Factors associated with the adoption of cost accounting system by selected travel agencies in hanoi, vietnam

FACTORS ASSOCIATED WITH THE ADOPTION OF COST
ACCOUNTING SYSTEM BY SELECTED TRAVEL
AGENCIES IN HANOI, VIETNAM

___________________________

A DISSERTATION
Presented to the Faculty of the Graduate School
Southern Luzon State University, Lucban, Quezon, Philippines
in Collaboration with
Thai Nguyen University, Socialist Republic of Vietnam

___________________________

In Partial Fulfillment
of the Requirements for the Degree
Doctor of Business Administration

___________________________

By
DOAN THI QUYNH ANH (ANGEL)
December 2013
i


APPROVAL SHEET

The Dissertation of

DOAN THI QUYNH ANH

entitled
FACTORS ASSOCIATED WITH THE ADOPTION OF COST ACCOUNTING
SYSTEM BY SELECTED TRAVEL AGENCIES IN HANOI, VIETNAM
Submitted in Partial Fulfilment of the Requirements for the Degree
DOCTOR OF BUSINESS ADMINISTRATION
A program offered by Southern Luzon State University,
Republic of the Philippines in collaboration with
Thai Nguyen University, Socialist Republic of Vietnam
has been approved by Oral Examination Committee

WALBERTO A. MACARAAN, EdD
Expert

EDUARDO T. BAGTANG, DBM
Expert

MELCHOR MELO O. PLACINO, PhD
Expert

ALICE T. VALERIO, PhD
External Panel

CECILIA N. GASCON, PhD
Chairman
Endorsed by:

Recommended by:

EDWIN P. BERNAL, DBA
Adviser

APOLONIA A. ESPINOSA, PhD
Dean

Accepted in Partial Fulfilment of the Requirements for the Degree
Doctor of Business Administration

_____________________
Date

WALBERTO A. MACARAAN, EdD
Vice President for Academic Affairs

ii


CERTIFICATE OF ORIGINALITY
This is to certify that the dissertation entitled "THE FACTORS
ASSOCIATED TO ADOPTION OF COST ACCOUNTING SYSTEM BY
SELECTED TRAVEL AGENCIES IN HANOI, VIETNAM", orally defended/
presented under the DBA Program jointly offered by Southern Luzon State
University of the Republic of the Philippines and Thai Nguyen University of the
Socialist Republic of Vietnam, embodies the result of original and scholarly
work carried out by the undersigned.
This dissertation does not contain words or ideas taken from published
sources or written works by other persons which have been accepted as basis
for the award of any degree from other higher education institutions, except
where proper referencing and acknowledgement were made.

DOAN THI QUYNH ANH (ANGEL)

Researcher/Candidate
Date Orally Defended: 14th, December 2013

iii


ACKNOWLEDGMENT

The researcher would like to express her heartfelt gratitude to the
following:
Leaders of Thai Nguyen University in Viet Nam and Southern
Luzon State University in the Philippines, who created the best conditions
to make her complete the dissertation and the DBA program;
Dr. Edwin Bernal, who helped her with detailed guidance and
instructions to complete her research;
Representatives from the Southern Luzon State University and the
Thai Nguyen University, as well as the teachers and staff of the ICT and
academic affairs office who encouraged and helped her and the members of
the class to persevere in completing our dissertations. ;

The directors and staffs of all enterprises, who have responded to
her surveys and for their enthusiastic support and participation.

For her family, parents, husband, children, and all of her dear
friends, as always, her sincerest love and gratitude for the encouragement,
understanding and support
Doan Thi Quynh Anh - Angel

iv

DEDICATION

This dissertation is wholeheartedly dedicated to my husband’s parents
and my mother; my husband Nguyen Huu Hung; and
mytwo childrenNguyen Hung Cương and
Nguyen Ngoc Quynh Chi. I also would
like to dedicate my work to the
tourism industry in
.Hanoi.

