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Quang Binh Homestay Owners Struggle in Price War Against Major Hotels

Price reduction by companies with deep pockets disproportionately harms homestay proprietors, who used to be farmers living near Phong Nha–Ke Bang National Park.

Many poor residents in Quang Binh Province have opened homestays to capitalize on the tourism boom that followed the discovery of Son Doong Cave in central Vietnam. However, a recent price war in the local accommodation market has driven hotel fees too low for homestay owners to stay afloat, according to Tuoi Tre

Following Tet, room rates have fallen as low as VND30,000 a night compared to normal levels of VND150,000–200,000. Locals believe the price war is the result of only ten of the more than 100 accommodations in the area. Owners of major hotels can afford to operate at a loss with these low rates while smaller owners, many of whom had to take out loans to construct their businesses, cannot. 

Head of Quang Binh's Market Surveillance Agency Vu Quang Thang said the agency is aware of the problem but no official steps can be taken unless the hotels are charging rates different than what they are advertising. Nguyen Van Ky, chairman of the province’s tourism association, says it wouldn't be an issue if more hotels joined the association as they would be forced to cooperate. 

In addition to pummeling the pocketbooks of the rural population, the low prices might be harmful to the tourism sector as a whole. Foreign guests are reportedly turned off by the rates, fearing they cannot be trusted or translate into substandard services.

Quang Binh's lodging landscape is set to undergo changes for reasons unrelated to the price war as well. Not surprisingly, a number of larger resorts and high-end accommodations have announced plans to enter the market.

[Photo: Kris Martyn/Wikimedia]

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