Yup, as Mel said, it's that bad. Not worse than India, just less friendly.
I'd like to give you some advice, but heck, what to say?
I had an awesome time in Vietnam despite people trying to rip me off. Here's a few lessons I learned:
1. Don't book weeks ahead. I travelled with a few that booked ahead and got the same deal that I did, even though they were promised the earth.
2. If you book a tour, listen to what's included and assume that anything else is not included. You can ask if other things are included, but the answer will usually be yes. If they say no, then maybe you got lucky and found an honest tour company! There are a lot more honest tour companies than dishonest ones, but even tour companies get ripped off.
3. As far as Halong Bay goes, I had a great experience despite not getting quite what I paid for because I was with great travel companions. I didn't have a problem with anyone trying to take my passport or money (although everyone wanted a piece of my wallet). What will probably happen is that you don't get quite what you are promised. And it probably won't even be the fault of the travel agency. You can cry about it or laugh about it. We had a great laugh and decided getting slightly ripped off was a more genuine experience.
4. If you like drinking, consider taking your own supplies on the boat. A lot of boats run out of drinks. If the staff don't like it you can always give them a tip to keep them happy.
5. As for buying from street touts, a very simple rule is to ask yourself is: if losing this much money really matters to you. If it does, follow Mel's advice.
And finally, the easiest way to know if the hotel is the real one is to go there. Tell your taxi to wait, and if you don't like the place, tell him to take you to the next hotel. I've done this on a couple of occasions when I got a bad vibe from the hotel staff (though never in Vietnam).
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