Vietnam to cut hotel, airline prices as tourism falls

Business Materials 19 December 2008 13:59 (UTC +04:00)

Vietnam will cut prices at hotels and on state-owned Vietnam Airlines by 30 to 50 per cent to boost the country's tourism industry, hit hard by the worldwide economic slowdown, senior tourism officials said Friday.

Nguyen Manh Cuong, deputy head of the Vietnam National Administration of Tourism (VNAT), said tourism in Vietnam had been hurt by the turmoil, with international arrivals down sharply, reported dpa.

Vietnam expected between 4.8 and 5 million international visitors in 2008, but had only received 3.9 million by the end of November. Visitor numbers from traditional tourism markets such as Japan, South Korea, and Europe were all down.

Vietnam's Ministry of Culture, Sports and Tourism will announce a plan to revive the tourism sector next week, said Vu The Binh, director of VNAT's Travel Department.

Binh said the plan would take effect from January 1 through to September 30.

The plan includes cutting prices on package tours run by state travel agencies and room rates at the country's three- to five-star hotels between 30 and 50 per cent.

Vietnam's government can influence prices at both state-run and private hotels, if the private hotels belong to official state-affiliated tourism bodies, as most do.

Binh said Vietnam Airlines had committed to reducing ticket prices 30 to 50 per cent on most of its flights, including those from Western Europe, Japan, South Korea and ASEAN countries, which account for 50 to 60 per cent of all arrivals.

Vietnam will begin granting visas on arrival at all international border gates as of next year. Currently, several of Vietnam's border crossings with Laos and Cambodia do not grant visas.

The plan will use some of the money allocated under Vietnam's 1-billion-dollar economic stimulus plan, announced earlier this month.

Vietnamese newspapers reported this week that VNAT plans to spend 20 to 30 million dollars on a global tourism marketing campaign in foreign media.

There were mixed reactions from hotel managers.

"I am optimistic," said Mai Van Chung, sales director of the Flower Garden in Hanoi's Old Quarter. "I think the plans can help to bring foreign visitors to Vietnam."

But Han Le Hang, manager of the boutique Zenith Hotel in downtown Hanoi, said most hotels had already cut prices 20 to 30 per cent.

"If a hotel cuts its rates by 50 per cent, it will have no money to pay its staff," Hang said.

According to VNAT, the number of international visitors to Vietnam had been rising some 10 per cent each year, but only 15 to 20 per cent were return visitors. The agency ascribes the low return rate to low quality of hotels and lack of entertainment.

VNAT estimates each visitor spends between 1,200 and 1,500 dollars in Thailand, 2,000 dollars in Singapore, but only 900 dollars in Vietnam.