The number of inbound tourist arrivals in HCM City picked up slightly in the early months but hotels are struggling with lower occupancy rates, said a report of the HCMC Department of Culture, Sports and Tourism.

International tourists take a walk in HCMC. Hotels in the city are struggling with occupancy rates at three- to fi ve-star hotels averaging out at only 67% in the early months

However, hotels are facing more challenges, with the average occupancy rate at three- to five-star hotels only reaching 67%, versus 70% in the year-ago period.

The tourism department said room rates at the HCMC-based three- to five-star hotels in the year’s first half average out at VND1.95 million per night, or US$94, largely unchanged from that in the same period in 2011.

Tourist accommodation service providers run into more problems than last year due to surging input costs including higher prices of power, water and specialized materials at hotels, coupled with higher salaries and interest rates. Meanwhile, hotels have to keep their room tariffs unchanged or even quote lower prices to lure customers.

The HCMC Tourism Association shared the same view on the troubled hotel sector. In addition, the association expressed a not-so-optimistic view on the travel sector.

Specifically, the domestic tourism has yet to achieve any significant growth although the tourism stimulus program has been carried out.

“This time last year, everyone was proudly talking about their growths, but this year enterprises are bemoaning decline in the number of customers,” said Nguyen Thi Khanh, vice chairwoman of the tourism association.

Similarly, Nguyen Viet Hung, general director of Fiditourist, said the travel business of his company plunged drastically in the first two months of the year with a sharp drop in the number of customers. The company cannot comment on the summer tourism season yet.

“Thanks to Reunification Day on April 30 and International Labor Day on May 1, our company recorded growth in the first half of 2012, but the outlook for the whole year is not so positive. We are cutting operational costs and developing niche markets to carry on,” Hung told the Daily.

SGT