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Tao Van Nghe, chairman of the 42-member Ho Chi Minh City Hotel Association and general director of the five-star Majestic Hotel, said his and many other hotels do not plan to hike rates.

A few may put up their prices, but only by 5-7 percent and not tens of percentage points as in the past.

Le Hoang Yen, chairwoman of Vina Media Corporation, said: “We used to find it hard to convince hotels to reduce tariffs, but some say now they will lower room rates next year.”

Vo Anh Tai, director of Saigontourist Company, said some hotels agreed to cut room rates after reviewing 2009 contracts with his firm.

Since the tourism industry is now in a tight spot, Tai said service providers should cooperate to lower prices.

Airlines flying to Vietnam should reconsider fares since global oil prices have plummeted, he said.

“I mentioned this to a Vietnam Airlines deputy general director and he agreed with me,” Tai said.

Bui Viet Thuy Tien, director of Asian Trails Company, said her firm has convinced four- and five-star hotels in HCMC and Hanoi to cut their 2009 rates by 5-10 percent but those in the central region have yet to announce their plans.

The tariff cut helped send tour prices down by 10 percent, she said, adding her company is now trying to persuade transport companies to follow suit so that tour prices could become even cheaper.

The number of tour bookings for winter 2008-spring 2009 has plunged by 25-40 percent, she said.

Her European partners expect the tourism industry to bounce back by 2010, she said.

In HCMC, five-star rooms cost more than VND2.6 million per night on average, or 35 percent up from the same period last year.

Four-star rooms cost VND1.84 million, or 68 percent up, and three-star rooms around VND910,000 (US$53), or 47 percent up.

Nghe said hotels could earn profits if occupancy levels top 65 percent.

Dietmar Kielnhofer, general manager of the Sheraton Hotel Saigon, expected the hotel industry to start slowly next year, but pick up by the third quarter when the economic situation stabilizes.

John Gardner, general manager of the Caravelle Hotel, said his hotel is preparing to cut costs next year since business is likely to be down, but he does not expect the situation to be disastrous.

Tourism hurt by global economy, Thai airport blockade

The number of foreign visitors to Vietnam dropped 22 percent in November from a year earlier, hobbled by a global economy slipping into recession and the temporary closure of Thailand’s main international airport.

Arrivals fell to 279,904, the sixth month of decline from a year earlier, according to the General Statistics Office. The office was unable to provide information on the last time visitors fell more. Overall visitor growth for the year has slowed to 1 percent.

Reduced revenue from overseas visitors may hurt industries from construction to hotels to transportation and make it more difficult for the country to achieve its growth targets. The government forecasts the slowest economic expansion this year since 1999.

“A big part of development here has been resorts and hotels, and with tourism coming down, people don’t see as much urgency to invest, which means construction also comes down,” said Ayumi Konishi, Vietnam country director for the Asian Development Bank.

“We can’t say that a drop in tourism by itself is going to jeopardize the economy or push the currency down, but it is part of a broader trend.

“Vietnam has to be prepared for lower economic growth.”

The government is targeting 6.7 percent growth this year and 6.5 percent in 2009. The economy expanded 8.5 percent last year, the quickest in more than a decade.

“The most difficult situation is for the resorts, because they don’t get the convention business,” said Stephen O’Grady, managing director of Vinacapital Hospitality in HCMC.

“The situation in Thailand is also having an adverse effect. We saw bookings at hotels in Hanoi canceled the last few days because people couldn’t get into the country.”

Bangkok’s Suvarnabhumi Airport restarted limited flights Wednesday after antigovernment protesters ended an eight-day blockade.

Air France-KLM Group and Deutsche Lufthansa AG have been operating flights to Vietnam via the Thai capital, while carriers including Vietnam Airlines Corp. and Thai Airways International Plc. also have routes between Bangkok and Vietnamese cities.

“Vietnam doesn’t have that many direct flights coming in,” O’Grady said.

“We still rely on third ports, and Bangkok is a significant player there.”

Visits by ethnic Vietnamese living overseas plunged 39 percent from October and 64 percent from November 2007, according to figures provided by the General Statistics Office.

“Family visits are discretionary spending,” said Louis Nguyen, a Vietnamese-American who is chief executive of Saigon Asset Management in HCMC. “Everybody is more careful about their cash now.”

Saigontourist’s Tai said tourism agencies can boost demand through price cuts.

In the last two months, Saigontourist continued to welcome European tourists regularly after it had informed them about tour discounts in time, he pointed out.

Source: Agencies