The Vietnamese competition watchdog has opened an investigation into a local travel arranger that has allegedly abused its predominant market position in several resort localities, it was announced Wednesday.

The probe into Anh Duong Co Ltd was launched following initial investigation results from a lawsuit filed in late April by ABTours, another travel agency, according to a fiat signed Tuesday by Bach Van Mung, head of the Vietnam Competition Authority.

ABTours has accused Anh Duong of abusing its dominant position to restrict competition in four resort localities, namely Nha Trang, Phu Quoc, Phan Rang, and Phan Thiet – tourism destinations that are favored by Russian holidaymakers.

Anh Duong began abusing its dominance in October 2013, when ABTours started bringing tourists from Russia to Vietnam via charter flights, the latter’s general director Nguyen Ngoc Luong said.

It then signed deals with hotel and resort owners in these places to exclusively use all of their rooms, and these facilities “are not allowed to receive booking from any other tour organizers,” Luong said.

Even when there were many available rooms, and ABTours offered to pay similar or higher prices, its booking was still rejected, he added.

In Khanh Hoa Province, home to the famous Nha Trang beach, Anh Duong has signed exclusive contracts with as many as 43 restaurants and resorts.

“We wanted to expand our market in these resort localities but had no chances,” he complained.

Andrey Smirnov, a board member of Anh Duong Co, confirmed the investigation to Tuoi Tre (Youth) newspaper on Wednesday, adding the company is working with the Vietnam Competition Authority on the matter.

Smirnov asserted that ABTours did not understand Anh Duong Co’s operation properly.

He also refuted accusations that his company is abusing its predominant market position, saying he has “enough data and evidence to defend the suit.”

Bad consequence

The general director of an international travel agency in Ho Chi Minh City said Anh Duong Co’s act not only eliminates competition but also directly affects the rights of tourists.

Tour organizers other than Anh Duong Co will have to pay higher to find rooms, thus increasing their package prices, and tourists will have to spend more, he explained.

Nguyen Van My, from Lua Viet Tours, hailed the “timely action” by the Vietnam Competition Authority, saying the abuse of dominance will cause many dangerous consequences for the tourism sector.

“By exclusively renting all of the hotel rooms, Anh Duong Co is totally capable of cutting their package prices to eliminate competitors,” he elaborated.

“Once there are no competitors left, the company will freely determine its prices.”

Hoang Huu Loc, head of the Board of Members of Saigontourist, said its partners in Russia face difficulty in selling packages to Vietnam because Pegas Touristik, a Turkish travel firm for which Anh Duong Co is the Vietnamese representative, offers very low prices.

“Our Russian partners have no idea why Pegas can sell their tours at such cheap prices,” Loc lamented.

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