Foreign rep offices vanish in tourism slump

Many representative offices of foreign tourism companies in Ho Chi Minh City have downed shutters over the past year because of declining arrivals.
As of September last year, there were 24 tourism representative offices in operation, according to the HCMC Department of Culture, Sports and Tourism.
Most of them were companies from Vietnam’s key tourism markets including South Korea, the US, Japan, France, Australia and Taiwan. Their main task was to work with local partners and bring foreign tourists from their countries into Vietnam, and sometimes, vice versa.
But with the global economic slump taking its toll on the local tourism industry, the number of representative offices has decreased gradually. Last month, there were just 16 left in the city and only half of them could be contacted.
“Some companies were no longer in the business while others kept changing their addresses,” an official from the tourism department said.
Overall arrivals in the first 11 months were recorded at 3.4 million, down 12.3 percent from the same period last year, according to the Vietnam National Tourism Administration. There were sharp declines in many markets, with South Korea down 21.4 percent, China 19.4 percent and Japan 8.9 percent.
Foreign travel firms said the sharp fall in tourist arrivals has hurt their business. Moreover, many of their local partners tried to fight the downturn by looking for tourists on their own, weakening the role of foreign representative offices in Vietnam.
Local tour operators said in tough times they couldn’t just depend on foreign partners to bring customers to them. Some even said their collaboration with representative offices so far had not led to expected results.
Legal hurdles
Apart from the economic slowdown, foreign travel companies said they found it difficult to maintain their business in Vietnam also because of delays in the implementation of the Tourism Law.
Vietnam’s Tourism Law took effect in January 2006, but it wasn’t until late 2008 that the Ministry of Culture, Sports and Tourism issued the first guidance for travel representative offices in the country.
Then it took another five months for the authorities in HCMC to be ready for granting licenses to foreign travel firms again. Over this period, some foreign firms could not have their expired licenses renewed.
As a result, they chose to dodge the law by changing addresses and phone numbers without informing the authorities. Some even moved to the offices of their local partner.
Officials said there was no legal basis for imposing penalties on the representative offices in such cases, so the only action they could take was to ask the firms to abide by Vietnamese laws.
An official from the HCMC Department of Culture, Sports and Tourism said not many representative offices have come to register their business since the department resumed licensing in June. Only three new licenses have been granted and three other renewed, the official said.