Business

Tuesday January 13, 2009

Tourism and travel may stagnate or decrease


Tourism and travel may well stagnate or even decrease in 2009 says an executive of one of the leading travel and tour companies in Malaysia.

Reliance Pacific Bhd CEO Datin Irene Gan shares her views on what lies ahead for her company and the travel industry

WHAT is the outlook for the tourism and travel industry this year?

Over the last 25 years global tourism and travel have tended to grow about one percentage point faster than real gross domestic product (GDP) growth.

However, it also fluctuated more than GDP, with higher peaks in good years and deeper troughs in bad years. Therefore, tourism and travel may well stagnate or even decrease in 2009.

Irene Gan

The Asia Pacific region has suffered the most rapid slowdown in demand since the middle of 2008, resulting in a sharp decline in arrival growth from +10.5% in 2007 to +4% from January through August 2008.

The Oceania and Northeast Asia were the regions suffering the brunt of the downturn in demand.

The good news is that oil price has fallen rapidly from its peak since mid 2008. While the fall is still not enough to offset the impact of the drop in demand, there maybe a silver lining this year.

On the other hand, the industry can be quite resilient with the increase in low-cost travel, globalisation, higher disposable incomes in emerging markets, and the higher propensity to travel.

There is no doubt that once the economic crisis is over, demand will recover quickly, reflecting the pent-up demand for travel that has accumulated during the current downturn.

How does Reliance Pacific plan to weather any slowdown in business?

Our strategies are to keep our business model relevant and contain our cost to remain competitive.

Of great importance is liquidity in a time of crisis and we will endeavour to stay cashflow positive.

We intend to build size in the region and to date we have increased our top line by 50% despite slowing demand.

The strategies to weather the slowdown: going back to basics, gearing up for growth through stronger management of the business and people and further empowerment to the business chiefs, but with clear vision and direction with very close monitoring systems.

What are your expansion plans?

We will lay the foundation for future scalable and sustainable growth. We will continue to invest prudently in acquiring human resource talents in Asia, technology and systems, securing new markets, creating a new generation of services and products and acquisitions.

Our investments in 2009 should bring us the benefit of top line growth and market share. We should be doing quite well in the current financial year ending March 31, 2009 barring further unforeseen circumstances.

Plans for the hotel management and resort development divisions?

The hotel division will open another suite hotel in Port Dickson in FY10. By then, we will have a total three hotels in Port Dickson.

This gives us a distinctively strong position in Port Dickson. Given its close proximity to the proposed new LCCT airport in Negri Sembilan, our hotels and properties for sale should benefit immensely.

The resort development division will see a shift to higher end developments.

The foundation will be laid for the remaining 40 acres of sea-fronting land to be developed on a joint venture basis.

 
RPB :  [Stock Watch]  [News]


For latest Bursa Malaysia indices, charts and other information click here

Search
HERE for best hotel deals in Malaysia with our AllMalaysia Travel Booking Engine, powered by Mayflower Travel

  • E-mail this story
  • Print this story