Hotels and tour operators are struggling and dropping their rates amid the steepest fall in arrivals since the 2003 SARS crisis and then bird flu outbreaks scared tourists away from Vietnam and other Asian destinations.

Next year the tourism sector - which employs more than 10 percent of Vietnam's workforce - faces zero growth or worse, the minister for culture, sports and tourism, Hoang Tuan Anh, warned at a Hanoi conference last week.

The Vietnam National Administration of Tourism (VNAT) has asked the communist government to spend 20 million to 30 million dollars on a global marketing campaign to draw back visitors next year and after.

VNAT said such a campaign - which would follow on from a smaller advertising campaign on CNN and the Discovery Channel - could be financed from a newly-announced one billion dollar economic stimulus package.

"The number of international arrivals has been down for months, but the situation has seriously worsened since October," said Vu The Binh, a senior official at VNAT.

That month, fewer than 300,000 international visitors arrived in Vietnam, a drop of almost 12 percent on October last year, according to VNAT figures.

By November, arrivals were down 22 percent year-on-year, although part of this was due to the shutdown of Thailand's airports by protesters.

Despite strong growth rates early in 2008, only 3.87 million tourists had come to Vietnam in the year to November, with arrivals from the United States, Japan, South Korea and Taiwan all down, the tourism ministry said.

"We forecast arrivals in 2009 will fall 20-30 percent from 2008 because of the global economic crisis," said Binh. "So we need to invest more in tourism products to make them return to Vietnam in late 2009 and 2010."

Tourism operators have echoed the complaints.

"Our clients from the United States and Europe - especially France, Britain and Germany - have been down since mid-year," said Nguyen Hang Quy of Huong Giang (Perfume River) travel agency in the former royal capital of Hue.

"It's because of the international downturn," he told AFP. "And 2009 will be more difficult. We are now trying to seek out new markets in Asia."

Tourism accounts for 4.5 percent of Vietnam's emerging economy and had been forecast to generate 3.7 billion dollars this year. The sector makes up 10.8 per cent of the workforce in the country of 86 million people.

A conference in Hanoi early this month was told that Vietnam could boost tourism revenues by at least 10 percent if it eased up visa regulations and expedited the process through online applications and visas-on-arrival.

The cumbersome visa application process was the "largest obstacle to establishing Vietnam as a global destination," said a Tourism Working Group paper presented by Baron R. Ah Moo, the CEO of Indochina Hotels and Resorts.

"Due to the processing time... last-minute travel to Vietnam is not an option and has been replaced by weekend trips to Phuket, Bali, Macao and Singapore," he said in a paper he presented at the Vietnam Business Forum.

Agence France Presse - December 14, 2008