Losing no 30% commission, the pain of Vietnamese hotels

Mr. Ngo Minh Duc, founder and Chairman of GOTADI Company, shared so at the Workshop on introducing the program “Digital transformation in the tourism industry”, taking place on April 2, within the framework of the Tourism Fair. Vietnam international calendar – VITM Hanoi 2022.

Mr. Hoang Quoc Hoa, Executive Vice President of Tourism Information Center (VNAT), emphasized, digital conversion is an urgent requirement and an inevitable trend for the global tourism industry. Vietnam is no exception to that trend.

In fact, Vietnam’s tourism is deploying technology products such as tourism management information dashboard system; tourism industry database for management agencies; Covid-19 safety self-assessment and registration system; Safe Vietnam Travel application; smart travel card for visitors; electronic ticketing and management system for attractions,…

Foreign OTA channels are taking advantage in Vietnam

For example, at the Temple of Literature – Quoc Tu Giam, Director of the Center for Cultural and Scientific Activities Mr. Le Xuan Kieu said that over the past time, with the support of the Vietnam National Administration of Tourism and technology enterprises, the Temple of Literature – Quoc Tu Giam has developed an electronic ticketing system, which is expected to launch in April 2022. This will contribute to facilitating tourists’ transactions in a “no-touch” direction, suitable in the context of the epidemic, and at the same time help the relic site manage ticket sales more effectively.

As one of the leading units in digital transformation, but after many lessons and experiences in the market, President Ngo Minh Duc of GOTADI commented, this is a very difficult, extremely difficult, and extremely costly process. poor, requires resources and perseverance.

According to him, the development of digital platforms by Vietnamese people is especially important in terms of technology mastery, helping businesses reduce costs in the process of applying technology to business.

However, Mr. Ngo Minh Duc said that the information technology industry of Vietnam’s tourism in general and tourism enterprises in particular is at a low level compared to the world. Compared to the airline industry, e-tickets have been around for nearly 20 years.

Therefore, Mr. Duc highly appreciates that the tourism industry is determined to transform digitally, because if we don’t do this soon, we will be backward and difficult to compete. “Right now we are losing, losing at home. It hurts hotel owners to pay up to 30% commission to foreign companies when selling through Agoda or Booking.com.

Mr. Ngo Minh Duc at the seminar (photo of TT Tourism)

Mr. Duc is referring to OTAs (Online Travel Agent), a channel providing products and services such as selling hotel rooms, tours, air tickets,… on an online platform. More than 70% of hotels in Vietnam are registering to sell rooms on OTA channels. Even many hotels said that the percentage of bookings coming from the OTA channel accounts for 50-60% of the revenue structure. Normally, businesses have to pay a commission of 15-20%, depending on the peak or low season. Even some units have to pay up to 30-45% commission to appear on the first page.

However, global OTA brands such as Agoda, Booking, Traveloka, Expedia… are accounting for 80% of the market share in Vietnam. As for Vietnam, there are only over 10 online travel companies such as Ivivu.com, Chudu24.com, Mytour.vn, GOTADI…

“One of the prerequisites is that we have to master technology, from which the tourism industry can develop, helping Vietnamese businesses grow,” Mr. Duc said.

Duc said that it is necessary to link and transform together, so that we can form and develop an ecosystem of Vietnamese people with smart service providers, smart users, smart destinations. smart and no longer lose at home.

By experiencing together and upgrading the system of Vietnamese people together, we will increase the number of suppliers, expand the target audience, apply Vietnamese cards, Vietnamese tourist cards everywhere, no longer dependent on foreign intermediaries.

Ngoc Ha