Foreign exchange rates a major factor in Malaysian outbound MICE

OUTBOUND tour operators handling MICE business in Malaysia are projecting a drop in business next year no thanks to the ailing ringgit, but destinations with cheaper local currencies will enjoy the silver lining of more Malaysian business.

The ringgit has weakened substantially month-to-date against many major and regional currencies.

Topaz Travel & Tours managing director, Stephen Thomas, said: “We locked in rates a year ahead and had quoted (prices to) the clients in ringgit, and now we have to absorb the difference.”

While the cost of packages are certain to go up next year as a result, Stephen predicts popular MICE destinations are those where the ringgit remains stronger than the local currency.

This includes countries such as Indonesia, Thailand, the Philippines, Sri Lanka and China. He cited that there were also enquiries for incentives to South Africa. 

Richard Vuilleumier, managing director of Panorama Tours Malaysia, also believes that South-east Asia destinations where suppliers provide quotes in local currencies or ringgit and not in US dollars will be favoured for Malaysian MICE.

The weaker ringgit means Malaysian MICE planners will look for ways to cut costs “such as choosing alternative destinations, accommodation or cutting down on meals”, he commented. “Longhaul destinations are sure to be the hardest hit.”

While some events are moving closer to home or downgrading accommodation and expenses, Adam Kamal, CEO of Rakyat Travel, is dealing with the situation differently.

“In 2Q2015, we expect a reduction in MICE movement overseas. Instead, we predict more domestic movement as companies cut costs. Thus, in this current environment, we are marketing domestic destinations more aggressively.”

Source: News