The VNAT says in the first four months of the year, 1.5 million foreign tourists came to Vietnam, an annual increase of 12.5 percent. In April alone, the country clocked up 350,000 – a 96.8 percent increase over the previous month.

On first glance, this is good news. At the Melia Hotel in Hanoi, during the high season (from October to February), the average occupancy rate is about 95 percent, but even in the low season months like May or June, it stands at more than 70 percent.

But the increase in visitors has led some hoteliers to raise room prices. Many hotels in Ho Chi Minh City have raised their room prices by about 30 percent but are still being overbooked. This has caused many difficulties for travel agents who face the risk of losing customers.

Le Hoang Yen, director of the Centre of Incentive Tours and Events of Ben Thanh Tourist (CITE), says that her company recently lost a group of 300 foreign visitors on a visit to HCM City in July because of the high hotel prices.

Ms Yen explains that the five-star hotel that CITE booked for the group raised the price of each room by US$100. After several negotiations, the hotel agreed to only a 10-percent discount.

“When we sent the new range of prices to our partners, they refused and said the new prices were not attractive enough to their customers,” Ms Yen says.

The Asian Trails Company encountered a similar situation when the hotel they had contracted to host their customers in Hanoi demanded twice the price promised.

“The contract was signed with a set price for the whole year which we then quoted to our partner. Now the price has been raised, we don’t know what to do,” complains Bui Viet Thuy Tien, the company’s director.

A recent survey by Visa International Asia Pacific and the Pacific Asia Tourism Association showed low product and service costs to be one of the main reasons foreign tourists choose Vietnam.

However, now the price for a room in HCM City is around US$65-100, while one in Thailand or India is about US$70-100, says Patrick Gaveau, Business and Marketing manager of Focus Asia Group Ltd, adding that so Vietnam loses its competitive edge.

“If hotel prices keep rising, it is possible that foreign tourists will no longer choose Vietnam as their holiday destination,” Mr Gaveau warns.

But there is hope. Analysts have said that overbooking and price hikes could be eased as construction of several top end buildings begin in Hanoi and HCM City.