Tuesday, June 7, 2016

High service costs challenge Laos' tourism business

By:  Vientiane Times June 6, 2016

VIENTIANE - The high cost of tour services in Laos is a major challenge for Lao tourism businesses when it comes to competing within the ASEAN region.

Median expenditure level for a traveller in Laos is about US$65 a day, while in neighbouring ASEAN countries average visitors paid only US$45, President of the Lao Association of Travel Agents, Mr Somphong Deviengxay told Vientiane Times yesterday.

"Until now we cannot decide what the reasons behind the service costs are or why," he commented.

Some tour companies answered that importing construction materials for hotels and guesthouses as well as foods can inflate the cost, Mr Somphong reported.

He believed that if those tour companies have sufficient products such as vans, hotels or guesthouses and restaurants of their own, they would be able to lower their costs.

Some companies are only agencies to bring tourists but have no products so the cost of service may be high, he observed.

To develop the Lao tourism business sector to progress sustainably and be able to compete within the region, he advised Lao tour agencies to invest further in their products and services.

Investors don’t need to pay large amounts of money for expensive materials as Laos is not a developed country and does not have a large population, he said. Companies only need to provide good services and accommodation to be successful.

"Laos still has a lot of rich natural resources. If we develop and use them properly it will benefit local people and national revenue for socio-economic development," Mr Somphong said.

The number of hotels, guesthouses, restaurants and entertainment shops as well as tourism companies is continuing to increase but service costs are still high as is the importation of some foods.

One Thai visitor commented 200 baht will buy him two meals in Thailand but in Laos it will buy him only one.

However, the numbers of foreign tourists visiting Laos has increased each year as has service investment according to the information, culture and tourism sector.

In 2014, the service sector covered about 44.2 percent of the country’s GDP and that was expected to further increase, according to a government report.

The number of foreign visitor arrivals in Laos for 2015 reached more than 4 million; large numbers were from China followed by Thailand as well as Korea, Japan, Vietnam and European countries.

The most popular destinations were Vientiane, Luang Prabang, Champassak and Vangvieng, a district in Vientiane province.

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