Inbound agents in Malaysia are seeing a niche but potential market in catering to European tourists’ rising interest in participating in wildlife conservation and charitable causes during their holidays in South-east Asia.

Alex Lee, CEO at Ping Anchorage Travel & Tours, said demand has grown at an average of 10 per cent annually over the last three years, with tourists mainly hailing from Germany, the Netherlands, the UK, France and Switzerland. Last year, the company handled around 3,000 volunteer tourists, mainly from Central Europe.

“The market is still niche and we would like to grow it organically by working with outbound agents from Europe and OTAs,” said Lee, who described such tourists as high yield and willing to spend on food and accommodation, and donate their time and money to the causes they believe in.

According to Lee, most voluntourists are FITs, above 35 and comprise small groups of less than 10 people. They typically spend one to three days of their total stay, which ranges from one to two weeeks, on volunteer activities.

The Terengganu-based Ping Anchorage works with WWF-Malaysia, Universiti Malaysia Terengganu and the Terengganu state government to promote mangrove replanting, and sea turtles and terrapin conservation at Setiu Wetlands. It also promotes tree replanting at Lake Kenyir and visits to meet aboriginal people.

Discovery Overland Holidays likewise has seen a 30 per cent increase in volunteer holidays between 2015 and 2016, senior product development/contracting manager Kingston Khoo told TTG Asia.

The company works closely with NGOs such as The Bornean Sun Bear Conservation Centre, Malaysian Nature Society and Malaysian Primatological Society to develop programmes, which include opportunities for visitors to do light maintenance work at the facilities as well as feeding the animals and cleaning their cages.

“Our main challenge is finding conservationists and activists who are passionate in their area of expertise to share their knowledge with our guests, as this will make the programme very meaningful,” said Khoo. “Most (guides) are volunteers and the challenge is to arrange programmes to fit their schedule.”

Managing guests’ expectations is hence key to a successful programme, Authentic Borneo director Marco Wunsch pointed out. He said: “We explain to our overseas partners who will then highlight in their brochures that accommodation in conservation areas are basic and some programmes such as night walks to see the slow loris are off the normal walking trails.”

Expedia Group CEO Dara Khosrowshahi expects commissions to come down as the OTA looks to pass on lower fixed costs achieved through growth not only to shareholders but hotel partners.

Speaking at the International Hotel Investment Forum (IHIF) in Berlin last week, Khosrowshahi said Expedia has been lowering industry commissions over the last 10 years as its business grows.

“As we scale our fixed costs relative to demand, we want to make sure we pass on those economics not just to our shareholders but to our partners,” he said.

“We’ve been in the business for 20 years and we wouldn’t be without (our) partners… We don’t have thousands of people working in the field but we get to market the products of our partners and the partnership is growing.”

However, Khosrowshahi believed the industry must change its pricing structure, specifically unbundle its pricing the way airlines have unbundled airfare pricing, so prices won’t “differ wildly” when a customer books through a franchise, Expedia or Booking.com, etc, and so that the pricing would truly reflect its value.

“I think the premier issue as it relates to commissions and brands is the pricing structure of the industry. It really hasn’t adjusted to the realities of the new economics of distribution. Airlines are de-bundling their products – seat, check-in bag, food, etc – into basic economy fares that are much cheaper.”

While fixed costs are down, Expedia is faced with enormous costs of going from a web to a platform company. “The market is consolidating and demand is consolidating into larger and larger platforms. We’ve gone from web company to a platform company and we have to essentially take in every single piece of travel inventory in the world – hotels, air, cars – and offer it in any way consumers want, website, mobile, WeChat, voice.

“Going from web to platform (entails) enormous costs, so in order to defray the cost, we try to bring more volume into our platform.”

Hence, the company in 2015 bought seven companies, among them Travelocity, Orbitz Worldwide and HomeAway, although it bought nothing last year.

With consolidation comes disruption, he said, and the HomeAway acquisition for example is an “extension of audience and supply into alternative lodging which we think will be very important over the next five to 10 years”.

Twice during the session Khosrowshahi said that the home-sharing economy will be professionalised and what we’re seeing right now “is just the beginning”, where it’s more like e-Bay 15 years ago which saw mostly entrepreneurs at home engaged in a marketplace.

“I think alternate lodging will be professionalised not only in terms of brands, but ownership. Combine technology and the distribution, the possibility for owners is tremendous,” he said.

There are threats and opportunities for the industry. One threat clearly is the pricing pressure, when massive supply of homes are made available to global travel, depressing prices. However, the opportunity that home-sharing brings, he said, is introducing new demand.

“My own kids, when they travel, it’s more about experiences. This can be the start of a new wave of travel growth and the opportunity for new brands and owners is tremendous,” he said.

Meanwhile, on opportunities for Expedia in China and Asia, Khosrowshahi said the company’s strategy is clear, focusing on middle-class China outbound while domestic is “essentially Ctrip’s business”. Travel agents is one of Expedia’s fastest-growing markets for China outbound, he said. South-East Asia outbound is also “truly extraordinary”.

