Seven travel businesses exploiting the Russian tourist market have just jointly signed a petition reflecting that a business in Khanh Hoa shows signs of unfair competition when offering products at unusually low prices compared to the general level.
The Department of Culture, Sports and Tourism of Khanh Hoa province said that it will work with the reflected businesses as well as the 7 businesses that filed petitions to clarify the matter.
This is a necessary handling method, because reflections related to competition in the market must be considered based on evidence and legal regulations.
In business, businesses have the right to optimize costs, reduce profits, implement promotions or apply a different price strategy to attract customers.
A business that organizes better, saves costs to sell products cheaper is a normal part of competition. What management agencies need to clarify is how that price is formed, whether it is transparent or not, whether it causes confusion for customers or uses illegal competition methods or not.
The feedback from businesses also raises a broader story for the tourism industry.
A tourism product does not only have hotel room rates or tour prices. Behind it is a chain of services from aviation, accommodation, transportation, dining, sightseeing, shopping to a team of tour guides and thousands of service workers.
In particular, to build and maintain an international tourist market like Russia, businesses must invest in charter flights, promote destinations, build distribution networks and accept many risks.
If the market is caught up in a race to see who sells cheaper, price reduction pressure is very easy to spread down the entire supply chain.
At that time, hotels must reduce room rates, transportation units must reduce service prices, restaurants must save costs and travel businesses must find every way to cut costs.
And to a certain limit, what is likely to be cut is service quality.
At that time, a cheap tour is not necessarily an advantage. Tourists may come more but spend less, experience is worse and the ability to return is also lower. Businesses have revenue but profits are slim, workers are under income pressure and destinations are also difficult to increase value.
That is the trap that Khanh Hoa tourism in particular and Vietnam in general need to avoid.
For many years, we have talked about the goal of shifting from increasing the number of visitors to improving the quality of visitors, extending the length of stay and increasing spending. To do so, the tourism industry cannot forever take "cheap prices" as the main competitive advantage.
Khanh Hoa is having a great advantage when the international tourist market, including Russian tourists, is recovering. The important thing at this time is not only to bring how many tourists to Nha Trang, but also to build a sufficiently stable market for businesses to feel secure in long-term investment.
Therefore, the reflections of the 7 businesses need to be clarified soon. If there is unfair competition behavior, it must be handled.
Conversely, if a business is being reflected that it is only implementing a legal price strategy, it is also necessary to publicize the results to ensure business rights and fair competition in tourism.
