Domestic tours less attractive due to high airfare prices

Many travel companies are worried that the number of domestic tourists will decrease in the upcoming tourist season as domestic air ticket prices have increased from March 1.

Under the latest regulations, ceiling prices on domestic routes have been adjusted to increase by 5% in comparison to the previous level.

The ceiling airfare for socio-economic development routes with a distance of less than 500km now stands at 1.6 million VND per one-way ticket and 1.7 million VND for other routes.
The ceiling price of tickets for routes of between 500km and 850km is 2.2 million VND per one-way ticket.

The airfare for routes between 850km and 1,000km is now 2.8 million VND per one-way ticket and at 3.4 million VND for routes of between 1,000km and 1,280km. Meanwhile, tickets for routes with a distance of 1,280km are to be priced at 4 million VND per one-way ticket.

The maximum price includes all costs a passenger must pay for an airline's service, excluding value added tax and fees collected on behalf of the airport, and including passenger service fees and security assurance fees, luggage, and service charges with additional items.

According to a review by the Civil Aviation Authority of Vietnam (CAAV) under the Ministry of Transport, the proposed increase in domestic air ticket prices is due to changes in the factors that form ticket prices, especially hikes of fuel prices and exchange rates.

However, if prices remain this high, it may reduce the competitiveness of domestic destinations, especially when many countries are competing to boost tourism as a post-COVID-19 growth driver, said industry insiders.

For example, Phu Quoc island in Kien Giang province which is a favoured destination with advantages in nature, scenery and accommodation facilities, loses points because airfare is quite expensive for domestic tourists.

In 2023, there was a time when the round-trip ticket price from Hanoi to Phu Quoc reach nearly 7 million VND, one and a half times more expensive than the ticket price to Bangkok, Thailand and 1 million VND more expensive than the ticket price to Bali, Indonesia. Therefore, instead of going to Phu Quoc, many tourists choose other locations abroad.

Last year, many customers chose long tours to Japan, Taiwan (China), the Republic of Korea, and Thailand. Most long tour routes departing to Australia, Japan, Europe, Canada, and the US were fully booked.

Pham Anh Vu, communications director of Viet Tourism Company, also said that since last year, domestic tours have had to compete with tours to neighbouring countries such as Thailand and Malaysia due to increased air ticket prices.

According to travel companies and tour operators, domestic tours are struggling to attract tourists. Popular tourist destinations such as Da Nang, Nha Trang and Phu Quoc are waiting for visitors as domestic tours are experiencing a slump.

Le Xuan of Go Vap district, HCM City, told Sai Gon Giai Phong (Saigon Liberation) newspaper that his family had to cancel a trip to Con Dao on March 4 due to the excessively high fares at 2.7-2.9 million VND per ticket.

"The round-trip airfare costs nearly 6 million VND per person to Con Dao. Meanwhile, a five-day, four-night tour to Thailand only costs about 8 million VND per person, so my family plans to change the vacation plan," Xuan said.

Pham Quy Huy, Director of Kiwi Travel Company, said that domestic tours are already less attractive than foreign tours, but it is expected to become even more difficult to sell domestic tours when air ticket prices increase. In fact, even though it's not yet peak summer season, airfare prices have increased.

"For example, from HCM City - Hanoi, the round-trip ticket price is about 3.5 -6 million VND per person, while the ticket price for a tour to travel abroad to Thailand and Singapore is about 3 -4 million VND," Huy added./.