Travel firms ready to raise tour fees following petroleum price increases

The petroleum price increase, which coincides with the high inbound and domestic travel season, has made travel firms worried stiff.
In the last few days, since the decision on raising the petrol price to 2900 dong per liter was released on February 24, travel firms have been holding many internal meetings to consider raising tour fees. The petrol price increase has raised the expenses of travel firms, especially the expenses for domestic tours which use coaches to carry tourists.
Now in Vietnam it is the first month of the new lunar year of the Cat - the “festival season”, when travelers like booking short tours to different places in the country. The petroleum price increase has made the expenses for tourist transportation increase by at least five percent for each tour. Besides, the expenses on meals and accommodation have also increased in the “price storm” caused by the petroleum price increase.
Travel firms say that the biggest problem for them now is that they still cannot foresee price changes in the tourism service market in order to adjust the tour fees. Meanwhile, they cannot adjust tour fees every day, because the regular changes will affect the feelings of tourists.
Luu Duc Ke, Director of Hanoitourist, said on February 26 that the team of coaches of the company asked for a five percent fee increase. Ke said that the firm cannot delay the increases any longer because the transportation expenses have increased too sharply. The partners of Hanoitourist, including hotels, have also warned that they will increase the hotel room rates and other services, starting from March 1. However, it is still unclear how high the hotel room rates will be.
“I’m afraid that the tour fees will increase by 10-15 percent, because not only the petrol price, but the electricity price will also increase, thus bringing about the price increases of other goods and services. Even the salary for laborers will also increase,” Ke said.
He went on to say that Hanoitourist is thoroughly considering increasing tour fees and plans to set up the tour fees at reasonable levels in order to avoid shocks to tourists. “We are going to negotiate with partners in order to share difficulties,” he said.
Regarding the inbound tours, Ke said, Hanoitourist will try to negotiate with clients on the tour fee adjustment. However, he admitted that it will be very difficult to adjust the tour fees, because clients booked tours a long time ago after the travel firm committed not to raise tour fees.
To Phuong Anh, the director of a construction company in Hanoi, said that one week ago, she decided to book a domestic tour for the company’s staff. Anh read on the official website of a travel firm that the tour fee for the Hanoi – Yen Tu – Ha Long – Cua Ong was 585,000 dong. However, on the next day, when Anh went to the travel firm to book tour, she was told that the fee has increased to 650,000 dong, because the petrol price has increased, thus making the expenses higher.
Meanwhile, some companies that provide tourism services have still kept the service fees unchanged. The hotels in Nam Cuong Group’s chain, for example, still keep the hotel room rates unchanged. Representative of the group said that the price increases, if any, will be decided after March 1.
Dinh Huong Thao from Tam Nhin A Chau travel firm also has affirmed that the tour fee remains unchanged because the partners of the firm have not announced any price increases. “If the 2008’s scenario repeats, the tour fee increases will only take place one month after the petroleum price increase. Meanwhile, we are still keeping a close watch over the market in order to make reasonable adjustments,” Thao said.
Big travel firms such as Vietravel or Saigontourist still have not taken any actions. Nguyen Minh Man, Head of the Communication Division of Vietravel said that Vietravel still has not raised the tour fee because it fears the tour fee increases will affect the feelings of tourists in the high tourism season. Man said that the petrol price increases have badly affected the travel firm’s operation, but the difficulties are not too big for Vietravel, because it has a coach team of its own and partners have promised to share risks.
However, Man has anticipated that the domestic and outbound tours will see the tour fees increasing in accordance with the airfare, petroleum and accommodation fee increases. Meanwhile, the inbound tour fees will not increase in 2011 as per commitments with clients.