What’s On

Vietnamese lawmakers back new tourism fund, reject controversial hotel surcharge

By Vi Vu   June 20, 2017 | 10:39 am GMT+7

Tourism officials have been blaming a dearth of cash on ineffective PR efforts.

Vietnam's legislative body, the National Assembly, on Monday passed several amendments to the Law on Tourism but rejected a controversial proposal for a hotel surcharge on foreign guests.

It still appeared as a victory for tourism officials as a brand new tourism development fund that they had been campaigning for over the past few years was finally approved, as part of the revised law.

Most of the amendments, to take effect early next year, focus on how to find more money for tourism promotional campaigns.

It remains to be seen how much the new tourism fund can secure, but at least theoretically, it should be more than the annual budget of $2.5 million that the government sets aside for tourism promotion every year.

The revised law allows the new fund to draw from the cash pool of visa fees and entrance tickets. 

The Vietnam National Administration of Tourism in February also proposed foreign tourists who stay at local hotels pay an extra fee into this fund.

But lawmakers argued that there is no legal ground to impose such a surcharge on foreigners, and eventually decided to exclude it from the law. Industry insiders described the prosposed surcharge "discriminatory."

Tourism authorities have estimated that Vietnam needs between $22-31 million each year for "effective" tourism development.

Nguyen Ngoc Thien, the culture and tourism minister, told legislators in late May that Vietnam’s current budget is much smaller than what regional countries are spending.

“Our tourism promotions are going nowhere and do not have a lasting impression on tourists,” Thien said.

Vietnam raked in VND400 trillion ($17.6 billion) from tourism in 2016, with a record number of foreign visitors reaching more than 10 million.

With visa waiver policies for various big markets in Asia and Europe, as well as a new e-visa system, the industry hopes to welcome 17-20 million foreign visitors and gain $35 billion per year by 2020, contributing 10 percent to the country’s economy, compared to the current 7.5 percent.

With current revenues as they are, cities and provinces are doing what they can with what they have to promote themselves.

Last December, Hanoi signed a $2 million deal with American television network CNN to air commercials featuring the capital around the world over the next two years.