Outbound tourism to see RM150m in losses from Covid-19 during school holidays

The total amount includes the estimated RM52.5m worth of potential losses in the umrah travel segment


SCHOOL holidays often spell gains for the outbound travel industry, but the Malaysian Association of Tour and Travel Agents (Matta) expects revenues to drop as much as RM150 million for the upcoming break.

Matta deputy president Mohd Akil Yusof (picture; left) said the total amount includes the estimated RM52.5 million worth of potential losses in the umrah travel segment, whereby locals tend to travel during the school holidays for their pilgrimage.

“During the holiday period, the umrah travel segment could increase from 1,000 to 1,500 persons per day, while each package costs an average of RM5,000,” he said at the association’s media briefing on the call to revoke the Fourth Schedule of the Tourism Industry Act 1992.

The association’s outbound travel VP Cynthia Tan said on top of the potential losses recorded by umrah travels, the outbound segment will see a loss of about RM100 million during the May school break.

“People often travel to more expensive destinations during the two-week break, including Europe.

“Moreover, the break in May this year will coincide with the Hari Raya holidays,” she said.

Similarly, The Malaysian Reserve reported that hotels have experienced RM67 million in losses due to booking cancellations.

Matta president Datuk Tan Kok Liang (right) had requested for the new Tourism, Arts and Culture (Motac) Minister Datuk Seri Nancy Shukri to amend or revoke the Fourth Schedule.

He said the schedule contains a section titled “Travellers Outbound Terms and Condition” which was issued on Feb 18, 2000.

“Over the last 20 years, six tourism ministers have come and gone, but there has been no change to the Fourth Schedule despite repeated calls by industry stakeholders to do so.

“The outdated terms and conditions are problematic instead of helping businesses and travellers,” he said.

He added that the Fourth Schedule has put travel agents in a dilemma since the outbreak, now faced with a potential liability of around RM500 million from customers seeking compensation, regardless of cancellation and refund policies of various service providers.

He added that since it was introduced by Motac, the ministry should take responsibility and intervene to resolve the current predicament faced by the industry.

“This is because many customers are only looking at the minimum administrative fee allowed in the Fourth Schedule, which is RM30 or 2% of the tour fare and ignoring the fact that all or a substantial portion of payments forwarded to airlines and hotels have been forfeited according to their cancellation policies.

“Should the situation escalate, Matta will consider engaging legal counsel for the travel industry to pursue the matter at a higher court,” he said.

Tan added that the Fourth Schedule was also drafted long before outbound travel became fully developed.

“The aviation industry was transformed by the entry of budget airlines allowing millions of Malaysians to fly around the region for their holidays. Stiff competition, low fares with strict terms and conditions are the order of the day.

“The tourism landscape and business models have changed drastically, but the Fourth Schedule is still where it was 20 years ago,” he said.

He added that as consumers are adequately protected by many existing laws, it is best to let travel agents operate freely, which will facilitate open competition in line with the Competition Act 2010 and let travel agents individually determine terms and conditions.

“Consumers and suppliers are adequately governed by the Contracts Act, Trade Descriptions Act and Consumer Protection Act.

“Tourism should not be held back by outdated regulations, and as such, Motac must act decisively to ensure that the Malaysian travel and tourism industry is competitively on par with the rest of the world.

“Legislation on standardisation of terms of holiday contracts between travel agents and holidaymakers must be current and updated to meet the marketplace’s current challenges,” he said.