Coping with currency woes

June 3, 2016

With the Malaysian ringgit in a recent flux, S Puvaneswary finds out what measures travel companies are taking to ease the effects of currency volatility on their business

Malaysian travel agents are changing and adapting their business strategies in the face of a weak ringgit, as currency fluctuations since 4Q2015 weigh on their operations and earnings.

Desmond Lee, group managing director of Apple Vacations & Conventions, told TTG Asia: “The weakened ringgit has made Malaysians more cautious of their spending, and we had to change our strategy in selling Japan and Europe.

“In the past, we used to focus on Tokyo and Osaka, but we now focus on Hokkaido, the eastern part of Honshu island and Mie Prefecture, where ground costs are cheaper by 30 per cent than Tokyo and Osaka,” he said. “In Europe, we focus on tours to Romania, Greece and Bulgaria as ground costs there are relatively cheaper than central Europe.”

The Kuala Lumpur-based firm now makes full payment in advance to ground suppliers overseas to lock prices at the current exchange rate. It has also allocated a bigger budget for advertising and marketing this year in order to close sales and settle advance payment with ground suppliers faster, added Lee.

Mayflower Acme Tours, meanwhile, monitors outbound package prices daily and marks up with a bigger buffer to prevent losses, deputy general manager – channel management Abdul Rahman Mohamed revealed.

Abdul said: “We also have a clause in contracts with customers and corporate clients that specify that the current rate quoted may be revised at the point of final payment, which may be made a month or two later when rates have changed.

“While MNCs are understanding and will comply (by contractual agreements), SMEs try to take advantage of the currency fluctuations and bargain for a lower rate to gain savings,” he lamented.

“The (ringgit) volatility has also made it necessary to hedge with foreign banks to purchase room inventory and ground transportation, something we didn’t have to do in the past when the ringgit was stable. However, we also see hedging as a means of making extra profit.”

Abdul indicated that hedging of currency risk is “especially necessary” with non-ASEAN partners as they do not want to trade in ringgit, unlike ASEAN agents who usually have a Malaysian bank account and will transfer the money to their currency when the ringgit appreciates.

The volatile ringgit has also unnerved inbound tour operators, with many opting to put a contracting clause with their overseas counterparts to protect themselves from foreign currency fluctuations.

Ally Bhoonee, executive director of World Avenues, said: “Inbound wholesalers like ourselves give credit to overseas wholesalers for FIT bookings two or three months in advance.

“We only get paid 30 days after the guest checks in and at an exchange rate (usually in US dollars) that had been predetermined earlier. If the ringgit weakens, we make a loss. But if it strengthens, we gain.”

Bhoonee added that a larger buffer would safeguard the company against losses, but they risk losing customers to OTAs amid a competitive business climate. Conversely, if the margins are kept thin, the company has to shoulder the risks.

Similar contracting pains are observed at Olympik Holidays, said general manager Adam Kamal. “It is easy with ASEAN partners as bookings are usually a month in advance so the difference is not much. It is much more difficult to deal with European and Middle Eastern counterparts as they book six to 10 months in advance and they want to adhere strictly to the contract.”

“We suffered a 15 per cent loss in 1Q2016 handling the European inbound market as we had to absorb the difference. Having been burnt, we thus concentrate on the ASEAN market.”

Olympik Holidays is currently developing an online booking engine for its B2B and B2C clients. Expected to be ready by early 2017, the booking engine will provide real-time updates on package prices.

Said Adam: “The booking engine will replace our traditional contracts with agents as they will be given a password and can book directly with us.”

Kingston Khoo, senior product development and contracting manager at Discovery Overland Holidays, said: “Ringgit fluctuation has been quite volatile since March and we have been sending out email announcements on foreign currency exchange rates to our partners every two weeks.

“When the ringgit depreciates against major currencies, this means savings to our (overseas) agents. In April, the ringgit appreciated, and agents have been accepting of the new rates.”

On the other hand, the domestic tourism market has not been severely impacted by the ringgit fluctuations, a situation the Malaysian Inbound Tourism Association (MITA) has taken advantage of when it held its inaugural travel fair in January this year.

Uzaidi Udanis, vice president of MITA, said: “We wanted to encourage more Malaysians to travel within the country. We didn’t think that response would be so encouraging, with around 13,000 visitors and package sales estimated at RM2 million (US$495,946).”

