The ringgit has depreciated almost 11 per cent against the US dollar since the start of the year, making ground costs more competitive to markets that contract in US dollars. At press time on Monday, the ringgit reached a historic low of 4.6 ringgit against the US dollar.
However, inbound agents told TTG Asia that the favourable exchange rate has not resulted in a huge pick up in business as both airfares and air connectivity remain an issue.
Arokia Das Anthony, director of The Essence of Asia Tours & Travel, lamented the lack of direct flights from the Indian cities of Amritsar, Hyderabad and Cochin, all of which are big source markets for Malaysia. For Indian cities that connect directly with Kuala Lumpur, flight frequencies have yet to return to pre-Covid levels.
He felt that Indian arrivals could have performed much better for Malaysia if there was better airlift. While Vietnam arrivals had picked up by “quite a bit” but he was unsure if it would sustain until end of the year.
Alex Lee, CEO, Ping Anchorage Travel & Tours, agrees, saying that poor air connectivity is hindering Europeans from choosing Malaysia even though the destination is very competitive now in the South-east Asia region.
Although the ringgit is in travellers’ favour, demand must be created for supportive flights to follow, opined Lee. In this regard, Ping Anchorage Travel & Tours is creating new packages with themes like beach retreats, nature, heritage and the arts, and will be exhibiting under the Tourism Terengganu pavilion at World Travel Market in London this November.
When asked about forward bookings for the year-end, Arokia said it was still too soon to tell – outbound agents are refraining from promoting specific destination at this point, so as to spread their business and reduce financial risks.
For Manfred Kurz, managing director, Diethelm Travel Malaysia, forward bookings were coming in “more or less as predicted” but it was getting harder to project the year-end performance as the booking lead time from Europe and the US had become shorter post-lockdown. While Europeans and Americans used to book three to four months ahead, they are now confirming just one or two months before their desired travel dates.