Wednesday, August 26, 2015

Sabah tour prices to be based on exchange rates

KOTA KINABALU: Travel agencies in Sabah will start collecting payment for tours based on daily exchange rates amidst concerns over operating at a loss due to the depreciation of the Malaysian ringgit.

Sabah Association of Tour and Travel Agents (SATTA) chairma, Dato’ Seri Winston Liaw, said the association’s committee has unanimously agreed on the strategy as a way of coping with the fluctuations in exchange rates.

In fact, Liaw recommended SATTA members to fix the exchange rate at RM3.8 against the US dollar and around RM1.6 for Renminbi as the baseline for quotations. The rates were proposed by Liaw during a committee meeting and have been adopted by his company, Airworld Travel & Tours Sdn Bhd.

Under this measure, Liaw said, clients would either pay more or less than the quoted price for tours, depending on the exchange rate of the day and their travel destinations.

For instance, Liaw said, if the Ringgit to US dollar is 4.1 at the time clients make full payment, then they would have to top up the 30 sen difference as the baseline is set at 3.8.

Conversely, if the ringgit came out stronger against the US dollar down the road and the exchange rate is lower than the 3.8 baseline, clients would pay less than the quoted price, he said.

Liaw said this in a press conference here yesterday, adding that the reason he made the announcement to the press was to avoid misunderstanding by clients.

According to him, airline companies have been practising this strategy for around a decade, in which the airport tax and fuel surcharge were the two variables which fluctuated according to exchange rates and global oil prices.

“We are applying airlines’ strategy to our tours. If we do not do that, the impact (of the depreciation of the Ringgit) to travel agents would be severe.”

He said the price difference to clients might be a few hundred ringgit, but to travel agents, the difference could easily snowball to hundreds of thousands of ringgit, not to mention the fixed overhead costs like salary and rental that tour operators have to pay.

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