Signs of a challenging business year are clear in Malaysia, where earlier this month, Moodyâ€™s Investor Service cut its 2019 gross domestic product (GDP) growth forecast for Malaysia to 4.4 per cent, down from the 4.7 per cent projected in January.
The ringgit further weakened this week, trading at RM4.1 against the US dollar, and is currently at its weakest level in over two months.
The effects of the economy slowdown are being keenly felt in the travel and hospitality sectors.
Jai Kishan, general manager at New World Petaling Jaya Hotel opines that 2019 will be a challenging year for corporate business and association meetings. He elaborated that both domestic and international companies have reduced their budgets when it came to conferences, meetings, and annual get-togethers.
â€œDue to ongoing austerity measures taken by corporate businesses, we had some clients who came back to us to renegotiate for price reductions, or value additions or amendments to signed contractual obligations. Some have also scaled down their event sizes, cancelled their bookings and moved to alternative, cheaper venues,” he elaborated.
Adam Kamal, general manager, Tour East Malaysia, said many corporate companies are more prudent in their spending. He said: â€œWe see more corporate companies organising conference and incentive programmes locally, rather than going overseas.
â€œThose companies that traditionally used to do longhaul incentive trips have cut back to medium-haul, while those doing medium-haul are opting for short haul, and those that used to do short-haul are now incentivising their staff with domestic trips,” Kamal shared.
To deal with the slowdown, Kamal added that they have adapted to these changes by offering more meetings, teambuilding, and incentive packages in Malaysia and South-east Asia.
Similarly for Kishan, his hotel has also refined their advertising strategy from mass advertising to targeted, focused advertising across all relevant digital platforms.
He added: “As we are still in the process of enhancing our market share, the hotel is responding to meeting organisers by offering exclusive promotional packages, upgrades, relaxed credit terms, value additions of AV equipment, LED Screens, and set ups for repetitive businesses.”