Will consumer travel fairs – an important source of cashflow and a key marketing tool for travel agencies – come undone by competition from online portals?
The crowd at ASTINDO Travel Fair in Indonesia
A declining footfall at the two main consumer travel fairs in Singapore, Travel and Holiday, over the past three years has thrown a question mark on the future of fairs.
Attendance at Travel 2013 and Holiday 2013, both organised by the National Association of Travel Agents Singapore (NATAS), saw their deepest drops in the last three years of 15 per cent and five per cent respectively. Sales volumes at each show also declined by about S$10 million (US$7.9 million) in 2013, compared with 2012.
Tudor Coman, CEO of Flocations, a Singapore-based meta-search for travel packages, charged that the NATAS fairs are “no longer effective” and are not giving the ROI they used to. And while large players such as Chan Brothers and Dynasty Travel can still afford to participate, the small- and medium-sized agencies “just don’t see the value” and are finding new channels to acquire customers, he said.
He asked: “Why would a consumer go through the headache of a travel fair when he can search the same deals online?”
Coman may have vested interest in expounding the view that fairs are doomed, but he may also have a point. Flocations showcases some 9,000 package deals from Singapore agencies, many of the firms SMEs, and Coman claimed the site gets the same traffic as a NATAS fair every day. This traffic neither needs to go to the exhibition centre for the show nor pay its entrance fees.
Vikram Malhi, Expedia’s general manager, South-east Asia, India and Greater China, Expedia echoed the sentiment: “With online travel agents, consumers have access to deals year-round instead of having to wait twice a year for travel fairs.”
A regional director of an established outbound travel brand which targets a slightly more upmarket clientele said sales from travel fairs in Singapore are down, although the company’s overall sales are up. As a result, the firm is evaluating whether it is worth participating. Over in Indonesia, however, the source noted that sales at fairs are thriving (see box below), but in Malaysia, its GSA makes more sales at the office than at the main fair organised by the Malaysian Association of Tour & Travel Agents (MATTA).
That however is just one agency’s experience. Going by visitorship and booth numbers it provides, the twice-yearly MATTA Fair in Kuala Lumpur is still hugely popular. But the leading, eponymous Virtual Travel Fair (VTF) organised by Smart Online Travel Assistant (SOTA) and co-hosted by The Star Online, the digital unit of Star Publications, is making inroads into the market, thanks to growing awareness of the fair, consumer adoption of online technology and the introduction of mobile application for Android operating systems last year.
Like the MATTA Fair, VTF, which debuted in April 2011, runs twice-yearly, but unlike MATTA, SOTA does not charge members – hotels, licensed agencies and attractions – a fee to trade their deals during the fair to consumers, predominantly Malaysians but also Filipinos, Indonesians, Hong Kong residents and Middle Easterners, according to SOTA’s chief marketing officer, Joanna Liao. VTFs in the past ran from six to 14 days. The first, in April 2011, saw 6,108 unique visitors; by the fourth VTF in September 2012, this rose to 63,381 visitors, and 70,113 in March 2013, SOTA claimed.
This is closing in on MATTA Fair’s 100,000 visitors in March 2013, although VTF’s seller participation is paltry at 70 agencies and 153 hotels, compared with MATTA Fair’s 1,094 booths in March 2013.
Aside from being open 24/7 and hassle-free – going to Putra World Trade Centre for the MATTA Fair can be a nightmare because of heavy traffic – consumers are also offered gimmicks such as a Lowest Price Guarantee, online contests and e-auctions.
Nazarin Chik Abu Hassan, development manager, Honey Vacation Travel and Tours, said sales from MATTA Fair currently is much bigger, around RM500,000 (US$152,625) to RM1 million, than VTF’s RM50,000 to RM100,000. Consumers at MATTA Fair tend to buy full-board packages to medium and longhaul destinations, while VTF customers tend to be younger and have tighter budgets.
“Thus, we sell Europe, South Korea and Japan at MATTA Fair, and mainly domestic and regional tour packages at VTF.
“In future, we believe online fairs will catch on in Malaysia.’
Michael Low, assistant manager business development, AF Travel, also believed online travel fairs will gain momentum in the future. But now, “MATTA Fair brings in better sales, and a spectrum of shoppers from budget to high-end”, he said.
Coman (above) asserts fairs are dying. Tan and Chan said – rubbish.
Consequently, the alarm bells aren’t ringing at either NATAS or MATTA.
National Association of Travel Agents Singapore (NATAS) COO, Anita Tan, said visitorship alone is not an accurate measure of a fair’s success. She said: “The travel fair dates may clash with the festive season or other consumer events that are happening during that period; an economic downturn may also cause consumers to be more prudent with their expenditure.
“Looking at sales volumes and visitor numbers, the average expenditure per visitor has grown over the years. This means that NATAS fairs are in fact attracting a growing number genuine buyers, and that consumers are spending more on their holidays to longhaul destinations.”
In a rebuttal to online players’ views that fairs are losing ground, Tan said: “They are assuming that our fairs are nothing more than deals and discounts. In fact travel consultants are on site to offer a great deal more services such as helping customers buy travel insurance and making recommendations on how to customise various aspects of a travel package.”
Hamzah Rahmat, president of MATTA, said MATTA Fair is like a carnival, where families enjoy performances and not just browse offerings and make purchases. At press time in February, there was a waiting list of 77 booths for the fair this month (March) due to space constraints. “For the September fair, we taking four halls at Putra World Trade Centre, instead of three as in the March fair,” said Hamzah.
