5-star hotels, resorts reluctantly slash service fees

      High-class hotels should not slash service fees?
Nguyen Tri Phong in Hanoi, while booking a room at Furama Resorts in Da Nang City for the holiday at the end of March, realized that room rates had not been slashed as he expected.
Phong said that the staffs of Furama Resorts said that the room rate was $327/night, including a pick-up and drop-off at the airport.
Meanwhile, Luong Duy Khiem, Deputy Director of ANZ Travel, said that travelers in groups can book rooms at 4-star and less luxurious hotels at much cheaper rates, 1.5 times or 2 times lower than the rates applied to separate travelers.
River Side, a 4-star hotel in Da Nang city, for example, is offering $50/night, while a 3-star $35-40/night. However, these rates are applied to travel firms, much lower than the officially announced rates. If groups of travelers use more than eight rooms, the room rate would be $36-37/night (4-star hotel).
Meanwhile, 5-star hotels even do not accept slashing room rates for tourists in groups, or just slash by a little of 10%. At Furama resort, the lowest room rate is $195/night.
Explaining the big gap between the room rates at high-grade and lower-grade hotels and resorts, Khiem said that high-grade and lower-grade hotels have different subjects of clients. The main clients of high-grade hotels are businessmen and high-income earners who do not care much about room rates.
Nguyen Duc Quynh, Managing Director of Furama resort in Da Nang city, said that every hotel has its own pricing policy.
High room rates can bring high profit, low profit and many clients bring less profit because hotels have to pay high commissions. Meanwhile, it is easier to slash room rates than raise prices.
However, “the market will define the right prices. Hotels are adjusting room rates in order to attract travelers,” he said.
Quynh said that Furama has not joined ‘Impressive Vietnam’ because it believes that Furama’s room rates are now reasonable. As for travelers in groups, the room rates will still depend on different times. However, Furama is considering slashing room rates or providing free meals to groups of travelers, or even one free night if the travelers stay for many days.
Once tour fees down, travelers up
When hotels have high rates of idle rooms, turnover is low. Therefore, all hotels, both luxury and less luxury ones, need to attract clients with special offers.
The 5-star Sheraton Hotel in Hanoi, after two months of shaking hands with several travel firms, slashing room rates for travelers from Australia, South Korea, Europe and the US, has seen the number of travelers increasing significantly.
According to VNAT, the number of foreign travelers to Vietnam has decreased by 10.3% in total, but the number of travelers from the US has still risen by 40% (89,500 travelers). The number of travelers from Australia has increased by 14.4% (49,500), France 12.4% (31,200), Canada 30% (22,500).
As for separate travelers, Sheraton has offered special hotel room rates, $145/night, applied until the end of April 30 in Hanoi, and $275/night from now to March 31 in HCM City.
Many other 5-star hotels are also offering special programmes to attract MICE travelers. In the last time, a lot of MICE tours were cancelled in the context of economic difficulties.
Do Khanh Tra, Foreign Affairs Director of InterContinental Hanoi, said that the occupancy rate reached 98% last week after the hotel launched a discount program applied to travelers in groups who stay for three nights and more.
Tra said that InterContinental Hanoi has also slashed service fees for workshops and conferences with associated free services, to be applied to events confirmed prior to June 30, 2009.