Managing director of Easy Tours Belgium, Antoine Noens

The constant addition of new players entering into Thailand’s established DMC scene has many questioning if the market is facing saturation, but players in the field are contending that the pie is growing bigger – and has a slice for everyone.

A newcomer is HG Travel Thailand, launched this April as a joint venture led by managing director Andre van der Marck. Thailand forms part of HG Travel’s wider expansion strategy into the region, adding to the Hanoi-based DMC’s presence in Vietnam, Laos, Cambodia and Myanmar.

Van der Marck sees a gap still in the small- to medium-sized grounds for bespoke operators like HG Travel Thailand, whose focus on the high-end, tailor-made sector will put it in a better position to customise “complicated itineraries spanning two to three weeks for demanding customers” than counterparts going after the mass market.

“Established DMCs in Thailand are either the small mom-and-pop variety or the big boys on the other spectrum,” said van der Marck. “We are not going up against the big boys like Diethelm or Destination Asia; we don’t want to fight against Goliath.”

Exo Travel group managing director Hamish Keith perceives it as a “very normal” development for operators that have been successful in neighbouring countries to set up in Thailand, owing to growing interconnectedness and cross-border travel in the region.

“Moreover, a client expects consistent service and usually prefers to deal with one DMC for each file rather than handle several relationships. This leads to more regional DMCs or satellite operations, which of course increases competition and can lead to some saturation in the marketplace,” said Keith.

Noting that competition is inevitable with a more crowded marketplace, Destination Asia (Thailand)’s managing director Pornthip Hirunkate also thinks that new DMCs will keep the incumbents “on their toes” and push them to “think out of the box and engage clients at even more creative levels”.

Keith agreed: “We believe that good operators who develop interesting products and are ready to invest in resources to promote the destination will help attract additional interest and attention to the region, which in turn helps to increase the size of the cake and ultimately benefits everyone, especially the destination.”

While new DMCs in South-east Asia have come knocking on the doors of Easy Tours Belgium with the lure of lower fees, managing director Antoine Noens argues that it’s not a simple price proposition when it comes to partnerships. “We don’t often change DMCs. Good times, bad times, we don’t change DMCs just for five dollars less,” he commented.

But if new players are able to “bring something new to the market” and “add value to relationships”, Karen Sales, senior event producer at Xyhyr Brand Experiences Australia, would consider switching partners in markets where existing ones have become complacent and lack product ingenuity.

It seems like the trade generally thinks the Thai DMC playing field is wide enough to accommodate newcomers.

“Arrivals are always rising in Thailand, with over 20 million real visitors each year. There is still room for niche players (like us),” van der Marck stated.

“Thailand is a stepping stone for anyone visiting South-east Asia, especially for emerging markets like Poland which is starting to explore this region. (More DMCs in Thailand) will (benefit) both buyers and sellers alike,” said Noens.

On the contrary, he suggests that Indochina is seeing a saturated DMC sector as emerging destinations like Laos and Cambodia do not have (sufficient) visitor volume yet to justify an expanding pool of DMC players.

Tourists walk down the marble walkway in Ephesus, Turkey 

The travel trade from Turkey are at ITB Asia 2016 to reassure buyers here that the destination is safe and trouble-free for tourists despite several terrorist attacks this year, a failed coup attempt and the ongoing ISIS conflict.

Kaan Yilmaz, culture and tourism counsellor at the Turkish Embassy, tourism & information office, described Turkey as the “safest country in that part of the region” and “trouble free”.

He said the government, through the Ministry of Culture and Tourism, has also been organising familiarisation trips for the travel trade to reassure the market that the destination is safe.

Tourist arrivals into Turkey had declined sharply this year. From January to August, there was a 38 per cent drop to 3.2 million visitors, down from 5.1 million compared to the corresponding period last year.

Inbound agencies are suffering as a result of low arrivals. Mukaddes Mehmetemin, sales and marketing director at Inter Travel Services, described business as being very bad.

For the first four months of 2016, the company lost around 80 per cent of its business from Asia and made the tough decision to stop selling packages in May until the situation improves, which she expects could only be in 2017.

