Vietnam Local travel firms may lose Asian markets
04/04/07 (GMT+7)
The Republic of Korea, Taiwan and other Asian countries prove to be very fertile ground for Vietnamese travel firms to cultivate. However, domestic travel firms in Vietnam are losing the market to foreign invested and illegally operating firms.
Travelers coming to Vietnam from the Republic of Korea (ROK) and Taiwan all seem to be assisted by foreign travel firms that operate illegally, especially the travelers from the ROK, an official from the Ho Chi Minh City Tourist Department said, warning that domestic travel firms might lose some Asian markets.
90% of Japanese and Korean travelers coming to Vietnam go through joint ventures with Japanese and Korean partners. OSC joint venture alone attracts 80% of the total 500,000 Japanese tourists coming to Vietnam annually.
According to the Vietnam National Administration of Tourism (VNAT), in 2006, Vietnam received 400,000 Korean tourists, or 1/10 of the total number of foreign travelers coming to Vietnam.
Korean travel firms have put more and more pressure on Vietnamese travel firms, forcing local companies to provide Vietnam tours at low prices. Meanwhile, Japanese travel firms book air tickets and hotel rooms (hotels in Vietnam) for their Japanese clients. As a result, Vietnamese partners just provide two simple services: car hiring and tour guides. Of course, they do not earn much money from these simple services.
In fact, many Korean tourists come to Vietnam under tours sold by institutions, offices and companies, the operations of which prove to be illegal and beyond the control of Vietnamese agencies.
In Vietnam, only VTB joint venture (headquarters in Tan Binh district in HCM City) officially registered for operation in 1994 and it now serves 20,000 clients a year. In addition, there are three representative offices of joint ventures of Korean and Vietnamese partners, namely Best Munhawa Travel Service, TSK Hanoori, and We US.
As Korean partners in the joint ventures have penetrated Vietnam’s market and understand the market, they try to force domestic travel firms to sell tours at the lowest possible prices. The Korean joint ventures can control the number of Korean clients coming to Vietnam.
In Japan, big service and tourism groups like JTB, which owns a wide network of selling tours and air tickets, attracts nearly all Japanese clients. There is a noteworthy thing that the groups sell tours at very low prices.
In Vietnam, many big travel firms once established divisions in charge of Japanese and Korean markets, but they have disbanded the divisions. Currently, 13 Vietnamese travel firms still receive Korean clients, but the number of Korean clients remains modest. Two of the 13 firms reported that the highest number of Korean travelers they had received in a year was 2,000. The same situation can be seen with the Japanese market.
The biggest problem for domestic travel firms when receiving Korean travelers is the lack of tour guides. There are 4,000 operational travel firms, while there are only 40 licenced tour guides for Korean travelers, which means that every tour guide has to deal with 10,000 Korean travelers a year.
The fee for hiring Korean-speaking tour guides has been escalating. A tour guide speaking English can be hired for $15-20 a day, one speaking Japanese for $25-30 a day, while one speaking Korean for $35-50 a day, which puts a heavier burden on domestic travel firms Vietnam.
(Source: Tien phong)
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