DTQA

v


TABLE OF CONTENTS
PAGE
TITLE PAGE ………………………………………………………………..

i

APPROVAL SHEET ……………………………………………………….

ii

CERTIFICATE OF ORIGINALITY ………………………………………..

iii

ACKNOWLEDGMENT ……………………………………………..……..

iv

DEDICATION ………………………………………………………………

v

TABLE OF CONTENTS …………………………………………………..

vi

LIST OF TABLES ………………………………………………………….

viii

LIST OF FIGURES ………………………………………………………...

x

ABSTRACT …………………………………………………………………

xi

CHAPTER
I

II

III

INTRODUCTION ……………………………………………

1

Background of the Study …………………………………..

2

Objectives of the Study …………………………………….

3

Hypotheses of the Study ……………………………..……

4

Significance of the Study …………………………………..

4

Scope and Limitation of the Study ………………..………

6

Definition of Terms ………………………………………….

7

REVIEW OF LITERATURE ……………………………….

10

Theoretical Framework ………………………………….…

25

Conceptual Framework ………………………………….…

27

METHODOLOGY …………………………………………..

29

Locale of the Study …………………………………………

29

Research Design ……………………………………………

29

Population, Sample and Sampling Technique …..………

30

Research Instrument ……………………………………….

30

Data Gathering Procedure …………………………………

32

Statistical Treatment ………………………........…….……

32

vi


IV

V

RESULTS AND DISCUSSIONS ………………………….

34

Respondents’ Profile ……………………………………….

34

The Accountants’ and the Managers’ Perception of their
Level of Awareness and Understanding, Ease of Use,
and Usefulness of Cost Accounting System …………….

36

Factors Significantly Affecting the Attitude of the
Accountants and the Managers of Travel Agencies in
Adopting a Cost Accounting System ……………………..

42

The Accountants’ and the Managers’ Perception of their
Level of Awareness and Understanding, Ease of Use,
and Usefulness of Cost Accounting System …………….

56

The Accountants’ and the Managers’ Attitude Towards
Adherence to the Cost Accounting System in the
Management of Costs in Travel Agencies ……………….

62

SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
Summaryof Findings ………………………………………

66

Conclusions …………………………………………………

67

Recommendations …………………………………………

68

REFERENCES ………………………...…………………………………..

70

APPENDICES ……………………………………………………………...

72

Appendix A - Survey Questionnaire ……………………………...

72

CURRICULUM VITAE …………………………………………………….

76

vii


LIST OF TABLES
TABLE
3.1

PAGE
Factors Affecting the Adoption of the Cost Accounting
System………………………………………………………….

31

4.1

Respondents’ Age and Gender ………………………………

35

4.2

Respondents’ Position and Field of Specialization ………...

36

4.3

Perceived Level of Awareness and Understanding of Cost
Accounting System ……………………………………………

38

4.4

Perceived Ease of Use of Cost Accounting System ……….

40

4.5

Perceived Usefulness of Cost Accounting System ………...

42

4.6

Attitude Toward Adherence to Cost Accounting System
in Cost Management …………………………………………..

44

Summary of the Respondents’ Perception and Attitude
Towards Adoption of Cost Accounting System …………….

46

Relationship between the accountants’ and the managers’
perception of their level of awareness and understanding
of cost accounting system and their attitude towards
adoption of the same cost accounting system in travel
agencies cross tabulation ……………………………………..

48

4.9

Chi-Square Tests ………………………………………………

49

4.10

Relationship between the accountants’ and the managers’
perception of ease of use of cost accounting system and
their attitude towards adoption of the same cost accounting
system in travel agencies ……………………………………..

51

4.11

Chi-Square Tests ………………………………………………

52

4.12

Relationship between the accountants’ and the managers’
perception of usefulness of cost accounting system and
their attitude towards adoption of the same cost accounting
system in travel agencies ……………………………………..

