Many travel agents do it.
Their gimmick is to get cheap tour prices out there in the market. Sadly, it is a fact that there will always be someone who will easily be duped because cheap tour cost spells higher profits for travel agents, if not savings for the travellers. This is even include agents who claimed to be professionals.
Here are how some examples how low tour prices results in:
When drivers and guides do not earn their wages from tour prices.
This is the most common abuse. Their wages are only earned from commissions made from your guests’ shopping. This often happens when there is compulsory shopping being part of the tour programme, regardless whether it is stated in the tour itinerary or not.
In a worst case scenario, the commissions earned are also shared with the Inbound Operator.
When these travel agents make their guest pay for tour components that you thought were already included.
Here are some easy ones to spot:
Room with that as a view? Yes, believe it or not, there are hotels with rooms without windows, much less a view. Sometimes, it is just a curtain covering a blank wall.
Often, these rooms are the lowest tiered in terms of price points. Normal professional inbound operators never contract them and would never use such rooms for their guests.
Then again, to the profiteers, that could easily be at least US$5.00 cheaper per night on the tour price.
- Entrance fees. Tour itineraries may already list some places of interests. Then you are told it is just to see its exterior and without entering the venue. Excluding the entrance fees is a saving between ranges from US$0.60 to US$15.00 per person. That would lower tour prices.
- Meals. Travellers come with all sizes of appetites. When the dishes arrive, some guests would immediately notice the portion could hardly passes of as a snack. They are then informed that they are free to order additional dishes if what was served was insufficient. Of course, it will be at the guests’ own expense.
Some agents or tour guides earn commissions from such incremental spending by the travellers.
When these travel agents are unlicensed and there are many!
Without license means they are free from all kinds of financial commitments such as:
- Industry’s subscriptions of US$22,000 & annual dues of US$100,
- Insurance at US$3 per traveler per day,
- Contributions to employees’ social welfare of 11.5% of wages,
- Sales tax of 10% of revenue, and
- Business tax of 22% on profits.
All the above are huge savings on costs.
When these are new travel agents have money to burn.
One of the bizarre methods of new investors into the travel business is how they fund to advertise their products. They know they will need to spend thousands of to get customers’ bookings. Instead of advertising, they sell their packages at loss. They equate that loss as advertising fees.
Some buyers know about this. They even shamelessly, ask inbound partners if their tour prices can be supported by ‘marketing fees’ when they are working the first time with the partner.
When these travel agents operates without address.
Under the guise of virtual office network. Some of these unlicensed travel agents (including free-lance tour guides) now operate from their laptop, selling packages in the comfort of a café or their own home. Rent Free for the business!
Most of these are former employees of travel agents. They have no problem vanishing in thin air when problems arise, if they wish to do so.
When these agents ‘copy-cat’ on popular Names.
While intellectual property is at a phrase still in its infancy in Vietnam, many agents infringe any copyright rules one can think of.
For instance, Saigon Tours has nothing to do with the state tour agency Saigon Tourist. Similarly, we as KOK THAI Travel (licensed as Quoc Thai Travel & Trading Co., Ltd.) face the same infringement from another separate entity called Quoc Thai Company.
What do we do about this?
We often do get requests where the customer would also attach packages with their amazing low prices. We just have to do the right thing. We offer our best prices and if not able to match the low prices, if the customer choose cancel their booking with us; so be it.
For agents with money to burn, they know that it is not sustainable. They will have to come to a time where they could no longer have any advertising funds to subsidize tour prices. We will not engage them as it would only start a price war that will result no winners.
Don’t get us wrong. It is not a case of budget travel agents requesting for a budget quote. There is something seriously wrong when budget travels insist of US$45 for a 2-night tour package accommodated in 5-star hotels.
There are crazy inbound agents out there with such offers but they are there because there are outbound agents overseas who will buy from them, regardless the risks.
True, we turn away a lot of booking request this way. We just cannot participate in business activities with no fair profits. Especially not when such activities destroys a trade that we are passionate for.
Where do we go from here?
The authorities are doing something about it but it will take time.
Unscrupulous agents are killing the industry.
The fact is, when outbound agents in stop buying from illegitimate inbound agent for their incredible low tour fares, the killing of travel businesses as we know it, can stop too.
Last words? Know your customers well, know your travel agent more. One who loves to travel would not want to unwittingly support the killing the economic lives of those who totally depend on the travel industries to feed their families