Club and Hanoi Tourism Club.

Both clubs have been asking firms to join them, introducing plans to help them develop both domestic and foreign markets, according to a report on a news website of the Ministry of Culture, Sports and Tourism.

One of the statements said the Vietnam Tourism Club claims that it is "the biggest and most prestigious non-government organization in Vietnam."

Nguyen Manh Cuong, deputy head of the tourism administration, said it's illegal for the club to recruit members and advertise itself without the approval of the tourism ministry.

The administration's warning has also been forwarded to police agencies and authorities in Hanoi and southern provinces as well as hospitality associations across Vietnam, asking them not to cooperate with the clubs yet so as to avoid possible fraud.

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