Flight price ceiling hike worries domestic tourism insiders

Nguyen Tien Dat, general director of Hanoi-based AZA Travel, said recent months’ sharp decrease in visitors to popular tourist destinations like Phu Quoc had been caused by soaring airfares.

The scenario could recur next year if airfare prices continue to increase in line with a Ministry of Transport decision to hike ceiling airfares for domestic flights of 500 km or more starting next March, he added.

During the off-peak period, airlines will have to balance prices to compete, so increasing the ceiling price of air tickets will not have much impact on tourism, Dat said.

However, at peak times as travel demand increases, people who buy air tickets for long trips will spend more money, forcing them to cancel their travel plans or switch to other budget-friendly options, he argued.

Airline ticket office data from travel firm Best Price showed that the average airfare price in June 2024 could increase 1.7 times compared to the same period in 2023 for some routes.

For example, one-way tickets for the Hanoi - Phu Quoc route could increase from VND1.3 million to VND2.2 million, and from VND1.1 million-1.7 million for the Hanoi-Nha Trang route.

Nguyen Van Dat, sales director of Best Price, said the domestic routes that will be greatly affected by the increase in price ceiling include Hanoi-HCMC, Hanoi-Nha Trang, Hanoi-Can Tho, Hanoi-Phu Quoc, Hanoi- Con Dao, Hanoi- Quy Nhon, HCMC-Hue and HCMC- Vinh.

"Tourists flying from Hanoi will be most affected," he said.

Currently, airfares account for 30-40% of tour package prices. With the increase in ceiling prices, Dat estimated that airfares would account for 50-60% of the total price, thus, people will hesitate to travel by air.

Starting from March 1, 2024, the maximum standard ticket prices for flights between 500 and 850 km will be VND2.25 million, an increase of VND50,000.

For flights between 850 and 1,000 km, the maximum ticket price will be VND2.89 million, an increase of VND100,000.

Flights between 1,000 and 1,280 km will have a maximum ticket price at VND3.4 million, an increase of VND200,000.

For flights spanning at least 1,280 km, the maximum ticket price will be VND4 million, an increase of VND250,000.

With round-trip tickets to domestic destinations comparable to outbound tour packages, domestic tourism insiders worry many potential customers will opt for overseas travel instead.

Pham Phuong Anh, CEO of a HCMC-based travel firm, said the price of round-trip flights from HCMC to Dien Bien in the northern highlands could be as high as VND8 million, more expensive than a 5-day tour package from HCMC to Thailand at VND7.5 million.

"If people decide not to travel to these domestic tourist destinations because of high airfare prices, the domestic tourism industry will be hit hard," Anh said.

The country served 103.2 million domestic tourist arrivals during the 11 months this year, concentrated in summer, especially June when 13.5 million travelers were served. The November figure stood at 4.5 million.