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Tuesday, August 9, 2022

Domestic tours costlier than outbound tours

By Van Phong

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HCMC – Due to rising airfares, domestic tours are more expensive than outbound tours, according to the Vietnam Tourism Association.

At a conference to discuss solutions to remove difficulties in production and business in the second half of the year on June 27, Minister of Planning and Investment Nguyen Chi Dung said the situation was irrational.

Domestic tours currently cost more than tours to other countries, such as Thailand, Dung added, voicing his concern over Vietnamese tourists’ choice to travel abroad instead of domestic destinations.

As airfares have surged, the proposal of raising the airfare cap by the local airlines and the Civil Aviation Authority of Vietnam would lead to airfares further soaring.

Vu The Binh, chairman of the Vietnam Tourism Association, said that the rising airfares induced by the surging fuel prices had driven up domestic tour prices although travel and lodging firms had launched multiple promotions.

Besides the fuel price pressure, Binh said sectors and units related to the tourism sector, such as aviation, travel and lodging, had yet to connect. As a result, domestic tourism service prices are not as competitive as in other countries.

He was worried that Vietnam’s tourism might lag behind other countries. Four- and five-star hotels and travel companies should lower the prices of their services, which may reduce the quality of services in the long term.

In addition, domestic tours have contributed 30% to local tourism revenue. The rising number of tourists will exert pressure on the quality of service.

Programs to reduce service prices cannot be applied too often as they may affect the quality of Vietnam’s tourism services, Binh said.

To solve the problem, he proposed airfares be set at levels that can support the local tourism market to recover. Authorities should come up with policies to attract foreign tourists to Vietnam, he said.

Regarding fuel costs, Bui Doan Ne, vice chairman and general secretary of the Vietnam Aviation Business Association, said enterprises are expecting a quick reduction of the environmental protection tax on fuels.

Vietnamese airlines’ airfares remain competitive with those of other countries. However, tourism develops fast, so the aviation sector needs support to recover. Support policies should be maintained until mid- or end-2023, Ne suggested.

The aviation sector can recover by 2024 if strong support policies are worked out quickly, Ne added.

He also expressed concern over the competitiveness of local air carriers compared with foreign rivals if the fuel prices increase further. Domestic airlines should increase night flights to improve their competitiveness.

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