In 2023, Vietnam's tourism market is expected to grow impressively after the Covid-19 pandemic. How do you evaluate the contributions of the aviation industry to the growth of the tourism industry?
In 2023, international visitors to our country will reach 12.6 million, 3.4 times higher than in 2022, far exceeding the target of 8 million visitors. Of the total 12.6 million international visitors, visitors arriving by air will reach nearly 11 million, accounting for 86.9% of the number of international visitors to Vietnam and 3.3 times higher than the previous year. In the domestic market, the tourism industry will welcome 108 million visitors, of which the aviation industry will transport nearly 74 million passengers, an increase of 34.5% compared to 2022.
In fact, to do this, in 2023 the aviation industry maintained and developed the domestic flight network with 66 domestic routes connecting tourist centers Hanoi , Ho Chi Minh City, Da Nang with 19 other local airports with more than 600 flights per day.
Not only maintaining existing routes, but 2023 is also the year that the aviation industry will change in exploiting new routes. Can you share some information to have a clearer assessment of the aviation industry in attracting tourists?
In addition, in 2023, Vietnamese airlines will also operate a number of new routes such as: Can Tho - Van Don, Hanoi - Ca Mau, Ho Chi Minh City - Dien Bien. Traditional international routes such as China and Russia have been restored, while expanding to exploit a number of new markets in the Central Asian region such as Kazakhstan, Uzbekistan, Turkmenistan, Mongolia. Promote the exploitation of routes to the Indian and Australian markets.
The top 10 international tourist markets to Vietnam in 2023 have changed compared to before the Covid-19 pandemic. In 2019, China was Vietnam's largest international tourist market, followed by South Korea, Japan, and Taiwan; Russia, the UK, and France are also countries with high numbers of visitors to Vietnam. However, the 10 largest international tourist markets to Vietnam today include: South Korea, China, Taiwan, the United States, Japan, Thailand, Malaysia, Cambodia, Australia, and India. Thus, the exploitation of new flight routes by airlines has had a clear impact on attracting tourists.
International tourists coming to Vietnam in particular and domestic tourists by air always account for the highest proportion compared to road and sea routes. The Ministry of Transport has issued Circular No. 34/2023/TT-BGTVT amending and supplementing the price frame for passenger transport services on domestic flights. Accordingly, from March 1, 2024, the ceiling price of air tickets will increase by 50,000-250,000 VND. So how will this affect the construction of tourism tours, sir?
In 2024, if the economic and tourism situation develops positively, the increase in airfares will have little impact. On the contrary, if the economic situation continues to be difficult, the tourism industry will be significantly affected. The adjustment to increase the ceiling on airfares could be a "fatal blow" to domestic tourism. Specifically, after March 1, 2024, the average airfare in June 2024 could increase by 1.7 times compared to the same period in 2023. For example, the Hanoi - Phu Quoc route increased from 1.3 million VND to 2.2 million VND; Hanoi - Nha Trang increased from 1.1 million VND to 1.7 million VND.
The increase in ticket prices will be one of the reasons why many tourist destinations are deserted, because tourists are "price-sensitive". This is clearly shown by the "lack of customers" of Phu Quoc tourism and many domestic destinations throughout 2023 due to the increase in airfares.
This scenario could repeat itself in 2024 when airfares increase under new regulations. If people decide to reduce their travel because of high airfares, destinations will be the first to be affected, not just travel companies.
What will be the specific impact of increased airfares on the tourism industry, sir?
Currently, airfare accounts for 40 - 60% of the tour price structure, so the increase in airfare forces travel companies to adjust domestic tour prices by 10 - 20%, reducing the attractiveness of the market and affecting the image of Vietnamese tourism in attracting international visitors.
In addition, the increase in airfares has led to tourists travelling by car and not registering for tours, causing travel agencies to lose revenue. Such high airfares have made it difficult for domestic travel agencies to attract customers despite organizing many stimulus programs.
The increase in airfares is the reason for the decline in domestic tourists because many people have decided to go abroad because the price is cheaper than domestic tours. For example, a tour departing from Ho Chi Minh City to the Northeastern and Northwestern provinces for 5 days and 4 nights on January 20, 2024 costs 10.49 million VND/person; or 6 days and 5 nights costs from 11-15 million VND/person. Meanwhile, traveling to Thailand has a promotional price of 5 days and 4 nights, staying at a 4-star hotel for only 5-6 million VND/person.
In addition, the increase in airfares will affect the repositioning of the tourism market in the current recovery period. Airfares not only affect tourism businesses, but many resorts are also deserted due to the impact of airfares, so most people tend to choose budget accommodations to save costs. Thus, it can be said that the increase in airfares will have a big impact on travel agencies, thereby greatly affecting the stimulation of domestic tourism. Not to mention, international visitors will also compare Vietnam tour prices with those of other countries in the region and may not choose to travel to Vietnam.
To attract tourists, the tourism industry requires cooperation between aviation and tourism. So how do you think we should build a cooperation plan?
The Covid-19 pandemic has greatly affected tourists' ability to pay, so stimulating demand with airline promotional policies is an important factor. In the current economic context, airfares have increased in price on both domestic and international routes, which is a major disadvantage in competing with other destinations in the Southeast Asian region.
To overcome this, airlines need to cooperate with travel agencies to reduce service prices, thereby not increasing tour prices, thereby supporting the aviation industry not to have to reduce ticket prices too much. For routes without commercial flights, the aviation industry encourages travel agencies to open charter flights with preferential policies, thereby diversifying products and adding new options for tourists. This will benefit all parties.
In addition, airlines should open new routes, helping tourists have more choices of new products, saving travel time. In the opposite direction, tourism businesses build new products according to new routes, thereby becoming strategic travel units of the aviation industry.
The aviation and tourism industries should consider long-term business cooperation to avoid the situation of increasing transportation prices during peak seasons. To do this, the Government needs to participate in coordinating ticket prices so that they are not too low compared to the floor price. In fact, Thai tourism receives great support from the "conductor" - the General Department of Tourism - as the link between aviation and tourism, helping to reduce airfares and tours. They collect from the spending of tourists when traveling to Thailand. This approach should also be learned by the Vietnamese tourism industry.
As an expert in the tourism industry, do you think the government should build a mechanism to support the aviation industry financially to reduce transportation costs?
In fact, to stimulate tourism in April 2023, the Thai government is considering a subsidy policy for airlines operating flights to less popular destinations. Malaysia has called on domestic airlines to adjust or reduce airfares for the upcoming festive season to help attract tourists to Malaysia.
However, in Vietnam, the Government cannot spend such a large amount of money on the aviation industry to reduce ticket prices at certain times because it will create unfairness between the aviation and tourism industries. In my opinion, the State should extend the application period of the 2% VAT reduction until the end of 2024 and expand the groups of goods that are reduced, thereby stimulating production and economic growth, which will lead to the growth and development of service products, including aviation and tourism.
Thank you!
10:08 January 13, 2024
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