53

Chi-Square Tests ………………………………………………

54

4.7

4.8

4.13

viii


TABLE
4.14

PAGE
Relationship between the accountants’ and the managers’
perception of their level of awareness and understanding,
ease of use, and usefulness of cost accounting system
and their attitude towards adoption of the same cost
accounting system in travel agencies ……………………….

55

4.15

Chi-Square Tests ………………………………………………

56

4.16

Independent Samples Test(The accountants’ and the
managers’ perception of their level of awareness and
understanding of the cost accounting system in travel
agencies)………………………………………………………...

57

Independent Samples Test(The accountants’ and the
managers’ perception of ease of use of the cost
accounting system in travel agencies)………………………

59

Independent Samples Test (The accountants’ and the
managers’ perception of perceived usefulness of the cost
accounting system in travel agencies)………………………

60

Independent Samples Test (The difference between the
accountants’ and the managers’ attitude towards
adherence to the cost accounting system in the
management of costs in travel agencies) …………………...

63

4.17

4.18

4.19

ix

LIST OF FIGURES
FIGURE
1

PAGE
Theory of Reasoned Action from Davis, Bagozzi&Warshaw
(1989) ……………………………………………………………..

22

2

Theory of Planned Behavior (Ajzen, 1985) …………………...

23

3

Technology Acceptance Model from Davis, Bagozzi
&Warshaw (1989)
…………………………………………………

24

4

Classification of Cost in Travel Business ……………………..

27

5

Cost Accounting System Adoption Factors …………………..

28

x


ABSTRACT
Title of Research

: FACTORS ASSOCIATED WITH THE ADOPTION
OF COST ACCOUNTING SYSTEM BY SELECTED
TRAVELAGENCIES IN HANOI, VIETNAM

Researcher

: DOAN THI QUYNH ANH (ANGEL)

Degree Conferred

: DOCTOR OF BUSINESS ADMINISTRATION

Name and Address
of Institution

: Southern Luzon State University Lucban, Quezon,
Philippines and Thai Nguyen University, Socialist
Republic of Vietnam

Adviser

: Dr. Edwin P. Bernal

Year Written
: 2013
______________________________________________________________

Inrecentyears, therapid developmentofworldeconomyin general and of
Vietnam in particularmadepeople's living standard improved.One of the
enterprises developed stronglyinrecent years wasbusinesstravel services. To
effectively measure the cost of service, this kind of enterprise requires the use
of appropriate accounting system which is also necessary to effectively offer
its clients the travel services at a most reasonable price. As well, the cost
accounting system aids the enterprise to measure its profitability and
sustainability.
This dissertation tried to find out the factors affecting the adoption of
the cost accounting system in selected travel agencies in Hanoi, Vietnam. The
primary data gathering tool used in this research project was a questionnaire.
Some 150 survey respondents who were accountants and managers coming
from the various travel agencies operating in Hanoi were randomly selected.

xi


The researcher found out that: (1) The survey respondents were
generally female while 80% of them were under 40 years old. Sixty four
percent (64%) of the respondents were accountants; 36%, managers.
Majority have solid background in either business or accounting; (2) The

accountants and the managers have high perception of their level of
awareness and understanding of cost accounting system; (3) Both the
accountants and the managers highly agreed on their positive perception
regarding ease of use and of the usefulness cost accounting system; (4) The
accountants’ and managers’ attitude towards adherence to cost accounting
system in cost management was high; (5) The factors that significantly affect
the accountants’ and the managers’ attitude towards adoption of cost
accounting system are: (a) Attitude towards adherence to cost accounting
system, (b) Awareness and understanding of the system, (c) Ease of use of
the system, and (d) Usefulness of the system.
Considering the noted weaknesses in the present-day implementation
and adoption of cost accounting system as well as the inherent benefits of
effective and efficient management of the system can bring to the travel
agencies, the following were recommended: (1)

