Support Skift’s Independent JournalismMake a Contribution Now
The dramatic plunge in Chinese outbound tourist traffic in the wake of the coronavirus outbreak, known officially as Covid-19, is causing massive headaches for Asia’s tourism industry players.
As more countries impose travel restrictions for visitors from China, and increasingly elsewhere, many of Asia’s tour operators and agents are caught in a double whammy: Not only are they not receiving any new bookings, they are now inundated with a spike in coronavirus cancellations and refund requests.
Overnight, many players in the tour operating space find themselves woefully inadequate to cope with the deluge of last-minute booking changes with the outdated or nonexistent technology systems they have.
And in a region where a vast majority of travel operators and wholesalers are just beginning to distribute their products online, this sudden wave of cancellations has created a cascading chain of technological challenges for Asia’s fragmented tours and activities sector.
Bearing Cancellation Pain
“The offline travel agents are suffering the most right now as they don’t have a system in place to track sales. A lot of these offline agents buy [tickets] in bulk and lose control [post-sale] without a proper inventory system,” said Blanca Menchaca, CEO of BeMyGuest, a Singapore-based specialist in technology and distribution of travel experiences.
“We are now trying to help many of the offline travel agents, but the lack of technology adoption is causing a lot of difficulty in getting refunds, as the whole process is really long and tedious,” she added.
For travel agents or operators whose main revenue stream comes from the Chinese market, the cancellation woes are even more acutely felt.
“Highly affected are tour operators with China as a key inbound or outbound market. These are typically mid- to large-sized players, but they still do not have sufficient technology in place to cope with the massive cancellations,” said Nigel Wong, honorary secretary general of Malaysian Association of Tours and Travel Agents.
“But for many of them, a major issue now is to manage cash flow and ensure survival of their business, so technology adoption is hardly on their mind now.”
Even tour operators for whom China is not a core focus are not spared the fallout of booking cancellations, as visitors from other markets are starting to put a halt to their travel in Southeast Asia.
Travel jitters remain high, especially as Thailand has among the highest number of confirmed coronavirus cases outside of China while a recent conference meeting played up the fears of transmissions risks in Singapore.
Depending on their reliance on the Chinese market, the cancellation rates that tour and operators in the region are seeing vary between 20 to 80 percent, Skift found after speaking to various industry players.
Big Boys Not Immune Either
Even major travel suppliers like theme parks and attractions have their own set of technological issues when it comes to cancellations and refunds. While major attractions typically have internal ticketing systems set up, said Menchaca, “connectivity is still a challenge” for many of them as they lack API (application programming interface) connectivity with the ticket distributors.
In the absence of an API that enables systems to be seamlessly connected, tickets cannot be canceled or refunded immediately without a serial number. The refund scenario in Asia typically involves agents having to send a file with serial numbers to the theme parks, which the latter then have to track and retrieve the corresponding serial numbers in their own systems, Menchaca noted. “Imagine when you sell millions of tickets!”
The hassle and stress that could arise from having to cope and manage the sudden onslaught of booking cancellations would be significantly reduced if travel agents, wholesalers or distributors had already adopted automated systems, which could enable them to accommodate requests for cancellations, refunds or extension of ticket validity almost instantly, travel technology specialists argued.
Part of the issue at play is also the existence of legacy systems for major theme parks and attractions, according to Chee Chong Chan, CEO of Singapore-based GlobalTix, an e-ticketing travel marketplace.
“The [digitalization] journey for the big boys is slower and harder. They have an inventory with hundreds of products, plus they have typically more archaic systems built 10, 20 years ago. In comparison, small operators’ uptake of technology is often faster and can be done within a month.”
That is apparent in the case of Nerf Action Experience, which opened in Singapore in October 2019. The investment in ticket digitalization technology from the outset has enabled the Nerf-themed attraction to better cope with cancellations arising from its corporate groups as well as overseas visitors, said Steven Chua, executive director of operating company Kingsmen Ventures.
“Investing in a robust technology system helps us significantly, especially now when we have to handle a lot of cancellations and requests for refunds and extensions of validity. [Technology] alleviates some of the manual work required of us and also to track the reasons for doing so.”
The plethora of options and costs of ticketing technology systems available in the market now definitely makes cancellation a “less tedious process than eight or even five years back”, remarked Chua. “Then, [cancellations] would make you tear your hair out.”
Pain Now, Gain Later
With no part of the tourism industry escaping unscathed as the virus outbreak drags on, how else can the low-tech pain points for tour operators and agents be alleviated during this crisis?
“Part of the pain lies in the big boy attractions, which would hold their trump card and say they don’t allow ticket cancellations,” said GlobalTix’s Chan. “However, we’re making a collective plea to ask them to help [the trade], and they are responding now. More attractions are coming up with ways to help agents.”
Menchaca also implored major attractions, especially large theme parks and sizable operators to “help by refunding even if your cancellation policies were nonrefundable”. She added, “Extending validity dates of tickets isn’t helpful enough as we don’t know how long the crisis will last and recovery will take months. Most airlines are accepting cancellations free of charge, so let’s follow their example.”
Clearly, the spate of coronavirus cancellations spells out the urgent need for tours and attractions to make serious efforts and investments in technology adoption but also diversify their market sources.
“This crisis will expedite the adoption of technology, I have no doubt about it. Once this crisis blows over, the number of people interested in technology adoption will shoot through the roof, said GlobalTix’s Chan.
“Some businesses are highly dependent on one market. We have heard attractions, especially those in Thailand, being content to have scored contracts with major Chinese OTAs like Ctrip or Dianping,” noted Chan, stressing the risks for industry players if they continue in the old ways.
But for now, one cancellation is probably one too many to bear for struggling tourism players.