A foreign tourist visits the northern resort town of Sa PaThe recent weakening of the dong against the dollar has not enabled travel agencies to attract more foreign visitors, instead, higher costs of outbound tours have actually reduced their profit margins.

On the so-called black market, the dong weakened to as much as 20,940 per dollar on Thursday, compared to 20,330 the same day last week. The dong was devalued in August by 2 percent.

Nguyen Cong Hoan, deputy director of travel agent Hanoi Redtour, said: “The dollar hike does not affect decisions on booking tours by foreign visitors a lot, so it does not help increase the number of foreign customers. Foreign visitors often book tours six to 12 months in advance.”

Moreover, the dong devaluation has not sharply cut prices of tours to Vietnam as airfares and accommodation fees, which account for the biggest part of a tour, are paid in dollars, he said. “All four and five-star hotels require dollar payments, while airfares are also paid in dollars. Even some restaurants and souvenir shops require payments in dollar.”

Nguyen Van My, director of travel agent Lua Viet, said neither does a stronger dollar against the dong encourage foreign visitors to increase their spending in Vietnam because the country’s tourism products are still “poor.”

Besides, the prices of goods and services have risen, so they are not buying more products or services, My said.

Hoan said Vietnam has not had many special tourism products for visitors, and what they did have were priced too high. The marketing was also too weak to attract customers, he said.

“Many visitors only come to know of the products after tourist guides introduce them. But their poor quality and high prices have left a bad impression on visitors,” he said.

Outbound hit

While the dollar hike has not helped increase the number of foreign arrivals to Vietnam, it has strongly affected decisions on outbound tours by customers.

Hoan said while the dollar had increased against the dong, it had dipped against other foreign currencies, so input costs for outbound tours have increased.

“We have to accept smaller profits,” he said.

Duong Mai Lan, head of the market research and development division for travel agency Vietravel, said the dong devaluation has made the increase in the price of outbound tours unavoidable. “Currently, the devaluation’s impact is not very big, but it will make travel agents’ business become more difficult in the coming months,” she said.

Nguyen Thi Tuyet Mai, external relations manager of Fiditour, said low-cost short tours are not affected much by the hike, but her firm finds it hard not to increase prices of more expensive outbound tours.

Some travel agencies have decided to focus on offering domestic tours. Because of domestic tourism stimulus programs and a nearly 50 percent drop in airfares, some firms have offered year-end tours at very low prices.

Fiditour, for instance, has lowered its package tour prices by nearly 20 percent for tours to destinations like Hue, Da Nang and Hoi An.

Vietnam attracted 4.17 million visitors in the 10 months through October, a year-on-year increase of 39 percent, according to the Vietnam National Administration of Tourism.

Source: Thanh Nien