While there is a pent-up demand for Malaysians to travel abroad after a two-year lockdown, the weakened national currency may put a damper on their holiday plans.
The weaker ringgit – which has depreciated more than 12 per cent year-to-date against a strengthening US dollar on aggressive interest hikes to fight inflation – has resulted in some DMCs altering their itineraries to make their offerings more enticing for Malaysians.
Hong Kong-based Pacific Link Travel and Tours’ director & general manager, Jacob Ng, said budget-conscious Malaysian customers are preferring half-board packages as opposed to full-board ones, along with lower category restaurants and roadside hawkers for their dining experience. Many Malaysian customers are also picking shorter – and cheaper – packages.
ERM Tours & Safaris in South Africa, which regards Malaysia as its biggest market in South-east Asia, has created more mono-destination tours to help customers save on regional airfares. It usually retails multi-destination tours across Southern Africa to Malaysians, shared managing director Hannes Boshoff.
Outbound Malaysian agents are also taking steps to mitigate risks.
Ally Bhoonee, executive director, World Avenues Travel & Tours, told TTG Asia that his company is renegotiating rates with overseas suppliers in Asia, Central and Eastern Europe as well as looking for cheaper accommodation options in order to maintain the current package rates.
He added: “We are creating more package options with different pricing tiers.”
He noted that forward bookings for the winter season in November and December to Europe is slow – this is partly due to the dollar exchange, high airfares, and the lack of seats on popular Middle Eastern airlines due to the 2022 World Cup in Qatar.
Cynthia Tan, managing director, Roystar Travel & Tours in Malaysia, is worried that should the US dollar continue to strengthen in the coming months, her company would have to ask customers who had already paid a deposit to top up the difference. Such a request would have to be made if the new package price is more than 10 per cent higher than the original price.
As a precautionary measure, the company has increased the selling price for its 2023 outbound packages.
“If this action is not taken, the company will make a loss,” Tan explained.
She said that package tours for end-2022 are not affected by the currency exchange as prices have already been locked and suppliers paid.