Tapping into the largest component in domestic visitors’ expenditure.
Last year, Malaysia earned RM86.1 billion in tourism receipts from 26.1 million foreign tourists, while another RM103.2 billion was spent by 239.1 million domestic visitors that included excursionists on day trips and tourists that stayed overnight away from home.
Shopping accounted for 33.6 percent of foreign tourism receipts and 37.8 percent of domestic visitors’ expenditure. Combined, they amounted to RM68 billion! But tour operators continue to focus on offering sightseeing or adventure at natural environments or man-made structures.
However, less than one percent of domestic visitors’ expenditure was spent on tour packages. This market will remain small if tour companies licensed by the Ministry of Tourism, Arts and Culture (Motac), numbering more than 5,000, continue to compete in similar products.
The Covid-19 pandemic had severely impacted all tourism businesses, more so for those that have invested heavily in a fleet of tour buses, as most vehicles were left idling since the Movement Control Order was imposed on March 18.
For the newer vehicles, their market value may even be lower than the amount owed to banks or leasing companies. Many tour buses will be repossessed if owners continue to wait futilely for charters by tour companies, government agencies or the corporate sector.
This is because it will take another four years for tourism to recover fully and only businesses that have undergone a reset to meet new challenges and demands of a world transformed by the pandemic would survive, not those that refused to change and wish to continue as before.
There are many ways owners can keep their tour buses running, but they require much harder work than just waiting for charters. They must change their outdated business model, create unconventional products, and innovate ingenious methods to thrive in the new normal.
And none better than organising excursions for shopping, which is the largest component in domestic visitors’ expenditure. Tour companies do not have to take unnecessary risks by opening outlets to sell goods when existing and experienced retailers are closing shop.
Tour operators ought to know where their strength lies. A busload of passengers is a captive audience that can be transported to many places on a day’s excursion. They can be brought to many locations many have not visited before, and these can be nearby within the same district.
If taken to a factory where groceries are produced or processed and visitors can buy at genuine factory prices, passengers would be like a kid in a candy store as they could buy the freshest foods at lowest prices. Savings can be huge for frozen seafood that command premium prices.
The itinerary can include many warehouses or factories that manufacture clothing, shoes, costume jewellery, consumer products, household items, electrical and electronic appliances, plus visits to cottage industries that make handicrafts, cakes, biscuits or keropok (crackers).
There are hundreds of factories in every district and dozens are fascinating to visitors. It is up to tour operators to collaborate with management of factories to facilitate visits by the public. Safety can be ensured as viewing could be from a secure distance away from machinery.
Such an arrangement would raise the standard of participating factories, as the whole facility could be spruced up for public display. The money spent is a great investment and more effective than normal advertisements. It would also make the workers feel proud of their jobs.
The colossal potential for factory tours can be mindboggling. At Balakong in Selangor, there are over 3,000 factories located at four industrial parks viz Balakong Jaya, Selesa Jaya, Taming Jaya and Kampung Baru Balakong.
In the Klang Valley, there are thousands of factories that many people would want to visit and shop. Nationwide, hundreds of tour buses can depart daily for shopping excursions, each with its own itinerary to visit different factories, warehouses, or cottages.
Such excursions would be more popular when offered free of charge or for a minimal fare with lunch included, provided tour operators be allowed to earn shopping commissions and passengers are not scammed.
Tour operators could offer free shopping excursions if Motac discontinue banning tourist guides and tour operators from receiving shopping commissions, with the condition that prices are the same for all customers whether brought there by bus or arriving on their own.
Management of factories would be happy to collaborate with tour operators as customers could return by re-joining the same excursion or using own transport. It is time for the authorities to relook at zero-fare tours, which were taboo involving foreign tourists but beneficial for locals.
The main reasons why tour operators did not explore shopping excursions were due to regulations stating that a tour bus with passengers must have a tourist guide unless exempted, and tour operators and tourist guides are not allowed to accept shopping commissions.
But over the past decades, tour operators and tourist guides joined foreign tour leaders in pocketing shopping commissions, confident that no action will be taken as long as there are no complaints.
Antiquated rules ought to be modernised and some are long overdue, such as forcing tour bus passengers to pay and listen to a tourist guide they do not want or need. Not only this is grossly unfair to customers, it has also stunted the growth of domestic tours since this regulation was introduced in 1975.
Today, many people use smartphones to read texts, look at pictures and watch videos, and visitors utilise destination apps to navigate on their own. And just like billions of people are constantly engaged in social media, thousands of residents would be eager to join free shopping excursions when offered by creative tour operators.
Hundreds of buses running daily nationwide carrying thousands of shoppers to buy the freshest goods at factory prices will contribute to a rise in sales, production and employment, and tour companies staying afloat. When effective vaccines for Covid-19 are found, international travel will resume. To be competitive, our entire tourism ecosystem must remain in place.
The views expressed here are strictly those of The True Net reader YS Chan of Petaling Jaya.