Vietnam's proposed 'tourism fee' leaves tour operators gruff

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Government says it needs more money to promote tourism, so it wants to charge visitors an extra US$1 per day


Tourists stroll down a street in downtown Ho Chi Minh City. Experts have criticized tourism authorities for failing to promote Vietnam tourism, and in fact doing the opposite by proposing a tax on international visitors. Photo by Hong Ky

Travel company director Tran Vinh Loc does not know how to tell his customers that the only way his government can think of to promote tourism here is to charge visitors US$1 a day.

"It is the government and not tourists who are responsible for tourism promotion," said the director of Ho Chi Minh City's Lac Hong Voyages tourism company.

"Tourism services pay taxes and the government should use a portion of the revenue to invest in promotion activities. How can they want to shift that responsibility to tourists?" he added.

But apart from concerns over the tax's bad impacts on tourism, experts and insiders are more concerned about the failing promotion of tourism in Vietnam in general. They say the tax would be just one more failure on a long list.

At a recent meeting of tourism companies and relevant authorities in Hanoi, director of Vietnam National Administration of Tourism (VNAT) Nguyen Van Tuan said the proposed tourism fee was a necessity.

Tuan said the proposal had been included in a government draft resolution on tourism development for 2013-2020.

The fee would be an important source of funds for tourism promotion activities, he said.

The government was spending some VND50 billion ($2.35 million) on tourism promotion every year before it was reduced to VND30 billion ($1.4 million) in 2012.

Tuan said funding was not enough for Vietnam, a country with nearly 7 million international visitors every year.

More than 6.85 million foreigners had visited Vietnam so far this year by the end of November, of which 4.2 million came for tourism purposes.

If imposed, the levy is expected to render revenues of more than $20 million a year, as each tourist stays for three days on an average.

Loc, director of Lac Hong Voyages, said three days per stay is a short time considering the average five-day stay in Thailand. He said only 30 percent of tourists visit Vietnam for a second time.

"Instead of increasing the average number of days a tourist stays in Vietnam and working on how to attract their second visit, Vietnam is creating another barrier for international visitors by imposing the levy," he said.

Where's the money?

Even if the fee is imposed, experts suspect tourism promotion will still be hindered by the ineffective management of spending endemic to Vietnam. They say it is unclear where the extra funding will go.

Bui Cao Son, director of Cruise Ha Long Company, said when the VNAT discussed the tourism tax in April, it was unable to explain how the funds would be managed, supervised and used.

"That is unclear and lack of transparency," he said.

Son said Quang Ninh Province has repeatedly increased tourism fees for the world-renowned Ha Long and Bai Tu Long bays but the quality of these places has not been improved.

"Toilets are filthy and many destinations are polluted," he said.

According to the latest plan, visitors to Ha Long Bay will pay VND200,000 ($9.5) for a "sleep-over" fee, in addition to the prices of boat tickets and room fees, starting from next month.

"In 2013, around 3 million international tourists visited Ha Long and the province collected up to $84 million in revenues, not including revenue from domestic tourists. Where has the money gone as Ha Long Bay's destinations continue to deteriorate?" Son said.

Robert Tan, a Singaporean tourism expert, also argued that charging $1 per day for international tourists could be seen as discrimination compared to domestic tourists.

Out of focus

If Vietnam is to go ahead with the fee, it must ensure transparency in spending the money and take many more concrete actions to improve the country's attractiveness to foreign tourists, experts said.

Kenneth Atkinson, head of the Vietnam Business Forum's Tourism Working Group, said this tax was first mooted by his working group and the European Chamber of Commerce in Vietnam as an idea for increasing available spending for destination marketing.

"However what's imperative in this is transparent collection and control over the funds and how they are spent to ensure they are not wasted," he told Vietweek.

"This also has to be matched against our requests for the authorities to reexamine Vietnam's visa policy and in particular its lack of an [effective] visa-on-arrival policy and the increased costs of visas," he added.

He said Vietnam needs to strategically focus on target markets and sectors rather than the current approach which seems to spread the money too thin over too many markets and sectors.

"We are losing ground to our neighbors like Thailand, Malaysia and Cambodia who are all seeing a much bigger growth in tourism arrivals than Vietnam," he said.

Experts say Vietnam offers travelers a rich and broad experience thanks to its natural beauty and the friendly nature of the Vietnamese people, not because authorities have managed the tourism sector well.

"The problems is that most of what is good about Vietnam as a travel destination happens in spite of, rather than because of, good management and leadership," said Mark Bowyer, a tourism expert who founded Travel Indochina and runs the website www.rustycompass.com.

Tim Russell, a Briton who lived and worked in Vietnam for 10 years and is now the director of sales and marketing of a travel agency in Thailand, said if VNAT needs extra money for promotion, they should discuss this with immigration authorities and use some of the "inflated" visa fees for this purpose.

"Given the recent hike in visa fees, making visas in Vietnam nearly twice as expensive as Cambodia and Laos, I think visitors are already being charged enough," he said.

Tourists also complain that when they go to Cambodia or Laos, they can simply turn up and pay $25 on arrival while Vietnam charges almost double at $45 for a 30-day or 90-day single entry visa, the most expensive in the region.

The Vietnam Business Forum, a consortium of international and local business associations and chambers of commerce, said in its annual report released recently that there has been "no progress" in ushering in a transparent, open, and effective visa-on-arrival system in Vietnam.

According to Russell, many countries charge a tourism fee but this is usually hidden within visa fees or airline taxes and thus tourists are unaware of it and no negative publicity is generated.

"I would advise against Vietnam raising more money for the purposes of tourism promotion until it has a coherent destination marketing strategy in place, executed by creative and experienced tourism professionals," he said.

"This is most definitely not the case at present and whilst the current VNAT regime is in place, there is little point in increasing the promotion budget."

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