Local firms losing big on inbound tourism market

TN News

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China, South Korea, Japan and Taiwan are the main markets for Vietnam's tourism sector, but Vietnamese travel companies are not getting most of this business.

Foreign companies are dominating this segment, and if the trend continues, Vietnamese companies will soon be working for them, unable to benefit directly from their own country's tourist attractions, a foreign expert who did not want to be named told Vietweek.

The warning was corroborated by industry insiders.

In an interview with Vietweek, Pham Trung Luong, deputy chief of the Institute for Tourism Development Research, said Vietnamese tourism was facing a "bad" situation. Local companies' foreign partners were finding customers in their base countries and sending them to Vietnam together with their own tour guides, thereby earning the bulk of tourism revenues.

The representatives of many big travel companies told Vietweek that they did not receive many tourists from China, South Korea, Japan and Taiwan, although official statistics showed strong growth in the markets compared to others like the US, Australia and Europe.

According to the Vietnam National Administration of Tourism, as of July, 773,000 tourists from China and 255,000 from Taiwan have visited the country this year. The number of tourists from South Korea and Japan was 421,000 and 329,000 respectively. More than 3.8 million foreigners visited Vietnam in the first seven months, up 10.8 percent from the same period in 2011.

Last year, the number of Chinese tourists rose by up to 56.5 percent year-on-year.

However, Vietravel, considered a leading inbound tour company, reported just 1,000 Taiwanese, 5,000 Korean and 14,000 Chinese tourists in the first half of 2012.

Tran Van Long, director of Vietmedia Travel, said his company's branch in Hanoi does have tourists from China, but not many. Tourists from other markets like Japan, South Korea and Taiwan are too few to be listed, he added.

The director of a major travel company in Ho Chi Minh City said his company has not operated tours for customers from Taiwan, Cambodia, China and South Korea for several years now. The number of Japanese tourists they service has decreased from around 2,000 every year to some 800 this year.

"Like many other local companies, we cannot approach these potential markets," he said.

According to Luong, poor promotion, dubious service quality and lack of good tour guides are among reasons that tourists from the main markets are getting out of reach of local travel companies.

Meanwhile, foreign companies are able to arrange all services like accommodation
and transportation within Vietnam, even though they do not have offices here, because they have contacts with the system of local hotels and restaurants, said Phan Dinh Hue, director of Vietcircle Travel Company.

Worse still, many Vietnamese companies which are cooperating with foreign companies earn very little from their partnership, because they do not do much, Luong said.

Vietweek found that most of these Vietnamese companies leased out their licenses for operating tours to their foreign partners and earned some commissions.

Some Korean, Japanese and Chinese companies have also asked people in Vietnam to register their company here and then use it to recruit tourists to Vietnam with full package deals, a local travel company representative, who wished to stay unnamed, told Vietweek.

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