MITA wants to grow its fair next year by involving more industry players and organising it in the states of Kuala Lumpur, Kedah, Johor and Sarawak.

This article was first published in TTG Asia, June 3, 2016 issue, on page 5. To read more, please view our digital edition or click here to subscribe.

RCI: No need for purpose-built China ships

By Raini Hamdi

June 3, 2016

Zinan Liu, Royal Caribbean International (RCI) president China and North Asia Pacific — Zinan Liu, Royal Caribbean International (RCI)
president China and North Asia Pacific

Swimming against the current, Royal Caribbean International (RCI) president China and North Asia Pacific, Zinan Liu, said “we do not do purpose-build (ships) for the China market and we never said any ship was built for China”.

Chinese travellers do not like purely Chinese products, said Liu. Rather, they like international products with some Asian or Chinese elements.

Royal Caribbean has been successfully tapping Chinese cruise passengers by homeporting in China and Asia since 2008 – without custom-made Chinese ships. Many Chinese guests are not seeking fly-cruise vacations, and homeports in the region with their friendly visa policies make them attractive to this group of people, he pointed out.

“Chinese consumers enjoy a three-year multi-entry visa to Singapore while ports of call such as Thailand, Malaysia and Vietnam offer convenient visa processing for cruise travellers. Australia also has friendly visa procedures for the Chinese. Plus, when China enters its winter season, Australia and Singapore are suitable for cruising,” he said.

Recounting its China milestones, Liu said it first tested the waters with Rhapsody of the Seas in 2008. In 2009, Legend of the Seas drew attention to cruising among consumers and the trade, and also hosted one of the most successful corporates charters in China.

In 2012, Voyager of the Seas arrived and “was referred to as the ship that brought China into the Super Boat era.”

“In 2013, with the arrival of Mariner of the Seas in China, we celebrated the fourth year in a row where there was a 100 per cent increase of passenger capacity in this region. Finally in 2015, the arrival of Quantum of the Seas, the most technologically advanced ship in the world, moved us from the Super Boat era to the Quantum era,” he said.

Even with the strong Royal Caribbean development in China, the penetration rate of cruising is far behind the rate of the North American market, thus great potential still awaits.

“The market is becoming mature and guests now are focusing more on the ship itself instead of the port-of-call destinations,” said Liu.

Is JW right for South Beach? Starck answers

By Raini Hamdi

June 3, 2016

TTG Asia’s senior editor Raini Hamdi interviewing
Philippe Starck during M Social’s media event held yesterday

HOTEL design is nothing without the right operator to bring “life” to the property, says pioneer of design and lifestyle hotels Philippe Starck, who was in Singapore yesterday at the media launch of Millennium and Copthorne Hotels (M&C)’s first M Social hotel in the world which he designed.

Responding to a question from TTG Asia e-Daily if he thinks hotels such as The South Beach in Singapore will be more original if it is self-managed than operated by a global hotel brand, Starck said this was the difficult question for owners.

“Me, I make the stage. You, now you need the movie director and without the right one, all of this will never work. They have to have the same ‘mood’, the same ‘tribe’; it’s difficult otherwise to drive a hotel like that, which is so personal,” he said.

M Social and South Beach both represent the dream of Singapore tycoon and developer Kwek Leng Beng, chairman of M&C, to create an iconic impact in the global industry. Kwek is in two minds about self-managing the South Beach and is in talks with Marriott International to flag it as a JW.

When asked about it at M Social’s media event yesterday, Kwek said it was “still not confirmed” if JW would manage South Beach and declined to say more.

Starck designed both South Beach and M Social. In an interview, he said in the wake of so many design, boutique and lifestyle brands, the life and soul of hotels have become ever more crucial.

“Design is nothing. Before design, there’s humanity, generosity, vision. I am not making a design but a movie. When I design something, I don’t know if it is beautiful or not, I don’t care. But I know step by step what my friends will feel, see, what emotions they will have and when they leave, they will say to their wife, ‘Oh my god, I was in a place and it was full of energy, it gave me ideas, it made me creative. Design is not life,” Starck said.

