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Tourism and Travel Services Business is a Conditional Business Line


1.2.1.3. Travel and tourism service business is a conditional business line.

The State performs the management function, including managing the business registration of enterprises. Travel and tourism services business, like many other industries, must register their business with the competent state agency. Business entities can carry out business activities that are not prohibited by law [13]. However, travel and tourism services business is a special industry, affecting many common interests of the community as well as many other tourism businesses. To ensure the right to freedom of business as well as harmonize other interests such as economy, security, social order, environment, scenic spots, etc., the registration of travel and tourism services business must ensure the necessary conditions prescribed by law. According to the provisions of Clause 1, Article 7 of the Investment Law 2014, enterprises conducting investment and business activities in that industry or profession must meet the conditions for reasons of national defense, national security, social order and safety, social ethics, and public health. Issuing conditions for tourism business is necessary, that is why the Tourism Law 2017 stipulates 02 Articles on conditions for tourism business with 3 tourism business models: domestic tourism business, international tourism business (Article 31) and travel agency business (Article 40). The law stipulates conditions for tourism business due to the specific nature of the business sector.

Firstly , it comes from maintaining the stability and development of the tourism economy and society. Tourism is seasonal, tourists are unstable, when the tourist season comes, the number of tourists to tourist areas increases dramatically. Tourists traveling alone with an impromptu mentality, lack of information as well as the lack of concentration of individual tourists have led to difficulties in the state's management of tourists, difficulties in providing tourism products as well as security.


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area. Travel agencies with the function of selling package tours will be responsible for guiding information, gathering tourists, making plans for necessary tourism products to prepare for use, thereby creating stability in the tourism economy as well as tourism security. With such importance, the person in charge of the travel business must be a qualified person in the tourism field [14].

Second , it comes from the product characteristics of the travel business. Travel service business mainly sells package tours or acts as an intermediary for travel services. The product of a travel program is created from the scientific connection of other travel products, a travel program affects many other businesses such as: accommodation, food, transportation..., affects historical sites, scenic spots... as well as affects tourists, Vietnam in the eyes of tourists. In such a travel product, many relationships arise between travel companies, tourists, other travel companies... which can easily lead to many complicated disputes. From there, the law sets out the condition that travel companies must have a travel business plan, have a travel program for domestic and international tourists.

Tourism and Travel Services Business is a Conditional Business Line

1.2.1.4. Seasonal tourism service business

As mentioned above, the tourism industry is a service industry, the business activities here are mainly service rather than production, in addition, tourism is an intermediary service, from which tourism is affected by many different factors leading to seasonal tourism business. Tourism services are mainly during the tourist season. The seasonality of tourism business leads to a mentality of opportunistic business, ready to compete unfairly, using illegal acts for profit. The seasonality of tourism depends on space,


Time, specifically, it will depend on that country, festivals, holidays, tourism resources, weather, terrain, socio-economic factors...

The seasonality of the travel business as well as other tourism businesses greatly affects the local population, local authorities, tourists, and travel companies. When there is too much concentration of tourists, it will lead to imbalance in the locality. Typically, there are difficulties in transportation, social services, state management, and local security and order. When the demand for tourism is too high, it will cause imbalance in protecting social security and order. At each level, seasonality makes it difficult for state management of tourism activities in general and travel in particular. On the contrary, when the tourist season ends, tourism demand decreases, leading to increased unemployment, which also affects the local socio-economy. For tourists, when tourists are concentrated in a certain area, it will be difficult to find accommodation, and the cost of living will increase. Travel agencies are ready to deal with these imbalances, using tricks to attract tourists, providing poor quality services with false advertising. Seasonality affects the interests of tourists as well as the competitiveness of travel agencies.

1.2.2. Conditions for doing business in tourism and travel services

Compared to the 2005 Law on Tourism, the 2017 Law on Tourism adds a number of prohibited acts to prevent, deter and have a basis for handling violations against organizations and individuals participating in tourism and travel service business activities, specifically:

- Harming national sovereignty, national interests, defense, security, social order and safety, cultural traditions, ethics, and fine customs of the nation.


- Taking advantage of tourism activities to illegally bring people from Vietnam abroad or from abroad into Vietnam.

- Damage to tourism resources and tourism environment.

- Discriminating against tourists, illegally profiting from tourists; competing for tourists, forcing tourists to buy goods and services.

- Conducting tourism business without meeting business conditions, without a business license or without maintaining business conditions during operation according to the provisions of this Law and other relevant legal provisions.

- Using the travel service business license of another travel service business enterprise or allowing other organizations or individuals to use the travel service business license of the enterprise for business activities.

- Practicing as a tour guide without meeting the professional requirements.


- Regulations on domestic travel business licenses, bringing regulations on domestic and international travel business to a common level, ensuring the quality of services provided to tourists. Travel business conditions are regulated more simply, reduced from 05 conditions to 03 conditions. However, in the new conditions, there are other strict conditions on the person in charge of travel service business must have graduated from a major in travel or have a certificate of tourism operation.

- Regulations on the obligation of travel businesses to purchase insurance for all tourists instead of only purchasing insurance for Vietnamese tourists going abroad.

