Only around one-fourth of the firms working in the tourism industry in Ho Chi Minh City are operating legally, a recent inspection has found.
Of around 4,000 companies or so engaged in the tourism industry, only a thousand were registered travel agencies with the city's Department of Culture, Sports and Tourism, La Quoc Khanh, deputy director of the department said after an inspection carried out last month.
Regulations require tourism firms have to get an establishment permit from the Department of Investment and Planning, then register their travel service at the Department of Culture, Sports and Tourism. They are also required to deposit VND50 million (US$2,630) with banks for compensating customers or partners.
Firms offering foreign tours are required to deposit VND250 million.
Many firms have skipped the last two steps, Khanh said.
Phong Cach Tourism Company was set up in May 2007 but has never registered its travel service, the department found last month.
It earned VND829 million from operating tours last year and VND349 million this year, but purchased on insurance for customers.
The inspection also found that several firms were offering foreign tours although they have not be authorized to do so.
Mai Vang (Yellow plum) Company has only registered for domestic tours but was advertising foreign tours.
Last February, Chan Troi Viet (Vietnam's horizon) Company, also known as Neo Duong Viet (Vietnam's road) co-organized a Bangkok tour with Thailand's 333 Company for 22 Vietnamese tourists. One of them was killed in a traffic accident after their Thai driver fell asleep while driving the bus.
It turned out that the firms were not licensed to organize foreign tours.
Some air-ticket agents also offering foreign tours without authorization, the inspection found.
The companies have been fined and suspended, and Chan Troi Viet has had its license provoked, Khanh said.
He explained the large number of unauthorized tourism firms to a lack of personnel, noting the Department of Culture, Sports and Tourism only employs five officials to manage travel agencies.
So it's hard for them to manage all the firms, given that the city attracts around 65 percent of the foreign visitors to Vietnam and offers tours to dozens of millions of local residents every year, he said.
But the head of a tourism firm who refused to be named said the department doesn't need to increase their staff according to the number of tourists.
They need to raise the penalties and providing training in tourism ethics, he said.
"For a long time, Vietnam's tourism industry has paid too much attention to developing tourism products, but neglected the management and training aspects."
Khanh conceded that the current fines were "not threatening enough."