Travel firms in Nha Trang fear return of ‘zero-dollar tours’ for Russian visitors

The Russian tourist season is currently at its peak in Nha Trang, with large numbers of visitors arriving for holidays and beach vacations.

Hotels, restaurants, attractions and resorts along the coastal area’s main roads are seeing a strong presence of Russian tourists.

However, several travel firms serving the Russian market said some tour operators are engaging in unhealthy competition by offering tour packages at unusually low prices.

Bui Quoc Dai, deputy executive director of Anex Vietnam Travel and Trading Company, said his firm had submitted a petition to the provincial Department of Culture, Sports and Tourism, calling for coordination to maintain a healthy competitive environment in the Russian tourism source market.

He said that travel companies have recently observed tour packages offered by some local operators at prices significantly below the market average, with pricing policies resembling the so-called ‘zero-dollar tour’ model.

Such practices can have negative consequences throughout the tourism supply chain, he said.

They may confuse customers about the actual value of tourism products and services in Khanh Hoa while placing unfair competitive pressure on companies that have made serious investments in the market.

“In the long term, this situation will affect the business performance of hotels and travel companies and weaken Vietnam’s competitiveness as a destination in the Russian market,” Dai said.

Nguyen Thi Xuan, director of the Nha Trang branch of Amega Tour and General Trading Company, said that some companies were cutting prices excessively to attract Russian tourists, putting pressure on other operators to follow suit and negatively affecting the overall business environment.

She said that excessive price cuts aimed at attracting customers could lead to a recurrence of the ‘zero-dollar tour’ model that previously emerged in the Chinese tourist market.

“If the authorities do not control this unhealthy competition, it will reduce the value of Nha Trang and affect the entire tourism service supply chain serving international visitors,” Xuan said.

Tourism authorities to inspect and take corrective action

Nguyen Long Bien, vice-chairman of the provincial People’s Committee, said the provincial administration had instructed the provincial Department of Culture, Sports and Tourism to investigate businesses’ reports of unhealthy competition and price-cutting aimed at attracting international tourists.

If violations are found, corrective measures will be taken.

Cung Quynh Anh, deputy director of the provincial department, said the department would work with relevant parties to verify the reported situation and seek solutions.

An industry expert said when a company sells tour packages significantly below the prevailing market price, it effectively accepts lower profit margins in order to attract customers, which can result in unhealthy competition.

He suggested travel companies operating in the Russian market in Nha Trang sit down together to find a balanced solution that would prevent disruption to the market while ensuring service quality for tourists.

He also noted that the ‘zero-dollar tour’ business model had existed for many years and operated on the principle of offsetting costs in one area with revenue from another.

Tourists could still receive the full range of services, but travel companies that did not adopt the model could face significant disadvantages.

Companies offering ‘zero-dollar tours’ typically make up for the low tour prices by taking tourists to shopping centers, restaurants or other services where prices are higher, allowing the operators to earn commissions.

“Other businesses are affected because it is very difficult to compete with companies using the zero-dollar tour model,” he said.