Is aviation 'over-harvesting'?

Travel agencies are being made difficult, customers are turning away.

The demand for travel is high, airfares during holidays and Tet double or triple, up to several million VND compared to normal days. This immediately affects the business of travel agencies, and tourists are scared and turn their backs on domestic tourism.

Mr. Pham Quang Hau, CEO of Rooty Trip, cited that a normal flight ticket + hotel room combo to Phu Quoc costs about 4 million VND, and during the peak summer season it is only 5-6 million VND. However, with sky-high prices, sometimes up to 8-10 million VND/round trip ticket, tourists do not travel to Phu Quoc.

Mr. Nguyen Tien Dat, Director of AZA Travel, was upset that airfares during holidays and Tet are expensive, but the reality is that there is a situation where customers who buy tickets early are charged more, but those who buy tickets close to the flight time are cheaper.

During recent holidays, domestic airlines often increase the number of flights close to the departure date (Illustration: Hoang Ha)

“It is unclear whether airlines have set it automatically or intentionally, but close to the holiday, they increase many flights with low prices, which puts early buyers at a disadvantage, not to mention that air tickets are still unsold. Travel companies do not dare to 'hold' many early tickets, afraid of losing money when prices drop; if we wait until the prices are low, it will be too close to the departure date, and we will not be able to sell tours,” Mr. Dat shared.

Obviously, according to Mr. Dat, sky-high airfares not only affect the travel plans and return home for Tet of many workers, but also cause damage to the airline itself and an entire tourist area, typically Phu Quoc during the recent April 30-May 1 holiday when the number of passengers decreased, rooms were empty, transportation units were idle,...

Meanwhile, tourists flocked to travel abroad. Statistics from travel agencies showed that during the April 30 holiday, 70% of tourists bought tours to foreign countries; some tours had a occupancy rate of over 90%, even full, such as tours to Thailand, Korea, Bali...

This trend continued on September 2nd, when a significant number of tourists chose to travel abroad. Outbound tours had to share market share with domestic tourists.

Figures from the Civil Aviation Authority of Vietnam show that the number of domestic passengers has unexpectedly decreased while international passengers have increased sharply.

Specifically, in the first 9 months of 2023, the total number of passengers passing through domestic airports was 89 million, an increase of 20% over the same period in 2022. Of which, international passengers reached 23.7 million, an increase of 266.8%; domestic passengers only reached 65.2 million, a decrease of 3.6% over the same period last year.

Regarding tourism during the upcoming Tet holiday, Mr. Nguyen Tien Dat said that the demand for domestic tourism is still there, but he is worried that tourists will consider going abroad. They will make comparisons because Thailand does not have a Lunar New Year, service prices have increased but not much. As for domestic tourism, if airfares are sky-high and services are limited due to Tet holiday, the prospect of Vietnamese people flocking to travel abroad is very likely to recur, and Vietnamese tourism will "lose right at home".

According to precedent, increasing flights before peak holiday seasons and Tet will certainly happen. According to travel agencies, airlines need to plan to increase flights earlier, with stable prices from the beginning and abundant supply. This not only allows customers to plan early but also maintains the reputation of the airline and protects the interests of partners, including travel agencies.

Need a "conductor" role

There are many reasons why Phu Quoc tourism has been 'shunned' by tourists in recent times, including the fact that airfares are too expensive. In order for Phu Quoc tourism to return to its prosperous period in 2018-2019, at a recent MICE tourism conference, Mr. Phung Huu Hoang, Deputy Director of Saigontourist in Hanoi, suggested that if there is no coordination with airlines, it will be impossible to solve the problem of bringing tourists to Phu Quoc.

Tourists are forced to pay expensive tickets, tourism suffers losses due to unstable ticket prices (Photo: NIA)

“Many times, we and other businesses have asked airlines to change their pricing policies so that Phu Quoc can return to its golden age. We have received promises that from now until the end of the year and into 2024, there will be more flights and prices will be adjusted more appropriately,” said Mr. Hoang.

In May, the leaders of Kien Giang Province People's Committee held a meeting with relevant parties to find ways to cool down ticket prices, but according to Mr. Pham Quang Hau, the situation has not changed much.

From the case of Phu Quoc, Mr. Nguyen Vu Khac Huy, General Director of Vina Phu Quoc Tourism Company Limited, said that it is necessary to seriously learn from Thailand when the tourism industry of this country receives great support from the "conductor" which is the General Department of Tourism, along with the consensus and unanimity of tourism units, airlines, hotels, shopping centers and management agencies.

This is the link between airlines and hotels, service providers such as transportation, entertainment areas, etc., thereby helping to reduce airfares, tour prices, and stimulate tourism. They collect from the spending of tourists when they come to this country. Thailand does very well and they have succeeded.

According to Mr. Nguyen Tien Dat, Thailand has the “art” of attracting tourists that Vietnam has not been able to do, not to mention the lack of connection, “each person doing their own thing”, without an overall strategy. For example, the sky-high airfare during peak seasons not only causes damage to the tourism industry, but also to the aviation industry itself, and more broadly, the economy.

Therefore, the story of Vietnam tourism needs a "conductor" that is always urgent, never too late. As Mr. Hoang Nhan Chinh - Head of the Secretariat of the Tourism Advisory Board (TAB) said, it is necessary to build an agency, a unit responsible as a conductor to guide travel, aviation, and tourism service businesses to develop evenly, reduce the impact of market fluctuations; guide businesses to go up, down, and sing together to have the best "choir".

In April 2023, the Thai government is considering a subsidy policy for airlines to operate flights to less popular destinations to stimulate tourism. In addition, authorities are also introducing incentives for airlines to return "flight slots" if they cannot operate to reallocate, helping to increase frequency and reduce airfares.

Last month, the country planned to buy some of the air force's empty slots at airports to serve the growing demand from airlines to boost tourism.

Thailand also subsidizes air tickets to stimulate tourism. In 2020, the Thai government subsidized 2 million air tickets, at $70 per person. Tourists buying round-trip tickets are subsidized no more than 1,000 baht ($30) per ticket.

Another subsidy package totaling US$722 million was also approved by the Thai Government in June 2020. Of which, 5 million nights of hotel accommodation will be subsidized and 40% of the price of normal rooms will be subsidized with a maximum subsidy of US$100 per night.

Malaysia has also begun to step up stimulus activities to increase tourism competitiveness, as the country’s Transport Minister has called on domestic airlines to adjust or reduce airfares for the upcoming festive season to serve the needs and welfare of the people.

Airfares are 'sky-high', tourism businesses 'call for help' Airfares during Tet are both expensive and scarce. Not only are workers worried, but tourists are also complaining, and destinations and travel companies are soon facing the fear of losing revenue during the peak season at the end of the year, continuing to 'call for help'.

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