On how he foresees Google’s inroads into travel, Khosrowshahi said: “Google is a marketing platform. They have indicated they want to stay at the top of the consumer consideration and are not going to be deep into customer service, it’s not what they do.

“They are a very important partner but also a very expensive distribution channel. We try to convert the customers (acquired through Google) over a number of interactions with us into direct customers. So they are a giant customer acquisition platform for us.”

Singapore has retained its top spot as the South-east Asia country with the highest visa-free access, revealed the 2017 Visa Restrictions Index, an annual travel freedom ranking published by the global residence and citizenship advisory firm Henley & Partners in partnership with IATA.

Climbing one spot from last year, Singapore ranks fourth globally – its highest ranking on the index in 10 years – with visa-free access to 173 countries. The Lion City is followed by Malaysia (13^th globally) and Brunei (23^rd globally) in South-east Asia with visa-free accesss to 164 and 151 countries respectively.

The biggest climbers in the region were Laos (eighth regionally, 88th globally) and Myanmar (ninth regionally, 93^rd globally) rising two spots each from last year. Laos added one country to take its visa-free access total to 48 while Myanmar brought down its total to 42, one less than last year.

In top places for North Asia are Japan (fifth worldwide/172 countries) and South Korea (seven worldwide/170 countries). Hong Kong, ranked third in North Asia, fell two spots to 22^nd globally in the 2017 index, with visa-free access to 152 countries.

China comes in sixth in North Asia, but ranks 85^th globally, with visa-free access to 51 countries, representing a rise of two places. Macau was the biggest climber in North Asia, adding four countries to take its visa-free access total to 127, putting it in fifth place in North Asia.

Overall, Germany maintains its top spot on the index for the fourth consecutive year, with access to 176 countries in total. Sweden remains in second place with 175 countries, and Denmark, Finland, Italy, Spain and the US jointly rank third, with their nationals enjoying access to 174 countries without a visa.

The UK, however, slipped down yet another position this year to fourth, having shared first place with Germany for three consecutive years from 2013-2015.

According to Dominic Volek, managing partner of Henley & Partners Singapore and head South-east Asia, the changing geopolitical climate – such as Brexit and US president Donald Trump’s travel ban – could affect global mobility and change the rankings over the next 12 months.

Contrary to the belief that OTAs have now dominated hotel bookings, European wholesale/travel agency distribution still is the largest share of business for hotels in Thailand.

About 80 per cent of Banyan Tree Hotels & Resorts Phuket’s German bookings comes through the wholesalers, area director of sales & marketing Ludovic Gallerne told TTG Asia.

Likewise, at The Rembrandt Hotel Bangkok, which boasts a strong North European market, the UK, Swiss, German and Danish wholesale markets have been traditionally strong and are still growing, said general manager Eric Hallin.

The UK and German-speaking markets also make up the strongest business from Europe for the Sala Hospitality Group, particularly for its Phuket and Samui properties.

Said group director of business development, Nicolas Reschke: “From the first year of opening we started great relationships with the major players who have supported us for 13 years since.”

The strong agent culture in Germany and Switzerland clearly has a role to play in driving contract bookings to Thailand hotels, said Klaus Sennik, general manager of Ramada Plaza Bangkok Menam Riverside.

“It is also important to recognise that Germany and Switzerland are home to some of the world’s most successful and influential tour operators such as TUI and Kuoni.”

The overall tendency for the European feeder markets to book further in advance through tour operators has helped Manathai Hotels and Resorts to be less reliant on last-minute OTA deals to fill rooms, according to group director of sales & marketing, Matt Fynch.

However, hoteliers in Thailand are not discounting the rising influence of OTAs, as outside of the German-speaking markets the travel agent holds less sway.

Banyan Tree’s Gallerne commented: “Trends are not similar in France with high online numbers and the rise of flash sales operators.

“The UK is a good mix but increasingly heading towards more online while Scandinavian operators remain strong in destinations with charter flights and not for luxury brands like Banyan Tree.”

Views also differ as to how the hotel-wholesaler relationship will pan out, with Phi Phi Island Village Beach Resort’s director of sales and marketing Pond Leartsinpakdee believing that key OTAs will “continue to gain market share from the traditional wholesalers in Europe and across the world” while the hotel grows its direct-to-website business.

Weighing in on the discussion, Ramada’s Sennik’s sentiments are more mixed. “There’s no doubt that more and more European travellers are using the digital space to book their holidays in Thailand,” he said.

“But the sheer strength, experience and determination of the agency wholesale market in Europe means that we expect to enjoy significant business from this traditional source for many years to come.”

Said Fynch: “I believe the agent/wholesale business will not go away soon or even shrink. The personal touch is still very much alive and well in European longhaul travel decisions to Thailand.”

Can there ever be too much tourism for a destination?
We asked this of UNWTO secretary-general Taleb Rifai and he said: “Growth is never the enemy. It’s about how we manage growth in a responsible and sustainable manner.” Something to think about this year, which is International Year of Sustainable Tourism for Development.

