The road ahead

What’s on the horizon for the region’s travel trade? Major associations tell TTG Asia what they’re firing up their engines for

Indonesia

elly-hutabaratElly Hutabarat, chairman, Association of Air Ticketing Companies in Indonesia (ASTINDO)

What are your biggest challenges now?
We have more competitors – not only from the growing number of travel companies, fuelled by demand from an expanding middle class, but also from our principals who compete with us for Internet bookings.

What must travel agencies change about their business?
Travel consultants must master their products and be able to respond to questions on destinations, facilities, etc. While such information is available online, they need to be able to find it. Therefore, we must invest in technology and human resources (HR), which requires a lot of money. Giving away our commissions by selling cheap will only hurt us eventually.

What is your association focusing on in 2013?
We are focusing on HR development. ASTINDO has formed the Ticketing Expert Council, compiled ticketing job competencies and trained our members’ staff. We are also overseeing the Ticketing Professionalism Competence Certification programme. This is a recent programme that will run through 2013. Another priority is to get more members from across Indonesia as only 10 out of 33 provinces are currently represented.

• Almost 400 members   

• 10% of registered travel consultants   

• >70% of all domestic and international airline ticket sales

Malaysia

adam-kamalAdam Kamal, honorary secretary-general, Malaysia Inbound Tourism Association (MITA)

What are your biggest challenges now?
Firstly, increasing competition among inbound tour operators has led to undercutting. MITA has suggested that the tourism ministry limit the number of inbound licences to 3,000 at any one time. New players who are serious about starting an inbound business can buy over an existing dormant agency. Secondly, threats from online booking portals and hotels that deal directly with overseas travel consultants. Thirdly, competition from overseas travel companies that have an inbound business here. They offer familiarity as they speak the same language as their target market as well as ease of transaction as customers can pay in their own currency.

What must tour operators change about their business?
Tour operators should embrace technology and go direct to the consumer instead of relying solely on B2B traffic. They need to understand that the effective use of technology can bring more business and help them reach a wider audience.

What is your association focusing on in 2013?
MITA is focusing on fair practices and using technology to drive business growth through seminars.

• 300 members

• 40% of inbound players

Philippines

cesar-cruz_thumbnailCesar Cruz, president, Philippines Tour Operators Association (PHILTOA)

What are your biggest challenges now?
An insufficient supply of accommodation, poor accessibility to destinations, underdeveloped travel infrastructure, visa entry restrictions and a getting a sustainable pool of tourism professionals.

What must tour operators change about their business?
Adapt to online marketing without losing the personal touch or customised service.

What is your association focusing on in 2013?
We aim to complete PHILTOA’s official inventory of tour packages under the Island Philippines Fun Getaways and Caravans brand. This includes tour packages with guaranteed departure to 17 regions around the Philippines, as well as various Metro Manila city and day tours operated by a consortium of 19 PHILTOA members. We are also organising the first Philippines  Tourism Convention in May and will expand the 24th Philippine Travel Mart in September. As part of our commitment to sustainable tourism, we will finance the construction of the first PHILTOA Ifugao Heritage Hut in Batad for village tourism.

• 289 paid members, 15 affiliates, 1 corporate member

• 53% of inbound tour operators

Singapore

robert-khoo_thumbnailRobert Khoo, CEO, National Association of Travel Agents Singapore (NATAS)

What are your biggest challenges now?
For the outbound leisure sector, competition remains rife among brick-and-mortar firms, OTAs and supplier websites. But there is still enough of the pie to go around.
Conversely, corporate ticket sales remained stagnant in 2012 with companies downgrading purchases and some eliminating travel. A rise in operational expenses has also squeezed profits. Things look a little brighter for DMCs, as arrivals to Singapore are expected to remain buoyant. Generally, those who target emerging Asian segments will do better.

What must travel agencies/tour operators change about their business?
Become more lean and mean by augmenting staff productivity i.e. training them to become multitaskers. NATAS is encouraging members to initiate more rigorous training programmes, and recently distributed cash vouchers as an incentive to enrol employees for courses.

What is your association focusing on in 2013?
Raising service standards in the industry. In February, we intend to unveil our accreditation programme for individuals, which will recognise those who have shown outstanding performance in various capacities.

• 350 travel agencies, 100 associate members

• 33% of travel trade

• 85% of total revenue generated by travel trade

Thailand

suthipong-pheunphiphop_thumbnailSuthipong Pheunphiphop, president, Thai Travel Agents Association (TTAA)

What are your biggest challenges now?
Travel agencies and tour operators in Thailand face two major challenges. Firstly, November’s events (such as the Pitak Siam protest in Bangkok) show that tensions remain, and this is a risk to us all. Secondly, the economic crisis in Europe has affected Thai outbound. Longhaul markets did not perform well in 2012 and travellers were diverted to shorthaul markets instead, maintaining steady business to Asian countries.

What must travel agencies change about their business?
Many consultants here have been slow to adopt IT in their management process. This is a concern as we move towards the ASEAN Economic Community (AEC) in 2015. About 30 per cent have an online presence currently, but penetration is growing.

What is your association focusing on in 2013?
We are concerned about the AEC and are making sure that Thai travel consultants are ready to compete in the open market. We are working with the government to provide training courses for members. While we offered just four or five courses a year over recent years, we plan to hold at least one per month in 2013 to improve the capabilities of Thai staff. TTAA is raising awareness and encouraging business owners to keep training their staff in computing because it is very important that they adapt to the digital era.

