Hotel price increases threaten Vietnamese hospitality

Hotel prices in Vietnam’s major cities have increased by 35-50 percent this year as demand far outweighs supply. Tour agents are finding it increasingly difficult to accommodate their customers. 
In the first quarter of the year, the number of foreign travelers to the country increased nearly 14 percent over the same period last year, according to Pham Tu, deputy head of the Vietnam Tourism Administration.

Vietnam’s 42,000 hotel rooms have only been able to meet 70 to 80 percent of this demand, he said.

Many hotels have taken advantage of this fact and raised room costs considerably.

Le Hoang Yen, head of the Ben Thanh Tourist’s Center for Incentive, Tours and Events (CITE), said a delegation of 300 international travelers has canceled their visit to Vietnam as room costs have been raised so substantially.

Bui Viet Thuy Tien, head of the Asian Trails tourism company, said some hotels in Hanoi have increased their room costs at over 60 percent against the prices negotiated last year.

Patrick Gaveau, a leader of the Focus Asia Company, said many foreign tourists choose Vietnam partly because the country has rather low hotel prices.

If the prices keep rising, there is a high possibility that foreigners would cease to travel to Vietnam so frequently, he said.

Two years ago a four-star room in Vietnam cost US$40-100, but now it costs $65-100 on average. In Thailand and India, where the tourism industry is far more developed, a similar room now costs $70-100.

Solutions

Tu suggested that tourism agents and hotels negotiate price reductions for long-term business relationships.

Agents should also attract tourists to other localities adjacent to Hanoi and Ho Chi Minh City, he said.

The country has been trying to attract more investors to build new hotels in major tourist hubs like Ho Chi Minh City, Hanoi, Hue, Danang, Phu Quoc, Quang Ninh.

Vietnam would earmark VND750 billion ($46.9 million) to develop tourism infrastructure this year and hopes to receive 4-4.4 million foreign tourists.

Last year, more than 20 million tourists traveled in Vietnam, a year-on-year rise of 6.6 percent. Foreign arrivals exceeded 3.5 million.

Source: Tuoi Tre – Translated by Tuong Nhi