Travel companies in the region share their projections
Inbound
The political uncertainties looming over the upcoming elections in India and Thailand are casting a shadow on inbound business.
Luxury Tours & Travel Singapore’s director, Michael Lee, foresees a slowdown for inbound traffic in Singapore for 1Q2014. He said: “(Arrivals) from these two countries (India and Thailand) will likely slow down as they may be less likely to travel but it will pick up later in the year.”
For Samson Tan, CEO of GTMC Travel, factors like the European economic crisis and political unrest in Thailand have already adversely impacted inbound travel to Singapore in 2013. In 2014, he intends to grow his number of bookings by 50 per cent, focusing on the online business.
“We want to concentrate on our website and increase our spending on search engine marketing,” Tan said. “The benefits of going online is we are available 24/7 with instant confirmation and we can reach out to more markets.”
Meanwhile, the launch of more midscale hotels this year will spell an opportunity for Luxury Tours to market Singapore as a less pricey destination. He said: “It is not new that Singapore is an expensive place so hopefully the cheaper accommodation costs can fight this.”
Outbound
Singaporeans’ penchant for overseas travel will continue to stay strong this year, buoying the business outlook for outbound firms.
“We have also quite successfully increased traveller yield year-on-year by about four to seven per cent,” said Chan Brothers Travel’s group managing director, Anthony Chan, who forecasts 10 per cent year-on-year growth for the company this year.
“We constantly seek to move consumers up the value chain and reap higher-yield travellers through continual product innovation and service differentiation,” he added.
As Singapore is a mature travel market, Chan admitted that a key challenge is keeping pace with customer demands. He said: “Our focus for 2014 will be on business process reengineering, which will see a fundamental rethink of workflow and processes to dramatically improve customer service and operating efficiency.” – Paige Lee Pei Qi
Inbound
The Malaysian travel trade is adopting a cautious outlook this year as business costs surge in the country.
Yap Sook Ling, managing director of Asian Overland Services Tours & Travel (AOS), said: “Business volume and yield are anticipated to be the same as 2013 or even less. Our profit margins are squeezed due to rising petrol, toll and electricity rates, and increasing staff salaries to make up for inflation.”
On the other hand, Luxury Tours Malaysia’s senior manager, Arokia Das, projects an increase of 35-40 per cent in business volume and 18 per cent in yield, driven by traditional markets such as India and the Philippines while Eastern Europe is a growing market.
Both Arokia and Yap see Visit Malaysia Year 2014 as a good platform to generate greater awareness of Malaysia and boost business from non-traditional markets like South Africa and CIS countries.
Luxury Tours – a strong player in the Indian inbound market – also foresees the Malaysian government’s impending move to introduce visa on arrival facility for Indian nationals visiting Malaysia through a third country (namely Singapore and Thailand) will help to create interest among Indian tourists.
Rising air connectivity between Malaysia and India brings further opportunities too, especially as Malindo Air’s new daily Kuala Lumpur-New Delhi services and upcoming daily Kuala Lumpur-Mumbai services (commencing February 15) will raise seat capacity and provide a low-cost alternative to Malaysia Airlines, said Arokia.
However, the lack of direct flights still limits access to secondary destinations such as Langkawi, Penang, Kuching and Johor Bahru, he pointed out.
This year, Luxury Tours will launch a booking engine with dynamic packaging on its website to enable direct bookings for both B2B and B2C clients, explained Arokia.
AOS will also roll out improved packaged tours as part of its new initiatives this year. Yap said: “We will create more unique overland packages so overseas (consultants) cannot compare our offerings with that of other tour operators and will be willing to pay a premium for our unique tour packages.”
Outbound
Higher living costs are curbing Malaysians’ spending, said Panorama Tours Malaysia managing director, Richard Vuilleumier.
He explained: “Prices have risen as the government has cut back on subsidies for sugar, petrol, electricity and toll, which in turn have an effect on outbound. As costs rise, Malaysians have less spending power and so may cut down on their holidays abroad. Natural calamities and unstable political situations abroad will also affect travel.
“The challenge will be to entice Malaysians to spend on travel, especially longhaul, as the ringgit has dipped against the US and European currencies,” he added.
Panorama Tours Malaysia is working towards branding itself as an ecotourism adventure specialist, with plans to introduce niche packages in four-wheel drive, cycling, biking and rock climbing tours.
The company is also keen to sell ground packages to coincide with airline promotions during low periods to entice Malaysians to travel overseas. “Another opportunity for us is to become a cruise specialist as consumer awareness about sea cruises are growing and (travellers) are willing to pay for all-inclusive cruises.” – S Puvaneswary
Inbound
The Indonesian inbound trade is stepping up efforts to woo more visitors from ASEAN.
“The launch of direct flights from Singapore to Makassar, Jogjakarta, Semarang, Surabaya and Bandung, plus the improved domestic flight network have opened up new product opportunities. For example, passengers can arrive in Jogjakarta, do overland to Surabaya and Bromo, then fly from Surabaya to Makassar to do the Toraja tour and fly out to Singapore,” said Adjie Wahjono, operations manager, Aneka Kartika Tours & Travel Services. The Surabaya-based operator expects revenue to increase by eight per cent this year.
“Singapore and Malaysia continue to grow, but (business from) the Philippines, Vietnam and Thailand are also up,” said Adjie, who projects a revenue increase between seven and 10 per cent for the South-east Asian market this year. “Last year, the European versus South-east Asian market composition was 70:30; this year we are looking at 60:40.”
Likewise, Panorama Destination will also step up focus on regional markets like Malaysia, Vietnam and India, said COO, Achmad Sufyani, as European markets have yet to return to pre-crisis levels.
Said Achmad: “In 2013, the volume from Europe was down by 25-30 per cent from 2012, but our revenue was up fairly thanks to currency exchange. This year, we expect to maintain our performance in the Netherlands, and will put more efforts in Eastern Europe such as in Romania and Serbia, and the Scandinavian countries.”
Sharing similar observations, Adjie remarked: “We have seen (European) group series booked for summer, but FIT bookings for April onward are still slow. This year, we are looking at increasing revenue by introducing upmarket packages.”
However, the upcoming World Cup in Brazil, which falls during the summer peak season, may prove a more attractive destination than Indonesia for European travellers, opined Achmad.
Outbound
“Tremendous growth” is expected for the Indonesian outbound market, according to projections by Al Mulenga, director of G2 Travel.
“In 2014, we will grow our core business organically and take on more employees. This year, G2 will open offices in Beijing and Tel Aviv,” said Al. “We see huge potential for business into the Middle East. Our partnerships in Dubai and Amman will lead to growth into Dubai, Jordan and the Holy Land.”
He added: “Overall, we are looking to grow our revenue by 100 per cent compared with 2013, when our total sales grew by 150 per cent.”
However, the rupiah depreciation may erode Indonesians’ spending power, causing travellers to opt for domestic or shorthaul travel and shorter holidays instead. “The industry will have to come up with innovative products that are affordable in 2014,” he commented. – Mimi Hudoyo
