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VietNamNet Bridge – Travel firms last Friday informed their foreign partners of higher domestic airfares applicable from Monday, while they are seeking ways to cope with the price hike at a time when the local tourism industry is still struggling.
Tour operators said the increases were out of the blue and it has given them little time to prepare tour plans and inform foreign partners. This has been the fourth airfare hike this year, with each flight marked up tens of thousands of dong.
Bui Viet Thuy Tien, managing director of Asian Trails Co. Ltd., sighed as she said airfares would be raised on Monday. International visitors to Vietnam on tours operated by the company often choose Hanoi-Danang or HCMC-Danang trips, and some may travel to other destinations like Phu Quoc and Nha Trang.
Similar to previous airfare increases, airlines informed tour operators just a few days before the price hike, so travel firms have to suffer losses on tours already sold to their partners.
“As each flight marks up VND55,000, we incur a loss of VND110,000 per round trip. With this price increase, our company must cover losses for 2,200 customers who already booked tours, which total around VND242 million, not including those buying more tickets to other destinations,” she said.
Tien was not happy with the sudden airfare hike. Foreign partners also complained because they had to cut profits to make up for the price increase.
A local company like Asian Trails, if after air tickets with the old prices, must advance a large sum of money to carriers to obtain tickets before new prices are applicable. “This is impossible because we don’t have this huge sum, so we have to suffer the losses,” she said.
Similar to Asian Trails, Indochina Services Travel Group last Friday updated their foreign partners on new domestic airfares.
In addition to an airfare increase, many passenger transport firms, especially those operating in the central region, have also announced a price hike of 4-6%, effective this month. Boat service fees in Ha Long Bay have also been raised, giving the travel company a headache.
“It is fortunate that some foreign customers have not bought complete tour packages with domestic airfares, but as for tours including all services, it is a headache. We often sell tours one year in advance, but now all services from air, road to boat travel mark up, which can only mean losses for us,” said Phuong Dung, director of Indochina Services Travel Group.
Some domestic tour operators in HCMC said that although airfares are increased, they will not raise tour prices as the purchasing power is weak now.
Some said they will further cut profits to make up for higher airfares, while others said they will find other ways, such as selecting tickets with slight price increases.
Pham Duc Hoa, deputy manager of the Domestic Travel Department of Saigontourist, said his company decided not to raise tour prices but focus on low-price tours to attract tourists.
“Prices of all tickets are increased, but some mark up lower than the others. For example, a two-way HCMC-Phu Quoc ticket is priced at VND3 million, but there are lower prices for the same flight with stricter requirements for departure and return dates and higher penalties for ticket cancellation, but we will try to guarantee the number of passengers to offer customers the best prices,” he said.
According to some travel firms in HCMC, the low-cost airfares for online bookings of Vietnam Airlines and VietJetAir attracted many customers.
The more airfares pick up, the more customers join such promotion programs. Tourists only need to spend money on hotels, transport and entrance fees, but travel firms suffer a cut in revenue.
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