Weak rupee hurts Malaysian MICE sellers

Malaysia's traditional peak season for Indian inbound incentives – September to mid-December – is likely to be a washout, according to Malaysian MICE specialists who have blamed the weak performance largely on the depreciating Indian rupee.

Hidden Asia Travel & Tours Malaysia’s managing director, Nanda Kumar, told TTG Asia e-Daily: “All three incentive groups from India that were secured earlier and slated for travel to Malaysia this quarter have postponed their trips. Comparatively, in 4Q2012, we handled eight incentive groups with 80 to 300 delegates from that market.”

Arokia Das, senior manager of Luxury Tours Malaysia, said he had seen a 20 per cent year-on-year drop in incentives from India this peak season due to reduced Indian buying power and the stiff competition between inbound operators in Malaysia.

According to Das, inbound operators are resorting to selling below net rates to win business, with some surviving on shopping tours for both incentive and leisure groups.

Illustrating the severity of the situation, he said: “A three-night land package in Kuala Lumpur, inclusive of a twin-share stay in a local four-star hotel, costs about RM800 (US$246) per night three years ago. Now it costs RM600 to RM650. With inflation, prices should go up, not down.”

The Indian rupee had depreciated by 21.4 per cent, from Rs54.60 to US$1 in January to Rs66.30 in September. This has pushed Indian clients to scale down on hotel options and choose Kuala Lumpur as a single destination instead of twinning the city with a beach destination such as Langkawi or Penang, as they had done in the past, revealed Das.

C P Sharma, managing director at New Delhi-based Neptune Travco, concurs, saying that he had to feature only the Malaysian capital city in two meeting and incentive programmes this quarter in order to reduce costs for the client.

The company has also negotiated with hotels for better rates in order to make its proposals more competitive.

-TTG Asia.