Amidst concerns of an imminent economic downturn, the president of the National Association of Travel Agents Singapore (NATAS) has called on local tour agencies to join forces and add more value to their travel products in order to ride the headwind.
According to figures from NATAS, Singaporean outbound departures for 2018 hit over 10.3 million. This year, that number crossed 3.1 million from January to April, registering a modest increase of 3.7% as compared to the same period last year.
The World Tourism Organisation (UNWTO) also reported that international arrivals are forecasted to reach 1.8 billion by 2030 and outbound travel from Asia will continue to surge.
Although the travel industry has shown resilience against recent geo-politic and economic instability, and remains a key driver of economic growth and development, NATAS president Steven Ler said more can be done to “fuel our business aspirations in the months ahead”.
“The economy outlook may not be rosy, but Singaporeans’ desire to travel will continue – regardless it’s a long trip or a short weekend getaway,” Ler told Travel Weekly Asia on the sidelines of the NATAS Holidays fair at the Singapore Expo on Aug 2-4.
“It’s just that now they are probably more cautious on what and how they are going to spend on.”
Collaborate and focus
To sustain the growth of the industry, Ler has called on tour agents to refrain from engaging in a “price war” and, instead, to “collaborate and focus”.
“The market is rather diverse now. There are so many agents here and we all sell different content. But we all share the same customer base,” said Ler, who is also the executive director of UOB Travel Planners.
“So, rather than engaging in a price war, why not we collaborate? We can come together to jointly organise marketing and promotional activities, so we can combine our resources to reach out to the same audience.”
The NATAS chief also believes there are too many confusing messages on some common destinations and customers would appreciate a “focused voice”.
“Right now, we have one destination but 10 different messages because 10 different agencies are selling it,” he said. “So, among a few agencies, we should identify which are the common products and key segments that we want to go after, so consumers can hear a focused voice.
“I’ll understand (agencies promote it alone) if it’s a differentiated product. But if it’s a common destination, why can’t we come together, work with the respective Tourism Boards, and promote that destination?
“I’d like to see agencies take initiative and say let’s get together and collaborate where possible. I do see more of it now, which is good, but more can be done.”
No price war
Travel agents Travel Weekly Asia spoke to said they are facing increasing competition from OTAs as well as the growing trend of travellers booking their flights and accommodation directly online from airlines and hotels. But they agree a price war is not the solution to wrest customers back to tour agencies.
“Slashing prices is not the way to retain your customers as there is no end to it,” said Wong Yew Hoong, director of EU Holidays. “Travel agencies need to add more value to the services we provide, in terms of convenience, good itinerary, and making customers feel that they have been well taken care of – from the time they step into your office for enquiries, through their trip, till they return home.
“Through a price war, there is a danger that agencies may cut corners in terms of their offerings, and that will affect the customers’ travel experience. If that happens, travel agencies will eventually be phased out.”
Anthony Chan, managing director of Chan Brothers Group, believes tour operators must keep coming up with interesting packages to retain their customers.
Using his agency as an example, Chan said, “Many people have been to the Great Wall of China. But very few people have seen the Great Wall from a birds’ eye view in a helicopter.
“A common destination, no doubt, but seen in a new angle. We provide that service and that’s the extra value we offer.”
Agreed Dynasty Travel’s PR and communications director Alicia Seah, who said her agency is creating new products around “bucket-list” destinations like the Arctic, Cuba, Iran and Mexico.
“The trend is that travellers are moving away from touch-and-go tours and are going for bucket-list destinations. Travel agents should create value with these far-flung places. That’s how we survive as travel agents,” she said.