Ceiling airfare increase killing tourism industry
LookAtVietnam - Travel firms believe that in the current big
difficulties, when people tend to fasten their belt, Vietnam should have to
slash the airfare to attract more travelers. However, Vietnamese air carriers
are doing the opposite thing.
difficulties, when people tend to fasten their belt, Vietnam should have to
slash the airfare to attract more travelers. However, Vietnamese air carriers
are doing the opposite thing.
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dong (return ticket) in May 2011, and then to 6 million dong. Meanwhile, the
figure may raise to 8 million dong, if the proposal by airlines to lift the
airfare is approved by the Ministry of Finance.
The information about the ceiling airfare increase has caused big worries to
travel firms which complain that this would kill the tourism industry, because
it makes the industry less competitive.
No need to raise prices in difficult period
Nguyen Phuong Nam, Director of the Phuc Tien Booking Agent in HCM City, said
that the ceiling airfare increase would put big difficulties for travel firms.
“In the past, we sold tickets mostly to the companies which booked tickets for
their staff’s business trips. However, the companies only book tickets when it
is really necessary, because the air tickets have become too expensive,” Nam
said.
“Previously, a lot of companies paid for the air tickets of their staff in
vacation trips, but they have cut the spending,” he added.
He stressed that the 20 percent increase is really a sharp increase in the
context of the current difficulties of the national economy. As everything is
getting more expensive, consumers have to fasten their belt. “Is it really
necessary for airlines to raise the ceiling airfares in such circumstances?” he
questioned.
Travel firms entreating God
Nguyen Vu Manh Ha, Head of the Operation Division of Ha Dat Travel Firm in HCM
City, said that the airfare increase has caused a headache to small and medium
travel firms.
According to Ha, in order to ease the risks from the airfare increases, big
travel firms can set up a booking agent to serve their tours, or they can spend
money to buy all low-cost tickets several months before the departure time,
which allows them to ease the costs, while small firms cannot do that. The firms
have to book tickets from air carriers or from the travel firms and they would
lose contracts if they cannot get tickets.
As such, bigger travel firms would get richer, while small firms would be at a
big disadvantage because of the limited financial capability. Meanwhile, they
still have to pay additional money to buy back tickets from bigger travel firms.
He went on to say that if the domestic airfare increases, it would be more
costly to travel domestically than abroad. This would prompt Vietnamese
travelers to choose to travel abroad, while foreign travelers would rather to go
to other South East Asian countries than to Vietnam.
Travel firms have warned that once the domestic airfare continues increasing,
this may lead to the “foreign currency bleeding.”
Tran Thi Lan Phuong from Dai Hung Son Company in HCM City said that the demand
for traveling has been increasing, and that domestic travelers are really the
important source of income for domestic airlines.
People nowadays usually compare the airfares offered by different air carriers,
while the majority of medium and high income earners now choose foreign
destinations for their trips. Meanwhile, foreigners would have to think about
whether to travel to Vietnam if they have to pay high, while the number of
tourism points is less than expected.
This would push Vietnamese tourism industry against the wall, while the national
economy may face the “foreign currency bleeding,” because Vietnamese and
foreigners pay more money to foreign firms.
“I think that the Ministry of Finance needs to consider if the proposal on
raising airfare is suitable for now, when the CPI increases are very high,” she
said.
Dat Viet
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