Vietnam travel firms feel threatened by potential foreign investors ahead of TPP — Talk Vietnam

Vietnam travel firms feel threatened by potential foreign investors ahead of TPP

November 25, 2015 by thanhniennews Leave a Comment

A tourism exhibition in Ho Chi Minh City. Photo: N.Tran Tam

Many travel companies have been seeking to increase market share in anticipation of a Pacific Rim trade pact that will allow investors from 11 foreign countries to provide tour operator services in Vietnam for the first time.

Big agencies such as Vietravel and Fiditour have made the move, expecting the evasion of foreign competitors when Vietnam permits “foreign investment to provide inbound services and domestic travel for inbound tourists” under the Trans-Pacific Partnership (TPP).

The country will only reserve the right to “adopt or maintain any measure with respect to tourist guides services.”

Foreign companies currently are not allowed to operate inbound tours, and have to partner with local businesses instead.

Once the restriction is removed, Vietnamese businesses will face “a huge challenge,” considering that most of local tour operators are small and medium.

Travel agencies from other TPP countries such as Australia, Japan and the US are big, according to local businesses and analysts.

Nguyen Quoc Ky, CEO of Vietravel, expressed his concern that Vietnamese companies will have to compete with many big rivals when TPP takes effect, possibly in 2018.

“Their presence will create a lot of difficulties to local businesses,” he said.

The Ho Chi Minh City-based travel firm recently organized its own exhibition to promote its tours, instead of waiting to take part in promotional events organized by tourism agencies, Ky said.

Fiditour, on the other hand, has shifted its focus to online sales, because it is not only convenient to clients, but costs the company less, allowing it to offer more discounts, representative Tran Bao Thu said.

She said it forecasts that foreign companies will tap the market through online services, given their long experiences in the business.

However, Phan Xuan Anh, chairman of Viet Excursions, a known contract operator for cruise lines, said local travel businesses need to focus on improving their services’ quality and innovating their products, instead.

He warned that even though they are not officially present in Vietnam, many multinationals have been attempting to build up their customer bases through their joint-ventures with local partners and offering competitive prices.

Huynh Van Son, a tourism management lecturer, said businesses need the government’s support to expand their operation not only domestically, but in other TPP participants’ markets so that they can capitalize on overseas markets.

Vietnam reported more than 6.3 million international arrivals in the first 10 months, down 4.1 percent year on year, according to the latest figures released by the Vietnam National Administration of Tourism (VNAT).

Vietnam travel firms feel threatened by potential foreign investors ahead of TPP — Talk Vietnam

Vietnam travel agencies join Cambodia Sea Festival

Vietnam travel agencies join Cambodia Sea Festival

Posted: 14 Dec 2014 02:18 AM PST

An art performance at the festival (Photo: VNA)
Vietnamese tourist companies joined foreign partners at the third Sea Festival held in Cambodia on December 12-14.
The festival took place in the coastal city of Koh Kong , about 250km southwest of the capital Phnom Penh, with the aim of developing the local marine tourism
Tens of thousands of visitors were drawn to the event which covered a food expo, a trade fair, a workshop on climate change, art performances, and sports events.
The first Sea Festival was held in the port city of Sihanoukville in 2011 and the second in Kep city last year.
The three cities are home to beaches listed among the most beautiful coasts in the world.
Tourism is one of the economic spearheads of Cambodia with the stable growth of 15-20 percent, making great contributions to the domestic gross production.
In January-October, Cambodia welcomed 3.6 million foreign tourists, a year-on-year rise of 6 percent. Vietnam topped the list with about 630,000 arrivals.
Last year, the country greeted 4.2 million overseas visitors and earned 2.6 billion USD in revenue.-VNA

FDI projects foster development of electronics industry | Look At Vietnam

FDI projects foster development of electronics industry

May 26, 2012

Vietnam’s export turnover of electronics products is seen growing strongly in the coming time given an influx of new foreign-invested electronics projects being set up and operational ones scaling up production. The arrival of large-scale foreign-invested electronics projects promises strong development momentum for the local industry.
New projects on the way

Cell phones are produced at the factory of Samsung in Bac Ninh.

