Malaysian travellers expect travel sector to get better over the next 12 months

  • Malaysia
  • Wednesday, 21 Jul 2021

The pandemic is set to change how we make and pay for our travel bookings. — Unsplash

While tourism in Malaysia is still halted amid a spike in Covid-19 cases, that hasn’t stopped local avid travellers from keeping an optimistic outlook.

A new global study by travel technology company Amadeus revealed that 42% of Malaysian travellers expect the travel sector to get better over the next 12 months.

“Malaysia is currently undergoing the fourth Covid-19 wave, putting a halt on all travel arrangements, be it local or international.

“Nonetheless, Malaysians are hopeful that travel could get better within the next 12 months,” said Amadeus Asia Pacific regional head (merchant solutions) Klein Wang.

The study pointed out, however, that there are some caveats to winning over travellers’ confidence in a post-pandemic landscape.

A major pain point, it seems, centres around cancelled bookings.

Over half of Malaysian travellers (68%) said the increased risk of cancellations due to the pandemic is a barrier to booking travel this year.

Respondents highlighted “refund uncertainty” (51%), “inability to change booking travel date as well as time” (48%) and the “inconvenience of the refund process” (47%) topping concerns when a flight is cancelled.

According to Amadeus, a flexible “pay when you fly” system could potentially give travellers peace of mind.

“In rebuilding traveller confidence, Amadeus believes that flexible payment options like pay when you fly can mitigate the pain points of customers who want to plan travel but are wary of cancellation policies.

“As we look towards travel recovery, these new innovative approaches will not only help drive the industry forward but also provide higher value bookings,” Klein said.

Spend within your means

The pay when you fly option essentially lets travellers pay a small deposit, in the region of 10% to 20% of the total cost (which is non-refundable in the event the traveller decides to cancel).

The balance is then settled a few weeks prior to departure, minimising the risk of cancellation. This novel payment option means that travellers do not enter a credit agreement and are not liable to pay the entire balance.

And in the event of cancellation, airlines won’t need to process a high number of refunds as the bulk of funds remain with travellers until the last minute.

The pay when you fly option should not be confused for the “buy now, pay later” model, Amadeus said. The latter refers to deferred payment options where traveller enter a credit agreement, typically with a third-party fintech company, and is liable for the entire balance of the booking.

Financial experts have warned against the buy now, pay later model. They cautioned that the option could encourage dangerous spending beyond what consumers can feasibly pay back.

The pay when you fly option, Amadeus said, could motivate more Malaysians to make travel bookings while ensuring that they do not enter into a credit agreement.

“Alongside overcoming refund uncertainty, pay when you fly could boost industry revenues with Malaysian travellers willing to spend 61% more per trip on average, and 56% of Malaysian travellers more likely to add additional services like meals and bags,” Amadeus said.

The research by Amadeus polled 5,000 travellers, drawn in equal numbers from France, Germany, Malaysia, Britain and the United States.

Longer trips

In a separate study, it seems that the pandemic has also triggered demand for lengthier holidays of more than 10 nights.

Data and analytics company GlobalData said the working-from-home arrangement makes longer trips a possibility.

“The pandemic has accelerated the work-from-home model, and the tourism industry could benefit. Those that are working from home, especially independent remote workers on a higher salary, no longer require a fixed location and only need somewhere quiet with Internet,” said GlobalData tourism analyst Gus Gardner.

Interestingly, the company also linked the rise of “accidental savers” to taking lengthier holidays. While some consumers struggled with their finances, others have been able to save more due to less recreational spending and reduced expenditure on commuting during lockdowns.

“Travellers who have seen a considerable increase in savings are more likely to splash out on longer stays. Adding an additional night onto a trip generally results in the average cost per night decreasing, meaning the increased cost of a longer stay is minimal.

“Therefore, those with higher travel budgets will easily be swayed by the prospect of a longer holiday. The pandemic has fuelled the desire to travel and make up for lost time – longer stays are a great way to do this,” Gardner said.

What’s for certain, though, is that people are keen to travel again.

“Many travellers are desperate to escape their lockdown locations and need a change of scenery. A lengthier trip gives the optimal amount of time to switch off and reset, which is likely to be driving the increase in demand,” Gardner concluded.

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