Some still unimpressed by ‘Impressive Vietnam’

Last month, 19 travel agents and 12 three-to-five-star hotels gathered at the HCMC Department of Culture, Sports and Tourism to commit to the promotion that offers 30-50% discounts on May 2008 room rates and runs until September 30.
However, the hasty way of preparing the country’s first nationwide tourism promotion program has raised many eyebrows as the program has lured only a few of the country’s hotels, major players in the promotion. Only 70 three-to-five-star hotels have joined the program’s 99 discounted tours among 10,400 tourism facilities throughout the country, including nearly 30 five-star, 90 four-star and 175 three-star hotels.
Browsing http://www.promotours.gov.vn  or http://impressivevietnam.vn  does not show many luxury hotels in Hanoi or HCMC on the discount list. Some hotels show indifference while others agree to offer a mere 10-20% discount. The preparation is unattractive to hotels. Many are wondering why such a big program was discussed only in a short time at the end of last year, making it difficult to join, as they had already planned budgets for 2009, especially those managed by international hotel management companies.
Most hotels did not wait for the VNAT promotion but foresaw the gloomy market and depending on their market segment, launched their own promotions such as offering additional services and cutting room rates. Some did not hesitate to say that the huge discounts are unrealistic.
“We have to be careful as in many markets and in all western countries you have to be careful about price fixing or a cartel. Some large international hotel companies may not wish to participate as they may have their own promotions in place,” says John Gardner, general manager of Caravelle Hotel in downtown HCMC.
Some attributed the differences between various market segments and between different management companies as hindrances to full hotel industry cooperation regarding ‘Impressive Vietnam’.
“Each and every hotel is different, just as each client is different,” says Dietmar Kielnhofer, general manager of the Sheraton Saigon Hotel & Towers, also in downtown HCMC. He added, however, that there needs to be a certain level of partnership, and to approach discussions.
“We need to plan on an element of elasticity and flexibility to our plans as this is what the operators and the market need right now,” Kielnhofer says.
Kielnhofer says he is a believer in targeted promotions designed to stimulate demand or capture a market share, but the promotion should be done in a sustainable manner.
“We do not want to offer promotions for the sake of promotions. We need to be measured and targeted and really be specific about what we are going after and what we want to achieve,” he says.
Kielnhofer says that it has taken a number of years to raise the rates and therefore supports the economic development of the country, so there needs to be careful about not going too far backwards.
“Dropping rates in an overall sense is not a truly sustainable strategy and is perhaps a little knee-jerk in terms of an attempt to tackle a demand and supply imbalance,” he says.
However, the managers of the hotels which have yet to join the promotion, say they will not be decoupled from troubled times and that they will go their own way to support the tourism industry.
“We are doing what we can to support each and every business with its own unique set of circumstances. Through this effort we are supporting tourism in Vietnam. We are flying the flag,” Kielnhofer says.
It has been more than a month since the promotion kicked off early this year, so it is too soon to say whether the national tourism promotion will produce good results.
“I think we need to be very careful as to where the marketing dollars are spent as it is very easy to spend large sums of money in markets and in media that is ineffective… Everyone will be very careful how they spend their money. Most people will be very conservative with their spending,” says Gardner of Caravelle Hotel.
Michael Issenber, chairman and chief operating officer of Accor Asia Pacific, says at an investor conference held in HCMC late last year that it seemed that Vietnam was trying to chase with other countries to woo international travelers while it was overlooking the great potential of the local tourism market.
He says lack of services has made Vietnam an unattractive destination for international travelers to repeat visits to.