Decided to "play big" to earn more

Thailand's Transport Minister recently announced that airfares on three popular domestic routes in the country will be 3.8-14% cheaper during the Songkran water festival, starting Friday (April 12).

On the Bangkok Post, the official said that ticket prices at 6 airlines (Thai Airways, Thai Airasia, Bangkok Airways, Thai Lion Air, Nok Air and Thai VietJet) flying between Bangkok and Chiang Mai, Krabi and Phuket are capped at 3,000 baht (more than 2 million VND) per trip, one way.

Compared to Lunar New Year 2024, the average cost decreased by 9.8% on the Bangkok - Phuket route, 14% for Bangkok - Chiang Mai and 3.8% for Bangkok - Krabi.

This year, Thailand held the traditional Songkran festival in 20 provinces and cities, lasting from April 12 to 16; some localities held it early and ended later to attract tourists.

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Songkran is expected to bring in 614 billion baht to Thailand in the second quarter of 2024. Photo: Bangkokpost

Although the second quarter is considered the low season, Thai tourism is expected to generate 614 billion baht in revenue as the number of domestic flights surges thanks to the Songkran event.

During the peak of the festival, Thailand's six international airports welcomed more than 2.6 million visitors, an increase of more than 28% over the same period last year. Of these, there were 1.65 million international visitors, an increase of 46%, and more than 960,000 domestic visitors, an increase of 6.59%.

Analyzing from the perspective of the travel business, Mr. Nguyen Cong Hoan, General Director of Flamingo Redtours, said that behind the story of Thailand "playing big" when deciding to reduce ticket prices during the peak tourist season is the way of calculating and determining the goals of the country's tourism industry.

Because Thailand determines that the revenue source is not only airfare and hotel room prices but also all spending by tourists (both domestic and international), from shopping, dining, entertainment,... to other services; from there, it will calculate and have support policies for airlines, so that service providers can reduce prices to create attractive tour prices.

“Vietnamese tourists spend 8-10 million VND on tours to Thailand, but when they get there they spend the same amount, or even more than what they spent. That is what tourism in the land of the Golden Pagoda aims for,” said Mr. Hoan.

According to Mr. Hoan, Thai tourism always considers the long-term. The Songkran Festival was recognized by UNESCO as an Intangible Cultural Heritage in 2023, so the government of this country has planned very attractive communication early and decided not to increase prices despite the record number of visitors. They accept losses or no profits to create a favorable impression and attract more visitors.

Some other countries also support tourism by reducing airfares. Mr. Hoan cited that the price of tours to Zhangjiajie, Chengdu, Kunming, etc. in China is much cheaper thanks to the government using its budget to directly support aviation. For example, when flying to Zhangjiajie, customers are supported with about 20-30% of the ticket price.

Meanwhile, in Vietnam, Mr. Nguyen Cong Hoan found that during peak tourist season, tourists are always worried about three fears: fear of high prices, fear of being ripped off, and fear of crowds.

Find a way to solve the "headache" problem

In addition to the objective reasons that make domestic airfares this year both expensive and scarce, such as more than 20 planes needing engine repair and maintenance; airlines ceasing operations, airlines narrowing their business, etc., having to bear more than 20 types of direct and indirect fees is also the reason why airfares have been inflated, about 60-70% without taxes and fees.

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Domestic airlines have decided to increase flights to cool down airfares during the peak holiday season of April 30 and the upcoming summer.

As a result, in the first quarter of 2024, the number of domestic passengers traveling by air only reached 17.5 million, down 15% compared to the same period last year, partly due to "sky-high" airfares.

Aviation experts say that this not only causes losses to airlines but also the Airports Corporation of Vietnam (ACV), the company that manages many airports in Vietnam, also loses revenue. Not to mention, the decrease in the number of tourists will directly affect the tourism industry, localities and the entire economy.

For the tourism industry, the high price of airfares during peak seasons, as admitted by the leader of the Vietnam National Tourism Administration at the regular press conference of the Ministry of Culture, Sports and Tourism on April 11, is a "very painful problem". The leader of this agency "is always concerned, has worked with aviation businesses" and will soon propose that the competent authority reassess the demand and costs to have an appropriate price policy.

However, in addition to the role of the central management agency, Mr. Nguyen Cong Hoan proposed to raise the issue at the local level.

Because when airfares are sky-high, the most disadvantageous is still the destination, especially for some provinces in the Central region such as Da Nang, Quy Nhon (Binh Dinh), Tuy Hoa (Phu Yen), ... or Phu Quoc island, due to the decrease in the number of visitors arriving by air. Meanwhile, the local source market does not exist or has a small customer base, with low spending.

Therefore, localities need to calculate and consider supporting airlines to increase frequency and open routes to the area. More passengers means infrastructure, hotels, restaurants, tourism services, etc. will develop accordingly.

For example, Binh Dinh previously supported 200,000 VND per passenger when airlines opened new routes. Thanh Hoa also has a policy to support airlines up to 3 billion VND if they open new domestic routes, 5 billion VND for international routes to Tho Xuan port. Ca Mau also supported 7 billion VND for airlines opening new routes to this locality...

Additional flights for peak holiday season 4/30-5/1

Based on optimizing the use of existing fleet and opening new early morning and late evening flights on routes with high demand, Vietnam Airlines has just announced the addition of more than 100 domestic and international flights, equivalent to more than 15,000 seats, for the April 30 - May 1 holiday.

In total, the airline will offer 575,000 seats and 2,900 flights during the peak period from April 26 to May 2, an increase of more than 10% over the same period last year.

Domestic flights with increased capacity are tourist flights from Hanoi and Ho Chi Minh City to Da Nang, Hue, Quy Nhon, Nha Trang, Da Lat, Phu Quoc, Con Dao, etc.

Vietjet Air also added 86,000 seats, equivalent to nearly 425 flights on routes to and from Ho Chi Minh City, Hanoi, Da Nang, Nha Trang, etc. during the summer period.