High prices, domestic tours are hard to compete

Price is the biggest obstacle

According to Mr. TL, the leader of a travel company in Ho Chi Minh City: This year's April 30 holiday season has many days off, so families have "finalized" their tours very early. Up to now, his company has almost "closed" most of its tour routes, in which the percentage of customers choosing domestic travel accounts for 39%, the remaining 61% are international tours. The reason is that the cost of domestic tours has increased quite high, by 40% or more, mainly due to the nearly doubled airfare. Therefore, although hotels have not increased prices, destinations have not increased prices, but the increase in airfare is too high, pushing up domestic tour prices sharply.

Domestic tourism is expensive, more and more Vietnamese people travel abroad

"In terms of attractiveness, destinations like Thailand, Indonesia... are not necessarily equal to Vietnam. During the recovery period, most localities are focusing on investing in infrastructure. Quang Binh, Quang Tri, and the provinces in the North Central region from the tourism depression are starting to have many positive changes, many creative products. Leaders of provinces and cities are also very aware of the need to attract tourists themselves, so they have proactively gone directly to source markets to introduce resources. After the pandemic, travel businesses have also focused on building many new domestic tour programs, adding more attractive destinations, higher quality, meeting the right trends of tourists. However, price is a huge obstacle. Many customers come to us, find the tour so interesting but complain about the high price. After comparing and contrasting, they choose to go to Thailand, to Singapore. In fact, for travel businesses, sales are still according to plan. Only being forced to change direction to bring tourists abroad, the destinations are disadvantaged, customers are disadvantaged, and the entire tourism industry is disadvantaged. "Vietnam is at a disadvantage," Mr. TL shared regretfully.

Vietnam's tourism stimulus story has never been done properly. With the current way of "everyone" wanting to provide all services to keep the profit, Vietnam cannot sell tours cheaper than Thailand or some Southeast Asian countries.

Mr. Nguyen Quoc Ky, Chairman of the Board of Directors of Vietravel Corporation

Mr. Nguyen Minh Man, Director of Communications - Marketing and Information Technology at TST Tourist, also announced that the company has almost achieved the plan to serve 2,000 tourists traveling during the April 30 - May 1 holiday. This year, customers booked tours early, 3 months ago, instead of fluctuating from 1 - 1.5 months as before. "Thanks to customers booking tours early, the company has proactively planned, keeping airfares and service prices good. If customers still book close to the date like before, both customers and businesses will be in danger because airfares are increasing sharply. In particular, if the proposal to increase the ceiling price of airfares by the Ministry of Transport is approved, the April 30 - May 1 holiday will fall into this period. Having both a holiday and an increase in the ceiling price is considered a double price increase. The company will not be able to sell the quantity as planned," Mr. Man breathed a sigh of relief.

According to TST Tourist, the tours with the most interested customers and early bookings include: Thailand, Taiwan, Dubai, Korea, Japan, and Europe. Since tourism reopened, the number of customers booking tours at TST Tourist has reached a ratio of 6/4 in favor of outbound tours taking customers to travel abroad. It is forecasted that from next June, this ratio will increase even more, when the Chinese market further relaxes quarantine requirements for tourists. In that context, increasing airfares and domestic tourism service costs will immediately impact the travel behavior of customers, pushing hesitant groups of customers to boldly switch to traveling abroad.

Everyone does their own thing, tour prices are hard to compete on

The trend of Vietnamese people flocking to travel abroad was predicted by Mr. Nguyen Quoc Ky, Chairman of the Board of Directors of Vietravel Corporation, because after a year of domestic tourism booming beyond the 2019 period, people will shift to traveling abroad. It is a natural trend, the compressed spring has gradually stretched. However, he still expressed concern when the story of prices is too unstable.

Mr. Nguyen Quoc Ky analyzed: From the aviation perspective, it is very difficult to ask airlines to reduce ticket prices in the current period. If the price of fuel used to account for only about 30% of aviation costs, it has now reached 50 - 60%. The total input costs of the aviation industry are increasing very high. Meanwhile, the demand for air travel today is not only for tourism but also for commercial passengers, and the head-to-head difference occurs almost all year round, depending on the season, events, holidays, and Tet. For example, on April 30, people from Hanoi go to Phu Quoc, the plane that way can reach an occupancy rate of 90 - 100% but the return flight may not reach 20 - 30%. Airlines cannot let the plane stay in Phu Quoc to wait for passengers to arrive, so they are forced to calculate the cost of both ends to divide it.

In this case, according to Mr. Ky, if there is a two-way ticket sales policy, customers buy a round-trip ticket package, then businesses can proactively calculate to have better ticket prices. On the other hand, airplanes are essentially high-quality means of transportation, requiring costs to ensure flight safety and ensure that the ship can fly, many times this cost is far beyond the level of payment in society. In the context of economic difficulties, low-cost airlines were born based on the foundation of cutting all costs to have the lowest price, so that passengers traveling by train and bus can "reach" up. However, in the past, maintaining ticket prices too low has unintentionally eliminated the entire railway industry and the airline industry cannot "survive" because airlines are all selling tickets below cost. This is something that cannot be maintained for long.

Meanwhile, from a tourism perspective, to keep prices stable, businesses must plan very early, make deposits long in advance to "hold" a series of tickets, accepting the luck of "winning all or losing all". The increase in airfare is something no travel business wants. Not to mention, tourist destinations are currently tending to "get together" to quietly collect fees or increase entrance fees. If this is not controlled, it will disrupt all sales plans of travel businesses, causing negative impacts on the entire tourism industry.

"In the Southeast Asian region, tourist-attracting countries such as Thailand, Singapore and Malaysia allow airlines to compete freely, with ticket prices determined by the market, but why do they still have attractive travel prices? It's because they have the "key" to connect. And to connect, there must be a "conductor" because tourism is a synthetic economy, a component of many infrastructure economic sectors, so to connect, one must rely on the upper level. This is the weakness of Vietnam's tourism," Mr. Ky said frankly. According to him, "Vietnam's tourism stimulus story has never been done thoroughly. With the current way of "everyone" wanting to do all the services to take the profit, Vietnam cannot sell tours cheaper than Thailand or some Southeast Asian countries."

"A budget of 5-6 million VND can choose to go to Thailand, Cambodia, while this amount of money is sometimes only enough to buy a plane ticket from Ho Chi Minh City - Hanoi; a little more money to go to Singapore, Malaysia; a higher budget can choose Korea, Japan; even higher can go to the US, Europe... The summer peak is extremely important to the Vietnamese tourism industry. If the number of international visitors cannot be compensated, the system of destinations, hotels, and restaurants will be very difficult.

Mr. Nguyen Minh Man , Director of Communications - Marketing and Information Technology at TST Tourist

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