Vietnamese travel agencies are to face harsh competition from foreign rivals once the country officially becomes WTO member expected this November.
The brutal battle between local and international tour operators is forecast to start this December when international tourism firms are officially allowed to establish wholly foreign invested companies in Vietnam to independently organize inbound tours, instead of holding 49% of stakes at most in a joint venture with a local firm as before.
Truong Nam Thang, director of OSC-SMI Joint Stock Tourism Service Company in Hanoi emphasized that foreign companies will jump in travel service right after Vietnam enters the global trade club due to several advantages such as low investments and simple establishment procedures.
“Foreign tour operators are keeping the upper hand,” Nguyen Van Cu, vice director of Hanoi-based Ho Guom-Diethelm travel joint venture admitted, worrying that foreign rivals with their global network and intensive capital will toss low-cost appealing services to weed out those holding flatter pockets.
Besides, they will soon gain more preferential treatments than local firms in booking air tickets and hotel rooms thanks to their long-standing prestige and large-scale business, he added.
The competition will be fiercer as Vietnamese travel companies have enjoyed protections from the communist-run government for so long that even the aged-old have not yet been strong and competent enough to lure international tourists on their own, Cu said, adding that 90-95 % of international visitors flocking to Vietnam to date are sent by overseas tourism companies.
Moreover, competitiveness of local travel agencies still remains low with poor products, small-scale investment and backward business mode.
Also, even joint ventures may face the possibility of bankruptcy as their foreign partners will soon end the cooperation and directly organize inbound tours to Vietnam.
To remain survival and stronger in the country’s integration, local tourism firms have to make thorough assessment of their own capacity therefore map out appropriate business strategy, experts said.
“They should focus more on their own strengths,” Nguyen Quang Lan, Head of Hanoi Tourism Department said, adding that local firms need to further exploit the local market, which foreigners are not entitled to jump in.
Besides, to lure inbound vacationers, Vietnamese travel agencies should pay due attention to building strong brand name, applying advanced technologies to offer demanding tourists low-cost and high quality tours and speeding up promotion campaigns both at home and abroad, Lan added.
Furthermore, the government is also in urgent need of creating a level playing field and a stable legal framework for all tourism firms with strict punishments for violators.
In related news, domestic tourism sector has so far signed 29 bilateral cooperation agreements with other countries, and set up relations with over 1,000 travel agencies in 50 different countries and territories. It has also joined international and regional forums like the World Tourism Organization, ASEAN tourism cooperation and the open Mekong sub-regional tourism development programs.
The National Administration of Tourism predicts that Vietnam will welcome 3.8 million foreign arrivals and 16 million domestic tourists during 2006.
Youth, Labour
Vietnamese