Another inbound player, Mehmed Dogan, president of Arar Tours, believes Turkey’s main problem was dealing with the general perception that the destination was not safe, and believed that the government should do more to change this perception by working with international media companies.

On its part, the company was working with hotels to come out with attractive tour package rates which are generally 30 per cent lower than in 2015. Despite the company’s efforts to increase business, the company’s core markets from Latin America and Asia saw a drop of around 30 to 40 per cent this year, said Mehmed.

Rahul Sharma from Exotic Holidays based in Auckland, which is also the GSA in New Zealand for Fez Travel, a large inbound tour operator and wholesaler based in Turkey, said demand for Turkey remained low partly due to a travel advisory from the New Zealand government which had been in force for many months already.

He said: “We’re trying to stir demand through early bird promotions for tour packages in 2017 but there are very few takers. In 2014, we had 700 clients going to Turkey. This year, the numbers have dropped to not more than 70. Forward bookings for next year is less than 20.”

California-based World Travellers’ Club president, Kaushik Sen, said demand for Turkey used to be mainly for its cultural tours in the south of Turkey bordering Syria, but now his clients are avoiding the destination altogether and were instead opting for Greece and Georgia.

Backed by the pan-Europe prowess of its parent travel company Der Touristik Group, Go Vacation – which is already represented in Thailand, Indonesia and Sri Lanka – is eyeing an even bigger piece of the Europe outbound market into South-east Asia with the creation of a new Vietnam outfit.

Led by general manager Erkan Tuncaakar, who previously headed Go Vacation’s business in Sri Lanka and Indonesia, Go Vacation Vietnam is the result of a joint venture inked between Go Vacation and Buffalo Tours during ITB Berlin in March this year.

For a DMC which already has access to 14 European feeder markets, Tuncaakar sees strong growth opportunities for Go Vacation in emerging countries such as Poland and Czech Republic, where tour operators there are beginning to show an interest in new outbound destinations in Asia like Vietnam.

As well, the launch of Go Vacation Vietnam will effectively shift Der Touristik’s Dertour, Meier’s Weltreisen and Kuoni Switzerland accounts from ICS, Diethelm and Asian Trails respectively to Go Vacation Vietnam, which Tuncaakar likens to as “bringing three siblings who were previously living in different houses back into one home”.

Furthermore, this consolidation will clearly enable Go Vacation to “consolidate strengths” to streamline its work process and efficiency as well as to gain market share, overriding its “diluted” clout in the market previously, Tuncaakar said.

ITB Asia 2016 opened yesterday morning at Marina Bay Sands, with Singapore minister for trade and industry (industry) S Iswaran (centre) as the guest of honour

Messe Berlin (Singapore), organisers of ITB Asia, has decided to stay put in Singapore for the next few years, said Martin Buck, Messe Berlin’s senior vice president.

An MoU to affirm this commitment was signed between Messe Berlin (Singapore) and the Singapore Tourism Board (STB) yesterday.

He elaborated: “Singapore as a city still offers the convenience when it comes to organising a tradeshow – be it the availability of hotels, and convenient access to both airport and tradeshow location.

“We’ve enjoyed a constructive and fruitful cooperation with STB for almost a decade, and it’s obvious we don’t have a reason to leave the city.”

When asked about future editions of the tradeshow and what it might hold for both buyers and exhibitors, Buck told TTG Asia that they were working on a matching process to create situations where appointments will bear a higher likelihood that deals will be struck.

“This is based on a steadily improving matchmaking system which tries to include more relevant information about what a buyer wants, and what an exhibitor has to offer. This strategy – which is more of a steady improvement process rather than a dramatic change of the format itself – is one that we will continue over the years to come,” he added.

As for the inaugural ITB China happening next year in May, Buck explained that the event would focus exclusively on Chinese buyers there, making it unique.

He shared: “We have already done up agreements with five of the biggest Chinese online tour operators such as Ctrip, Alitrip and Tuniu to bring their buyers to our show.”

Skyline of Shanghai, China

Despite the massive injection of hotel rooms across many Chinese cities in recent years, China remains an attractive market for international hospitality companies looking to intensify their reach in this vast market.