A source from the Haiphong Economic Zone Authority (HEZA) said a Japanese electronics manufacturer is working with HEZA on promoting a large-scale printer factory project in the city.
Though declining to reveal the name of the investor, the source informed the project worth over US$100 million is aimed at producing printers for export. The investor is finalizing necessary procedures and it is expected that HEZA will grant this investor an investment certificate in June or July.
Not only Haiphong, other localities also see many foreign electronics producers and cell phone makers coming to sound out opportunities or pouring additional capital into their operational projects, even in the current tough circumstances.
Most notably, Wintek Corporation, a Taiwanese producer of touch screens for Apple iPads and iPhones, has decided to revise up the investment capital in its Bac Giang-based factory from US$250 million to US$1.12 billion. The additional capital of US$870 million will be used to import more devices and production lines, as well as expand the workshop to boost production.
The factory of Wintek in Vietnam will supply touch panels, liquid crystal displays (LCD) and liquid crystal monitors (LCM). When stable production is achieved, the factory will export billions of dollars worth of products and generate jobs for over 10,000 workers.
Meanwhile, Nokia in late April officially launched its cell phone plant project in the Vietnam-Singapore Industrial Park (VSIP) in Bac Ninh Province. The project worth 200 million euros, or US$256 million, is expected to start operation in 2013, turning out 180,000 products per year and creating jobs for 10,000 people.
This decision was made a few months after Nokia shut up and scaled down several factories in Europe to cut costs. This marks a new step in Nokia’s strategy to turn Vietnam into a link in the global supply chain of the world’s leading cell phone maker.
A factory producing cell phones and electronics components invested by Japan’s Kyocera will get off the ground this June. The factory worth US$55 million in the first phase will be developed in Thang Long II Industrial Park in Hung Yen.
Although the first phase has yet to be kicked off, Kyocera has already planned to add US$195 million in the second phase to expand production of cell phones and others. The factory is expected to start service in August 2013.
Development momentum
In a short period of time, many electronics projects with hefty foreign direct investment (FDI) capital have come to Vietnam. This has raised expectations for the development of the local electronics industry and bigger contribution of export revenue since the investors of the aforesaid projects all aim at export and creating global supply chains.
Although the local economy is facing many troubles, Vietnam remains attractive to foreign investors thanks to the abundant manpower and the strategic position connecting China and Southwest Asia, said analysts. The fact that Nokia has decided to invest in Vietnam instead of the experienced Thailand, Malaysia or Indonesia shows that Vietnam is still an appealing investment destination.
According to several electronics enterprises, the electronics component factories in China and other Asian countries currently tend to shift their production to Vietnam. This is proven by the presence of the production facilities of the world’s leading electronics groups in Vietnam, such as Samsung of South Korea, Intel of the U.S., Panasonic, Canon and Fujitsu of Japan, and Foxconn of Taiwan.
Analysts noted these projects have been making great contributions to the development of Vietnam’s electronics industry. The factories of the world’s top electronics producers in Vietnam will attract satellite investors, and certainly boost export.
Previously, the export of cell phones and electronics components usually fetched US$300-400 million per month. However, since July last year, the export turnover of this commodity group has always stayed at US$1.3 billion a month, said the General Department of Customs.
This achievement is mostly attributed to the Samsung factory in Bac Ninh. The factory last year exported over US$6 billion worth of products, and an average US$1 billion per month this year.
The South Korean electronics group is expanding its factory by pouring an additional US$830 million, taking the total investment capital in the factory to US$1.5 billion. This will definitely bring in higher export revenue in the coming time.
Meanwhile, the project of Intel, though just in its first-phase operation, has contributed a hefty 50% to the total export turnover of the HCMC-based Saigon Hi-Tech Park in 2011.
SGT

Travel firms give in, slashing summer tour fees to lure more travelers | Look At Vietnam

Travel firms give in, slashing summer tour fees to lure more travelers

May 25, 2012

LookAtVietnam – Travel firms, suffering from constant anxiety due to the
sharp fall of the number of travelers registering domestic tours, have kicked
off a noisy sale promotion campaign summer 2012.