Travel agencies should

expand the role of their accountants from merely record keepers and
processors of supporting documents to financial and business advisors; (2)
Re-tool the accountants in the use of international financial reporting
standards that fit the requirement of the travel agencies; (3) Enhance the
competencies of the managers by providing them adequate knowledge and
skills in using financial information in making informed decisions; and (4)
Appraise the cost accounting system that the travel agencies are adopting.

xii


1

Chapter I
INTRODUCTION

As Vietnam rides in the development of world economy, its
hospitality/tourism industry had gained remarkable leap. Demand in a widerange of hospitality-related products and services increased as people's living
standard improved. This included products and services in travel services
which is one sector in the multi billion-dollar world-wide hospitality industry.

Productsand services intravel agencies are designed to satisfyspecial
needsof consumers such as understanding the culture, tradition and the
historicaltreasures of one locality, appreciating natural beauty of the place,
experiencing the climate, foods, events and festivities of the area, and a lot of
activities simply designed for sightseeing and for rest and recreation. The
demand for travel products and services is not very stable as it easily changes
due to instabilityofthe climatic conditions and the economicand political
situation of the particular tourism destination.

It

therefore

requires

that

players in the travel business to be more creative and innovative to anticipate
changes in the business landscape in order to cushion the impact of slack
time in the business.

On the other hand, it also requires that industry players fully graspthe

characteristicsof

tourism

organizebusinessactivities

and
that

travel
optimally

productsto
meetthe

be

able

to

needsofclients

andensureenhancedbusiness performanceon the basis of strict cost control.
It also requires strong organizational skills as well as understanding of the
upstream and downstream links and costs which are, more often than not, not


2

too easy to quantify as transfers of values take place with the transfer of
intangible subjects of business transactions. While the application of sound
managerial accounting techniques and concepts is inevitably necessary, all
must start from the solid understanding and appreciation of cost accounting
and the adoption of appropriate cost accounting system.

Background of the Study

Vietnam’s tourism industry had already achieved a considerable
amount of success. By the end of 2012, Vietnam had 1,120 international tour
operators, 11,840 recognized card-holder tourist guides, 4,809 card-holder
instructors and 7,031 card-holder local tourist guides for international travels.
There are tourist accommodation establishments all over the country
estimated at 13,500 with 285,000 chambers. These include 57 5-star hotels,
147 4-star hotels, and 335 3-star hotels.

In general, adoption to cost

accounting systems in the tourism industry is considered deficient.

Determining the cost of products and services in a travel agency poses
a great challenge for the firm’s accountants and managers in as much as the
business’ price offerings depend largely on the relevant costs.

Doubly

challenging is the implementation of a firm’s policy on cost allocations
because this requires a deal of rationalization so as not to overburden one
product/service while others overburdened with unnecessary costs.

This

therefore requires the identification and the use of appropriate cost driver(s) to
achieve full rationalization of the system. Further, to achieve comparative and
competitive advantages, it is necessary that costs associated with the


3

implementation of activities in major business functions along the value chains
should be analyzed as to whether these are value-adding or non-value adding
costs. Obviously, only value adding activities are client-focused activities and
therefore add to the achievement of the value expectations of the clients.
While cost accounting is a necessary requirement to achieve more in the
travel business in Hanoi, less has been benefiting fully from it. To determine
the factors that drive the sector to adopt cost accounting system is the major
reason why this research was conducted.

Objectives of the Study

The general objective of this research was to determine the significant
factors associated to the adoption of cost accounting system for Hanoi-based
travel agencies. The study was conducted to meet the requirements of the
following specific objectives:

1. To determine the profile of the respondents in terms of gender, age,
position and field of specialization.
2. To describe the accountants’ and the managers’ perception of their
level of awareness and understanding, ease of use, and usefulness of
cost accounting system.

3. To identify the factors which significantly affect the attitude of the
accountants and the managers of travel agencies in adopting a cost
accounting system.