Who’s the next biggest disrupter for hotels after Airbnb?
We asked this of Peter Henley, president and CEO, Onyx Hospitality Group and he said: “Cruises may be the next big thing that hotels have to watch out for as competitors in Asia.” Not too off the mark, with cruise lines seeing the region as ports of gold.

Where are Britons going?
We asked this of Kritaka Kakkar, Mercury Travel UK and she said: “Outside Europe, with visa-free travel in EU perhaps no longer possible (for Britons) following Brexit.”

IATA has urged Japan to revamp its airport infrastructure for the 2020 Olympics and future tourism growth through collaborative thinking and extensive consultation with the industry.

Japan has set aggressive targets for attracting international tourist arrivals. Having welcomed around 24 million international tourists in 2016, the country now hopes to reach 40 million visitors in the 2020 Olympics year and 60 million visitors in 2030.

“The Olympics are an important milestone and an impetus to get things done. But it must be part of a long-term joined-up planning process focused on the big prize of welcoming 60 million visitors to Japan annually – and keeping Japanese businesses and people efficiently linked to the world,” shared Alexandre de Juniac, IATA’s director general and CEO.

IATA stressed that infrastructure planning is key for the continued growth of tourism and welcomed the development of Tokyo-Haneda’s international network, the privatisation of Sendai and Osaka’s Kansai and Itami Airports, and continuous efforts to improve competitiveness by reducing costs and optimising infrastructure.

“Not that long ago Japanese airports were the most expensive in the world. They are not cheap today, but Kansai and Narita have dropped from among the 10 most expensive to 13th, and 23rd, respectively,” said de Juniac. “We are moving in the right direction and there is still more to be done – particularly at Haneda which is bucking the positive trend by raising charges.”

IATA also called for airports to be efficient and provide sufficient capacity to meet market demands. In preparation for this growth, IATA urged a comprehensive plan for the development of a more competitive Japanese air transport infrastructure in the areas of smart security, terminal efficiency, airspace efficiency, low cost terminals and coordination.

Cathay Pacific will step up the frequency of its services in Europe, North America and Australia to meet growing consumer demand, it said in a press release.

The carrier will add four weekly flights between Hong Kong and San Francisco on the new Airbus A350-900, while flights to Los Angeles will be reduced from 28 to 21 per week. As well, the airline had earlier announced additional services to Vancouver and Boston from late March.

San Francisco will mark Cathay Pacific’s first US and second North America destination to see the deployment of the A350. The new aircraft will feature a refreshed business class cabin as well as new premium economy and economy class seats.

During the Southern Hemisphere’s peak summer period from late October to March, the airline will replace its current four-times-weekly service to Brisbane via Cairns with direct flights to both cities. The switch means that Queensland’s capital will receive 11 non-stop flights from Hong Kong each week, while Cairns will be served non-stop thrice weekly.

Meanwhile, Cathay Pacific’s existing daily flight to Brisbane will be served by the A350 from March 26 while capacity on its four-times-daily Sydney route will be increased from late October by operating a third flight with the Boeing 777-300ER.

In Europe, Madrid will see an increase from four to five flights per week from late October, while a sixth weekly flight will operate to Manchester from early December. At the same time, Paris will see the resumption of an 11^th weekly service.

After Malaysia lost some key European connections last year when national carrier Malaysia Airlines cut these routes, agents in the country are finding a silver lining in niche products and secondary source markets from Europe.

“The market has been turned upside down – our main problem is losing connectivity from Frankfurt – and we can’t depend on old methods anymore,” said Uzaidi Udanis, president of Malaysia Inbound Tourism Association (MITA).

To convince Europeans to choose Malaysia despite the hassle of connecting flights, Uzaidi said offerings must be “niche” and go beyond “general sightseeing”. Examples, he said, are islands and beaches, the Ironman marathon (Malaysia and Japan are the only Asian countries to offer this), and for more mature markets, rainforest treks.

Ahmad Fathil Abd Ghani, manager (event and promotion), Tourism Terengganu, added: “Local content is more important to Europeans than to, say, mainland Chinese. For instance, Italians don’t like cold, hard, business-like hotels in Redang. They prefer Perhentian, where more hotels are homegrown and where they can mix with the local people.”

Fathil said there are also opportunities in markets like Hungary and Czech Republic, which enjoy connections to Kuala Lumpur operated by Turkish Airlines.

Admitting that awareness of Malaysia is lacking in these countries, he said they nonetheless warrant a serious look as some traditional markets are showing signs of plateauing. There has not been a big increase in German arrivals into Malaysia, which is now around 130,000 visitors, he said.

Uzaidi also saw “strong interest” at ITB Berlin and has secured a few groups for MITA members from Eastern Europe.

Esmadee Endut, managing director of Hedaco Travel & Tours, said: “I’m not worried about Malaysian Airlines cutting off (European) routes. People don’t mind making a transit, flying on Etihad, Qatar, Emirates, etc. A lot of my clients from France have told me they prefer and love these routes.”