Tourism collision course
When the general manager of a five-star hotel tales the forum to speak about activities that his hotel has done to upgrade services to lure guests, a tour operator among the audiences whispers to his peers: "He doesn't need to do anything. What he only needs is to bury his head in a pillow for a good sleep."
The tour operator's comments carry sarcasm, as he shows frustration over the easy job for hoteliers due to the shortage of rooms, and the boiling water travel agencies are in now in securing sufficient accommodations for their guests. After the sweet marriage between hoteliers and tour operators now come the period of bitter relationship, although the ties are inseparable.
Back in 2003, when the epidemic of Severe Acute Respiratory Syndrome drove away international travelers, hoteliers and tour operators closely coordinated efforts to woo back visitors to ride out the tough times.
In the past few years, however, these brothers in the tourism family - as the relationship is referred to by many in the circle - have no longer seen each other even as brethrens due to the conflict of interests; They cannot have a common voice, at a time the industry is facing a critical shortage of hotel rooms for visitors.
Problem for Industry
Criticisms, like the above anecdote view meeting of the Ho Chi Minh city tourism industry late last week, are now widespread. Tour operators are sending out more outcries over the old problem of shortage of hotel rooms at every possible chance, like in review meetings or tourism conferences since 2005. Several years have elapsed but HCMC cannot resolve the trouble.
The city now does not have enough rooms, so tour operators have encountered many difficulties in arranging rooms for their guests. In many occasions, travel firms say they incur losses when hotels lift up room rates while they have to keep tour prices unchanged to maintain good relations with overseas buyers.
The severe shortage of rooms is problematic not only to travel firms but alto to tourism officials, who fear that the problem will render bad impacts on the development of the sector.
"A company serving Australian tourists has recently canceled trips for 50 visitors per day due to the problem. It is the bad thing for the city's tourism," voices La Quoc Khanh, deputy head of the city's tourism department.
The head of sales and marketing at a four-star hotel in HCMC says that the average room rate at her hotel has doubled year-on-year, increasing from US$57 a room per night in 2006 to US$120 in 2007. The price is the record high. However, marketing executives like her have also feel stressed.
Every week, some of the hotels in the city will keep each other informed of the selling prices. Thus, if her room prices are lower than the rates at others of the same quality, she will face serious problem with the hotel's owner, says the marketing director, who does not want to be named.
"We are facing with the common selling prices pressure. We cannot sell the room at the price lower than other same hotels," she says.
But the pressure is also laid upon top executives of hotels
General director of the five-star Majestic Hotel Tao Van Nghe says he himself also gets stressed with the high price. More money to come in, but he has to put himself in a constant race to add services and value to the hotel to meet the guests' expectations in line with their higher spending.
"I know that l cannot sell the product at a price worth more than its proper value forever because the customers will turn their back in the future," he comments.
Around three or four years ago, the room rate of a five-star hotel room was under US$100, lower than the average price of the same standard hotels in the region. The price has been maintained for some years.
However, as international arrivals increased again after SARS, together with the lack of hotel rooms, hoteliers have tried their best to catch up with the rate in the region, but the race among the city's hotels never stops ever since.
"In HCMC, we are selling rooms at the peak prices," says John Gardner, general manager of the Caravelle Hotel.
It is the peak prices that are making HCMC a less attractive destination than other destinations in the region. When considering prices, ones not only look at the quality of an accommodation but also the quality of the destination as a whole. Thus, it is very difficult for the tourism industry to get the consumers' acceptance when they have to pay the price for tours to HCMC as high as tours to more popular destinations like Hong Kong or Singapore.
The causes
The city's tourism department says that by 2010, the city will need more than 14,500 standard rooms including 7,000 rooms of three- to five-star ratings. In 2020, the city will face a shortfall of around 20,000 rooms.
In an effort to resolve the situation, the city's government last year asked the tourism department and other related agencies to make a list of locations for developing hotels to deal with the severe shortage of quality rooms prompted by growing international tourist arrivals.
And in late November, HCMC chairman Le Hoang Quan selected the first four locations for developing new hotels and a resort, and assigned some local firms to develop these locations into premium accommodation facilities.
In HCMC, it takes several long years to complete construction on a hotel project due to problems with site clearance and other administrative procedures, while in other provinces, the development process is normally halved to around two years. As such, many projects cannot be put to use as scheduled, and the situation can only change if the city government takes stronger measures and is more resolute in the action.
The project to upgrade the Rex Hotel, for instance, has faced prolonged delay due to difficulties in site clearance, as some households were still staying in part of the project's area. Similar problems are also found in other projects like the one to develop a complex on the premises of the current Kim Do Hotel, or the project to expand the Majestic Hotel.
Says Tao Van Nghe from the Majestic Hotel: "We cannot make the space ready as scheduled. The problem usually makes developers stressed and frustrated."
The lack of a suitable vision for development is another problem.
There are over 25,700 hotel rooms in the city, but just a quarter of them are three- to five-star rooms suitable for international visitors. This situation has persisted for years, but local tourism authorities have not conducted any surveys or assessment of the situation as inputs for building a strategy on developing hotels in the city.
"We are facing a critical shortage of hotel rooms and other basic infrastructure facilities for tourism due to the lack of a transparent policy and a strategy for the sector in the past years," says Dong Thi Kim Vui, director of the city's tourism department.
The contradictory comments of the five-star hotel's general manager and the tour operator at the 2007 review meeting of the HCMC tourism industry last week as mentioned earlier, therefore, will remain the regular war of words in the coming years.