4

4. To statistically test the difference in the accountants’ and the
managers’ perception of their level of awareness and understanding,
ease of use, and usefulness of cost accounting system.
5. To statistically test the difference between the accountants’ and the
managers’ attitude towards adherence to the cost accounting system in
the management of costs in travel agencies.

Hypotheses

The following hypotheses were tested using inferential statistical tools:

Hypothesis 1:

There is no relationship between the accountants’ and the

managers’ perception of their level of awareness and understanding, ease of
use, and usefulness of cost accounting system and their attitude towards
adoption of the same cost accounting system in travel agencies.

Hypothesis 2: There is no difference in the accountants’ and the managers’
perception of their level of awareness and understanding, ease of use, and
usefulness of cost accounting system.

Hypothesis 3:

There is no difference between the accountants’ and the

managers’ attitude towards adherence to the cost accounting system in the
management of costs in travel agencies.

Significance of the Study

This study will be significant to the following groups and individuals:


5

Hospitality Industry and Travel Agencies. This research study will
be significant to the hospitality industry of Vietnam.

As the researcher

accomplished its objective of determining the factors that significantly affect
the adoption of effective cost accounting system among the travel agencies, it
also aims to provide the tourists with reasonable prices of the services and
products that the various agencies offer.

The benefits of effective cost

accounting system are not only reflected to various travel agencies but to the
hospitality industry in Vietnam through the tourists who will be better satisfied
by the competitive pricing policy in the travel agencies.

Management of Travel Agencies. The management of various travel
agencies shall be benefited directly when these business organizations are
able to appraise, improve and implement an effective accounting system. In
particular, sound accounting system must necessarily mean being able to
gather, process, report, and evaluate operating result and financial status of
the travel agencies.

The system is a tool that facilitates effective

management of a particular travel agency.

Accountants and the Professional Association of Accountants.
This research would be an eye-opener for accountants and the professional
association of accountants. It is not enough that an accountant is skillful in
the art and science of accounting. It is equally important that accountants
ensure that managers and other responsible officers understand and
appreciate the value of an accounting system so that the latter do not alienate
themselves and be able to take full advantage of the use of relevant
information that maybe generated from the use of the system.

It is also


6

important that accountants maximize their roles as business and financial
advisors in order for their professional services to become more and more
relevant and useful.

Tourists. The tourists benefit from this work when travel agencies are

able to account appropriately the costs to clients of the various products and
services.

Government.

Good accounting ofrevenues, costs and expenses

would mean a good assurance for the government tax agency to be able to
assess and collect the most accurate amount of taxes.

Academic Communities.This research shall become a rich source of
literature for both the students and faculty who are interested in such topics as
accounting for travel agencies in Hanoi.

Scope and Limitations of the Study

This research was confined to Hanoi area and involved some 104
accountants and managers of the various travel agencies. It excluded the
travel guide and other staff among the respondents, a decision which was a
departure from the original plan.

Specifically, the researcher gathered data

from seven (7)businesses described as models in tourtravelserviceinHanoi,
which included astate-owned enterprise specializinginthefieldofbusiness
travel, international travel, and domestic tourism for both local and foreign
tourists.


7

In particular, respondents came from Vietnam Travel and Marketing
Transports Company, Vietnam National Administration ofTourism, Thang Loi
andHanoi Tourism, AsialinkTravel Joint Stock Company, New Horizons Travel
Joint

Stock

Company,

and

theauthorsalsoconductedsurvey

Saomai
from

Travel

other

Company.

25travelcompanies

Besides,
in

the

areaofHanoi.

Meanwhile, the research focused on determining the factors that
affected the adoption of cost accounting system among various travel
agencies.

It examined the perception of both the accountants and the

managers on the level of their awareness and understanding, ease of use,
and the usefulness of the cost accounting system. It further examined their
attitude towards adoption of cost accounting system for effective management
of costs in travel agencies.

