Relevance of tour operators will continue to decline
Published on: Sunday, November 15, 2020
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In 1972, the Tourist Development Corporation was established and took over the Tourism Department, which was also set up by the Ministry of International Trade and Industry.

In the same watershed year, Malaysia hosted the Pacific Area Travel Association (Pata) Conference. 

Pata, later renamed Pacific Asia Travel Association, is still the largest travel promotional organisation in the world. Since 1951, bigwigs from all over the globe converged at its annual conference and the resultant publicity greatly boosted tourism for the host city and country. 

In 1986, the Pata Conference was held for the second time in Kuala Lumpur. Amid the gloom during the recession, the major event brought much cheer when both public and private sector players rallied together to play host to the movers and shakers of the global tourism industry.

Tourism in this country went up another notch when the Ministry of Culture, Arts and Tourism (Mocat) declared 1990 as the first Visit Malaysia Year (VMY). 

It was so successful that another VMY was designated just four years later, in 1994. It was too close to get a buy-in.

Mocat’s marketing arm, the Malaysia Tourism Promotional Board (MTPB), had to go on overdrive to replicate the success achieved in VMY 1990, which increased foreign tourist arrivals from 4.8 million in 1989 to an astounding 7.4 million in 1990, an astonishing 54 percent!

One of  many MTPB’s programmes in 1993 was to invite leading outbound tour operators from major markets around the world to visit Malaysia on selected dates, so that they could be briefed together before dispersing and head towards their choice destinations in the country.

For example, the North American market comprised those from the United States and Canada. 

Top tour operators there were identified and invited by MTPB, given complimentary seats by Malaysia Airlines, courtesy rooms by Malaysian Association of Hotels (MAH) and free transfers and tours by Malaysian Association of Tour and Travel Agents (Matta).

After their arrival to Kuala Lumpur, they were briefed the next morning at the hotel’s function room. 

A top official from MTPB was the first speaker followed by Malaysia Airlines. Next it was me representing Matta and finally an official from MAH. 

Those uninitiated may be wondering why such VIP treatment for a select few? 

This was because large tour operators used to hold sway in tourism that even airlines and hotels kowtow to them.

But this started to change after the internet was introduced in the mid-1990s.

Until then, the most effective marketing tool was the printed catalogue and pages had to be limited. 

Hence, only the most saleable tours to popular destinations were featured, as the space on a page was more valuable than those in display counters or cabinets at luxury stores.

Thick tour catalogues were printed and distributed a year in advance. 

Then, only the rich could afford to travel far and wide and they take their annual vacations very seriously, planning and booking many months or even a year ahead, and not spur of the moment. 

And outbound tour operators would only sell destinations they are personally familiar with and only appoint inbound tour operators they have met to ensure everything runs smoothly and customers receive great service throughout the tour so that they remain fiercely loyal.

Those days, renowned outbound tour operators could travel to anywhere globally for free as airlines and hotels would be happy to offer complimentary seats and rooms, and local inbound operators glad to provide transfers and tours free of charge, all hoping to secure future business.

Although working in a large inbound tour company in 1990, I was given an all-expenses-paid trip by an American tour company just to attend an annual meeting in Honolulu and sightseeing in Kauai and Maui islands, as it could leverage complimentary services for all participants.

Airlines used to rely heavily on travel agencies to book individual seats, mostly for business travellers; and tour operators to block large volume of seats that will later be filled up by passengers joining series group tours with scheduled departure dates over the coming months.

But with increasing use of the internet for online purchases and many passengers booking directly with scheduled carriers, airlines decided to stop paying commissions to travel agencies in Malaysia from January 2008.

The commissions were five percent for domestic flights and nine percent for international.

Hotels too were reaching out directly to end-users without having to deal through travel agencies that act as intermediaries. 

Only the largest tour operators and travel agencies were given competitive wholesale hotel room rates for resale in the open market.

But today, most hotels are at the mercy of giant online travel agents (OTAs) operating in cyberspace as they have cornered the tourism market and reaped most of the profits from  hotel operators, which have also been losing out to private accommodations arranged through Airbnb.

In recent years, overwhelming number of travellers book flights on their own, particularly with budget airlines, book rooms at hotels or unlicensed accommodation, use e-hailing apps to move about freely at various destinations, purchase entrance, train or bus tickets online, search for  information such as local food and attractions, and navigate the streets using their smartphones.

What we now have are mostly independent, informed, and confident travellers treating the world as an oyster when armed with a smartphone downloaded with destination apps and empowered by social medias for information and communication 24/7.

Today, most people would not be comfortable leaving home without their smartphones whereas very few travellers need the service of tour operators. 

As huge airlines have even gone bust in this pandemic, millions of tour operators globally would have to close shop, if not already.

Shops selling cameras and watches used to be hugely popular but the functions of keeping time and taking photos or videos are now being performed by smartphones and transmitted to others.

Similarly, the role of tour operators will continue to diminish while social media influencers gain prominence, particularly travel vloggers with huge following. 

In recent years, MTPB had been on the ball by actively engaging with online search engines, travel review sites, giant OTAs, social medias and travel vloggers, as they now hold sway in the tourism scene.

YS Chan

 





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