The dramatic collapse of Chinese tourist traffic coming out following the coronavirus epidemic, officially known as Covid-19, is causing huge headaches for operators in the Asian tourism sector.
As an increasing number of countries impose travel restrictions on visitors from China and increasingly elsewhere, many Asian tour operators and agents are involved in a double embarrassment: not only do they not receive new bookings, but they are now inundated with a spike coronavirus cancellations and refund requests.
During the night, many players in the tour’s operating space find themselves terribly inadequate to cope with the deluge of last minute changes in bookings with the outdated or non-existent technology systems they have.
And in a region where the vast majority of travel operators and wholesalers have just started distributing their products online, this sudden wave of cancellations has created a chain of cascading technology challenges for the fragmented tour and activity sector of the Asia.
“Offline travel agents currently suffer more because they do not have a sales monitoring system. Many 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 the distribution of travel experiences.
“We are now trying to help many of the offline travel agents, but the lack of adoption of the technology is causing many difficulties in getting refunds, as the whole process is really long and tedious,” he added.
For travel agents or operators whose main revenue stream comes from the Chinese market, cancellation problems are even more acute.
“Tour operators with China as a key inbound or outbound market are very impressed. They are generally medium to large players, but they still do not have enough technology to cope with the huge cancellations,” said Nigel. Wong, honorary secretary general of the Malaysian Travel Association and travel agents.
“But for many of them, a major problem now is managing cash flow and ensuring the survival of their business, so adopting technology isn’t nearly up to now.”
Even tour operators for whom China is not the center of attention are not spared from the fallout of booking cancellations, as visitors to other markets are starting to stop their travels in Southeast Asia.
Travel jitters remain high, especially as Thailand has the highest confirmed number of coronavirus cases outside China while a recent conference meeting raised concerns about transmission risks in Singapore.
Depending on their dependence on the Chinese market, the cancellation rates that tours and operators in the region are seeing vary between 20 and 80 percent, Skift found out after speaking with various players in the sector.
Big boys aren’t immune either
Major travel providers like theme parks and attractions also have their own set of technological problems when it comes to cancellations and refunds. While major attractions typically have internal ticketing systems, Menchaca said, “connectivity is still a challenge” for many of them as they lack API (application programming interface) connectivity with ticket machines.
In the absence of an API that allows for continuous connection of systems, tickets cannot be canceled or refunded immediately without a serial number. The reimbursement scenario in Asia typically requires agents to send a serial number file to theme parks, which the latter then have to track down and retrieve the corresponding serial numbers in their systems, Menchaca noted. “Imagine when you sell millions of tickets!”
The hassle and stress that could arise from the need to cope with and manage the sudden onslaught of cancellations of reservations would be significantly reduced if travel agents, wholesalers or distributors had already adopted automated systems, which could allow them to meet requests of cancellations, refunds or extension of validity of tickets almost instantly, said travel technology specialists.
Part of the problem at stake is also the existence of legacy systems for major theme parks and attractions, according to Chee Chong Chan, CEO of GlobalTix, based in Singapore, an e-ticketing travel market.
“The [digitalization] the journey for older kids is slower and more difficult. They have an inventory with hundreds of products, they also typically have multiple archaic systems built 10, 20 years ago. In comparison, the adoption of technology by small operators is often faster and can be done within a month. “
This is evident in the case of Nerf Action Experience, which was opened in Singapore in October 2019. The investment in ticket digitization technology from the beginning has allowed the Nerf-themed attraction to better deal with cancellations resulting from its Corporate groups and foreign visitors, said Steven Chua, executive director of the Kingsmen Ventures operating company.
“Investing in a solid technological system helps us significantly, especially now that we have to manage many cancellations and requests for refunds and extensions of validity. [Technology] relieves some of the manual labor required by us and also to track the reasons for doing so. “
The plethora of options and costs of the technology ticketing systems available on the market now certainly makes cancellation a “less tedious process than eight or even five years ago,” Chua noted. “Then, [cancellations] it would make your hair tear. “
Pain Now, Gain Later
Without any part of the tourism industry escaping unscathed as the virus outbreak spreads, how else can low-tech pain points for tour operators and agents be alleviated during this crisis?
“Part of the pain lies in the attractions of the big boys, who could hold their trump card and say they don’t allow ticket cancellation,” said Chan of GlobalTix. “However, we are making a collective request to ask them to help [the trade]and are responding now. More attractions are coming up with ways to help agents. “
Menchaca also pleaded for major attractions, notably large theme parks and sizable operators to “help by refunding even if cancellation policies were non-refundable”. He added, “Extending ticket validity dates isn’t useful enough as we don’t know how long the crisis will last and the recovery will take months. Most airlines accept cancellations for free, so let’s follow their example.”
Clearly, the wave of coronavirus cancellations clarifies the urgent need for tours and attractions to make serious efforts and investments in adopting the technology but also to diversify their market sources.
“This crisis will accelerate the adoption of technology, I have no doubts. Once this crisis runs out, the number of people interested in adopting the technology will hit the roof, said Chan of GlobalTix.
“Some companies depend heavily on a market. We listened to attractions, especially the Thai ones, happy to have obtained contracts with important Chinese OTAs such as Ctrip or Dianping “, stressed Chan, underlining the risks for the operators of the sector if they continue according to the old methods.
But for now, a cancellation is probably one too many for troubled tourism players to bear.
Photo credit: Many tour operators and agents in Asia have just started digitization. Flooded with travel cancellations, companies are struggling to keep up with requests. People queue to buy masks in Hong Kong on Friday February 7, 2020. Kin Cheung / Associated Press