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Service prices soar despite steady power supply on Vietnam’s Ly Son Island

Bad news for visitors to Ly Son Island off the coast of central Vietnam: although the island has been connected to the national grid, this does not necessarily mean service prices have been lowered.

An aerial view of Ly Son Island off Quang Ngai Province, located in central Vietnam
An aerial view of Ly Son Island off Quang Ngai Province, located in central Vietnam

Instead, service providers are charging tourists even more, as the island, about 30km off central Quang Ngai Province, is embracing a new wave of holidaymakers and investors after an underground cable system connecting it to the national electricity grid was inaugurated on Sunday.

The VND678.7 billion (US$32.02 million) power supply project will provide steady power to islanders, and reduce the electricity prices business owners have to pay to around VND2,000 a kWh, down from VND12,000 per kWh.

However, if tourists expected to enjoy lower room rates at hotels on the island, they were wrong.

The Dai Duong Hotel, located next to the island’s harbor, installed air-conditioners in all of its rooms on Monday, and increased its prices from VND300,000 per night to VND400,000 ($18.83) the following day.

The hotel owner said the new prices are worth it because “the rooms are now air-conditioned.”

The Thanh Loi Hotel nearby also applied a similar price hike for the same reason.

Garlic, land are no exception

Traders of garlic, the island’s specialty, did not waste the chance to increase their selling prices.

While Ly Son garlic used to cost only VND50,000-60,000 a kg, visitors now have to pay up to VND80,000 for the vegetable.

Toi mo coi (orphan garlic), or garlic whose bulbs contain only one big single clove each, jumped to VND1.2 million ($56) per kg, up from only VND700,000 per kg.

There is now huge demand for land to set up new facilities to embrace the increasing number of tourist arrivals on the island, and land prices have thus skyrocketed.

Nguyen Van Thanh, owner of the Thanh Loi Hotel, said that while the 500-square-meter plot of land he wanted to buy cost only VND700 million ($32,950) in March, the asking price is now VND1.2 billion ($56,481).

“However, no large land transactions have been made on the island, as people don’t think it is the right time to sell their property,” Thanh said.

Lacking in tourism products

The power supply project is actually bringing changes to the island, creating a busier and more active atmosphere on it.

Viet Cuong, an electronics center located in downtown Quang Ngai City, which is the provincial capital, has invested VND1 billion ($47,068) to open a store on the island.

“Demand for electronics will surely increase as islanders need the products for their own use, and to serve tourists,” store manager Pham Viet Cuong said.

Even so, there are issues that need to be solved in order to make Ly Son an appealing tourism destination, as there are currently only a few attractions on the island. The primary highlight is the natural beauty of the beaches and coral reefs.

The island needs infrastructure improvement, new attractions, and environmental and waste treatment solutions to be able to develop, a hotel owner said.

But Nguyen Thanh Son, a chief official from the island’s administration, is upbeat about the prospect of development.

In the first eight months of this year, Ly Son received 18,000 visitors, equaling the full-year figure of 2013, Son said.

“The Ly Son administration will work with relevant agencies to formulate a plan to sustainably develop the island’s economy and tourism,” he added.