KUALA LUMPUR: Bumiputra travel agents are facing significant business challenges following the government’s shift in spending practices, says the Malaysian Association of Tour and Travel Agents (MATTA).
It highlighted that under the recently revised directive, the Finance Ministry encouraged officials to use corporate credit cards for direct airline ticket purchases and trip bookings, sidelining traditional travel warrants and agent services.
MATTA deputy president Sheikh Awadh Sheikh Abdullah said the revised directives have disrupted travel agents facilitating government-related travel throughout the years.
“Government departments, agencies and government-linked companies (GLCs) are now favouring direct purchases from airlines and hotels, bypassing the use of travel warrants and travel agent services.
“The impact of this updated circular has rendered the use of travel agent services unnecessary,” he said in a press conference yesterday.
Also present were MATTA vice-president for Air Transportation Dr Fazil Khan Abdul Kadir, vice-president for Education and Training Shazli Affuat, as well as special task force members Mohd Ali Ab Malek and Hashif Farid.
According to a recent MATTA survey, Sheikh Awadh said, there was a significant decline in business among bumiputra travel agents, who offer services such as rescheduling, cancellations and itinerary changes.
“These value-added services have been saving the government the extra costs when changes are necessary.
“65% of these agents also covered the operational costs, indirectly preventing additional expenses for new bookings or ticket purchases,” he added.
Since 2023, Sheikh Awadh said 76.5% of bumiputra travel companies have seen profit declines, with 65% reporting losses surpassing RM500,000.
“This has resulted in a 70% retrenchment rate within the sector, further burdening businesses still recovering from the Covid-19 pandemic,” he said.
Mohd Ali, who has been running a travel agency for more than three decades, said calls and enquiries have been on the decline as more government officials make direct bookings online.
“While we still get enquiries and submit our quotations, it is sad to find out that the officials eventually made the bookings themselves online according to the itinerary we proposed.
“We cannot stop them. But it is sad to know that they opted for the cheaper options without considering the value-added services that have made government bookings and travels smooth all this while,” he said.
Fazil Khan agreed, saying these officials, when resorting to making their own bookings online using corporate credit cards, missed out on all the value-added services travel agents offer.
“This is especially in the case of last-minute changes and emergencies such as flight delay, baggage loss, refund or boarding denial due to name differences on payment cards and flight tickets.
“These last-minute changes and situations often occur in government travels because we have been handling them on their behalf round the clock all this while,” he said.
Calling for more support to local private enterprises, Sheikh Awadh said international booking platforms do not contribute any taxes to the country’s coffers, and do not create many jobs for locals.
While MATTA acknowledged the government’s cost-saving motives, he called for a balanced approach that does not hinder economic growth or the development of local private enterprises.
“The tourism sector, and specifically travel agents, remains integral to Malaysia’s economic progress, contributing to gross domestic product and job creation.
“In line with national policies such as Ekonomi Madani and the Bumiputra Economic Transformation Plan 2035, MATTA calls on the government to revisit the implementation of these expenditure guidelines to support bumiputra travel agencies and sustain their crucial role in the economy,” he said.
Sheikh Awadh added that a letter had been sent to the Prime Minister’s Office, and he hoped that the government would discuss the matter with them.
