Malaysian travel consultants lament sorry state of rate parity

While local tour operators have long complained that hotels offer them contract rates that are higher or similar to the dynamic rates offered to OTAs, the gap has widened in recent months to place traditional travel consultants at the losing end.

Arokia Das, senior manager at Luxury Tours Malaysia, shared: “A year ago, OTAs were offered rooms without breakfast at slightly higher rates. This year, they get rooms with breakfast at rates that are lower than what we get.”

The average contract rate for a four-star hotel ranges from RM220 (US$61) to RM250 for local travel consultants, but OTAs get rates as low as RM190, including breakfast, he said. “This is happening because hotels need business and there is an oversupply of rooms.” As a result, “local players lose out to OTAs who make money and are not even based here”, he opined.

Agreeing, Ally Bhoonee, executive director of World Avenues, said this is unfair to travel consultants who have invested in destination promotion. “It also makes the destination look ‘desperate’ to overseas outbound tour operators, who will take full advantage and squeeze the local travel consultants for further discounts.

“The industry – Malaysian Association of Hotels (MAH), Malaysian Association of Tour & Travel Agents and the Ministry of Tourism and Culture – must come together to find a solution to this issue,” he said.

However, MAH president, Cheah Swee Hee, told TTG Asia e-Daily the association does not regulate rates as “This is a free market”.

Asked whether there is a solution to rate parity, he said: “If travel consultants want good rates they must also be able to commit a certain number of room nights to the hotel.”

Meanwhile, Alex Lee, CEO of Ping Anchorage Travel & Tours, has found a way out of competing against OTAs by diversifying into the hospitality industry with the 22-room boutique hotel, Terrapuri Heritage Village, in Penarik, Terengganu.

He said: “We sell rooms to OTAs and traditional travel consultants, and we have also diversified to offer services to small inbound MICE and bespoke programmes to high-end clients.”

-TTG Asia.

Corporate Travel Bazaar 4 @ Penang ( 8 & 9 October 2013)

-Tourism Malaysia.

PST Travel's B2B site takes off

Malaysia's PST Travel today unveiled a new dedicated B2B site for local travel consultants, equipped with a booking function for instant confirmation.    
Accessible at b2b.pst.com.my, PST is waiving the monthly subscription fee for the use of the site’s Internet booking engine (IBE) during the launch phase between August 5 and 31. PST Travel’s B2B unit head, Robert Saw, said: “We are confident that most of our existing consultants will see the benefits of using this IBE and that it will give them a positive return on investment.”
 
PST Travel CEO, Ngiam Foon, said: “We have very attractive fares for travel from points in Malaysia for select destinations in ASEAN and North Asia compared to what the average consultant can obtain from their GDS.” He said cost savings could run up to 80 per cent on select airlines during the launch phase.
 
“I hope the savings made will drive consultants to (book through) our IBE instead of just using it for their search convenience…Another very compelling reason to use our IBE is the ease of finding the lowest available fare without much ticketing knowledge,” he added.
 
Ngiam explained that the new site’s launch was timely and would address current challenges faced by consultants, especially the small and medium-sized agencies, which include a dire shortage of staff with sufficient ticketing knowledge, reluctance to commit more financial resources to fund any increased bank guarantees and a lack of access to attractive fares.
-TTG Asia.
www.pst.com.my

Malindo dangles cash incentive for travel consultants

Malindo Air has launched a two-month long incentive programme in the hopes of growing its 700-strong base of travel consultants by threefold.
 
Between June 1 and July 31, travel consultants who issue tickets for FITs via the airline’s B2B system will receive a cash reward. Consultants will earn RM8 (US$2.60) per passenger for meeting monthly sales targets of 100-250 passengers per segment, RM10 per passenger for 251-500 passengers, RM12 per passenger for more than 501 passengers.
 
Consultants also stand to earn RM50 per passenger per segment for business class tickets. Commissions will be calculated at the end of June and July, and the incentive paid out by the 15th of the following month.
 
Malindo Air CEO, Chandran Rama Muthy, said: “We are a (consultant) friendly airline and we wish to reward (those) who help us fly with high loads…Our services between Kuala Lumpur and Kota Kinabalu, Kuching registered average loads of 80 per cent.
 
“The scheme is timely as we are about to launch new turboprop services out of Subang Skypark to Johor Bahru, Kota Bharu and Penang on Monday (June 3) and commence new jet services from Kuala Lumpur International Airport to Sibu (June 11), Miri (June 14) and Tawau (June 26)”.
-TTG Asia.

Travel consultants ramp up cross-selling

More travel experts are now offering a greater variety of add-on options during hotel bookings in order to attract and retain customers, with airport transfers and sightseeing tours representing the biggest cross-selling opportunities.

According to Amadeus’ second Asia-Pacific hotel distribution survey, travel consultants were also increasingly rolling out assistance for car rentals, concert ticket purchases, dinner reservations and even metro passes. Kartikeya Tripathi, regional director, hotel distribution, Amadeus Asia-Pacific, said: “Travel consultants today need to respond to changing consumer preferences by providing a one-stop service to travellers, particularly given the rising demand for ancillary options when travellers book their hotels.”

The study found that travel consultants now consider ease of booking and commission guarantees as the most important criteria when choosing a channel to make hotel reservations. Results mark a shift in priorities from 2010, when the amount of commission was the foremost concern.

The trade also listed hotel reviews as among the top five must-have features in a hotel booking solution, with findings indicating that some 70 per cent of travellers check user reviews before booking.

Meanwhile, those polled indicate that they have less influence over a traveller’s final choice of hotel, with only 32 per cent noting that customers accepted their hotel recommendations without question. The same figure was 51 per cent in 2010.

Furthermore, 62 per cent of travel consultants said travellers now compare their offers against consumer website prices, up from 48 per cent in 2010. The study suggested that travel consultants could influence travellers’ choice of hotels by offering a better deal and prepaid vouchers. Over 1,047 travel consultants in Australia, China, India, Japan, Malaysia, New Zealand, Philippines, Taiwan and Thailand were surveyed.

-TTG Asia.