Mai Hanh, a boss of a small media firm, decided to book a tour for her family on Tet holiday. She wanted to travel to the sea city of Nha Trang. However, she changed her mind after consulting with the officers of travel firms. The problem is that outbound tour fees are even lower than domestic tour fees.
At Vietravel, for example, a four day trip to Nha Trang – Da Lat costs no less than 9 million dong. Meanwhile, a 6-day trip to Bangkok – Pattaya in Thailand would cost 6-7 million dong only.
After putting some thoughts, Hanh decided to choose the tour to Bangkok. “I feel happier to spend less money to travel to Bangkok, where I believe there are many things to see,” Hanh said.
In fact, domestic tours had always been more expensive than the tours to neighboring countries before Vietnam Airlines decided to raise the airfare by 20 percent on December 15. Currently, a tour from Hanoi to southern destinations such as Phu Quoc Island and Da Lat costs approximately 10 million dong. Meanwhile, passengers just need to spend 2-6 million dong to travel by air to neighboring countries.
Therefore, travel firms fear that with the 20 percent airfare increase, domestic tours would even have less travelers.
Pham Ha, Director of Luxury Travel, said that the tours in Vietnam are usually more expensive than that in other regional countries. Meanwhile, tourism sites have continuously raised the excursion fees recently. This, together with the 20 percent airfare increase and the high inflation would make it even more difficult to attract travelers for domestic tours.
“In the current difficulties, not only businesses, but individual clients also tend to fasten their belt. Therefore, the more expensive the tours get, the more difficult to sell tours,” Ha said.
Meanwhile, Vu Hoang Anh, Director of Net Dep Dong Duong Travel Firm (Indochina’s Charm), said in previous years, travel firms were informed many months in advance about the airfare increases. However, they have not been informed in advance about the latest increase. It took only several months from the day Vietnam Airlines proposed to increase the airfares to the day the proposal was accepted. Therefore, travel firms do not have enough time to get adapted to the new circumstances.
“The airfares have increased unexpectedly, while clients have booked tours until the end of 2012, and a half of them have paid money,” he complained, adding that his travel firm would have to offset losses with their own money.
Like other travel firms, Net Dep Dong Duong now has to draw up new plans to get to the new circumstances. It is considering designing the tours which do not much require travel by air, while considering using trains for short distance trips.
“The Vietnamese market is leaving its competitiveness itself. If the situation cannot be improved, travelers would head for other markets,” said Anh.
Booking agents have reported big changes in selling air tickets in the last few days. HK Vietnam said that before the day the new airfare was applied, people rushed to book tickets. On December, HK Vietnam sold 3 billion dong worth of air tickets of Vietnam Airlines, while the figure was 6 billion dong on December 14. However, the sales dropped to one billion dong on December 15, the first day of applying the new airfare.
However, the sharp falls in the sales of tickets do not make booking agents and airlines feel worried. In general, the move by Vietnam Airlines to raise the airfares would be followed by other air carriers. Therefore, passengers will still have to accept the high airfares, because they need to use aviation services.