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High air fares are cramping the domestic tourism sector,
according to tourism businesses.
"Tourism will be strongly affected by higher transportation costs as transport
on average accounts for up to 70 per cent of a tour's price," said Nguyen Van
Luat, director of the Phuong Bac Tourism and Advertisement Joint Stock Co.
"We have already been hit by high road transport costs due to rising petrol
prices. Now, if air fares increase, we will face huge losses."
According to Luat, tourists coming to Viet Nam often visit several places across
the country, instead of confining their stay to one town or city.
"In a tour that lasts 14-21 days, visitors will travel a great deal, and often
they will fly from one destination to another," Luat said.
"If the air fare increases, the tour price will be more expensive so that
tourist may choose to visit other countries in the region over Viet Nam.
"Higher air fares do not only affect foreign visitors but also domestic
tourists, who may opt to travel less."
Ho Lan Vy, a tourism worker, said higher air fares would have a significant
impact on tourism, especially as the Tet (Lunar New Year) holidays have been
approaching.
"Vietnamese workers have a long holiday during 2012 Tet and if air fares are
pushed up, visitors will travel by car or go on shorter tours," Vy said.
"Otherwise, they will fly to other countries."
In anticipation of the price rises, many tour companies have started to cut down
on their expenses.
Many of these businesses used to provide bonuses to their staff by paying for
trips to holiday destinations, but this practice is becoming less common due to
rising air fares, said tour operators.
To help tourism companies overcome the challenge of rising fares, operators
suggest the Government carefully consider the implications of increasing the
ceiling price for air fares at this moment.
"Price is so important in the tourism sector," said Luat. "It creates
competitiveness."
"While air fares must increase eventually, the gap between fare increases must
be at least 24 months because we have to advertise and promote tours well in
advance."
In May, the ceiling price for air fares was raised by 20 per cent.
Late last month, the Ministry of Transport granted in-principle approval to a
proposal for Vietnam Airlines to raise the ceiling price by 1.5 times over
current fare levels.
If the new levels are approved, the price for return air fare between Ha Noi-HCM
City will be about VND8 million (US$380).
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