If South Beach was well-managed, he added, it would be the most “classic” hotel in Singapore, which he defined as “perfect, timeless, with astonishing quality”; not because it was on some front cover of a magazine but because it did not forget the people aspect and it made guests feel they were at home with “mood, feeling, soul”. He added it was ridiculous how so many hotels now were lifeless.

“I invented the boutique hotel and when we see the ‘children’ of boutique hotels today, I’m ashamed. My wife and I travel every day. We prefer classic hotels; we never go to trendy hotels,” he said, adding that super trendy hotels riled him the most. “You know its lifespan is two years. When you go to sleep, you don’t know where the switch is and when you wake up, you wait two hours for the breakfast.”

When asked how South Beach and M Social inspired him when designing them, Starck said: “My body has the age to go to South Beach, but my brain has the age to come here,” referring to M Social, which is designed for the millennial mindset.

“South Beach is a very well done hotel. It is for interesting, intelligent, cultured, fun businessmen and fun parents. Here (M Social), it is for the crazy children, because we hope all our children will be crazy.

“South Beach talks about the serious part of Singapore, money. M Social talks about the future of Singapore – the life, creativity, what the young people will do in Singapore.”

Meanwhile, Starck hints of a new brand he is developing in France which he said would be a “revolution”. It is set to be launched in September. In Asia, he is designing another hotel in Taiwan.

He is not interested to set up a Philippe Starck hotel brand.

“My job is to dream and create, not to know if the champagne is cold. We’re not operators. Everybody has to know his know-how and make the best use of it,” he said.

– Read more on TTG Asia’s July issue as Millennium Hotels & Resorts’ president-Asia, Cetin Sekergioglu, and M Social general manager Ting Huong Tak talk about injecting life into M Social

Armed with fat budgets, California heads to China

By Prudence Lui

June 3, 2016

Beteta: China is a very important market

TOURISM promotion organisation Visit California recently led a trade mission to China, its first one in the country, as part of efforts to attract more Chinese travellers to the US state.

The 12-member team headed to the key cities of Beijing, Shanghai, Guangzhou and Hong Kong.

President and CEO of Visit California, Caroline Beteta, said: “With this market being so important and (with their businesses) being driven by relationships, we want to make sure to come over and establish relationships ahead of the others. This will be a regular practice.”

California is already receiving a good level of Chinese visitation, having recorded 1.1 million Chinese arrivals in 2014, but Beteta said she wants to better capitalise on the projected 60 per cent growth over the next four years.

She added that the agency’s global operating budget has been more than doubled from US$50 million last year to US$115 million this year, allowing it greater firepower.

Also expecting an increase in funds is Greater Palm Springs Convention and Visitors Bureau, which would likely have its marketing budget bumped up from US$300,000 to US$500,000 in 2016-17.

“We’ll invest more in social media and plan to partner with other destinations like Santa Monica and Gateway to Death Valley in order to explore FIT itineraries,” said its president and CEO, Scott White.

The bureau, which sees meetings traffic dominated by domestic travellers, hopes to attract more MICE groups from China.

Online GDS training tool for agents goes live

By TTG Asia

June 3, 2016

GDS Genie, the world’s first online resource dedicated to GDS training, is now accessible.

The portal offers proficiency in three of the world’s largest GDSs, namely Galileo, Amadeus and Sabre.

Across all three systems, 40-hour introductory sessions cost 199 pounds (US$286) while the 120-hour professional sessions cost 229 pounds. Various other refresher courses and specialised training are also available.

Fees are inclusive of examination and certification.

“A career in travel is much sought-after and many jobs are advertised asking for GDS experience, but it’s not easy to get official training from GDS companies unless you already work in travel; it’s a Catch-22 situation,” said managing director of GDS Genie, Bruce Martin, who has been in travel recruitment and training for over a decade.

GDS Genie is being launched alongside two distribution partners, social media strategy firm Ginger Juice, which was founded by Martin, and travel trade e-learning platform Online Travel Academy.

Corporates spur demand aboard United’s first direct Singapore service

By Caroline Boey

June 3, 2016

BUSINESS travellers and FITs are driving demand on United Airlines’ direct Singapore-San Francisco service, the only non-stop air link between Singapore and the US since Singapore Airlines suspended their direct services to New York and Los Angeles in 2013.

The inaugural flight departed from San Francisco International Airport on June 1 and touched down in Changi International Airport this morning. Its first flight from Singapore also took off earlier today and will land in San Francisco at 09.15 the same day.

