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Travel firms urge tax extension, lower rates

Update: April, 14/2012 - 08:49

HCM CITY — The HCM City Tourism Association has urged the Government to extend the deadline for tax payments and cut lending interest rates for local travel firms that have been hit hard by falling demand for tour bookings.

Nguyen Thi Khanh, vice chairwoman of the association which now represents 130 tourist companies, hotels and restaurants in the city, said the majority of its members have predicted their business situations would deteriorate.

This year, the domestic tourism segment would no longer be a "life buoy" for the local hospitality industry as it had been three years ago, said Khanh, blaming the trend on falling incomes and rising prices.

Many tourist companies also complained they had to keep the prices of their tours unchanged following contracts signed previously with counterparts in the context of increasing input costs and rising prices for petrol, transportation and meals. This would result in lower profits and even losses, they said.

The Young Generation Company's deputy director Tran The Dung said bookings for tours are falling while prices for services were seeing unexpected rises.

"Our current business situation is quite bleak as the number of booked tours for the coming April 30 and May 1 holidays is set to drop by 30 per cent over the same period last year," said Dung.

"For example, during this incoming holiday season, our company had to compensate VND90,000 (US$4.3) for each visitor to tourist attractions in the central city of Thua Thien Hue as the visiting fees were raised without any notice. These emerging costs would lower our profits."

Customers were no longer generous as before. That had forced tourist companies to slash tour prices. Thus, service price hikes were a huge challenge, he said.

Viet Nam Tourism Company (Vitours) director Cao Tri Dung said he agreed as increased transportation costs have a huge impact on local travel companies.

The number of booked tours to destinations in the central region were slumping due to skyrocketing air fares, he said.

Vice chairwoman Khanh said some small travel companies had to shut down their business to avoid further losses.

"Only large tourist companies with sufficient financial capacity and strong brands could survive in the such a gloomy situation," she said. "However, most travel companies in the city were small or medium sized and therefore the general situation is not so bright," Khanh said. —VNS

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