New decree for Vietnamese outbound tour operator’s deposit

Tourism companies wanting to do business in the outbound segment are required to deposit VND500 million each from January 1, doubling the current level, according to Decree 180/20/ND-CP that has been issued by the Government.
In fact, the prevailing Tourism Law only regulates a deposit of VND250 million for international tour service providers including the outbound and inbound segments.

The new law came out with amendments to Decree 92/2007/ND-CP released on June 1, 2007 by the Government stipulating that tourism enterprises have to deposit VND250 million for inbound tour services or VND500 million for either outbound services or both services. Decree 180, meanwhile, does not mention the deposit for companies operating domestic tours.

Like the Tourism Law, the newly-issued decree states that the deposits at local banks are used for handling disputes in case tourism companies fail to fulfill their obligations as well as expected in tour arrangements. Under the new law, the depositors are subject to negotiated interest rates instead of non-term rates currently.

According to the Vietnam National Association of Tourism, there are 1,242 international tour service providers active nationwide as of September. They consist of nine State-owned enterprises, 404 joint stock companies, 15 joint ventures, 806 liability-limited companies and eight private firms.

Although local authorities have yet to give specific information on the number of Vietnamese travelling overseas annually, the Vietnam Tourism Association estimated that some 3.5 million residents went abroad last year with total spending of roughly US$3.5 billion. Most international tour service providers offer outbound tours to huge numbers of customers. However, regulations and sanctions putting this segment under stricter control and protecting the rights and benefits of customers remain unavailable at home.

With the new decree, the Government has doubled the deposit of outbound tour service operators but it has still failed to tackle a problem in this segment going against the Tourism Law.

In 2009 when tourism companies struggled with slackened demand, the Government allowed joint ventures to pilot outbound services from August 10 in the same year to December 31, 2010 instead of allowing only local firms to do so in line with related laws as proposed by the Ministry of Culture, Sports and Tourism. However, there has been no information on terminating the pilot from authorities, resulting in the fact that many joint ventures have still been active in the outbound segment.

“Joint ventures not only sell outbound tours to individual customers and those from companies but also join biddings for MICE visitor groups with local enterprises,” an executive of a large tourism company in HCMC said.

Source: SGT