Asked why the carrier is offering the service now, Laurence Chin, country manager Singapore and offline sales, United Airlines, said: “It is important for us from a business and strategic perspective, and we can do it because of the 787-900 Dreamliner aircraft that we have recently received with the capability of doing this in a profitable manner.”

He added: “We know this product is what customers want because they have told us as such and we are comfortable with the numbers so far from both the business and leisure side of things. In fact, passenger load has exceeded our projections.”

According to travel agents in Singapore, corporates are especially keen on the service given the four hours saved by taking the direct route. Previously, Singapore travellers needed to transit at Tokyo or Hong Kong.

Jane Chang, spokesperson for Chan Brothers Travel, said the time saving is a clear advantage, especially for corporate travellers.

There was also strong FIT response on economy seats during a recent three-day sale. “During the promotional period, the under S$1,000 (US$724) air fares were attractive in comparison to other indirect flights to San Francisco traditionally priced between S$1,300 and S$1,500,” said Chang.

However, she also observed that some leisure travellers may prefer a transit to break the long commute from Singapore to the US.

But even as United ceased services between Singapore and Tokyo as of June 2, Chin argues that it’s all about giving customers more options.

“Before, they have to fly via Narita or Hong Kong to San Francisco. Now, they have the option to fly direct and save four hours. For those who still want to go via Narita or Hong Kong, that is still available too through our joint venture with All Nippon Airways,” he said.

Strong interest for the flight have been garnered from firms in the technology, finance and pharmaceutical sectors, added Chin, stating that corporate clients have always been strong supporters of United’s offerings, and the Singapore-San Francisco service is no exception.

Dynasty Travel is also seeing an uptake especially on business class seats by corporates.

Alicia Seah, spokesperson for Dynasty Travel, said: “For corporate clients entitled to travel in business class for flights longer than seven hours, United’s BusinessFirst is selling the best (compared to Economy Plus and Economy).”

Seah also noted that United’s new service in economy class is about 20 per cent to 30 per cent cheaper compared to SIA, depending on travel dates and timings.

She further added that Singapore’s position as a regional air traffic hub means “demand can also derive from Indonesia, Malaysia, Myanmar and Vietnam”.

When asked if SIA’s plan to revive direct flights to the US in the near future is a threat, Chin said: “We welcome competition because we believe that by having good, robust and fair competition, everybody benefits. The consumer obviously benefits and we benefit by being forced to come up with better products to compete effectively.”

Additional reporting from Dannon Har

Travel industry sees wave of interest in messaging chatbots

By Dannon Har

June 3, 2016

WITHOUT the lambaste and fanfare often associated with new technological trends, chatbots have crept their way into social messaging applications and are being used by travel companies to engage with their customers.

Skyscanner made known this week that users can now search for flights or get destination inspiration conversationally via Facebook Messenger, the first metasearch engine to implement such technology.

The chatbot is powered by several internal components, such as its flights API data and machine learning of user search trends. For instance, users can simply type “not sure” when the chatbot asks where they wish to go, and suggestions given will be tailored to each user based on what the bot knows about that person.

“The messaging economy and conversational search are areas which we believe are incredibly important evolutionary features for the travel industry. It has been a top priority for us to take a pioneering approach when it comes to building a bot for Facebook Messenger,” said Filip Filipov, director of B2B at Skyscanner.

“We want to make travel search as easily accessible as possible, and believe that the launch of our Messenger bot will allow more people to search for their travel in a fun and informative way.”

Explaining why this is taking off in the travel space, Fergal Kelly, chief commercial officer at Mobile Travel Technologies (MTT), told TTG Asia e-Daily during the sidelines of Travelport LIVE APAC Customer Conference 2016: “The first instinct (for many people) these days is to text. It’s how they interact with each other and it’s how they expect to manage and sort out their lives. What chatbots are simply doing is allow them to interact that way.

“(Even as social technologies evolve), people still want to be treated like a human, an individual customer. Chatbots come as an efficient way of servicing this need compared to (having someone) take a call, for example.”

Meanwhile, hotel operators such as Onyx Hospitality, with brands like Amari Hotels and Resorts and Ozo under their belt, have integrated chatbots with their property management systems, offering guests round-the-clock automated chat services with the hotel.

