Vietnam determined to lower hotel service fees to attract more tourists

The hotel service fee now makes up 20 percent of the domestic tour fee, which is one of the most important reasons behind the weak competitiveness of domestic tours in comparison with the outbound tours to Thailand and Cambodia.
Hotels.com, a website on the hotels in Asia Pacific in March 2012 released a report saying that the hotel room rate in Vietnam was the lowest in South East Asia. However, the hotel service fee accounts for a bigger proportion in the tour fee structure than in Thailand, Cambodia, Laos and Malaysia.
On average, a traveler only has to pay 50-60 dollars to spend a night at a five star hotel in Cambodia, 100-120 dollars in Thailand, but he would have to pay 200 dollars in Vietnam.
The big gap in the hotel service fee, plus the high airfares both have made domestic tours more expensive than the outbound tours to neighboring countries.
Nguyet Nga, a senior executive of Saigontourist, said though the airlines have reduced the airfares by 49 percent, the domestic tour fees remain very high. One would have to pay 10 million dong for a tour from HCM City to Ha Long Bay with five days and four nights at a four star hotel. Meanwhile, a tour to Thailand with the same quality just costs 8 million dong.
The reports have also pointed out that the number of travelers booking domestic tours has not seen any increase over the last two months, since the day airlines and travel firmed began joining hands to stimulate the demand.
A survey at Hanoitourist, Du Lich Viet and Vietravel has found out that there is only one domestic tour by air booked for every three tours to Thailand.
Nguyen Cong Hoan, Deputy Director of Hanoi Redtours, said the domestic tour fees remain higher than the tours to South East Asian countries, because the ground service fees have not decreased.
The quoted hotel room rates for separated clients in Thailand are higher than in Vietnam. However, hotels would offer big discounts to travel firms. The hotel room rate applied to the travelers to Thailand is 49 percent lower than the quoted rate.
He went on to say that in Thailand, relating service providers join forces to develop tourists and attract more travelers, Airlines, hotels and restaurants all cooperate with travel firms in order to set up reasonable tour fees. Especially, in some cases, they would accept the tour fees which are lower than the production costs.
However, they still can make profit when travelers go shopping in Thailand and spend money on entertainment services in the country. For example, a gold, silver and gemstone group would accept to pay 70-100 percent of the bus tickets, if the travel firm brings travelers to their shops.
Meanwhile, in Vietnam, it’s nearly impossible for travel firms to persuade involved parties to reduce the fees of the services provided in the tours.
Hotels always say “no” to the proposal by travel firms to reduce the room rate, especially in the high tourism season. Very few agreements on the room rate reductions have been reached so far.
However, Hoan believes that if an alliance, representing travel firms, comes forward and conducts negotiations with hotels, the situation would be improved.
“Hotels would not have any more reasons to refuse to offer room rate discounts, once a lot of travel firms commit to bring clients,” he said.
“The cooperation would not only help reduce the tour fees, but also bring stable profits to the hotels,” he added.
Luu Duc Ke agrees with the view, saying that it would be difficult for one travel firm to spend a big sum of money to book seats at the hotels. However, when hotels have big and stable orders, they would be able to reduce the service fees.