Strong Brunei dollar drives ASEAN tourists away

Strong Brunei dollar drives ASEAN tourists away
The Brunei Dollar (Bottom).
PHOTO: The Straits Times

THE strong Brunei currency is discouraging Southeast Asian travellers from visiting the sultanate.

The Brunei dollar, along with the Singaporean dollar, are the strongest currencies in ASEAN. The sultanate's currency is pegged to the Singaporean dollar.

One Brunei dollar is equivalent to about 2.90 Malaysian ringgit; 9,740 Indonesia rupiah; 32.9 Philippine pesos; and 25.5 Thai baht.

"Tourist arrivals (from ASEAN) are less because of our (strong) currency. We are surrounded by (countries with weaker) currencies except for Singapore," said Sugumaran Nair, inbound manager of Freme Travel Services Sdn Bhd.

This makes it hard for local travel agencies to sell tour packages especially to travellers from ASEAN.

"Let's say that they used to pay RM200 (S$67) for a tour package in Brunei. Now, suddenly with the ringgit becoming weaker, what used to be RM200 is now RM300 if we (Brunei operators) are selling the tours at $100 (S$100). So why should they buy tours here when they can find cheaper tours in Malaysia?," he said.

The high operational costs in Brunei also makes it hard for tour operators to lower their selling prices.

"When they (ASEAN tourists) come here, they have to pay higher. If they are going there (Malaysia), it is okay. It's also good for outbound (local tourists going to Malaysia)," Nair said, adding that the weakringgit has benefitted Malaysian tourism.

The Malaysian currency has been on a rapid decline since June last year and was even trading a few weeks ago at three ringgit against the Brunei dollar.

Nair said the weak ringgit will "definitely" attract more tourists from around the region and across the globe to Malaysia and give the country's tourism industry a windfall.

This will also encourage Bruneians to travel to Malaysia.

"Tourists will definitely come (to Malaysia) because this is the chance for them to travel cheap and grab whatever they can (shopping). That's certainly an edge for Malaysia tourism. Their currency is down, everybody changes money to ringgit and are going to spend money there," he said.

Nair, however, said international tourists are unlikely to be affected by Brunei's strong dollar as it is still relatively weaker against the strengthening US dollar. This could also possibly attract tourists outside of ASEAN to go to the sultanate.

A representative from a local travel agency said his firm has received "more" travel bookings to Malaysia in the past three months.

He added the company's inbound section on the other hand, has received "fewer" arrivals compared to "several months ago".

He, however, did not provide statistics to support the claim.

Earlier this month, Tourism Malaysia said it expects to see an increase in the number of Bruneians travelling to Malaysia as a result of the weak ringgit.

Zurina Abdul Samad, director of Tourism Malaysia in Brunei, said data in the first four months of this year showed a 4.9 per cent year-on-year increase in Brunei tourist arrivals to Malaysia.

"We believe that more people are taking advantage of the exchange rate and going to Malaysia, especially to Miri, to shop," she said.

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