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

Empty hotel rooms means cheaper accommodation for tourists |Vietnam

Newly released figures reveal Vietnamese hotel room occupancy dropped by 30 per cent in the first eight months of 2009.
HCM CityHowever, what’s bad news for the industry is good news for bargain hunting tourists planning on visiting Viet Nam.

The information, provided by commercial real estate CB Richard Ellis (CBRE), also shows numbers of foreign tourists coming to Viet Nam has decreased by 19.7 per cent compared to the same period in 2008.

In Hanoi, the occupancy rate at three-star hotels dropped from 77 per cent last year to 43 per cent in the first six months of 2009, while the rate at four star hotels dropped from 67 per cent to 39 per cent. The rate at five star hotels dropped from 69 per cent to 50 per cent.

It’s a situation that has been mirrored in HCM City. By June the average room rate at four-star hotels had dropped from its year beginning price of $80 to just $50 per night. Five star hotels averaged a drop from $130 a night to $80.

In general, the room rate in HCM City has dropped by 25-38 percent within six months.

Though the survey makes for gloomy reading for the tourist industry, according to global hotel index provier STR Global, Vietnam is still considered a more bustling market than many others.

According to Robert Mcintosh, a senior executive of CBRE Hotels Asia Pacific, hotels are taking the right course of action in reducing room rates in order to attract more clients.

However, in some cases, hotels fear reducing room rates will badly affect brand names. Some have opted instead for launching promotional campaigns.

Mr Mcintosh added that Vietnam’s biggest problem in the hotel market remains the lack of medium range options. However he believes the situation will be quite different in three to five years.

He adds that big hotel management groups like Accor, Intercontinental and Marriot may well bring more mass market and top level brand names to further develop the market.

VietNamNet/VNE

Thailand bouncing back

There are thousands of hotels in Thailand and it’s hard to generalize about them but overall it seems that great deals are more scarce than some foreign visitors might have hoped a few weeks ago after the airport closures in Bangkok. The general trend seems to be that business hotels in Bangkok have had trouble bouncing back but that beach resorts are doing OK. Here’s an article from today’s IHT on the topic:
In the closing weeks of 2008 it looked like Thailand might be beckoning visitors for an opportunity of a lifetime: cheap luxury hotel rooms and empty beaches. The global economic downturn combined with the seizure of Bangkok’s two main airports by protesters in late November brought the travel industry to its knees. In early December staff at Bangkok’s top five-star hotels greatly outnumbered the dwindling number of guests.
But as has happened many times in recent years when tourism suffered from disasters natural and human-made - the tsunami of 2004 and military coup of 2006 among them - the foreigners have returned to Thailand.
“It’s started to bounce back,” said Pornthip Hiranyakij, secretary general of the Tourism Council of Thailand, a travel industry association. She estimates that beach resorts in southern Thailand were about 80 to 85 percent full during the holiday season compared with about 90 percent last year.
A staff member at the high-end Four Seasons hotel in the northern city of Chiang Mai said the hotel would be “crowded” for the rest of January; on the resort islands of Samui and Phuket the beach chairs filled up for the holidays.
The Thai central bank reported this week that the weeklong closure of Bangkok’s airports by protesters cost the country 290 billion baht, or $8.3 billion, in lost income, about 3 percent of the country’s total gross domestic product.
Thailand remains a relatively cheap place to visit. Hotel Web sites are offering off-season rates for what would normally be peak season, even around Chinese New Year, when visitors from Hong Kong, Singapore and mainland China normally flood the country. The Year of the Ox starts Jan. 26.
Some luxury hotels are discounting more than others. Hotels that cater to business travelers were worst affected by the cumulative effect of the business downturn, Thailand’s political crisis and the airport closure. The Conrad Hotel, which caters to business travelers and diplomats, is offering rooms for $150. By contrast the riverside Mandarin Oriental Hotel, popular with well-to-do tourists, showed no discounted rates in early January on its Web site and was offering rooms upwards of $389.
The early months of the year are traditionally considered the high season in Thailand because it rains less frequently and temperatures are generally cooler. But travel industry executives say they are most concerned about the political climate.
Thailand’s three years of political turbulence climaxed Nov. 25 with the seizure of both of Bangkok’s airports by anti-government protestors. The airports reopened eight days later, but only after hundreds of thousands of foreigners were left stranded.
Now with a new government in power and the protesters strutting victoriously - the new foreign minister was one of the anti-government protesters who shut down the airport - the tables are turned.
Supporters of the previous government are out on the street protesting. Thailand’s political crisis looks likely to drag on.
On Wednesday, Prime Minister Abhisit Vejjajiva announced that an upcoming summit of regional leaders would be moved from Bangkok to the beach resort town of Hua Hin because of fears protesters could disrupt the event. The summit by the Association of Southeast Asian Nations, which will begin Feb. 27, was initially scheduled to take place in December but was postponed because of the country’s political crisis.