Visitors could be charged US$1 for each night spent in the Vietnamese metropolis

The Ho Chi Minh City tourism department is seeking feedback on a proposal to impose a small ‘tourism tax’ on visitors for each night spent in the city.

Money raised from the proposed VND23,000 tax, equivalent to roughly one U.S. dollar, would be spent on improving the local tourism infrastructure, the department said in its proposition to the municipal administration.

Inspiration for the tax came from revisions to the law on tourism, effective from January 2018, which will allow localities to create a fund for tourism development with revenues generated from tourists.

The proposal has so far received positive feedback from local travel companies, who say the fee will be insignificant to tourists but will have huge upsides for Ho Chi Minh City’s tourism infrastructure and promotional opportunities.

Tran The Dung, deputy director of The He Tre Travel, said it is a good idea to have a new source of capital, funded by tourists who enjoy services offered by the city.

“The lack of free restrooms and trained tourism professionals could be fixed with money from this new fund,” he said.

While the tourism department did not elaborate whether the ‘tourism tax’ will be applicable to both domestic and international visitors, industry insiders say the tax should be piloted on foreign visitors first with collections made by travel firms or hotels.

“Ho Chi Minh City is expected to receive six million international tourists this year, and a $1 per night fee could be a huge source of revenue for re-investment in the tourism sector,” Dung said.

Careful consideration needed

Charging overnight visitors a ‘tourism tax’ is not an uncommon practice.

Certain Italian cities impose such a tax on tourists staying overnight, with visitors required to pay the tax directly to their hotel before the end of their stay, according to the ItalyVacations.com.

In July, Malaysia’s tourism ministry also stipulated that foreigners staying at paid lodgings in the country should be charged a flat tax of $2.30 per night, while Malaysians are exempt from the fee, according to Channel NewsAsia.

However, the director of a Vietnamese travel firm said the model should be carefully studied before its introduction in Vietnam, especially when the Ho Chi Minh City tourism department has yet to clarify whether the tax is only meant for foreign tourists or includes domestic visitors as well.

He noted that room rates and tour prices in Vietnam are quite high compared to other countries in the region, so a tourism tax may make packages to Vietnam even less attractive, especially for tourists on multiple-day trips.

“We should try to improve the quality of our tourism products before we consider charging tourists more fees,” he advised.