Tour agents warn of pricier packages without diesel subsidy

INBOUND tour agents will be forced to adjust the price of their packages if there is no diesel subsidy for tour bus operators as their businesses will also be affected, the Inbound Tourism Alliance said.

Its chairman Uzaidi Udanis said it is a domino effect that whenever there is a cost increase, the prices (of tour packages) will also increase.

“There are other components involved such as transport, hotels, restaurants, tour guides and the various packages. Everyone is affected.

“The problem is that these price increases cannot be controlled because it is a free market.

“It cannot be avoided, so we may have to start adjusting the prices if costs increase,” Uzaidi said.

Tour bus operators have warned that they will have no choice but to raise the prices of tour packages by up to 50% if the government fails to accord them a reasonable diesel subsidy.

Peninsular Tour Bus Operators Association president Steven Chong had said that because the diesel price is now floated, it will be difficult for operators to fix the prices of their packages.

Transport Minister Anthony Loke had said the government had no plans to include tour bus operators under the targeted diesel subsidy scheme as most of their customers are foreign tourists.

He also warned that operators could not increase prices without informing the Land Public Transport Agency.

Communications Minister Fahmi Fadzil said Putrajaya will look into ways to help tour bus operators following the removal of subsidised diesel, adding the government was aware of tour bus operators’ concerns about higher fuel prices.

Starting June 10, the retail diesel price at all petrol stations in Peninsular Malaysia was set at RM3.35 per litre, which is the unsubsidised market price based on the average for May 2024, according to the automatic pricing mechanism formula.

Uzaidi said the issue now is that if the bus operators increase their fees by up to 50%, then tour agents would also have no choice but to increase their prices.

“For example, if a tour bus operator who normally charges RM400 for a one way trip from KLIA to a city hotel raises the price by 50%, we will end up paying RM600,” Uzaidi said.

“Then we have to look into the increase in costs and adjust our profit margins. We also have to understand that the bus operators have to look into maintenance of the buses, the drivers (welfare) and other issues.”

He said it was not only the tour bus operators who may raise their prices, but hotels and restaurants may follow suit.

“For example, if we bring in 20 tourists from Dubai and the price at restaurants increase, then we will also have to adjust our prices.

Uzaidi said that they are also competing with neighboring countries such as Vietnam, Thailand, Indonesia and others.

“We also cannot increase our prices as we have committed to previous packages and the deposits have been paid.”

He said they are a consortium of inbound travel agents and tour operators with about 463 members nationwide.

“They oversee connecting with travel agents overseas to promote Malaysia, attend tourism fairs, conduct marketing and other tasks.

“Most of our clients are international travel agents who we consult to get foreign tourists to visit Malaysia.

“If there is a price increase, then we have to inform our international counterparts.

“If the cost for travel is RM1,500, but then the bus operators increase prices up to 50%, then we have to inform them (counterparts) about it.”

He said their association has appealed to the Tourism, Arts and Culture Ministry to look into the diesel subsidy.

“They (authorities) should also know that when tourists come in, they will spend money, which in turn contributes to the economy.

“So, we have to look at what’s the best mechanism the government can come up with to help the industry,” Uzaidi added. – June 19, 2024.