Foreign firms draining Vietnam's tourism revenues

TN News

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Vietnamese tourists sightseeing in South Korea. Photo by Nguyen Tran Tam

Many foreign-owned or foreign-operated companies in Vietnam have been organizing unauthorized outbound tours, draining billions of dollars a year from the local tourism industry.

A joint venture tourism company between Vietnam and Japan advertises tours to Turkey and Spain on its website, while another joint venture from France offers various options to Europe, both with prices around the same as at local tourism firms.

A staff member from the Japan-Vietnam joint venture told an undercover reporter from Thanh Nien that they have been running the business for many years without a hitch.

Vietnamese tourism laws and WTO integration commitments do not allow travel agencies with foreign components to organize local or outbound tours in a country, but Vietnam's inconsistent policies have made it possible.

Vietnam National Administration of Tourism (VNAT) in 2009, due to the economic crisis, allowed foreign companies to organize outbound tours through the end of 2010.

But the administration's deputy head, Nguyen Manh Cuong, signed a decision in December 2010 allowing the Japanese joint venture, only identified as H., to continue operating such tours.

Representative offices of tourism companies from South Korea, Malaysia, Singapore, Thailand and Cambodia have also found ways to bring Vietnamese on overseas trips through the establishment of partnerships with local companies.

Vietnamese tourists to South Korea have been increasing as companies have been tempted by various promotions from the South Korean General Department of Tourism in Vietnam, which awarded many prizes to them for bringing the most tourists to South Korea and paying Vietnamese agents $70,000 for advertising such tours.

Insiders say the partnerships between foreign and local travel agents actually do local companies more harm than good.

They said it has not only allowed foreign companies to pocket the lion's share of proceeds, but also gradually put them in the position of dominating the outbound tourism market.

Tourism figures showed that around 3.5 million Vietnamese took overseas trips in 2012, up 20 percent from the previous year, and spent more than US$3.5 billion.

Inbound arrivals have been growing at annual 10 percent rate, and tourism insiders said the outbound market will catch up with it in several years before surpassing it, thus creating a tourism trade deficit.

La Quoc Khanh, deputy director of Ho Chi Minh City Tourism Department, said each country has its own rules for outbound tourism, but most aim to keep tourists in their country to boost consumption at home instead of elsewhere.

Nguyen Phu Duc, former deputy director of VNAT, said the tourism industry needs to improve in order to both keep locals at home and bring in more foreign tourists.

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