Travel firms have no other choice than slashing tour fees sharply to attract
more clients. Some firms have even offered the price discounts of up to 30-40
percent, which has surprised travelers.
Quynh Hoa, an office worker in Hanoi, said that at first, her company planned to
organize a tour to Malaysia for its staff. However, after hearing about the tour
fee reductions, the leaders of the company have been asked to reconsider the
decision. It is very likely that a domestic destination would be chosen instead
of an outbound tour.
Bien A travel firm has launched an attractive program for the tours from HCM
City to VUng Tau. Those who book tours now would enjoy the immediate 530,000
dong tour fee reduction, which means that they would have to pay 950,000 dong
instead of 1480,000 dong.
Hanoi Redtours has kicked off the summer travel season with three tours to the
central region’s sea, offering the tour fee reductions of up to 3 million dong
per traveler. Those, who book the Da Nang – Quang Nam tours would pay 5.5
million dong instead of 7.5 million dong. Meanwhile, a sharper reduction of 3
million dong to 6.7 million dong has been offered for the tours to Quy Nhon –
Binh Dinh, Nha Trang – Phu Yen.
Hanoitourist is running a sale promotion program, offering the sharp tour fee
reduction of 2 million dong for those, who book the tours to Nha Trang – Doc Let
and Nha Trang – Da Lat, one of the most favorite destinations for the travelers
who love sea bathing.
Especially, Vietrantour has slashed the tour fee by 40 percent applied to 20
domestic tours. The tour Hanoi – Can Tho – Bac Lieu – Soc Trang – Ca Mau now can
be booked at 6,890,000 dong. The travelers who want to go to Saigon and Vung Tau
in the south would have to pay 7,290,000 dong, while the tour to Sapa – He Kou
costs 4,290,000 dong only.
Also, Vietrantour is now offering the 20 percent tour fee reduction (to
2,499,000 dong) for the tour Hanoi- Ha Long Bay, under which travelers can spend
night on five star cruise ship.
Analysts have noted that the domestic tour fees all have decreased by nearly 50
percent in comparison with the tour fees set up for the May holiday.
Explaining the sharp falls of fees for the tours in summer, Vietrantour’s
Director said that travel firms have been backed up by the national flag air
carrier Vietnam Airlines which has accepted to slash the airfare by 40 percent
applied to the groups of 10 or more travelers. This is the biggest sale
promotion campaign which would last throughout the summer.
Other travel firms have also confirmed that the tour fees have been slashed only
with the cooperation of air carriers. Hanoitourist has said the travel firm is
joining forces with Vietjet Air, a private airline, to slash the fees of some
tours in summer.
However, representatives of travel firms have affirmed that the tour fee
reductions would be applied to domestic tours, while outbound tours still have
not enjoyed benefits from the program. It is because the main goal of the
campaign is to stimulate the demand for domestic tours.
Nguyen Thi Khanh. Deputy Chair of the HCM City Tourist Association, said travel
firms are meeting some problems with the program. The problem is that travelers
in groups do not have the habit of booking tours soon.
Bao Han

Google weighs into airfare market-

Google weighs into airfare market


News out of the United States that Google has entered the online travel market, buying ITA Software, a flight information software company, for $US700 million.

The move to acquire Massachusetts-based ITA will see Google muscle into a market controlled by Expedia, Kayak, Orbitz, Microsoft's Bing Travel and other sites.

The web search giant said its acquisition of ITA "will create a new, easier way for users to find better flight information online".

"The acquisition will benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and air fares," Google said in a statement.

"Airline travel and search are a terrific opportunity for more innovation, more investment and more interesting products,"
Google chief executive Eric Schmidt said in a conference call.

"There's clearly more room for competition and innovation here."

Google stressed that it "won't be setting air fare prices and has no plans to sell airline tickets to consumers”.

"Our goal is to build a tool that drives more traffic to airline and online travel agency sites where customers can purchase tickets," the company said.

ITA specialises in organising airline data, including flight times, availability and prices.

Bing, Kayak, Orbitz and TripAdvisor are among ITA's present customers and Google said it looked forward to working with them and will "honor all existing agreements".

Google vice president Marissa Mayer said nearly half of all airline tickets are now sold online and Google said requests for travel-related information are among the highest-volume queries received at the search engine.

"But for many people, finding the right flight at the best price is a frustrating experience," Mayer said.

50 % increase in foreign arrivals in May/Vietnam

Viet Nam welcomed nearly 440,000 foreign arrivals in May, an increase of more than 50 per cent compared to the same period last year, according to the Ministry of Planning and Investment.

Vietnam tourism industry surviving on domestic travelers

Domestic travelers to be given preference

Domestic tours competitive with outbound tours

Tourists visit Ha Noi’s Old Quarter. Viet Nam welcomed nearly 440,000 foreign tourists in May, an increase of more than 50% compared to the same period last year.

Most of the tourists were from mainland China, Australia, South Korea, Thailand, Taiwan, France, Malaysia and the US. The number of Chinese tourists surged remarkably, up by 111 per cent compared to last May.

Ministry statistics revealed that about 2.2 million foreign arrivals passed through the country’s borders in the past five months, representing a 37 per cent increase over the same period last year. HCM City was the most popular destination, with 1.3 million arrivals, accounting for more than 50 per cent of all foreign tourists across the country.

