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Lower ringgit mitigates GST impacts on Malaysian tour prices
S Puvaneswary, reporting from ASEAN Tourism Forum, Nay Pyi Taw, January 26, 2015
 

MALAYSIAN tour operators are unfazed by the expected rise in package prices arising from the Goods and Services Tax (GST) - set to be introduced in April - and increased operational costs.


Adam Kamal, CEO, Rakyat Travel, said: “Our package rates will go up by six per cent, but we’re mitigating this with add-ons such as free mementos and insurance coverage for clients. I don’t think business will be impacted as the rise will be cushioned by the weakened ringgit.”


Desmond Lee, group managing director, Apple Vacations & Conventions, intends to increase rates by up to 10 per cent. “Initially this will affect demand causing a year-on-year drop of 20 per cent. But travellers will get used to the rise, and from October, demand should return. This year, we plan to attract more visitors from the middle and upper-middle income groups in Japan and China.”


However, Emong Tinsang, senior manager-sales and operations of Borneo Adventure, which is looking at a raise of seven to 10 per cent, said: “It is too early to gauge the impact, but as we offer unique experiences such as longhouse tours to Batang Ai, we don’t compete on pricing.”


Khirul Zainie, managing director, MegaBorneo Tour Planner, Brunei, said while most partners will increase contract rates five to eight per cent, some have taken advantage by increasing rates 15 to 20 per cent.

 

“We have changed our partners due to this. Tourism Malaysia should educate the players so that the destination does not lose its competitiveness. The weakened ringgit has made the destination much more attractive for Bruneians...I project at least a 30 per cent year-on-year increase this year,” she said.


CP Foo, general manager, Century Travel Centre (Brunei), describes higher contract rates from partners of five to 10 per cent as “quite reasonable”, adding that Bruneians will not stop visiting Malaysia due to the GST, but will be encouraged by the depreciated ringgit instead.

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