More Malaysian event houses are building incentive programmes in China around cheaper second- and third-tier cities, especially those served by budget carriers, in a bid to maximise budgets as a result of a weakened ringgit.
Outbound agents in Malaysia told TTGmice that not only are clients suffering a weaker buying power, some have cut incentive budgets due to poor corporate performance.
As a result, Desmond Lee, group managing director, Apple Vacations & Conventions, has noted that trips to Europe are giving way to medium-haul options in Asia.
China in general is “easier to sell” due to similarities in F&B, culture and language among Malaysian Chinese, according to Lee. In particular, second- and third-tier cities are winning clients’ favour.
“Places that are getting increasingly popular are Xi’an and Kunming which are serviced by AirAsia X; Changsha, serviced by AirAsia; and Wuhan, serviced by AirAsia X and Malindo Air out of Kuala Lumpur. Their appeal lies in local attractions, authentic culture and food, and interaction with locals through cooking classes, cycling tours and old town walks,” said Lee.
Adam Kamal, CEO, Olympik Holidays, who has seen more clients skipping first-tier cities in 2016, said “ground costs in Xi’an, Kunming and Chengdu are 15 to 20 per cent cheaper”.
They were motivated by cost savings and “interesting offerings” that allow participants to experience local culture, Kamal added.
“Malaysians have become more sophisticated and they want local experiences.”
Mint Leong, managing director at Sunflower Holidays, has observed the same trends, especially among SMEs, while some clients have chosen to cut their stays in China by a night.