Business

Saturday November 21, 2009

Keen for a trip to Iceland?

By LAALITHA HUNT


Big drop in currency value makes formerly expensive destination attractive.

LONG year-end school holidays are upon us and many Malaysians may be scrambling to find some great last-minute holiday deals.

Since the global financial crisis, Malaysians are observed to be staying close to home, choosing mainly popular domestic and regional destinations with affordable deals for the long holidays.

On the other hand, a few adventurous ones are seen to be making plans to travel to less popular destinations such as Iceland in order to take advantage of the fallen currency.

Iceland’s capital, Reykjavik, is said to be one of the trendiest in the world with thriving cafes, high energy clubs, friendly pubs, and a brightly colored old town with rows of wood houses clustered together.

Iceland’s most famous geothermal pool, a milky-blue spa fed by mineral-rich heated seawater from the nearby geothermal plant is the country’s top tourist attraction.

Reykjavik is also one of the most expensive cities in the world – but it just got a lot cheaper.

Iceland’s overextended banking industry collapsed late last year and the country had declared bankruptcy.

This led to a free fall of its currency, down by almost 50% to the US dollar this year.

According to Topaz Travel and Tours Sdn Bhd managing director Stephen Thomas, conditions appear to be stabilising in the travel industry as signs of an economic recovery take hold.

“We have seen a pick-up in travel by Malaysians over the past two months since the economic slowdown as well as the swine flu epidemic,” he says.

Although holiday travel may have picked up, Malaysians are still seen to be cost-conscious when making holiday plans.

The cautious sentiment could be due to the fact that Malaysians may still have concerns as the global as well as the domestic economy is only in the early stages of a turnaround.

“Many have cut back on the long haul flights and are instead choosing to travel to regional destinations such as Bali, Bangkok and Phuket,” Stephen notes.

Many Malaysians had shelved their plans for long-haul travel to Europe, except for senior citizens and pilgrimages, he notes.

However, destinations with direct flights offered by low-cost carrier AirAsia have also become popular picks among Malaysians.

“People are also choosing to travel to Beijing and Chengdu in China, Sri Lanka as well as Kerala and Cochin in India as a result of its affordable flight rates,” Stephen said.

A check on the AirAsia website currently revealed that one-way all inclusive fare to Beijing and Chendu is as low as RM149 one-way for online booking.

Reliance Shipping and Travel Agencies Sdn Bhd’s general manager/director Raymond Lee concurs that demand for leisure travel has picked up since the Malaysian Association of Tour and Travel Agents fair in early September.

His agency has seen a significant pick-up in bookings for tours to countries such as China, Europe, Japan, Hong Kong and Australia.

“There’s also pent-up demand for destinations such as Turkey and Egypt,” Lee says.

Tour packages to Turkey for ten days offered by the agency for as low as RM2,999 proved to be a major hit among travellers looking for exotic vacation experience, Lee notes.

Meanwhile, HCity Sdn Bhd chief executive officer Lee Lai Huat says Malaysians are more inclined to travel domestically this year.

Hcity, which manages the online accommodation reservation service provider HolidayCity.com observes that favourite online booking this year was weekend getaways or short holidays and are all within 3 hours’ travelling time.

“About 19% of our bookers spend less than US$100 (about RM340) per booking in 2009,” Lee says.

Top five destinations for online bookers from January to November this year include Kuala Lumpur, Singapore, Malacca, Penang and Langkawi, according to Lee.

As for the year-end travel, some of the top favourites by online bookers this year include usual favourites such as Kuala Lumpur, Singapore, Malacca, Kuching as well as the Gold Coast, Australia.

Despite the higher currency exchange, Australia remains a favourite destination for Malaysians.

Aussie dollars has appreciated by as much as 30% from the beginning of this year against the ringgit

Cheaper flights

Besides the availability of cheaper flight options provided by low-cost carriers, Australia is also perceived as a value for money destination by most Malaysians, Lee notes.

“Their accommodation and tour products are of good quality and the aggressive promotional campaign by Tourism Australia certainly helps,” Lee says.

We’re not seeing any increase in the number of Malaysians making room bookings for UK hotels this year compared to 2008. Despite the cheaper pound and the availability of lower-priced flight tickets, Malaysians still have the options of travelling to other destinations that are cheaper and do not consider the UK as a priority.

However, travel to other parts of the world such as London and Iceland does not seem to have increase despite the depreciation in its respective currencies.

“We’re not seeing any increase in the number of Malaysians making room bookings for UK hotels compared to 2008. Despite the cheaper pound and the availability of lower priced flight tickets, Malaysians still have the options of travelling to other destinations that are cheaper and do not consider the UK as a priority,” Lee shares.

Iceland is also not a favourite destination for Malaysians, Lee adds.

“Obviously, the distance is a major factor and despite the fact that the stunning natural landscape is a major attraction for most travellers, Malaysians would certainly be put off by the cold weather and long hours of flying required,” he says.

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