Their scopes of business, by their very nature, are meant to thrive together. They are not set on directions for the collision course, but the current situation leads all players in the tourism industry to the conflicting claims. Says the general manager of the five-star hotel: "Maybe in the next few years when the (hotel) market becomes saturated, hoteliers will need more support from tour operators."
Back in 2003, when the epidemic of Severe Acute Respiratory Syndrome drove away international travelers, hoteliers and tour operators closely coordinated efforts to woo back visitors to ride out the tough times.
In the past few years, however, these brothers in the tourism family - as the relationship is referred to by many in the circle - have no longer seen each other even as brethrens due to the conflict of interests; They cannot have a common voice, at a time the industry is facing a critical shortage of hotel rooms for visitors.
Problem for Industry
Criticisms, like the above anecdote view meeting of the Ho Chi Minh city tourism industry late last week, are now widespread. Tour operators are sending out more outcries over the old problem of shortage of hotel rooms at every possible chance, like in review meetings or tourism conferences since 2005. Several years have elapsed but HCMC cannot resolve the trouble.
The city now does not have enough rooms, so tour operators have encountered many difficulties in arranging rooms for their guests. In many occasions, travel firms say they incur losses when hotels lift up room rates while they have to keep tour prices unchanged to maintain good relations with overseas buyers.
The severe shortage of rooms is problematic not only to travel firms but alto to tourism officials, who fear that the problem will render bad impacts on the development of the sector.
"A company serving Australian tourists has recently canceled trips for 50 visitors per day due to the problem. It is the bad thing for the city's tourism," voices La Quoc Khanh, deputy head of the city's tourism department.
The head of sales and marketing at a four-star hotel in HCMC says that the average room rate at her hotel has doubled year-on-year, increasing from US$57 a room per night in 2006 to US$120 in 2007. The price is the record high. However, marketing executives like her have also feel stressed.
Every week, some of the hotels in the city will keep each other informed of the selling prices. Thus, if her room prices are lower than the rates at others of the same quality, she will face serious problem with the hotel's owner, says the marketing director, who does not want to be named.
"We are facing with the common selling prices pressure. We cannot sell the room at the price lower than other same hotels," she says.
But the pressure is also laid upon top executives of hotels
General director of the five-star Majestic Hotel Tao Van Nghe says he himself also gets stressed with the high price. More money to come in, but he has to put himself in a constant race to add services and value to the hotel to meet the guests' expectations in line with their higher spending.
"I know that l cannot sell the product at a price worth more than its proper value forever because the customers will turn their back in the future," he comments.
Around three or four years ago, the room rate of a five-star hotel room was under US$100, lower than the average price of the same standard hotels in the region. The price has been maintained for some years.
However, as international arrivals increased again after SARS, together with the lack of hotel rooms, hoteliers have tried their best to catch up with the rate in the region, but the race among the city's hotels never stops ever since.
"In HCMC, we are selling rooms at the peak prices," says John Gardner, general manager of the Caravelle Hotel.
It is the peak prices that are making HCMC a less attractive destination than other destinations in the region. When considering prices, ones not only look at the quality of an accommodation but also the quality of the destination as a whole. Thus, it is very difficult for the tourism industry to get the consumers' acceptance when they have to pay the price for tours to HCMC as high as tours to more popular destinations like Hong Kong or Singapore.
The causes
The city's tourism department says that by 2010, the city will need more than 14,500 standard rooms including 7,000 rooms of three- to five-star ratings. In 2020, the city will face a shortfall of around 20,000 rooms.
In an effort to resolve the situation, the city's government last year asked the tourism department and other related agencies to make a list of locations for developing hotels to deal with the severe shortage of quality rooms prompted by growing international tourist arrivals.
And in late November, HCMC chairman Le Hoang Quan selected the first four locations for developing new hotels and a resort, and assigned some local firms to develop these locations into premium accommodation facilities.
In HCMC, it takes several long years to complete construction on a hotel project due to problems with site clearance and other administrative procedures, while in other provinces, the development process is normally halved to around two years. As such, many projects cannot be put to use as scheduled, and the situation can only change if the city government takes stronger measures and is more resolute in the action.
The project to upgrade the Rex Hotel, for instance, has faced prolonged delay due to difficulties in site clearance, as some households were still staying in part of the project's area. Similar problems are also found in other projects like the one to develop a complex on the premises of the current Kim Do Hotel, or the project to expand the Majestic Hotel.
Says Tao Van Nghe from the Majestic Hotel: "We cannot make the space ready as scheduled. The problem usually makes developers stressed and frustrated."
The lack of a suitable vision for development is another problem.
There are over 25,700 hotel rooms in the city, but just a quarter of them are three- to five-star rooms suitable for international visitors. This situation has persisted for years, but local tourism authorities have not conducted any surveys or assessment of the situation as inputs for building a strategy on developing hotels in the city.
"We are facing a critical shortage of hotel rooms and other basic infrastructure facilities for tourism due to the lack of a transparent policy and a strategy for the sector in the past years," says Dong Thi Kim Vui, director of the city's tourism department.
The contradictory comments of the five-star hotel's general manager and the tour operator at the 2007 review meeting of the HCMC tourism industry last week as mentioned earlier, therefore, will remain the regular war of words in the coming years.
Their scopes of business, by their very nature, are meant to thrive together. They are not set on directions for the collision course, but the current situation leads all players in the tourism industry to the conflicting claims. Says the general manager of the five-star hotel: "Maybe in the next few years when the (hotel) market becomes saturated, hoteliers will need more support from tour operators."
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