Russia economic gloom hurts tourism

On December 16, the Russian central bank raised its key interest rate to 17 per cent from 10.5 per cent and the ruble fell beyond 60 to the dollar.

These economic difficulties have affected the spending plans of the Russian people, and it is expected that their travel budgets will be the first to be cut.

Nguyen Van Thanh, steering deputy chairman of the Khanh Hoa Tourism Association, told Biz Hub that Russia's economic downturn has not affected the province's tourism industry yet, but he predicted next year would be a difficult time for travel firms.

"The annual period between November and April is the peak season for Russian visitors coming to Vietnam. This year's season may not be much affected, but we have to prepare for the following season," said Thanh.

Meanwhile, during his annual press conference on December 18 in Moscow, Russia's President Vladimir Putin assured Russians that the economic downturn would last only two years, at most.

Some travel firms in central Khanh Hoa Province told local media that the number of Russian tourists to Vietnam in December has not decreased, but a number of tours have been cancelled.

Nguyen Duc Tan, managing director of Anex Tour Vietnam, told vnexpress.net that, as of December, daily bookings have decreased from 200 to 70-80 per day, a reduction of 60 per cent.

Tan said his company set a target of 120,000 visitors from Russia this year, a four-time increase compared with last year, but now he believes it will be difficult to reach this target.

Tan explained that a 4-star hotel room in Nha Trang costs a Russian couple US$800, or 28,000 rubles, last year. But now the price has climbed to 49,000 rubles due to the devaluation.

"If the number of Russian visitors goes down, travel firms will experience many difficulties. We have to hire an airplane at the same cost, while there are fewer passengers. In order to lure enough passengers, we then have to offer a 50 per cent discount per seat," said Tan.

He also said that the company had discussed discounting the costs of rooms with local hotels and resorts. Following discussions, large hotels agreed to a discount of 25-30 per cent, while smaller hotels might offer 15 per cent reductions.

"However, tourist agencies still face difficulties if Russians visitors cancel their tours," Tan said.

He added that visitors often spend two-thirds of their budget for airlines tickets and one-third for hotels. In Thailand, hotels support tourist agencies by reducing room rates from $200 to $70-80 per room, when the country tried to lure visitors during the difficult political crisis.

"If Vietnam could do the same, the travel firms may escape difficulties," said Tan.

Further, the Turkey-based travel firm Pegas Touristik told Khanh Hoa News Online that the company had to offer a 50 per cent discount for those purchasing a recent Vietnamese tour, however, the situation has not shown positive signs.

Pegas Touristik has begun a trend, bringing Russian tourists to Nha Trang, with most visitors coming from the Russian Far East.

Statistics from the Khanh Hoa Department of Culture, Sports and Tourism show that the number of Russian visitors to the province in the first 11 months this year was 189,234, an increase of 58.6 per cent over the same period last year.

A direct flight between Moscow and Cam Ranh International Airport was recently opened to meet the demand of Russian tourists seeking to spend their holidays in the sunny beaches of Nha Trang.

At present, Russian tourists are being taken to Khanh Hoa by travel firms, including Pegas Touristik, Focus Travel, Annex Vietnam and Nhat Minh International Tourism Co Ltd.

The Province seeks to attract 250,000 Russian tourists to Khanh Hoa this year, which accounted for one-third of the province's foreign guests.

Besides the traditional destinations of Nha Trang, southern Binh Thuan's Mui Ne and Phu Quoc island has also attracted a large number of Russian tourists.

Phu Quoc is the only tourist site to exempt visas for Russians coming for up to 30 days, while other provinces grant visa exemptions for those coming for only 15 days.

Travel firms in these two areas are also concerned about how the situation in Russia might affect their revenues.

Thanh said that the most important factor for the tourism sector is to provide high-quality products.

"The travel agencies and policy makers should hold their hands, and we [the association] will always act as a bridge to mobilize the strength of local tourism," said Thanh.

Nha Trang has entered its peak season, as its long beaches and warm weather welcome visitors from around the world.