After hotel-building boom, Vietnam tourism falls sharply

Dec 2, 2008, 9:33 GMT

Hanoi - An abrupt decline in the number of foreign visitors to Vietnam over the past four months has nixed the country's hopes for rapid growth in the sector this year, a senior government official said Tuesday.

'We can't achieve the target we set at the beginning of the year in the context of the global economic crisis,' said Minister of Culture, Sports and Tourism Hoang Tuan Anh.

Nguyen Manh Cuong, deputy head of the National Administration of Tourism, told local media last Thursday the global economic recession was the main reason for the decline. Cuong said heavy rains and flooding this autumn, Vietnam's weak transportation infrastructure, and the low quality of guides and travel company services also played a role.

In 2007, Vietnam received more than 4 million foreign visitors, an increase of 19 per cent over 2006.

The country planned for 5 million foreign arrivals this year, a further 14 per cent increase, but by the end of November only 3.8 million had arrived.

Arrivals fell dramatically from 411,000 in April to 279,000 in November. The latter figure represents a 22 per cent decline from November 2007.

Travel companies say the number of tourists is falling even though peak season for foreign visitors in Vietnam is generally from September to March.

'Despite our best efforts in advertising and boosting tourism, the number of foreign visitors to Danang has fallen by 10 to 30 per cent,' said Ngo Quang Vinh, director of the tourism department in the central coastal province of Danang, normally a prime tourist destination.

'The number of foreign visitors has fallen about 20 per cent compared with the same period last year,' said Tran Thu Hien, a sales executive at Saigon Tourist, one of Vietnam's largest travel companies.

Hien said by November her company has usually sold out all of its tours through the end of the year, but this year many seats are still available.

Hotel room occupancy rates are also falling. Many luxury hotels reported room occupancy rates of 55 to 65 per cent, up to 15 percent lower than the rate during the same period last year.

Le Quang Sang, manager of the Liberty Hotel in Ho Chi Minh City, said occupancy rates there had dropped more than 25 per cent.

'We have never before seen a decline of foreign customers staying in our hotel at this time of year,' said Ha Le Hang, manager of the Zenith Hotel, a boutique establishment in downtown Hanoi. Hang said occupancy rates, normally about 99 per cent, were down to about 85 per cent. The hotel has cut the price of a deluxe room from 101 dollars to 77 dollars a night.

The decline in tourism comes after a year of massive expansion in Vietnam's luxury hotel industry, with several international developers announcing plans for resorts costing hundreds of millions of dollars.

A senior executive at Vietnam's largest resort casino project, the 4.2 billion dollar Ho Tram Development Strip Project in the coastal town of Vung Tau, said construction remained on schedule, but that the trend was worrying.

'No one can help but worry in a global economic crisis like this,' said Pham Quang Vinh, vice president of ACDL Ltd, the Canadian company developing the project. 'But our project is long-term, so our only worries are for the short term.'

'I think next year will be another tough year for Vietnam's tourism industry,' said tourism minister Anh. 'We will be doing well if we can keep the number of foreign visitors unchanged from this year.'