Tourism suffers from price storm and stronger foreign currencies

It is not the right time for Vietnamese travellers to take domestic tours because the tours have become expensive due to the price storm. They also should not fly to Europe because the VND/EUR exchange rate has soared to the record high of VND25,000/EUR1.
Tour fees fluctuate due to exchange rate fluctuations

Deputy Director of Carnival Travel Firm Tran Thuy Dung said that though it is now the high season of travelling to Europe, with a lot of festivals taking place in spring in European countries, the number of clients booking tours to Europe is low. Clients are considering thoroughly whether to travel to Europe as tour fees are set in EUR instead of the dollar, while the EUR is increasing sharply in value. The EUR price was only VND23,600/EUR1 at the beginning of the year, but it has risen to VND24,800/EUR1.

Travellers are now choosing the US as a destination. Hoan My Travel Firm said that there is no more room on tours to the US departing in April, though the company has increased the capacity by 100%. The firm previously organised two tours a month only, while the number of tours has increased to four since March 2008.

The company has found that 85% of travellers booking tours to the US combine travelling and visiting relatives. The travellers will stay in the US with their relatives for one or two months more after the travelling time.

Ngoc, a client who booked a tour to the US at Hoan My, said that it is now the right time to visit the US. She and her family will have seven days touring the US and six weeks to visit their relatives living in California.

Hoan My’s tour to the west of the US now costs $2,250 and the one to the east $2,500.

Ngoc said that it is not too costly to go to the US now. She has to pay VND39.5mil per person only to go to the east (VND15,800/US$1) instead of VND40.6mil if she had travelled last year, when one dollar was converted to VND16,250/US$1.

Tour fees higher, people abstain from travelling

The time from April to July is the high tourism season, when companies organise summer tours for their staffs.

However, travel firms complain that it is now very difficult to persuade leaders of companies to book tours for their staffs. Businesses now have to struggle with a sea of difficulties, higher production costs and lower profit. Therefore, many of them plan to cut summer tours.

An official from Saigontourist said that the tourism plans were agreed upon between Saigontourist and its partners in February 2008. However, some of the partners have cancelled the plans.

The official said that as transportation fees have increased due to higher fuel prices, tour fees are expected to increase by 20% over the April 30-May1 holiday compared to last year.

Meanwhile, inbound tourism service providers complain that they cannot persuade foreign partners to pay higher tour fees.

Bui Viet Thuy Tien, Director of Asian Trails, said that foreign clients have refused to accept higher tour fees, though Tien explained that it was because of unavoidable reasons. Meanwhile, hotel room rates have also increased by 20% at least.