The research did not delve on the technical aspect and on the
appraisal and design of cost accounting system. Determining, therefore, the
appropriateness of each cost accounting system in the selected travel
agencies was out of the scope of this research.

Definition of Terms

The following terms has been operationally defined:

Cost is the value of money that has been used up to produce something, and
hence is not available for use anymore. In business, the cost may be
one of acquisition, in which case the amount of money expended to


8

acquire it is counted as cost. In this case, money is the input that is

gone in order to acquire the thing. This acquisition cost may be the
sum of the cost of production as incurred by the original producer, and
further costs of transaction as incurred by the acquirer over and above
the price paid to the producer. Usually, the price also includes a markup for profit over the cost of production.

Cost Accounting System. It is the process of collecting, analyzing and
evaluating costs of products and services.

Generally, a cost

accounting system consists of five parts and they include input
measurement, inventory valuation, cost accumulation, cost flow
assumption and recording of inventory cost flows. As applied in travel
agencies, it is concerned with assigning and allocating of the
appropriate amount incurred for the creation of a particular tourism
product and the offering and actual delivery of travel services.

Ease of use of cost accounting system is perception of accountants and
managers on the level of difficulty in use of use cost accounting
system. The ease of use of cost accounting system may refer to the
ability of accountants and managers in using the cost accounting
system.

Level of awareness and understanding of cost accounting system is the
perception of accountants and managers of cost accounting system
base on their knowledge about accounting, cost, and cost accounting
system.


9

Travel agencyis a private retailer or public service organization that provides
tourism related services to the public which include airlines services,
car rentals, cruise lines, hotels, railways, and package tours providers.
In addition to dealing with ordinary tourists, most travel agencies have
a separate department devoted to making travel arrangements for
business travelers and some specialize in commercial and business
travel only. There are also travel agencies that serve as general sales
agents for foreign travel companies, allowing them to have offices in
countries other than where their headquarters are located.

Usefulness of cost accounting system is the perception of accountants and
managers on the usefulness of cost accounting system.


10

Chapter II
REVIEW OF LITERATURE

This chapter authors reviews the related literature and studies on travel
industry in Vietnam in general, Hanoi travel in particular. This chapter
provides the reader with sufficient theory about cost accounting, and the
usefulness of cost accounting system. It discusses theories framework and
conceptual framework.

Tourism Industry and the Travel Sector

Vietnam’s tourism industry had already achieved a considerable
amount of success. By the end of 2012, Vietnam had 1,120 international tour

operators, 11,840 recognized card-holder tourist guides, 4,809 card-holder
instructors and 7,031 card-holder local tourist guides for international travels.
There are tourist accommodation establishments all over the country
estimated at 13,500 with 285,000 chambers. These include 57 5-star hotels,
147 4-star hotel, and 335 3-star hotels.

During the existence of Vietnam for 53 years, its tourism industry saw
its ups and downs. It had gone through its difficult times including critical
economic conditions, natural disasters, widespread epidemics, global conflicts
and local wars and terrorism. However, it had, so far, through difficult times,
achieved considerable milestones.

By far, as of 2013, Vietnam Tourism had already identified some key
tasks towards bringing the industry to a greater height, which include(1)
continuous implementation of the development strategy embodied in master


11

plan of Vietnam Tourism 2020, vision 2030;(2) promotion of activities in the
E - tourism marketing and branding of Vietnam tourism as provided for in the
tourism logo and slogan to attract tourists from 8 key tourism markets of
China, Japan, Korea, Malaysia, Thailand, Australia, France, and Russia; and
(3) exploitation of tourism development in Ha Long Bay and a number of other
prominent tourism points to ensure the sustainability, high economic
efficiency, image building heritagein these tourism areas.