MATTA is also looking to give participation priority to its members over non-members such as airlines and foreign national tourism organisations.
Anthony Chan, group managing director, Chan Brothers Travel, Singapore said: “While an online medium is handy for offering basic travel products such as flight, accommodation or vehicle rental, more complex travel products require detailed and lengthy elaboration from dedicated face-to-face personnel.
“Many customers also still want the more personal touch, reassurance of physical customer service staff, payment security and support in an emergency or after-sales service.”
Besides, the divide between online and offline is gray. “Up to 40 per cent of transactions at our retail offices and travel fairs are generated from online enquiries, eventually being closed over-the-counter due to complexity of the products,” he said.
Sheryl Lim, regional director of Asia, Insight Vacations, said travel fairs and roadshows account for 15-20 per cent of the company’s revenue and provide an avenue to create branding and to connect face-to-face with their target audience.
For consumers, it’s “a great platform” to discover various travel offerings and ideas for the next vacation, all under one roof, particularly for those who prefer a personal touch, are less tech-savvy and are time-short.
“A travel consultant is not just a middleman. He offers his expertise in managing complex itineraries and assists with visa submissions, change of travel plans, refunds, cancellations and rebooking,” she reminded.
Agreeing, Richard Yip, director of tour sales and product development, S Travel, said: “The NATAS fair may have lost some ground in terms of the number of visitors but it remains the number one choice for consumers who want to seek the best deals all under one roof. Travel fairs are essential for us as they help us to enhance our company’s branding, showcase our travel products to all consumers and, so far, we have managed to canvass a good portion of our annual revenue through them.”
Nevertheless, to ensure travel fairs continue to have a firm foothold, more value-add must be provided for the visitors.
Insight Vacations’ Lim said: “Travel fairs can be more than a place just for travel bargains; it can be a showcase of new destinations and new travel concepts. For instance, travel experts can be invited to the fairs to share their experiences and expertise.”
S Travel’s Yip added: “Prices (at travel fairs) must also be more transparent, showing customers the cancellation fees and service charges they incur.”
(Ed’s Note: This article was written before the NATAS Travel 2014. At press time, figures for the fair were not available.)
Source: National Association of Travel Agents Singapore
Fairs thrive in Indonesia
Indonesia has seen a growing number of fairs in the last five to seven years, organised by a consortium of tour companies, airlines or travel associations.
Shows such as Indonesia Travel and Holiday Fair (ITHF), ASTINDO Travel Fair, Garuda Indonesia Travel Fair and ASITA (Association of the Indonesian Tours and Travel Agencies) Travel Fair came up in Jakarta in the last few years, some of them held annually, others twice-yearly.
In the early days, outbound travel fairs were designed to grab a bigger piece of the high season pie, but Indonesia’s economic instability in the late 1990s and early 2000s had inspired tour companies and airlines to come up with cheap low-season packages to attract travellers. This worked so well that now “there is a market for every season”, said RajaMICE CEO, Panca Sarungu.
Rising disposable incomes and the entry of financial institutions that allow travellers to pay by instalment with their credit cards further boost the business.
ASTINDO Travel Fair last year attracted 63,000 visitors with a total transaction of Rp73 billion (US$5.3 million) over three days. Of the total sales, 70 per cent was outbound. This year, the fair’s organising committee chairman Anto Haditono targets 65,000 visitors and Rp85 billion in sales.
Garuda’s fair last year attracted some 60,000 visitors with a total transaction of Rp60 billion.
Panorama Group’s managing director, Rama Tirtawisata, said: “Travel fairs change travel behaviours. In the past travellers determine holiday dates and look for available packages, now they plan their holidays (especially short breaks) based on the best deals, which are usually found in travel fairs. In fact, they may not even plan to travel but the deal is so good they buy the package and work on a leave.”
Bernard Akili, vice president marketing and product development, Smailing Tour, said: “Indonesians love deals, so promotional packages, instalment payments with zero interest from banks, plus cashback offers during the show really work.
“On top of that, BCA Bank now offers a zero interest instalment (plan) on overseas shopping to its credit card holders.” About 70 per cent of Smailing’s total sales last year were for the low season period.
Panorama Group’s own travel fair, World of Panorama, which primarily targets year-end holidays, last year contributed a third of group tour business for December last year, said Panorama Tours managing director of Leisure Travel Management, Meity Monica Lukito.
Travel fairs now do not only take place in Jakarta but in other big cities around the country, thanks to the growing middle-class society and improved accessibility to these places.
ITHF has branched out to cities such as Bandung and Makassar; Garuda’s fair is now held in nine cities including Sumatra, Java, Bali and Nusa Tenggara; and ASTINDO’s fair this year will be held in Jakarta and Surabaya.
ASITA Travel Fair, launched in Jakarta in 2012, was held in four cities last year. This year, it will be held in nine cities including Pekanbaru, Palembang, Semarang and Balikpapan. The events are organised by RajaMICE.
Said RajaMICE’s Sarungu: “People with buying power are no longer centralised in cities like Jakarta and Surabaya. More people in the various regions now can travel, thanks to improved accessibility in the country.”
Additional reporting from Paige Lee, Mimi Hudoyo and S Puvaneswary