Hanoi tourism sector struggles with rising airfares

The steady rise in airfares could undermine Hanoi's appeal to both domestic and international visitors ahead of the summer holiday season.

Travelers in Ha Long Bay. Photo: Pham Hung/The Hanoi Times

Summer holidays in Vietnam are often kicked off by the national holidays, which fall in the week of  April 30 and  May 1. This year, Vietnamese will have five days to enjoy the holidays from  April 27 to  May 1.

On Vietnam Airlines’ website, ticket prices for an economy passenger flying from Hanoi to Phu Quoc on  April 28 range from VND4.4 million ($173) to VND7.2 million ($283). Meanwhile, fares from Ho Chi Minh City to Hanoi on the same day range from more than VND1.7 million ($67) to nearly VND4.9 million ($192.6).

Similarly, it costs almost VND1.8-4.5 million ($70.7-177) per passenger to fly from Hanoi to Phu Quoc on budget carrier VietJet Air at the end of April. Fares for the Cantho-Hanoi route range from VND890,000-4.5 million ($35-177).

According to Do Dinh Cuong, Vice Chairman of the Hanoi Tourism Association, the increase in ticket prices is due to a shortage of aircraft, which harms the transport capacity of domestic airlines. The increase in airfares adds 30-60% to the total cost of a trip.

Nguyen Tien Dat, General Director of Hanoi-based tour operator AZA Travel, said people will tend to travel abroad if they find it cheaper and more reasonable than at home.

Domestic tours from Hanoi to other places, such as Phu Quoc, Nha Trang, and Da Lat, cost Vietnamese up to VND10 million ($393). Meanwhile, for a similar budget, they can fly to South Korea, Thailand, China and Taiwan (China) to enjoy their holidays.

Vu The Binh, chairman of the Vietnam Tourism Association, said market regulators and aviation and tourism companies must discuss solutions to find a balance that benefits both airlines and tour operators.

There needs to be a conductor to manage and oversee the market and provide the right incentives to ensure that both sides act in the common interest," he said.

Phung Quang Thang, Vice-Chairman of the Vietnam Association of Travel Agents (VISTA), said domestic purchasing power was still strong, but they had to choose affordable tours amid rising airfares.

He said travel companies need to be good at forecasting and redirecting their customers, as well as addressing the challenges and opportunities presented by current market conditions.

Visitors at Viet Phu Thanh Chuong (Thanh Chuong Residence) in Soc Son district. Photo: Hoai Nam/The Hanoi Times

"The number of bookings I've received for the April-May holidays is up 30% from last year," Dao Trong Tan, founder and CEO of Tavi Travel, told The Hanoi Times. "Overall, I think the total market has increased by a quarter compared to last year."

It's a trend that Vietnamese are now looking to travel abroad because it's often affordable and reasonable, he said.

As the holiday lasts five days, people will prefer low-cost tours, said General Director of Wondertour Le Cong Nang.

"Road trips to the coastal areas of Ha Long, Cat Ba and Sam Son, tours to the mountainous areas of Sa Pa, Moc Chau and Ninh Binh, and flights to Danang, Thailand and Singapore with reasonable prices will be preferred".

Flamingo Redtours, based in Hanoi's Hoan Kiem district, has seen a surge in bookings in recent weeks. The company caters to customers who want to travel during their business trips.

Nguyen Cong Hoan, general director of the company, said that Hanoi's tour operators need to change the customers they are trying to attract.

"Travel agents in Hanoi used to look for customers traveling from the central and southern regions. Now we need to explore the customer base in the north," he said.

He said local companies must develop new tours with high-quality services and products to lure big spenders.

"Hanoi should work with neighboring provinces and cities to develop joint products and services," he added.

In addition to air travel, Hoan suggested that local companies and authorities could explore trains as a travel option to reduce costs and increase travelers' satisfaction.

"Rail services are now improved. The railway industry is fully capable of meeting the growing demand of the market".

According to Dang Huong Giang, director of the Hanoi Department of Tourism, the northern region will be an important market for Hanoi travel companies as people choose to travel within the region.

It expects the number of travelers to Hanoi in the second quarter to grow at a similar rate to the first quarter, thanks to stimulus packages and changing consumer tastes.

"Hanoi will prioritize working with businesses and neighboring local governments to boost travel," Giang said. "We hope to create new tours, new products, and services that are affordable for local travelers, thus exploring the full potential of the region."

She added that the Hanoi government will explore partnerships with online media platforms to advertise the city's landscapes, cultural values, and popular sites and attract more visitors.