Travel business can be transformed through innovation, invention and creativity

IN MALAYSIA, anyone wishing to operate a travel agency or tour company must obtain a licence under the Tour Operating Business and Travel Agency Business (Tobtab) regulations, or take over a business from among the more than 5,000 currently registered with the Ministry of Tourism, Arts and Culture.

There are three main types of Tobtab licences. In the past, new players were granted the “Inbound” licence only, which allows the company to accept bookings from incoming tourists before their arrival to Malaysia, sell domestic tour packages to both Malaysians and foreigners in the country for travel within Malaysia, and operate tour buses/vans or car rental service after obtaining permits for individual vehicles.

Many new enterprises were eager to offer packaged tours to overseas and applied for the “Outbound” licence the moment they became eligible. Most outbound operators conduct escorted group tours with scheduled departures in a series. Bigger tour companies also organise incentive tours for large groups that can number several hundred or thousands of qualifiers.

The third category is “Travel Agency Business”, formerly known as “Ticketing”. Travel agencies act as agents for principals such as airlines and hotels and used to play a pivotal role until the advent of the Internet. The crushing blow came in 2008 when airlines stopped paying commissions to travel agencies, which varied between 5% and 9% of ticket prices.

Travel agent is a generic name used by both the industry and public for referring to firms or staff in the travel and tour business. Many of these companies incorporate “Travel & Tours Sdn Bhd” in their names and hold all three Tobtab licences. Not long ago, successful new applicants were granted all three licences upon approval, even if they had applied for only one.

Before new Tobtab licences are issued, candidates are required to attend a “Travel & Tours Management Course”. During training, those with little clue of the travel business dropped their jaws when I pointed out the many risks and opportunities. Also, travel agents could act as intermediaries that provide value-added services or be just another layer of cost as middlemen.

Post pandemic, they ought to reinvent themselves. Forty-five years ago, I worked as a tours coordinator with an inbound operator and handwrote letters, confirming service arrangements to be typed and sent via snail mail to overseas tour companies. A telex machine was used for urgent messages as cost of long-distance phone calls were prohibitively expensive. In later years, fax machines were used and followed by a variety of communication tools using the Internet.

Today, we could use WhatsApp to communicate with others globally through voice, texts, pictures, videos or video calls. While communications have been transformed beyond imagination, the role of travel agents remained largely the same over the past decades.

Sadly, many will no longer be around or thrive post pandemic if they plan to continue dishing out more of the same. When they were busy with business in the past, there is little time to pause and ponder. But since the Movement Control Order was introduced on March 18, there were plenty of opportunities to unlearn and relearn what they know, and to upskill and reskill.

To reinvent their business, they must think outside the box and not seek solace from one another. They ought to re-explore a whole new world transformed by the pandemic, rebuild business models, and not continue to look at the market as if they know it like the back of their hands.

If a training workshop for travel agents is to be conducted by a competent facilitator, participants can be coaxed to throw out crazy ideas for argument sake in brainstorming sessions. Ideas that appear weak, weird or wild initially may later turn out to be gems. The travel business can only be transformed through innovation, invention and creativity. For inbound tour operators, instead of continuing to rely only on piecemeal bookings from their overseas counterparts and sales generated via websites or social media, they can also explore tapping into the much bigger market of independent travellers that have not been making use of services offered by travel agents.

Back home in their own countries, these travellers can easily make their way to the airport and catch the flight they have booked to Malaysia. Upon their arrival here, they can easily proceed to a local hotel by taking a train, bus, taxi or e-hailing vehicle. Note that on average, foreign tourists spent over RM500 per person per day and stayed for over six nights in Malaysia.

Visitors to Kuala Lumpur may purchase a travel pass card that can be used on rail public transport including airport transfers via KLIA Ekspres and a two-day unlimited ride on Rapid KL rail services (LRT, MRT and KL Monorail lines). It is a good initiative by a train operator, but travel agents are in a unique position to link a multitude of service providers for tourists.

A large tour company or a consortium of smaller ones could pool their resources together and hire technical experts to help develop a “One Pass” that can be used not just for transport by train, bus, taxi or e-hailing but also at hotels, restaurants, shops, attractions, entertainment spots and for sightseeing within the city or excursions to another.

Utilising QR codes, the pass can easily be distributed and used at countless number of participating service providers. For example, they can be sold at say RM199 per day on twin-sharing basis and registered users may opt for any form of land transport within the city, a hotel room for the night including breakfast the next morning, a buffet or set meal for lunch or dinner, entrance tickets to many attractions, free gifts at selected shops and entertainment spots, join sightseeing tours, excursions, adventures, and many other activities.

Some tourists may exceed the value of the pass while others will underutilise. The former will enjoy their stay to the hilt while the latter is happy with the convenience and facilities. It is much the same as restaurants offering buffet where some diners would stuff themselves silly, while others hardly ate. The “One Pass” would be an ideal gift from corporations to staff or among family members and friends.

The success of such a pass can be easily replicated in many countries and founders are likely to become rich beyond their wildest dreams. If the start-up is not sold for millions, it would be worth billions later from its huge and growing customer database, as data is the new currency. By closely tracking tourists’ activities, it could decipher the science and master the art of travel business, and not rely on assumptions or gut feelings.

For example, e-hailing companies such as Uber and Grab may have lost billions, but they are still worth a lot more as the valuation of a company can also be based on future potential earnings. Entrepreneurs, including travel agents, may have to turn to new business models if they desire to go big or excel in the trade. But first, they need to re-explore a whole new world.

YS Chan

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The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.