Travel agents of the future
IN Malaysia, tour operators and legitimate travel agents operate businesses licensed by the Ministry of Tourism, Arts and Culture (Motac) under the Tobtab (Tour Operating Business and Travel Agency Business) regulation introduced in 1987.
Licenses for tour operator companies can be for inbound or outbound calls.
Holders of an incoming permit may also operate tourist coaches and vans or rental vehicles.
These commercial vehicles require individual permits which are only granted to companies with an incoming tourist permit.
Travel agencies are companies that act as agents for principals such as airlines and hotels.
Previously, they played a central role as one-stop-shopping centers where customers could secure and generally pay less for flights and accommodation than the prices that airlines or hotels charge to the public.
Also, it would be difficult for potential travelers to get from one airline office to another until they were satisfied with a suitable flight.
Airlines also couldn’t afford to operate too many branches just to sell their own services. With high overhead, these cost centers would reduce the overall profit.
Therefore, travel agencies were highly regarded and courted by airlines and hotels until the advent of the internet in Malaysia from the mid-1990s.
In 2001, the new owners of AirAsia converted the airline into a low cost airline and allowed travelers to make reservations directly online.
By 2008, airlines stopped paying commissions to travel agencies in Malaysia for the sale of airline tickets, which were 5% for domestic flights and 9% for international flights.
Customers who refused to pay for the service billed by travel agencies learned to book online.
With the introduction of smartphones later, a wide range of information has become readily available.
The availability of numerous mobile apps allowed users to book and pay for services on the go, and they could navigate without using large, foldable maps or asking for directions.
Travelers could now go anywhere independently and with confidence, as they could easily move around any major city using electronic calling services and were no longer at the mercy or antics local taxi drivers.
For longer distances, they could also compare options between bus services and trains.
If so, travel agents have become largely redundant, with the exception of travelers who haven’t embraced the technology, but they are a dying breed.
Even for dining there, the MySejahtera app should be used to scan QR codes and display the double vaccination certificate when asked.
As for incoming and domestic tour operators who only act as intermediaries in arranging services for their customers to be provided by suppliers, their prospects are just as bleak as travel agents.
The traditional role of intermediaries has been greatly diminished by technology.
Only tour operators that provide real services such as running their own tour buses for airport transfers, sightseeing tours or ground transfers will continue to be essential, as will hotels that offer accommodation rooms and restaurants. for food and drink.
Overseas tour operators have traditionally relied on tour groups escorted by tour operators for overseas travel. Many earned additional income through buying commissions and optional tours that could be shared with their chaperones, local tour guides, or incoming tour operators.
But most international tourists are free and growing independent travelers.
While travel agents have become largely redundant as intermediaries and will soon be followed by inbound and domestic operators simply acting as intermediaries, what about outbound operators?
Unfortunately, they too will eventually suffer the same fate. It is only a matter of time before the super apps for international travelers become available and are used by most international tourists in the same way the giant online calling apps have managed to push the market away. traditional taxis.
Giant online travel agents have long captured the lion’s share of flight and hotel bookings that even physical travel agents buy from them and the online accommodation market has taken the hotel market share by offering cheaper private accommodation.
Those who develop super apps for international travel are likely to borrow a leaf from Uber, which has crushed the world’s taxi industry by subsidizing 58% of fares, so customers only pay 42% of the price. rates for drivers.
Although Uber has lost billions of dollars a year, the company’s valuation is worth much more.
It’s the same with Grab which moved to Singapore and would soon be listed on the Nasdaq Stock Market, a US exchange based in New York.
In order to go public, Grab has chosen to merge with a special purpose acquisition company listed on the stock exchange.
The merged company, known as GRAB, is said to be valued at $ 39.6 billion.
When listed, the company is said to keep $ 4.5 billion in cash, which is equivalent to RM18.75 billion.
While cash flow is the lifeline for normal businesses, huge funding from venture capitalists could keep loss-making startups afloat.
The new businesses with the highest growth potential are those that can build up a gargantuan customer database that can initially start with a single service.
For example, Grab has implemented more than 10 on-demand ridesharing services, including taxis, private cars, carpooling, bike sharing, shuttle services and bicycle taxis.
She has already ventured into many consumer services such as hotel reservations, video on demand platform, ticket purchasing, food ordering, grocery shopping and a wide range of financial services. .
It won’t be surprising that super apps decimate traditional travel agents by promoting travel passes to various destinations with the widest variety of options for hotel stays, dining, sightseeing, transfers, entrance tickets and other activities desired by tourists, but at half the normal prices.
Therefore, the travel agents of the future will be great apps where travelers can buy the best options and prices, and book directly as needed without going through middlemen. They no longer ask around for information that could be inaccurate or out of date.
YS Chan is a Master Trainer for Mesra Malaysia and a Master Trainer in Asean Tourism. He is also a consultant and writer in the tourism and transportation sector, and a researcher for the Travel Industry Occupational Framework published by the Department of Skills Development. Comments: [email protected]