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dividing line Luzi Matzig in TravelAsia

Interview, TravelAsia, July 4, 1997

LIVING OUT HIS, MEKONG DREAM


When he was four years old, Luzi Matzig got a glimpse of the Far East when he bought Swiss chocolates which gave him pictures of Angkor Wat to stick in a silver book. Little did he dream that years later, he would become the pioneer into the Mekong region. Raini Hamdi speaks to the group general manager of Diethelm Travel Thailand.

Q: What's behind Diethelm's move into inbound in Malaysia? Is it a must, for inbound tour operators' survival today, to have a network of offices throughout the region?

A: It will certainly help to strengthen your position, but you have to watch where you are setting up new operations.

For instance, we have no interest to set up in Singapore or Hong Kong, where it is getting more and more difficult to make money. Malaysia has great potential still - it's a great country, there are roundtrip possibilities, potential for tours and transfers. Singapore - how much can you make from half-day city tours? Hong Kong - what can you do?

China is another matter. We have signed up with Kunming CITS and have just gained approval to set up an office in Yunnan, which I believe is the gateway to southern China. Indonesia has tremendous potential but we have no immediate plans to set up an operation there.

I'd rather be a good operator to a certain area. If we do Cambodia well, why don't we specialise in Cambodia? There is always a place for such companies. The regional concept does not always mean success.

Q: But can you make money when the business is becoming so price-oriented?

A: It is a silly trend, this drive for cheaper prices. The prices we have now are the prices of 10 years ago. Yet costs, in particular labour costs, have more than doubled. This price trend is unfortunate. Many of the long-established cooperations and friendships are being ruined just for the sake of a few dollars. There is hardly any loyalty.

Q: What's causing this trend?

A: The basic cause is economic slowdown. Things are not booming. In some places in Europe, there is even zero growth. The competition gets tough and everybody fights for business. Tourism was new then. Now, there are many players. Too many.

Q: What can agencies do to survive?

A: One, you have to find all kinds of ways to save costs. Then, you can look at new marketing opportunities, like dealing directly with customers through the Internet. This helps to raise your profit margins.

You also have to decide carefully who you want to deal with. In this competitive environment, agents have a lot to lose. Payments have become a headache. Last year alone, we lost four major operators - Hetzel, Leguan, Belmondo and the old Wettstein - each of them went down the tubes with our money. Even if you are making money, you have to make a lot more to make up for the ones who fail.

Agents are put in a difficult position. If you give credit, you are at risk. If you don't give credit, the major operators don't want to work with you. Another thing agents have to do to survive is to think of unusual itineraries. Look at other possibilities like self-drive.

Q: When you look for ideas for unusual itineraries, do you put yourself in the shoes of your customer? How do you know it will be the right thing to do?

A: I think what I like, many people will also like. Usually, I'm a few years ahead. Self-drive in Thailand, for instance. We tried that 10 years ago but it did not work. People got lost, they could not return the car to the airport. We also- tried motorbike safaris in north Thailand in the mid-70s. It was ahead of its time by 15 years. Sometimes, we're too much ahead.

Q: Let's talk about the Mekong. It's evident that area is your favourite. Why?

A: When I was a child, I bought chocolates which gave me pictures of Angkor Wat to paste in a silver book. I never forgot that; it was my first contact with the Far East and I dreamt about it. I wasn't sure I would have enough money to visit the Far East one day. It was magical to a child - overgrown ruins, the promise of adventure, exoticness.

There is so much potential in the region. Look at Myanmar or the planned ski resorts in Lijiang. There is plenty you can do. I do believe this is the future. While Thailand is the leader at the moment, Myanmar will certainly be one of the leading forces in the future.

Q: What is your vision for Diethelm?

A: Diethelm Travel is already the leading inbound operator in Thailand and the Mekong, but I really want to open up Yunnan. We've signed the joint venture and are presently getting an operating licence, so now I want to put it on the map. Borders are keeping things apart. Otherwise, you can do many new combinations. Easily.

In fact, many borders have opened up and we are offering many inter-regional itineraries. For example, Myanmar- Thailand-Laos as a 15-day tour; Laos-Vietnam- Cambodia a very successful tour combination of 16 days; or our new five-day Mekong Adventure, combining Southern Yunnan with North Thailand and making use of river transport from China via Laos and Myanmar to Thailand.

Our complete network of regional offices throughout the Mekong countries will allow for many new multi-country tour itineraries, which would not get sufficient marketing support if we were just operating in one particular country.

Thailand is the natural gateway for such multi-country tours and many clients choose to relax on Thailand's many beaches at the end of their Mekong countries tour.

Q: Let's talk about the EC Directive and its impact on newly-emerging destinations like Myanmar or Laos. What message would you like to send out to European overseas tour operators, indeed the EU?

A: The EC Directive protects the customer from tour operators in Europe who made promises they could not keep. This is, basically, a good development. However, things have now gone overboard in that many opportunistic clients make use of the EC Directive to demand excessively high compensation for shortcomings or alleged short-comings of the destinations.

Many European tourists were sold on the wrong tour and expect European standards of transport or accommodation in places like Vietnam or Laos, which is totally unrealistic.

In order to protect inbound tour operators in South-east Asia from excessive claims for compensation, the best idea would be for the EC countries to introduce a compulsory "compensation claim insurance" which would handle such claims.

Everybody would win.

The client would get fair compensation, the European tour operator could pass on the handling of the "complaint letters" to the insurance company, and the inbound tour operator in the destination would be freed from excessively high refunds - refunds which are made to satisfy their large European principals who often lack a sense of understanding of local customs and procedures, and who simply want to satisfy their clients and avoid court cases at all costs.


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