Tourism enterprises need readiness for coming competitors

The Vietnam-US Bilateral Trade Agreement will soon let US travel agencies operate in Vietnam. The Saigon Times spoke to tourism administration vice chairman Pham Tu about prospects for stiff competition

Can you talk about the tourism agreements that will come into effect when Vietnam joins the World Trade Organisation?

There is still no general agreement for tourism when Vietnam joins the WTO. I think that basically, it will be like the one we have discussed with the US. Vietnam will play on an equal ground, with no more Government subsidising for native enterprises. How will the market be after that?

Of course it will be exciting with a lot of good opportunities. The event will be a wake up call for the Vietnamese tourism sector to start developing faster and more professionally.

Every coin has two sides, and we should concentrate on the positive one. When the international travel agencies come to Vietnam, they will have much stronger promotion capabilities, which means the country’s image will be larger on a global scale.

Besides, the domestic tourism agencies will also learn from their programmes.

Will the international market dominate the native one?

Not really, but they will be a big chunk of the market. We must accept it because our travel capacity is not strong enough.

In tourism, travel accounts for just 10 per cent of the total - the rest is divided between hotels, restaurants, entertainment, transport and shopping. Vietnam has 600 enterprises with business licenses for international travel; however, most of them are young and fall short in both ability and experience. In the travel sector, capital is not the most important thing - management capacity is. Vietnam enterprises are weak in their understanding of the market and customer service.

As we inch closer to the date, how will the tourism sector alter its development plans?

The target to receive 6 million visitors by 2010 is double the current demand. But this target cannot be compared with figures in other countries. We need an attraction to triple the number of the visitors - it’s not easy to do this. To reach the target, tourism development needs to become a national policy. We must improve roads, railways, airways and waterways.

The State should give more incentive policies to the sector, and make visa exemptions for a number of countries.

As for training the labour force for the sector, the administration has requested the Government to establish three tourism schools this year so that the country with have 10 more schools by 2010. The sector will also take part in promoting the image of Vietnam by co-operating with other sectors to organise Vietnamese cultural events in other countries. Move festivals will also be promoted.

More importantly, we will establish tourism offices in many more places around the world (now there are only 25 Vietnamese enterprise offices abroad).

Do you have any warnings for enterprises in the face of all this economic change?

Joining the WTO is a drastic challenge. Some enterprises will go under. No one can tell enterprises what to do - they have to find their own way to keep afloat in the face of global competition.

Domestic enterprises should understand international laws and also dare to take risks. Probably around half of the enterprises will fail, and half will emerge as the best the country has to offer.

There may be, in fact, some who will perform well with clever business plans, not just because they are a large company. In tourism, benefits sometimes belong to medium- and small-sized enterprises.
 

Thanh Nien