Pan Pacific Hotels Group (PPHG), for instance, will debut Pan Pacific Beijing in 1H2017 while Amara Hotels & Resorts will launch the Amara Signature Shanghai early next year.

Acknowledging China’s saturated market, PPHG’s CEO Bernold Schroeder chalked up the current oversupply in some cities to the building boom during the lead-up to mega events such as the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

“Today, there are 2.4 million hotel rooms in China, just half of that in the US. However, China’s population is four times larger than that of the US, and with robust growth projected in domestic and international travel, there is still room for expansion in the long run.”

He added: “As a company however, we are investing for the long-term. China is a huge, emerging market which at the same time is fragmented, with global hotel brands being relatively lesser-known. This presents an opportunity for smaller hotel groups such as PPHG to strengthen our brand presence in China.”

“Brand recognition” is also an important factor driving Mövenpick Hotels & Resorts’ development strategy in China, said Asia senior vice president Andrew Langdon.

As China is typically among the top five feeder markets for the group’s resorts in Asia, the presence of Mövenpick properties in tier-one Chinese cities will influence Chinese outbound travellers’ choice of stay abroad, he informed.

Amid slowing international arrivals and intense competition in China, Dawn Teo, director of strategic planning and corporate development of Amara Holdings, still sees China as “an attractive destination with great market potential”.

“While China’s (recent) growth story is muted, its GDP growth of over six per cent is still enviable compared to the rest of the world,” said Teo. “The total demand from both international and domestic travellers will outpace the current supply. We expect China to be among the fastest-growing hotel sectors.”

Meanwhile, the fierce competition in China’s first-tier cities has also led hotel groups to shift their expansion focus to secondary and tertiary cities.

InterContinental Hotels Group (IHG) has over 222 hotels in its China pipeline, of which more than 90 per cent will be located are in second-, third- and fourth-tier cities, according to Kent Sun, chief development officer, IHG Greater China.

He said: “These cities still have vast available areas for developing new hotel projects. Many local governments and developers are looking to build landmark structures to boost their (respective) city’s image and reputation which has provided good opportunities for us to expand our portfolio in China.”

China’s secondary and tertiary cities are also of “particular interest” to Hilton, Asia-Pacific president Martin Rinck told TTG Asia. “This is owing to the significant gap between existing hotel supply and the exponential increase in demand – particularly in popular leisure destinations such as Yunnan, Guangdong, Shaanxi and Sichuan,” he added.

Likewise, resort destinations in second- and third-tier cities are attractive to IHG. Said Sun: “Their booming prospects are backed by favourable government policies including more public holidays, annual leave encouragement and a boost in domestic consumption.”

David Scowsill

Tourism will likely remain a bright spot for South-east Asia in the coming years, with forecast investment to total US$782 billion, accounting for 7.4 per cent of total investment in the region in the next decade, said World Travel & Tourism Council (WTTC) president/CEO David Scowsill.

However, some South-east Asian countries are notably lagging in terms of infrastructure development to meet the needs of estimated tourism growth rates of 6.2 per cent per annum until 2026, he added.

Citing WTTC’s latest Travel & Tourism Investment in ASEAN report, Thailand is classified as ‘future focus critical’, as investment spend has fallen significantly since its 2006-2007 peak while tourism demand has spiked in recent years.

Infrastructure is also constrained in Myanmar, Cambodia and the Philippines and forecast investment does not meet the needs of future demand. Vietnam and Laos, in comparison, are faring better with infrastructure improving in tandem with growth prospects.

On a more positive note, investment in Malaysia and Brunei are well balanced while Singapore and Indonesia stand out in being able to roll out infrastructure ahead of demand.

This varying performance of South-east Asian countries in future tourism and travel preparedness also reflects the fragmented pace of development that long characterises the region.

When asked if the current economic slowdown in parts of Asia would impede tourism growth, Scowsill remarked: “Technically we have been in recession for the past seven to eight years… Travelling has become part of people’s psyche and they are unlikely to cut back on travels.”

Also working in the region’s favour, besides its strengths in culture diversity and price competitiveness, is the perception of South-east Asia as a “safe destination”, especially when compared with Europe which suffered a string of terror attacks in the last 18 months, Scowsill pointed out.