They take a blended approach however, with chatbots replying automatically to customers while at the same time allowing the option for hotel staff to also conduct “real” chats via the integrated system developed by Hong Kong-based hospitality solutions provider StayPlease.

Said founder and CEO of StayPlease, Alan Sun: “Guests can choose to interact through visual interfaces (on the chat apps) to request service amenities, but they can also simply type it out (like having a) normal conversation.”

Hotel customers of StayPlease are currently offered integrated solutions on an array of social chat apps, including WeChat, Whatsapp, Line, Facebook Messenger, Skype and Telegram. Services that guests can request via chat range from room upgrades to in-room dining as well as car, spa and restaurant bookings.

On the airline front, KLM Royal Dutch Airlines is a pioneer, offering real-time 24/7 social media interaction as a service with their customers since 2009. They don’t use chatbots at all however, preferring instead to hire a dedicated team of over 200 service agents.

But the big idea remains the same and they have even taken this a step further as of end-March this year.

Via Facebook Messenger, customers can check booking and check-in details, as well as be given boarding pass and flight status updates, the only airline to do so. Passengers can also contact KLM’s social media service agents directly on the same platform.

“We believe we should be where our customers are,” said Pieter Elbers, president and CEO of KLM.

“Our customers feel comfortable sharing info with us via a more personal platform like Messenger. Last year, we activated the Messenger button on our Facebook page, allowing customers to contact KLM even more directly via private messaging. Cases increased by 40 per cent, which shows customers appreciate this form of communication.”

Kelly observes that this is a positive move by brands to better cater to customer needs.

He said: “What we are seeing is a call to action in travel, like in any other industry, to build a relationship where customers already are, whether it’s Whatsapp, WeChat or Facebook Messenger. The brand has to follow.”

Still, “it is very early days so it’s not yet possible to see what the impact is”, he warns, advising that “(as such apps proliferate), it is important to find the balance between interaction and irritation.”

When asked if Kelly’s customers at MTT, which include the likes of Singapore Airlines and BCD Travel, and recently Etihad Airways, are looking into this, he said: “Yes, everybody is looking at it right now and it’s a very current topic.”

[SPONSORED POST] Finding the Lowest Hotel Rates

By TTG Asia

June 2, 2016

Individual corporate travelers do not always possess an overall view of the travel volume generated by all their colleagues. Finding a one – off cheap rate doesn’t help companies consolidate volumes, neither does it gain negotiation power with hotels. With increased transparency and knowledge of public rates through the Online Travel Agencies and price comparison websites, corporate buyers today have trouble distinguishing between the different hotel pricing options available. The availability of free information also means that travelers may see low non – refundable saver rates on a hotel’s website and compare them to fully flexible rates negotiated by the company.

Corporates require the best of both worlds – a choice of hotels to meet travelers’ needs at the lowest price, bearing in mind booking conditions. Effective rate negotiation is as much about choice as price; the mix of rates available is determined by the corporate’s choices. The lowest rate may not be the most cost effective rate, as negotiated rates often include airport or local transportation, breakfast, Internet, parking and other amenities. Corporate buyers no longer need to choose between dynamic and fixed price models when it comes to finding the lowest hotel rates. Neither do procurement managers need to invest the time to create a hybrid model. In order to leverage the best value, HRS, the leading hotel solutions provider, has a few key pieces of advice for buyers:

The key driver in any hotel rate negotiation is occupancy. Volumes can be leveraged to source and shortlist hotels that meet the corporates quality and location requirements – as well as price objectives. Develop an understanding of the day of week, location and seasonality patterns in order to take advantage of the available rate types.

The cost of amending or cancelling a booking should also be factored into the negotiation. HRS estimates that one in six corporate bookings are cancelled or changed. The incremental cost to the corporate could be as much as 100% of the first night’s stay.

The dynamic nature of hotel rates means that price does not necessarily equate to quality. It does not always follow that a better quality of hotel should cost more. New hotels are generally more prepared to offer lower rates because they need to ‘lock in’ corporate business and have the flexibility to do so.

corporate.hrs.com/sg

salesapac@hrs.com

+65 6580 2828

@HRS_AsiaPac

HRS Global Hotel Solutions

Singapore to develop 126-hectare eco-tourism hub

By TTG Asia

June 2, 2016

Concept art of the new Rainforest Park

SINGAPORE will be home to a 126ha wildlife and nature precinct dedicated to eco-tourism come 2023.