Travel business in Hanoi. Hanoi is strategically located. It is the capital
of Vietnam, the center of politics, economic activities, culture, scientific, and
an important traffic highway of the country. As one of the largest tourist

centers of the country, Hanoi plays a very important role in the tourism
development in general and in particular, of Tonkin. International tourist
arrivals in Hanoi comprise about 30 % of its visitors. It capitalizes on its
historical and cultural advantages, it placed domestic tourism at the forefront
of the industry in this part of the country. Hanoi is also a center for receiving
and deployment of tourist travels to the northern region and the other regions
in the territory of Vietnam as well as to countries in the region.

As a tourist destination, Hanoi boosts a rich assembly of natural
landscape

wonders

which

include

HanoiWestLake,

HoanKiemLake,

QuanSonLake, Suoi Hai, and Van Tri. It also impresses tourist by its special
dress relic Thang Long Imperial Citadel, the Giong festival at Phu Dong
temple and temple Soc, and the Ca tru which is recognized by UNESCO as a
world cultural heritage. In addition, the epitaph of Dr. Le Mac at Van Mieu
Quoc Tu Giam, a recognizedUNESCO world documentary heritage had


12

become a tourist attraction.

Because of these,Hanoi has always been

appreciated by the international tourists as an attractive destination .

With the planned area expansion to 3.6 times the size of the old area,
and with a population of over 6.5 million people, Hanoi opens up an exciting
potential for the tourism industry. With nearly 5,000 sites including 803 sites
which had been ranked first in number of historical monuments, Hanoi had
achieved eligibility to develop cultural, historical, and spiritual tourism.

In

addition to all these, Hanoi is emerging as the ideal location for eco-tourism,
leisure, and entertainment.

Hanoi is also home to cultural establishments systems, and information
center of the country with the proliferation media facilities and establishments
including radios, televisions, major theaters, major museums, the performing
arts theater folk such as rowing - water puppetry. These are very attractive to
international and domestic travelers.

Since several years back, Hanoi has a number of prestigious travel
magazines such as the World 's leading Travel and Leisure ( U.S. ), Smart
Travel Asia ( HKG ). It has since won the title of Top 10 tourist destinations of
Asia.

International visitors to Hanoi are increasing in number. It rose by an
average of 18-20 % every year. In 2008, Ha Noi welcomed 1.3 million visitors;

in 2009, due to the global economic crisis and the disease, Hanoi had some
1.02 million visitors much lower in number compared to the previous year; in
2010, during the celebration year of the one thousandth year of Thang Long -


13

Hanoi Cabinet and the National Tourism Year, Hanoi’s tourist arrivals
increased to 1.7 million; in 2011,the city welcomed 1.84 million international
passengers; and in 2012,it welcomed over 2 million international tourist.

Markets of domestic tourists going to Hanoi comprise a large
proportion, with an average annual passenger traffic accounted for of over 20
% of domestic tourists in Vietnam . In 2002, Hanoi welcomes 2.8 million, by
2009 had brought 9.2 million, in 2010 to reach 10.6 million; in 2011 to reach
11.6 million; in 2012 to reach over 12 million passengers.

Domestic tourism inHanoiis also on the rise. People travel for many
different purposes such as shopping, visiting relatives and for healing. In fact,
38.6% of visitors to Hanoi stay at hotels; 24.4 % in guest houses; 21.8% in
lodging houses; and 15.2% stay with friends and relatives. Shopping is a
pastime, especially of domestic tourists. Spending on shopping accounted for
the highest proportion of their budget at 27.7%; followed by food, 22.5%;
accommodation, 22.1% and the rest were spent for transport and
entertainment.

This year, 2013, Hanoi has nearly 500 international travel agencies and
close to 500 domestic travel agencies.

It has about 50 companies and

individual business households transporting tourists. Hanoi focused cultural
institutions such as the Opera House, the NationalCinemaCenter, the major
museums, the performing arts theater folk as rowing water puppetry are very
attractive to international travelers and domestic tourists. Meanwhile, the park
system such as Lenin Park , Thu Le Park , Park Dong Da , Youth Park , West