VietNamNet Bridge – Many travel firms are discontented with the unhealthy competition in the tourism industry as multiple firms are racing to lure customers by offering low-priced tours but failing to ensure the service quality accordingly.

Local tourists are seen at a resort in the south-central coastal province of Khanh Hoa.

Head of the domestic tourism division of a major travel firm in HCMC reported industry players were now ready to lower prices below the cost to win contracts catering to big groups of customers.

A tour from HCMC to Nha Trang lasting four days with stay at a low-cost hotel should normally be priced at VND2 million a person to ensure a profit margin of 10%, he said.

However, when bidding, his company accepted a lower profit, at 5%, to revise the tour price down to VND1.9 million a person, and even at no profit at VND1.8 million only to retain close customers. Despite its effort, his firm failed to win the deal as the tour price offered by other rivals are much lower than the break-even price of VND1.8 million.

“It is impossible to maintain the service quality for customers with such low prices. Our company as a big one was forced to give up the deal while others were aggressive to win the contracts at any prices. We failed to win certain deals despite offering break-even prices,” he stressed.

Normally, corporate customers with numbers of huge worker pay much attention to tour prices and they easily change tour operators because of a small discount. This is the business segment in which unhealthy market players are willing to undercut others by offering extremely low prices to win over customers.

It is unavoidable that low-priced tours cannot guarantee good services. A slew of customers have complained that their sightseeing programs had been shortened as tour providers wanted to cut costs.

Even worse, fewer meals are provided for visitors. Visitors in certain cases also have to purchase entrance tickets by themselves at some tourist sites even though they chose packaged tours.

Nguyen Thi Khanh, vice chairwoman of the HCMC Tourism Association, said her association was collecting information from related enterprises to make reports to relevant authorities to deal with the problem.

Source: SGT