Hotels break promises to slash room rates

The Vietnam National Administration of Tourism (VNAT) has requested 3-5 star hotels to respect commitments on slashing room rates it made under the ‘Impressive Vietnam’ programme which aims to attract more tourists to Vietnam.
VNAT said that it has received a lot of complaints about hotels spontaneously raising hotel room rates and breaking contracts signed previously with travel firms, both foreign and domestic, thus badly affecting the prestige of Vietnam’s tourism.
A number of travel firms in HCM City, through the Vietnam Tourism Association, have requested intervention to force hotels to stabilize room rates. The firms said that hotels are again planning to raise hotel room rates in the year-end high season.
Meanwhile, industry insiders have said it is difficult to request hotels to slash room rates at this moment, for several reasons.
First of all, hotel room rates will be valid until the end of 2009 only, and it is unclear if this will be extended beyond the New Year.
Secondly tours on offer for 2010, travel firms have been available since August and September. It is, they claim, to stick with old prices while the prices of all other goods have been increasing.
Third, VNAT forecasts a significant increase in the number of international tourists to Vietnam.
“Hotels made commitments to slash hotel room rates, but they still can raise room rates by saying there is now a shortage of rooms. We can’t do little to intervene,” said Nguyen Cong Hoan, deputy director of Hanoi Redtours.
The programme to attract more tourists in Vietnam is a direct result of a drop in the number of tourists during the economic downturn. The Government approved a 50 percent VAT reduction and a corporate income tax payment delay for travel firms. It allowed all 4-star and higher hotels to organize entertainment activities until two am and waived visas for travelers on promotion tours.
It has been argued that instead of ordering hotels to slash hotel room rates, it would be better to extend the duration of the VAT reduction for travel businesses, which might allow hotels and transport service providers to slash their fee. Once service fee decrease, travel firms will also be able to slash tour fees.