KUALA LUMPUR: Bumiputra travel agents are facing significant business challenges following the government’s change in spending practices, says the Malaysian Association of Tour and Travel Agents (MATTA).

He pointed out that under the recently revised directive, the Ministry of Finance encouraged civil servants to use corporate credit cards for direct purchases of airline tickets and travel reservations, thereby setting aside travel mandates and traditional agent services.

MATTA Vice President Sheikh Awadh Sheikh Abdullah said the revised guidelines have disrupted travel agents facilitating government-related travel over the years.

“Ministries, agencies and government-related companies (GLCs) now favor direct purchases from airlines and hotels, bypassing the reliance on travel vouchers and travel agency services.

“The impact of this updated circular has made it unnecessary to use the services of travel agencies,” he said at a press conference yesterday.

Also present were MATTA Vice President for Air Transport Dr Fazil Khan Abdul Kadir, Vice President for Education and Training Shazli Affuat, and Special Task Force members Mohd Ali Ab Malek and Hashif Farid.

According to a recent MATTA survey, Sheikh Awadh said, there has been a significant decline in the business of bumiputra travel agents, who offer services such as rescheduling, cancellations and itinerary changes.

“These value-added services have saved the government additional costs when changes are necessary.

“65% of these agents also took care of operational costs, thereby indirectly avoiding additional expenses for new reservations or ticket purchases,” he added.

Since 2023, Sheikh Awadh said 76.5% of bumiputra travel agencies have seen their profits decline, with 65% of them reporting losses above RM500,000.

“This has led to a 70% redundancy rate within the sector, further straining businesses still recovering from the Covid-19 pandemic,” he said.

Mohd Ali, who has run a travel agency for more than three decades, said calls and inquiries were falling as more government officials made direct bookings online.

“Although we are still receiving inquiries and submitting our quotes, it is sad to learn that the managers ultimately made the online bookings themselves according to the route we had proposed.

“We can’t stop them. But it is sad to know that they opted for the cheapest options without considering the value-added services that have made government bookings and travel easier all this time,” he said.

Fazil Khan agrees, saying that these managers, when they decided to make their own reservations online using corporate credit cards, missed out on all the value-added services offered by the agents of travel.

“This is especially true in the case of last minute changes and emergencies such as a flight delay, lost baggage, refund or denied boarding due to name differences on payment cards and plane tickets.

“These last-minute changes and situations often arise during government travel because we manage them on their behalf 24 hours a day the entire time,” he said.

Calling for more support for local private businesses, Sheikh Awadh said international booking platforms do not contribute taxes to the country’s coffers and do not create many jobs for locals.

While recognizing the government’s economic motivations, MATTA called for a balanced approach that does not hinder economic growth or the development of local private businesses.

“The tourism sector, and particularly 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 review the implementation of these spending guidelines to support bumiputra travel agencies and maintain 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 the government would discuss the matter with them.