By Khalid Noorshah
Travel agencies will be bracing themselves against demands for refunds from clients who had confirmed their travel plans during the duration of the Movement Control Order (MCO), according to a tour agency who does outbound and umrah packages.
Managing Director of Tiram Travel Sdn. Bhd., Md. Yusoff Abdul Ghaffar said, once the MCO is lift up by the government, he expects 80% of its clients both from the outbound and umrah packages will submit claims for refunds.
“As a tour agent, we are only facilitators between clients and the other tour service providers. The question of refunds are subjected to the terms and conditions by each service provider, namely airlines, hotels and other supporting services in the tourism industry.
“The bulk of the claims will be for flight tickets. Some airline companies have stated that they will give a full refund but others do not usually give refunds. They will instead offer to postpone the flights within a year and will impose a penalty if the offer is not taken up within the offered period”,
he said.
Md. Yusoff, whose travel agency has been in the industry for the last 41 years, however, doubts that clients will take up the offer by airlines companies firstly because traveling is still not safe until there is an effective vaccine for Covid-19 readily available and secondly, by then people may not have the
means to travel anymore.
“The situation is the same for pilgrims performing the umrah. Their flights will be postpone and no penalty imposed, however, most clients usually perform the umrah with their family members and close relatives but due to their financial capacity after the MCO is lifted, some would not be able to
fulfil the trip and this will affect the others too.
“For example, if I were to perform the umrah with my brother and other relatives but my brother is in a financial situation after the MCO is lifted, I rather postponed the umrah trip to help my brother with whatever resources including refunds from the cancelled trip,” he said.
He said that, negotiating for refunds from hotels and other supporting services may be easier than with airlines companies because the policies put in place hinders airline companies from giving refunds.
“Clients will not be happy because there were no services rendered moreover flight tickets consists the bigger bulk of travelling expenses but the airline companies have their own interest to protect.
The only way is to have government intervention to appease both parties,” he opined.
According to Md. Yusoff the present economic situation is the worst to date compared to the 1986 economic crisis and the 1997-1998 monetary crisis. In the two earlier situations, although there were a drop of 20-30% in sales, people were still able to travel.
When asked if the tourism industry’s situation will improve if the governments lifts the MCO in June or July, he thinks even by then people are not yet ready to start travelling.
He said that he expects the climate for the tourism industry may change for the better in January 2021 and that travel agencies handling umrah and inbound packages will be more resilient than those handling outbound packages.
“I think, the bigger and more established travel and tour companies will survive this pandemic but some of the middle size and to a larger extent, the smaller tour companies may have to close shop.
The key is in having cash reserves. The middle and small size companies may have cash reserves up to 6 months but that is not enough.
“I expect many of the smaller tour agencies will not be able to survive. We will see many in the tourism industry being unemployed unless the government, if it has the capacity, gives out soft loans for these companies and be able to pay back once the tourism industry in the country is favourable again,” he said.
According to Md. Yusoff, once the MCO is lift up, tour and travel agencies will have to offer creative and competitive tour packages and the government can assist the industry by introducing incentives such as tax relief for advertising and promotions, among others.
“All these efforts, however, are dependent on how fast the world economy recovers and how soon individuals can be financially stable,” he said while adding that it took up to three to four years before the tourism industry recovered due to the 1986 economic crisis.
Asked whether tour agencies handling umrah packages will face the same fate, Md. Yusoff said, tourist travel is a leisure activity whereas umrah is a religious base ritual therefore there will always be people who will want to perform it.
“In the present situation, however, it all depends on the issuance of umrah visa by Saudi Arabia. I’m sure the Saudi government will look into many aspects which may include medical, travel, lodging and logistic protocols to secure the safe passage and health of the pilgrims before deciding to issue
the visa.
“I would think the service providers in the tourism industry will also deliberate on health and safety issues and will come up with their own protocols which may even be more stringent than their present protocols,” he said.
On whether Tiram Travel will be able to whether the present situation, Md. Yusoff said, the company have enough cash reserve to last them a year and presently none of its workers is being laid-off.
Tiram Travel has at least one branch in all the states in Malaysia except Selangor and Sabah where it has two branches each and in every district in Johor except Mersing and Segamat. It also was in the midst of preparing the opening of a branch in Sarawak when the MCO came into force.
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