Experts said the increase could be attributed to efforts by the national tourism sector to organise various programmes and take full advantage of large cultural events, including the 35th anniversary of the Liberation of South Viet Nam and the national reunification, the 120th birthday of President Ho Chi Minh and the Sen (Lotus) Village Festival. Viet Nam Ethnic Culture Week in northern Thai Nguyen Province and the 1,000th anniversary of Thang Long-Ha Noi are also considered big tourist draws.

A large number of domestic travellers were also reported during the long Reunification Day (April 30) and May Day holiday.

Many tour agencies and companies are offering tourists stimulus package programmes. Central Khanh Hoa Province will launch a programme to reduce the cost of entertainment services and air tickets by 30-50 per cent, and central Da Nang City will offer a 5-25 per cent price reduction programme in August and September.

More tourist arrivals

Viet Nam’s tourism industry hopes to attract 1 million Chinese visitors this year, officials have said.

In the first quarter of the year, Chinese tourists to Viet Nam increased 215 per cent year-on-year, according to Nguyen Anh Tuan, deputy director of the Department of Travel Agents under the Viet Nam National Administration of Tourism.

He said the national flag carrier Viet Nam Airlines launched direct air routes from Ha Noi and HCM City to Shanghai.

"The last two programmes promoted in Shanghai and the two eastern coastal provinces of Zhejiang and Jiangsu can be considered to be successful with the attendance of representatives from around 100 Chinese tourist companies. They were interested in Viet Nam sea travel," Tuan said.

After the first tourism promotion programme held in Beijing, Shanghai, Shenzhen, Guangzhou and Sichuan last year, 100 travel companies have carried out surveys in Viet Nam with the aim to create new tours.

"The Tourism Bureau of Sichuan, the province with more than 100 million people, along with a group of enterprises and media, surveyed Viet Nam last March. They want to open a direct air link with at least charter flights from Sichuan to Viet Nam," Tuan said.

VietNamNet/Viet Nam News

Travel firms continue to quote Low Fees/Vietnam

"Travel firms all say they will continue quoting low fees to attract domestic travelers. Home-grown tourists were the main prop of the tourism industry in the aftermath of the world financial crisis, reports VietNamNet.



Several southern firms have announced a 35-40 percent tour fee decrease. A five day tour of central Vietnam (Da Nang – Hoi An – My Son – Ba Na – Hue – Phong Nha) is offered at 3.67 million dong per traveler. A four day itinerary (Da Nang – Hoi An – Ba Na – Hue – Phong Nha) will sell for 3.16 million dong. Pagoda and temple buffs can opt for a six day Hanoi – Ha Long – Trang An – Bai DInh Pagoda – Sa Pa tour costing 5.84 million dong or a four day Hanoi – Ha Long - Bai Dinh Pagoda tour costing 4.32 million dong.



Northern travel firms have said they would match the southern companies’ discounts. According to Nguyen Cong Hoan of Hanoi Redtour, details will soon be made public.



The problem is for the tour operators is that they don’t know what hotels will do in response to higher electricity and water prices. Air fares have risen too. Thus Hoan said that despite the discounting, tour fees overall are fifteen percent above 2009 levels.



Airfare is the largest component in the cost of a tour. Vietnam Airlines and other carriers have been granted permission to raise ticket prices to just over two million dong for Hanoi-HCM City flights. Some experts believe that this should be seen as good news, for it allows air carriers to charge a range of fares. It appears that carriers intend to continue deep discounting (up to 50 percent) on many flights.



Round trip tickets between Saigon-Hanoi , Saigon- VInh or Hanoi-Da Lat are now quoted at 1.8 million dong. The promotional round trip fare from Buon Me Thuot to Can Tho has been slashed to 1.8 million dong – still 400,000 dong more than last year.



The sharp competition in Vietnam’s domestic travel market reflects tour operators’ perception that Vietnamese travelers ‘rescued’ the tourism industry in 2009 when international arrivals dropped dramatically due to the global financial crisis.



Vietnam received only 3.8 million foreign travelers last year, 400,000 less than in 2008. At the same time, the number of domestic travelers rose twenty percent to 25 million. Vu The Binh, Director of the Travel Department at the Vietnam National Administration of Tourism, said the net result of these fluctuations was an increase in industry revenues of nearly ten percent.



Ha Yen"

Business travel climate described as “brutal”-06 October, 2009

American Express Global Travel Services president Charles Petruccelli described a "brutal" operating environment for the travel industry with some companies putting total freezes” on travel spending and others reducing budgets by almost two-thirds.


