Tourism firms in Ba Ria-Vung Tau bemoan sharp land rent spikes

Tourism firms in Ba Ria-Vung Tau bemoan sharp land rent spikes

Tourism firms in Ba Ria-Vung Tau bemoan sharp land rent spikes

Bao Uyen

HCMC – Many tourism enterprises in Ba Ria-Vung Tau Province are grappling with a slew of difficulties due to soaring land rents.

The Ba Ria-Vung Tau branch of the Vietnam Chamber of Commerce and Industry (VCCI) and the provincial Tourism Association held a conference last week to listen to local tourism enterprises. Many bemoaned land rent rises compared to their current contracts.

Nguyen Van Sy, deputy manager of Thang Muoi Tourist Hotel Joint Stock Company, said his firm inked a land lease for a 33-year term with a total area of 28,000 square meters. There have been two rental hikes so far, particularly a 1.9-time increase in the 2013-2014 period, equivalent to VND1.163 billion a year. This was followed by a rise of 7.37 times with VND8.6 billion a year. Therefore, his company has delayed a four-star resort project with total capital of VND120 billion, due to unstable and high land prices.

He said such rates have been unreasonable, coming as a shock to businesses and investors. His firm, with chartered capital of only VND8.1 billion, now has to pay land rent of VND8.575 billion per year, but prices of tourism products and services cannot soar accordingly.

Le Tan Dung, manager of Nghinh Phong Travel Joint Stock Company, said his firm has received two notices from the provincial tax department this year, with the total land rental of some VND8 billion, a shock increase of 18.13 times over 2013-2015 and accounting for half of the company’s full-year revenues.

Dau The Anh, director general of Vung Tau Cable Car Tourism Joint Stock Company, said the rental in 2011-2016 has surged 14 times over the 2006-2011 period.

He said the tax department has not adhered to contract terms between firms and the provincial government. While pending complaints, he proposed tax authorities not issue new documents to ask for tax payment, and not apply late payment penalties.

At the conference, many firms said most tourists just spend one day in the province, leading to low revenues. Rental spikes have adversely affected their business plans at a time when the local tourist industry is reaching saturation due to many competitors from neighboring provinces and cities.

Nguyen Thi Mai, a member of the Vietnam Association of Small and Medium Enterprises, said such high rental prices have posed a slew of difficulties for local firms, resulting in small or no profit. If the situation continues, many firms will go bust.

Bui Ngoc Diep, deputy chairman of the Vung Tau Tourism Association, said many major projects from domestic and international investors have been delayed.

Dau Anh Tuan, head of the Legal Department at VCCI, told the Daily that these changes would not only disrupt business operations but also create a negative image for the business environment in the province, leading to fewer investment opportunities.

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