Silver lining for Malaysia and Thailand amid currency woes

Malaysia and Thailand are experiencing a depreciation in their respective currencies although there are signs that the MICE sector could benefit from the market turmoil.

In spite of the combined onslaught of a depreciating currency and sluggish economy, MICE operators in Malaysia are seeing strong bookings from Chinese MICE groups for 2016.

The bookings have been driven by improved air links from China and visa exemption to be granted for Chinese groups of 20 pax and more from October 1 to March 31, 2016.

Air China will resume four-times weekly services between Beijing and Kuala Lumpur from October 25, complementing the daily services of Malaysia Airlines and AirAsia X. China Southern Airlines will also commence thrice-weekly services from Guangzhou to Kota Kinabalu from December 1.

Li Haijiao, account manager of Beijing-based Comfort MICE Service, said: “Better direct air accessibility and visa waiver for groups will definitely help to promote (Malaysia). Air China also has a good reputation and is a trusted brand among Chinese travellers.”

Chinese MICE groups are showing a stronger interest in Malaysia, observed Winnie Ng, deputy general manager of Kuala Lumpur-based Pearl Holiday Travel & Tour, which participated in a recent roadshow organised by Malaysia Convention & Exhibition Bureau to major Chinese cities.

She said: “(Chinese) government officers are limited to a budget of US$110 per room night in Malaysia. With good rates and promotions from five-star hotels in the capital, many (Chinese MICE) are opting for five-star properties.

“We have a confirmed booking of between 1,500 to 1,800 pax from a multi-level marketing company from China for May 2016 and another multi-level marketing company for 3,300 pax in July 2016.”

Likewise, KL Tan, general manager of Borneo Trails Tours & Travel in Kota Kinabalu, is also seeing strong forward incentive bookings to Kota Kinabalu from China for 2016.

Over in Thailand, the MICE sector might see some mild benefits from the depreciation of the baht, buyers at IT&CMA told TTG Asia e-Daily.

A weaker Thai baht will work in the favour of the Thai MICE sector “a little bit”, especially in the context of other regional currencies, said Aleizer Yrrah Jasmin, MICE travel consultant with Philippines-based Corporate International Travel and Tours.

Longhaul buyers like Jorge Vasques Rodrigues, administrator/executive officer of Lisboa-based Sotto Tour Travel Engineering, also views a weaker Thai currency “an advantage”.

However, some trade members are not convinced that a cheaper Thailand would suffice to reboot its plateauing MICE sector, especially in an era of heightened security worries in the wake of the recent Erawan bomb attack in Bangkok.

Liam Crawley, chief financial officer, Wyndham Vacation Resorts Asia-Pacific, pointed to a more immediate financial problem a dipping baht brings. “Hotels will be negatively impacted should they incur costs not in Thai baht.”

On the other hand, despite the Singapore dollar surging to a new high against the ringgit, Malaysia appears less desirable as a destination for Singapore MICE groups, with agents reporting slower business events bookings from the Lion City this year.

RA Jits Travel & Tours managing director, Harminderjit Singh, said the strong Singapore dollar and good flight access out of the country had resulted in corporate companies looking further afield for their overseas events, with many opting for Thailand.

Said Singh: “While our FIT business had grown 15-20 per cent year-on-year, the reverse is also true for our meetings and incentives sector (which decreased 15-20 per cent).”

Similarly, Raaj Navaratnaa, general manager at Johor Bahru-based New Asia Holiday Tours & Travel, has received many enquiries from incentive clients in Singapore looking at destinations such as Myanmar, Philippines and Vietnam.

Its inbound business from Singapore, on the other hand, dipped 30 per cent drop this year, a situation that was further aggravated by the haze in September and the recent ‘red shirt’ rally in Kuala Lumpur.

“A big meeting group of 600 pax from Singapore planning to have their meeting in Kuala Lumpur in end-September cancelled because of the rally,” said Navaratnaa. “They are instead going to Thailand.”

He added that the main challenge for Malaysia is a lack of new products to impress repeat corporate clients from Singapore, as upcoming attractions like the Twentieth Century Fox World Malaysia in Resorts World Genting and Movie Animation Park Studios in Perak will only open in 2016.

-TTG Asia.