40% plunge in CNY outbound travel

January 15, 2017, Sunday

KOTA KINABALU: Outbound travel during Chinese New Year has dropped by around 40 percent compared to previous years amid the weak ringgit and economic slowdown, said Malaysia Chinese Tourism Association (MCTA) Sabah Chapter chairman Lawrence Wong.

Although the weak ringgit makes Malaysia’s inbound travel more competitive among the neighbouring countries, Wong said the outbound travel had been greatly affected due to the unstable currencies.

Wong said his travel agency, Times Holidays Travel and Tours Sdn Bhd, was selling tour packages at lower profit margin in order to boost sales. He said his company was also offering more outbound destinations with lower exchange rates, such as China. His travel agency has opened up bookings for outbound Chinese New Year tour packages six months before.

“We cannot pass on the higher cost to clients now and thus have to bear the loss incurred in currency exchanges ourselves. At the moment, we are really cautious in offering outbound packages,”Wong said, when asked on the prospect of outbound travel during the coming Chinese New Year festive season.

Overall, Wong said outbound travel had declined by 40 to 50 percent and would be expected to persist throughout this year in view of the economic slowdown and inflation.

“People can do without traveling because it is not a necessity. Perhaps some will opt to defer their travel plans by a year or so,he reckoned.

Of course, Wong said there are people who could still afford to travel at this point in time.

“Even though business has dropped a lot this year, we remain optimistic,”he said.

He said the government had assured that the ringgit was not as weak as it seemed and would recover in time.

“We do hope the currencies will stabilize and ringgit will rebound.”

On another note, Wong said the number of charter flights to Sabah is expected to decline this year due to complicated procedures involved. Nonetheless, he said inbound travel to Sabah was faring well for the Chinese New Year period, adding that five-star resorts and hotels in Kota Kinabalu were fully booked during that time.

Meanwhile, Popular Express Travel Sdn Bhd managing director Dewi Chen said the weak ringgit affected mostly outbound travel to the United States and cheaper destinations such as Taiwan, Thailand and Vietnam.

“When the ringgit was strong, locals may travel up to three times a year to destinations such as Taiwan or Vietnam, which costs slightly more than RM1,000 (per person). Now locals cut down their overseas travel to once a year only.”

She went on to say that there has not been any tour package to the United States for the past year, which used to be a popular destination as the price has surged from RM20,000 up to RM50,000 per traveller.

Chen said outbound travel to Canada had also reduced significantly as vacation in Canada was usually bundled with a tour in the United States.

Similarly, she said demands for travel destinations where spending was in US dollars have dropped by more than 50 percent, such as Palau and Hawaii.

However, Chen said the weak ringgit did not have much impact on the more expensive tour packages like cruises, Japan or Europe because these travellers have their minds set on going to the destinations, though locals would probably spend less in those countries.

As for Chinese New Year outbound travels, Chen said overseas travel had not reduced.

“Just look at how good AirAsia’s business is,” she said.

She said many locals who travelled during Chinese New Year have booked their flight tickets a year in advance when the tickets were still cheap, but they often overlooked the fact that hotel rooms would be very expensive or fully booked during the festive season.

“We get a lot of customers who ask for our help to book hotels during Chinese New Year,”Chen said, adding that some travellers would give up their travel plans and air tickets due to the exorbitant hotel prices.

“Despite the bad economy, people will still go travelling unless they really cannot afford it,” she said.

Nonetheless, she said the weak ringgit did affect the overall travel industry, as several smaller travel agencies have ceased to operate.

She said many smaller travel agencies used to benefit from the spillovers from their bigger counterparts, who could not take in any more clients when the sector was thriving.

On the other hand, Chen said inbound tourism in Sabah was faring well during the Chinese New Year and some hotels have also hiked their room rates.

“We have paid five-star hotels in full to book their rooms back in November last year for Chinese New Year. We expect to get 1,500 foreign tourists for inbound travel during Chinese New Year, of which 90 percent of them are from China. And we have paid RM500,000 to book the hotel rooms. We will suffer a loss if we are not able to sell all the rooms,”she said.

Sabah Tourism Federation (STF) president Datuk Seri Winston Liaw had said the travel industry would see a tough year ahead as people were skeptical about spending their money on non-essential products or services with the weak ringgit.

Liaw said traveling, which consumers consider as a luxury item, would not be their priority at this point in time as the value of the ringgit depreciated.

The OTC price for USD/MYR as of this morning:
Buy: RM4.37, Sell RM4.48 tried to nego for cheaper selling price, but the m oney changer said too scared the price will increase further, and their profit lesser.

Becoz their heads are buried in sand and they dont want to hear of the real problem. It doesnt affect them anyways.. the cronies will continue business as usual.

That's an interesting thought....A transient proxy to USD, due to current brexit issued....

I had attempted to buy some a few months ago when it was below 5.2....May try again when it goes below 5.3....

very interesting...

if u hold the view that gbp with brexit trouble will eventually be better than rm with xmdb drag, current and future, that will be way to go.

i will take some time to explore this, maybe buy some gbp denominated stocks/etf's.

Change RM > GBP. Then from GBP change to?

Have to hold...And GBP interest like zero.... So basically depending on appreciation....

Can convert back to myr if needs myr....If to any other currency....It would be a proxy to aud for me....

Btw, if convert GBP > AUD, will the money changer go this route? GBP > MYR > AUD or GBP > AUD

This post has been edited by Ramjade: Jan 16 2017, 08:50 PM

i don't do the money changer way....use dci....and yes, you can do gbp-aud direct dci......

Most money changer rates are not negotiable. So dont bother.


U might get better rates if you change GBP overseas. But then again, unless you are travelling. If you do it here, I dont see what you will gain rather than losses from mkney changer exchange rates.

This post has been edited by TOMEI-R: Jan 16 2017, 10:31 PM

Correction. Money changer rate can nego. Seen before with my eyes at Midvalley. Person infront of me.

Can nego but they dont layan. Try yourself and see.

Can. Bigger amount they can give better rates

Can a lot can nego lah.

If you can afford to wait fr the AUD to drop-in or not drop-in, then we can use DCI, right? But if we wished to invest overseas quickly,... then we have to have immediate foreign currency cash in-hand.

if you want to invest, then of course, you need the money upfront....

i am referring to the potential arbitrage opportunity with the brexit fears....which i believe is over-reaction....

at the height of the drop after the brexit vote, before myr's grief, it dropped below 5.2....i missed a strike because my agent mistaken my instructions....soon after, the myr slide happened, and it went up to 5.6.....i would have made quite a lot of money just trading it back to myr....

sgd still so strong vs myr...last year this time i remember from 3.06 drop till 2.9 - 2.94 range already.i referring to 3 week before cny

then the usd seem like stagnant for now....

All the talk about a possible Singapore economy slowdown seems just remain talk SGD $ is still strong as ever. More so against the RM. Its even going up now approaching CNY.

This post has been edited by TOMEI-R: Jan 17 2017, 04:51 PM

The GBP has rebounded even before the brexit press conference....

Actually, the bnm "peg" on the USD is condemning the myr as the USD soften in the lead up to trump installation....

They have to maintain the peg. Reason:
1) USD drop, mass exchange will happen. Keeping the USD up deter people from changing USD
2) Replenish some lost USD2b of reserve burned
3) Let exporters have stable exchange rate

This post has been edited by Ramjade: Jan 17 2017, 06:37 PM