The space in development, situated just outside the Central Catchment Nature Reserve in Mandai, is currently home to the Singapore Zoo, Night Safari and River Safari.

The plan is for two more wildlife parks to join its ranks – a brand-new Rainforest Park and the Bird Park, which will relocate from its current space in Jurong. Eco-friendly accommodations are also in the works.

Visitors will be able to stroll on aerial walkways at the 12.5ha Rainforest Park, or relax in pods and watch birds take flight in nine aviaries that feature different landscapes at the 17ha Bird Park. The precinct’s surrounds will also boast nature trails, boardwalks, gardens, waterways and playgrounds.

The main hub area will feature an indoor nature-themed education centre and hold exhibitions aimed at raising awareness and appreciation for the region’s biodiversity and natural heritage.

“Visitors have asked for more novel, engaging and immersive experiences and we hope the new Mandai nature precinct will provide all that and more,” said Mike Barclay, group CEO of Mandai Safari Park Holdings.

“We are also mindful of the need to provide appealing public spaces so that everyone can enjoy the beauty of the Mandai nature precinct.”

The new developments at Mandai are slated to be completed in phases from 2020 onwards.

[Sponsored Post] Bali welcomes first Hilton Garden Inn

By TTG Asia

June 2, 2016

New Hilton Garden Inn Bali – Ngurah Rai Airport is the Gateway to Bali’s Plethora of Attractions

Only 500 meters away from the island’s international airport, Hilton Garden Inn Bali – Ngurah Rai Airport is situated at a prime location to offer travelers a great launch pad to discover Bali from the moment of arrival. Conveniently located at Jalan Ngurah Rai Airport, the hotel is approximately five kilometers’ drive away from the well-known Kuta beach precinct, which boasts a wide array of retail, dining and entertainment options. Hotel guests arriving from the airport can expediently check in and immediately head out to Kuta, and the other famous enclaves such as Ubud, Nusa Dua and Seminyak, to explore the beauty of Bali.

Guests can dine on-property at The Garden Grille and Bar®, which offers a full cooked-to-order breakfast and dinner, cocktails*, and evening room service. The Pavilion Pantry® is open 24 hours and features a complete selection of salty snacks, sweet treats, cold beverages, and ready-to-cook meals.

Outfitting to business purposes and MICE, the hotel also features a total of six small- to medium-sized meeting rooms, one multi-function hall, and one ballroom. Hilton Garden Inn guests will see why Life’s Better at the Garden™ through amenities and services offered at each location, including complimentary Wi-Fi throughout the hotel, 24-hour business center with Print Spots™ remote printing, a state-of-the-art fitness center, a bar and an outdoor pool.

The award-winning Hilton Garden Inn hotel brand provides guests with upscale accommodations and the modern amenities needed for a successful and comfortable experience for both business and leisure guests. The satisfaction promise affirms that Hilton Garden Inn will to do whatever it takes to ensure every guest is satisfied, or they don’t pay. You can count on us. Guaranteed™.

All 291 guest rooms boast the brand’s signature bedding featuring fresh, white duvets and crisp linens; a spacious and clutter-free work desk with an ergonomic desk chair; and an in-room “hospitality center” with a mini fridge and coffee/tea maker.

The hotel participates in Hilton HHonors®, the only hotel loyalty program that allows members to earn Points & Miles® on the same stay and No Blackout Dates on reward stays. To celebrate the hotel’s opening, Hilton HHonors members will receive Double Points per stay on the best available rate through stays completed between May 1 and July 31, 2016. HHonors members always get the lowest price with its Best Price Guarantee, along with HHonors Points, free Wi-Fi, digital check-in and no booking fees only when they book directly through Hilton.

Hilton Garden Inn Bali – Ngurah Rai Airport is located at Jl. Airport Ngurah Rai No.7, Kuta, Bali, Indonesia. For more information or to make reservations, please contact the hotel via +62 361 8976100 or visit Hilton Garden Inn Bali – Ngurah Rai Airport.

Read more about Hilton Garden Inn at www.hgi.com and www.news.hgi.com.