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Opening outbound tour market threatens local companies
Local tour operators have objected to a new decision allowing foreign travel agencies to enter the outbound service sector, saying they would be hurt badly by the new competition.
Earlier this month, the Vietnam National Administration of Tourism (VNAT) issued the decision to allow joint ventures between local and foreign investors to offer outbound tour services. The decision is applied on a pilot basis from August 10, 2009 to December 31, 2010.
Before the decision, foreign-invested travel firms could only bring foreign tourists to Vietnam, while sending tourists abroad was the “playing field” for only domestic firms.
“VNAT should have thought carefully before making such a decision as it will badly affect our outbound business,” Than Hai Thanh, general director of Ho Chi Minh City-based Ben Thanh Tourist, told Thanh Nien Daily last week.
“We will lose in this battle right in our home market as foreign firms have better overseas networks and products from their key markets, such as France and Japan,” he said.
“Ben Thanh Tourist served about 7,000 outbound visitors in the first half of 2009. However, this new decision would prevent us from meeting our full-year target.”
Vo Anh Tai, director of Saigontourist Travel Service, said the decision, aimed to help tourism joint ventures cope with a decline in inbound business during the economic slump, should be rolled back when the trial period ends.
“In China, tourism joint ventures are still restricted in operating outbound services,” Tai noted.
The other side of the story is that foreign-invested firms said the permission has brought a new hope for them in diversifying their business in Vietnam, especially during the current slowdown period.
Director of APEX Vietnam Nguyen Van Tran said his company expects to provide outbound tours to key Japanese cities by the end of 2009.
“Better products with high quality service will be our strength to compete in the Japan-bound tours,” he said.
“APEX is targeting Japanese-invested firms in Vietnam which need to send staff to Japan for travel or training,” he said, adding that the new decision has brought equal competition opportunity to all travel agencies operating in the country.
George Ehrlich-Adam, General Manager of Exotissimo Travel Vietnam said: “It’s such a good decision to bring in a level playing field to everyone who can offer good quality service and good prices to clients.”
“I don’t care about competition as the market is big enough for all players,” he said.
“We will initially focus on the regional outbound markets like Thailand, Laos, Cambodia and Myanmar before reaching out further to China, Hong Kong, Singapore, Australia, Europe and the US,” he added. “Our outbound market niche would be group tour, frequent individual traveler tour and tailor-made tour.”
Vu The Binh, head of the travel department under VNAT, said joint-venture travel companies would be licensed to do outbound service within 10 days of applying.
The new decision will make it easier for these firms to tap their potential overseas markets, he said.
Domestic travel companies would not face severe competition as the joint-venture travel firms will have their own niche outbound market as part of long-term strategies, he added.
According to the new decision, VNAT will meet with relevant agencies and travel firms every six months to review their outbound operations.
“I expect 12 travel joint firms currently operating in Vietnam will seek licenses for outbound services,” Binh said, noting VNAT already granted the first license to a Japanese-Vietnamese joint venture firm last week.
“Following WTO commitments, all tour operators in Vietnam would be treated equally,” he said.
La Quoc Khanh, Deputy Director of Ho Chi Minh City’s Department of Culture, Sports and Tourism said the threat of new competition wasn’t as bad as some thought because, “among the eight joint travel firms operating in the city, some of them haven’t even been running their inbound services effectively.”
According to VNAT, foreign arrivals to Vietnam fell 18.7 percent year-onyear to 2.1 million in the first seven months this year.
However, the total number of outbound visitors has increased markedly over the same period last year, Binh said, adding the exact figure wasn’t available.
Vinh Bao
thanhnien
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