LETTER | Are some tour bus operators forming a cartel?

LETTER | I was surprised by the report "Mita allows 20 percent hike in rental of tour buses".

The Malaysia Inbound Tourism Association (Mita) is one of the seven trade associations that companies licensed under "Tour Operating Business and Travel Agency Business" regulations must join as a member - which is mandated by the Tourism, Arts and Culture Ministry.

Like other travel associations, it has no authority to allow or disallow price increases for services such as daily or hourly charters, airport transfers or overland trips.

Moreover, all of the above rates are not fixed or regulated. Tour bus operators are free to choose the type and quality of vehicles they wish to operate and set prices they deem appropriate.

However, if some or all Mita members were to standardise tour bus rates and increase them in unison with rising costs such as diesel, such cartels would be against the Competition Act 2010.

Also, it will backfire as customers could easily turn to tour bus operators that are members of the other six travel associations - Malaysia Association of Tour and Travel Agents, Association of Bumiputera Tourism Operators of Malaysia, Malaysian Chinese Tourism Association, Malaysian Indian Tour and Travel Association, Car Rental Association of Malaysia and Persatuan Agensi Pelancongan Umrah and Haji.

Fuel prices least of their worries

Earlier, Mita claimed that tour bus operators could incur additional costs of RM200 to RM300 per day is correct but those who misunderstood would think the additional costs are on a per bus basis when it is for a fleet.

In truth, fuel prices are the least of the worries of tour bus operators. Their main concerns on expenditures fall under two major categories - fixed and operating costs.

For example, if the total cost for a new tour bus is RM756,000; then depreciation costs are RM75,600 a year, RM6,300 a month and around RM210 per day - regardless if the vehicle is running or idling.

Just like hotel operators are focussed on occupancy, tour bus operators are on utilisation. Both businesses adjust room rates and charter fees to keep their rooms occupied or buses running, as they could gain additional revenue from food and beverage or shopping commissions.

Granted, tourism industry players would like to see hotels and tour buses placed under the essential services category as both contribute greatly to the country's economy.

However, with the desire to cut fuel subsidies and reduce the smuggling of subsidised fuel, more essential services such as stage and express buses are included in the targeted subsidy.

YS CHAN is a master trainer for Mesra Malaysia and Travel & Tours Enhancement Course as well as an Asean Tourism Master Trainer. He is also a transport and training consultant and writer.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.