Tourism industry faces new challenges after Ministry’s decision takes effect

The country’s tourism industry has not gone back to the old normal, but worries are even greater after the Ministry of Transport’s decision on air ticket price ceiling which is effective from March 1, 2024.


This puts the tourism industry facing challenges when domestic flight ticket prices increase.

Travel agencies yesterday said that package tour prices for this Tet holiday increased from 10 percent to 20 percent because domestic airfare accounts for 50 percent to 60 percent of the package tour price structure; thus, the costs of a tour slightly increase.

Resident Hoang Thuy Vui on Cong Hoa Street of Ho Chi Minh City’s Tan Binh District said that she is finding information on tours to the Northeast and Northwest provinces. An employee of a travel agency answered her that the costs of the tour Northeast and Northwest provinces in 5 days and 4 nights will be VND 10.49 million (US$430.89) a person and VND11 million-VND15 million a person in 6 days and 5 nights. According to the woman, the domestic tour is so expensive compared to the same tours to Thailand with a promotional price of less than VND 5 million at a 4-star hotel.

Ms. Hoang Thuy Vui revealed that she is considering foreign tours, to Southeast Asian countries such as Thailand, and Singapore, or pouring more money into tours to Taiwan (China) or Korea.

Similarly, after finding tour prices from many travel agencies, Mr. Ngo Minh Toan on Nguyen Dinh Chieu Street in HCMC’s District 3 said that domestic tours are extremely expensive. He fretted that the tours would have poor quality service because the Tet holiday is peak season. He is considering a cheaper tour to Singapore - Malaysia for 4 days with a price of VND6.7 million per person and will depart the first week after New Year.

Mr. Nguyen Minh Man, Director of Communications - Marketing of TST Tourist, disclosed that high or low tour prices depend on the price of services from airlines to cars, ships, yacht services, restaurants, and destinations. He moaned that the Ministry’s decision on the air ticket ceiling will result in an increase in air tickets. If air tickets increase, it will greatly affect the cost of the tour, making the tourism industry more difficult.

Meanwhile, Ms. Tran Thi Bao Thu, Director of Marketing and Communications of Vietluxtour Travel, informed that the paradox is that currently domestic tour prices have increased significantly compared to normal days in each market. Domestic tour prices during Tet increased by 5 percent to 15 percent compared to prices at normal times, while tours to foreign countries during peak season only increased by about 5 percent. This paradox is largely due to the increase in airline tickets.

According to her, the domestic tourism industry can compete with foreign countries if prices are maintained stable whereas if prices of air tickets, costs of hotels and restaurants increase simultaneously, it will be very difficult to attract domestic as well as foreign customers.

It is forecast that the tourism industry will face difficulties in the near future as Chairman of the Board of Directors of Saigon Tourism Corporation Pham Huy Binh commented that when air ticket prices increase, tour prices will increase accordingly greatly affecting the cost of package tour prices.

Mr. Luong Hoai Nam, General Director of Bamboo Airways, analyzed that the country's aviation industry is going through a more difficult period than the Covid-19 pandemic. Airlines are facing pressure from business losses and pressure from leasing companies to withdraw planes if they do not pay rent on time. Currently, leasing companies are also ready to withdraw aircraft from Vietnam and bring them to other potential markets such as Europe, and America. Therefore, there needs to be a good solution to ensure consumer benefits, as well as help aviation businesses survive in the economic crisis.

Meanwhile, Mr. Tran Du Lich, a member of the National Monetary Policy Advisory Council, said that raising the ticket price ceiling is intended to create ample room for airlines to be flexible in each time and ticket sales. However, he emphasized that the government needs to link the price policy of domestic airlines with the tourism industry; thereby, having reasonable prices in the tour structure.

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