Tour agencies hit hard by travel bans
Companies BT spoke to say nearly all in-bound tours have been cancelled, while outbound tours have dropped by as much as half
Singapore
AS countries issue travel restrictions to stem the spread of the novel coronavirus, business has almost competely dried up for travel agencies in Singapore.
Companies that The Business Times (BT) spoke to reported that nearly all in-bound tours have been cancelled, while outbound tours have dropped by as much as half.
"The business from Feb 16 has been effectively zero," Balaji Narayanan, director at Millennium Tours & Travel, told BT last week. "All incoming groups have cancelled or no-show. All bookings for February, March and April stand cancelled."
Mr Narayanan has been handling operations alone for about a month, as his employees sensed difficulties and started clearing annual leave from early February. Although about half of Millennium Tours' outbound bookings have gone ahead, some customers are hesitant, fearing for their personal safety given reports of discrimination against Asians overseas.
"We are waiting for the time being. We will aggressively market once some ease appears," said Mr Narayanan.
A representative for another agency, who did not want to be identified, said that all inbound tour bookings in March and April have been cancelled, and the company has not seen much interest for May and June. Some outbound bookings have been cancelled or postponed.
Although the government has urged companies to use the downtime to train and upskill staff, the representative said the industry's high turnover makes upskilling efforts costly. It has also refrained from marketing its packages too aggressively during this time. "Whatever promotion we send out won't have a good impact on our brand image. No one wants to talk about travel," the representative said.
With little that can be done about the lack of customers, many companies will have to hunker down and wait out the storm, said Christopher Khoo, managing director of tourism consultancy MasterConsult.
Mr Khoo noted that tourism bounced back within 12 to 24 months after the Asian financial crisis and Sars outbreak. However, the Covid-19 outbreak will be harder to come back from, as it is affecting the entire world rather than primarily Asia.
He added that Singapore stands a good chance of effecting a turnaround, because it can dip into its reserves for the second support package and likely still have more dry powder left over. However, he does not suggest an immediate bailout for the tourism industry, as the government may need to prioritise other tasks and get a better sense of the scale of help needed in the coming months.
"We have to tough it out, but I don't think this business can tough out 11/2 years with zero revenue, or 20 per cent revenue," said Mr Khoo. "This is something the government will have to take the lead on, to see how to mitigate some of the issues."
Mr Khoo praised government efforts to encourage locals to take staycations and visit local attractions, though he noted that such revenue will not be able to fully offset the loss of overseas visitors.
To attract more domestic customers, travel agencies could design new tours coupled with activity sessions, said Dr Wong King Yin, a lecturer in marketing at the Nanyang Business School. Some examples would be tours to local farms with flower arrangement sessions, or to the Sembawang Hot Spring Park with a massage session afterward.
"There are a lot of hidden gems in Singapore that are worth exploring," she said. "The key is to be creative and offer local travellers something unique and surprising."
Chan Chee Kong, chief operating officer of e-ticketing platform GlobalTix, suggested that the government could set aside a budget to pay for staff training, which employees could undertake while on unpaid leave to help companies manage cashflow.
He added that this could be a time to "future-proof" the travel industry by providing upfront funding for companies to implement new technology solutions, as opposed to the current reimbursement system, which requires companies to invest their own resources first.
Dr Wong urged travel agencies to take this opportunity to update their websites with customer reviews, introductions to tourist spots, and fresh photos and videos - all of which could help attract customers when business recovers.
Victoria Chong, marketing communications executive at Chan Brothers Travel, said the company is taking measures to contain and cut costs, adding that impact to its business is "evident and inevitable" as "global travel has currently come to a temporary standstill in light of travel and border restrictions across the globe". Aiming to minimise the downturn's impact while preparing for the tide to turn, it will also upskill employees and redesign and broaden job scopes through cross-training.
The Travel Corporation, which houses multiple travel brands including Insight Vacations, Trafalgar and Contiki, said it is using the downtime to carry out corporate social responsibility activities, such as volunteering at Willing Hearts Soup Kitchen.
Dynasty Travel forecasts sales to decline by up to half for Q1 2020, as travel sentiment has been weak since February. It plans to tap the government's relief measures for staff training, and hopes there will be more funding to assist in restructuring operations.