Such conditions threaten "globalness" but also provide "an opportunity to provoke the status quo with clients" and advocate "complete outsourcing."


Petruccelli in a speech said "there is no rational explanation in continuing to manage travel internally with fixed expenses. Companies have outsourced technology management to technology companies. It exists in human resources. So why not in travel?"


Does he see the recession as over? He answered:


"We are seeing some pick up in some areas of the business. Systematically, we have been beating our forecasts in transaction volumes," but "my sense is we are not going to see serious pick up before the end of 2010."


Petruccelli also noted that US and Chinese travel are showing signs of improvement, while Hong Kong, Japan and Singapore are not.

United move could cost consumers $2 billion-16 July, 2009

United Airlines’ move to force some agents to pay credit-card fees when their customers buy tickets with plastic is certainly a “trial balloon” but it raises a question for agents and consumers: will it catch on with other carriers?

“Given the usual herd mentality in the industry starting way back when commissions were reduced and carrying forward to today's myriad of baggage, mileage redemption and call center fees, it would not be surprising to see this play out in a broader way,” says PhoCusWright Connect.

Business travelers may be the ultimate losers in the latest scuffle between airlines and travel agents over credit card fees, writes David Grossman in USA Today.

Some travel agents and corporate travel managers believe this is only the beginning. "It is going to be a fee that will be passed on to all travel agencies eventually," said Randy Limbacher, president of Canyon Creek Travel American Express.

Michelle De Costa, the global travel manager for Sapient Corporation, recalled that when Delta Air Lines became the first carrier to cut commissioners, others immediately followed.

"They are going to do it with some select agencies that probably don't sell a lot of United and just see what the marketplace will bear,” he said.

If all airlines adopt this policy in the U.S. it could represent a cost shift in excess of $2 billion from airlines to travel agencies, according to Paul Ruden, senior vice president for legal and industry affairs for the American Society of Travel Agents.

Agents are upset about the move and vehemently complain it is an effort to shift business costs onto their backs.

United, the nation’s third largest airline, sent notices to some travel agents saying that as of July 20, they must pay the credit-card fee when leisure or corporate customers buy tickets with credit cards.

It’s no surprise that United wants to cut costs since it lost $382 million in this year’s first quarter. Some airline analysts rank it behind only US Airways for the greatest risk of bankruptcy.
The fee proposal has drawn opposition from the American Society of Travel Agents and the Business Travel Coalition, whose leaders say they will ask federal and state officials to investigate for possible collusion if other airlines follow United’s lead.

Agent Chris Russo said United’s goal might be to shift more ticket sales to its own Web site -- obviously a long-standing airline goal.

“We look at this as a very large threat to our ability to compete at selling airline tickets,” Russo told the AP. “We are their largest distribution system, but we’re also the one they think costs them the most money.”

Report by David Wilkening

Vietnam discount drive in trouble-26 March, 2009

HANOI –Vietnam National Administration of Tourism (VNAT)’s strategy to create low-cost tours amid the economic downturn is in danger of disintegrating as hotels refuse to reduce prices.

The VNAT announced the strategy after foreign tourist numbers plunged 12 percent in January to 370,000 and analysts predicted things to get worse.

It announced a national campaign to last until the end of September under which tour package prices are to be cut by 30 to 50 percent to attract foreign tourists to the country.

It sought a commitment from travel agencies and hotels to cut room charges by up to 50 per cent and persuaded Vietnamese airlines to join the campaign.

Seventeen hotels and 14 travel firms in HCM City signed up, promising to offer discounts of 30 to 50 per cent.

But only a handful have so far honoured their commitments, though with much lower discounts than promised.

The hotels said they were still waiting for the Government’s incentives for those involved in the campaign, mainly related to taxes and electricity and water prices.

Dietmar Kielnhofer, general manager of Sheraton Saigon - which is not part of the campaign - told Vietnam News that since all businesses and market segments were affected by their own set of market conditions, rather than participating in an overall rate reduction strategy, the hotels chose to support the initiative by individual case-by-case discussions.

"For this type of protracted economic crisis, there is no one-size-fits-all solution," he said.

Nguyen Duc Quynh, deputy executive director of the Furama Resort Danang, said Furama had not participated in the campaign because its room prices were already reasonable.

"To ensure the hotel’s profit and staff’s income, we have maintained the current rates but sometimes we make some reductions for group tourists," Quynh said.

Some hotels did not want to reduce their prices because it could affect their prestige, while others were afraid that if they cut tariffs now, they would be unable to raise them in the future, he said.