• About 580 travel agencies, while over 130 are airlines, foreign NTOs and extraordinary members

• 10% of registered travel consultants

India

iqbal-mulla_thumbnailIqbal Mulla, president, Travel Agents Association India (TAAI)

What are your biggest challenges now?
The zero commission issue. Saddled with financial problems, some airlines are now trying to cut corners by withdrawing the commission they traditionally pay to travel consultants. The last national budget also revised service tax upwards from 10 to 12 per cent.

What must travel agencies change about their business?
Since margins are declining, we need to be innovative and come up with out-of-the-box ideas. Travel consultants should strive to offer clients tour packages according to their needs and demands, and value-for-money deals.

What is your association focusing on in 2013?
TAAI is focused on reinstating our right to commission, doing away with the weekly payment system, reducing service tax and bringing in web parity. We plan to significantly enhance connections with state, national and international tourism boards. TAAI will also work aggressively on our Vision 2020 roadmap that aims to raise the bar for all travel- and tourism-related services and activities to meet globally accepted standards. We are in the midst of identifying critical factors that impact the investment climate, in order to boost tourism.

• 2,500 members, including those overseas

Malaysia

mohd-khalid-harun-_-thumbnailMohd Khalid Harun, president, Malaysian Association of Tour & Travel Agents (MATTA)

What are your biggest challenges now?
The lack of IT knowledge and understanding of the importance of technology in growing the business. Consumers are purchasing direct from suppliers and OTAs through the Internet. The traditional travel agency must change with the times and remodel its business to incorporate technology.

What must travel agencies change about their business?
Learn to innovate and incorporate IT into their businesses. Pump in more capital to invest in IT solutions and follow the latest trends on where consumers are buying online.

What is your association focusing on in 2013?
Improving our members’ knowledge of e-commerce and using it to grow their businesses. To this end, we are organising a global travel and tourism conference in April. We are also holding the annual World Islamic Tourism Mart in June, through which we hope to create opportunities for members interested in promoting Islamic tourism.

• 2,800 members

• 80% of the industry represented

Hong Kong

paul-leung_thumbnailPaul Leung, chairman, Hong Kong Association of Travel Agents (HATA)

What are your biggest challenges now?
Technology, especially the birth of OTAs, has transformed the way we do business. Consumers also go directly to suppliers. In the past, we were the key sources for ticketing and hotel bookings as we offered better prices and various services like ticket delivery. This is no longer true.

What must travel agencies change about their business?

Don’t compete head-on with OTAs with simple functions like hotel bookings, as they are doing so well. Instead, we have to create more value-added options such as hotel and transfer packages, and provide more information for clients to make decisions.

What is your association focusing on in 2013?
Helping our members equip themselves fully and meeting their needs, such as having an online presence and Internet tools. We may boost their online capacity by consolidating our resources for mutual use.

• About 300 members covering ticketing, inbound and outbound

• 20% of the industry represented

• 50% of the industry’s revenue

India

rajeev-kohli_thumbnailRajeev Kohli, vice president, Indian Association of Tour Operators

What are your biggest challenges now?
The global economic uncertainty is changing consumer behaviour patterns. They now look for deals and discounts, and the selling community is forced to offer the same level of service at lower prices even when supply costs are increasing. Consumers are also booking trips with shorter lead times as short as four to six weeks before departure. The travel industry is finding it hard to forecast future revenue streams and therefore cannot effectively budget future expenses. Futhermore, government policies such as double taxation are antiquated.



What must tour operators change about their business?
They can no longer be complacent and rely on current or traditional operating systems. The cycles of change are becoming smaller and unless businesses understand the need to be proactive rather than reactive, they will face a wall.

What is your association focusing on in 2013?
Our focus has always been on our smaller and medium-sized members, as smaller players often need help. We have also been consistently engaging tourism officials on government policies. We need to help change policies to keep our members relevant and viable as well as ensure a level playing field and equal market access.

• Approximately 4,000 members

• 80-85% of all foreign exchange earnings in tourism

Philippine

aileen-clemente_thumbnailAileen Clemente, president, Philippine Travel Agencies Association (PTAA)

What are your biggest challenges now?
On an industry level, PTAA wants to see the National Tourism Development Plan come into fruition (achieving the goal of 10 million international and 35.5 million domestic tourists by 2016). Factors influencing its success include the removal of onerous taxation on airlines operating within the Philippines, the implementation of investment incentives for tourism-related enterprises, and travel consultants making intuitive and effective process improvements.

Other issues that need to be looked at are the proper implementation of value-added tax and withholding tax for travel agencies and tour operators, as well as seat and airport capacity.

What must travel agencies change about their business?
Travel agencies must accept that the business model for travel firms has evolved. They must maximise the use of enabling technologies, while still maintaining good client relationships.

What is your association focusing on in 2013?
PTAA’s top priorities continue to be facilitating the evolution of the business model for travel companies and being actively involved in advocacy efforts. This includes lobbying the authorities to pass laws in order to keep up with the times, providing seminars on current issues for members, participating in tradeshows in collaboration with the Department of Tourism, etc.

We will also continue to promote destinations that have been recently launched in the Philippines and provide suitable venues for networking among our members.

• About 350 members are travel firms, while over 200 are hotels, resorts, transport operators, schools and GDSs

• 85-90% of total travel volume

This article was first published in TTG Asia, January 11 issue, on page 1-3. To read more, please view our digital edition or click here to subscribe.

Additional reporting from Mimi Hudoyo, Rosa Ocampo, Marianne Carandang, Shekhar Niyogi, Rohit Kaul, Prudence Lui and Timothy France

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