- In order to ensure compliance with the provisions of the Investment Law 2014 and the Enterprise Law 2014, the Tourism Law 2017 stipulates that foreign-invested enterprises are allowed to conduct tourism business in accordance with the provisions of Vietnamese law and international treaties to which Vietnam is a member, creating a level playing field.


equality for businesses, contributing to promoting competition, improving service quality and professionalism in tourism activities.

1.3. The role of tourism business in the economy, politics, culture, society and ecological environment

1.3.1. The role of travel business

The formation and development of travel business is an objective necessity of tourism development. It comes from the contradiction in the relationship between tourism supply and demand and the characteristics of tourism production and consumption. Travel business plays an intermediary role, distributing tourism products and products of other economic sectors to tourists. The World Tourism Organization (UNWTO) has assessed East Asia - Pacific as a dynamically developing region and attracting many international tourists [8, p.1]. With such a potential source of tourists, travel business also plays an important role in Vietnam's economy.

In Vietnam, the tourism industry was formed, developed and legally recognized in 5 main business lines:

(1) Travel business

(2) Tourist transportation business

(3) Tourist accommodation business

(4) Business development of tourist areas and tourist attractions

(5) Other tourism service business

Based on the function and nature of operations, industries (2), (3), (4), (5) are classified into the group of tourism producers, while (1) Travel business is classified into the group of tourism product distributors.

The main product of the travel business is package tours, which play an intermediary role, connecting tourism supply and demand, promoting the development of domestic and foreign tourism. Travel business


impact on supply and demand, resolving conflicts between supply and demand. Thus, the role of the travel business is to distribute tourism products and other products. Travel businesses provide information to tourists, tourism businesses, tourist destinations, and necessary tourism information will be provided to both tourism consumers and tourism product suppliers. The information provided is very broad and detailed, such as information on resources, weather, political institutions, religion, law, customs, currency, prices of tourist destinations as well as information on services provided. Information content for suppliers and tourist destinations includes the main purpose of the trip, free time, time of tourism consumption, payment ability, income level for tourism consumption, quality requirements, tourist habits as well as special requirements of customers. Travel agents provide information to tourism suppliers. When there is a lot of primary information, tourism suppliers can orient tourists' desires, and on that basis create appropriate tourism products and services.

Based on travel businesses, other tourism businesses such as transportation, accommodation, food and beverage... will consume a larger quantity of products than usual, in addition, the supply of these products will be planned, regular and stable. With a plan for the quantity of products and a stable number of customers, businesses can focus resources on improving and developing, improving the quality of their tourism services. Advertising and marketing costs will also be reduced, as well as other industries, activities focusing on the intermediary market will have lower costs but achieve higher business results. Based on the contract signed between the two parties, the manufacturer has shared business risks with tourism businesses.


The nature of the travel business is tourism, so attracting customers is the top priority of the travel business. Travel businesses create their own marketing networks, tourist destinations only need to invest in infrastructure, renovation, upgrading, advertising, market research, and tourist tastes are mainly undertaken by travel companies.

For tourists, when using the services of travel agencies, tourists will save time, money, and effort, which means that the cost of making the trip will be lower but they will receive better products. With a team of professional, well-trained tour guides, tourists will receive more valuable information, tourists will inherit the knowledge of experts, be guaranteed safety, and use their time reasonably.

From connecting tourism products to providing to customers, acting as information agents, and brokering tourism products, travel companies contribute greatly to the development of tourism and the economy.

1.3.2. The role of tourism business in the economy, politics, culture, society and ecological environment

In the world, tourism business is considered one of the leading economic sectors, developing at a high speed, attracting the attention of many countries because of the great economic and social benefits it brings. This is even more evident in the current trend of globalization, regionalization and international integration. With continuous growth over the past decades, tourism business in general and tourism business in particular have affirmed themselves as one of the fastest growing and largest service economic sectors, contributing to the development and prosperity of countries.

In Vietnam, in terms of economy, the development of tourism business has had a positive impact on increasing and contributing a great role in


Balancing the budget balance is the most direct impact of tourism on the economy. Many localities in the country have earned tens of billions of VND each year through the development of tourism services. Socially, tourism business contributes to creating many jobs, stimulating the restoration and development of festivals and traditional craft villages. Changing the face of many localities - where there are developed tourist areas.

Through tourism business, countries can expand foreign relations, enhance understanding of the country, people, history, and national traditions of the countries tourists visit; through tourism activities to educate patriotism, preserve and enhance traditional values ​​of the nation.

It can be affirmed that tourism business is increasingly important for economic, political and social development, contributing to the economic restructuring, bringing revenue to Vietnam's budget, attracting investment capital and exporting goods on the spot. Tourism business has a positive impact on the development of related economic sectors, especially the handicraft industry; contributing to the implementation of the policy of hunger eradication and poverty reduction, creating many jobs and regular income for workers in many different regions across the country. Changing the face and improving living conditions in remote, isolated, border and island areas; promoting the preservation and development of advanced Vietnamese culture, imbued with national identity; being a bridge for cultural exchange between regions in the country; making an important contribution to the work of preserving and protecting environmental resources.

However, besides the great advantages of tourism business for the socio-economic development of Vietnam, tourism still has many challenges and negative aspects, forcing the state to set conditions for tourism business activities for the purpose of inspection and supervision;

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