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Fierce competition in international tourism field

“More challenges than opportunities,” this is the common concern of many Vietnamese international travel companies at this time when Vietnam has become a member of the World Trade Organisation.

Tariff to protect domestic businesses will be gradually narrowed; the competition becomes fiercer with the participation of big foreign travel companies. The most concern is that competitive ability of domestic travel companies still remains limited.

For the past years, Vietnamese tourism firms have operated under firm protection of the State when foreign companies were not allowed to open their affiliates or open foreign-owned businesses. They were only permitted to join joint ventures with Vietnamese businesses with a limited amount of capital.

But the situation has changed, international travel firms have to face a fact that protective tariffs will be lifted after WTO’s accession. Vietnam has to follow the commitments to open tourism service market, permitting foreign companies to take tourists to Vietnam in the form of foreign-owned businesses or joint venture with local firms with high rate of capital contribution.

Foreign companies, with much money, strong trademarks, high technologies, professional organisation, global agent networks and good ability to exploit market, will cause difficulties to domestic companies who are weak at competition. In fact, many travel companies of Vietnam have not made proper preparations for integration when competition is fierce in many aspects.

Competition is fierce in term of products, which companies attach importance to attraction and customers’ needs. With their advantages, foreign companies will have competitive strategies to divide market share of Vietnamese tourism products, for example, using their strong distribution networks to occupy market share.

In addition, foreign companies make the best use of their financial ability to use promotion in certain periods of time and use techniques to reduce product price to defeat weak competitors.

In the context that Vietnamese accommodations and hotels have not met the demand of tourists, foreign travel firms will “shake hand” with hotel owners to take priority of reservations. Therefore, weak companies of Vietnam will lack sources of tourists. Foreign companies will also attract good employees from local companies to work for them.

In order to exist and develop in the globalisation, Vietnamese travel firms must understand international laws and grasp commitments and schedules to open market. Local travel firms should invest in internet reservation technology to meet the needs of tourists and make high-quality tourism products.

Local firms should also seek ways to expand market, work out strategies of marketing and establish nation-wide agent network to occupy domestic tourism market. They should boost the work of training managers.

To support local firms, the National Administration of Tourism needs to boost promotion in key traditional tourism markets and provide information and prediction of the tourism development situation.

By SON LAM

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