Top of the world

May 5, 2016

Worldhotels’ EVP Asia-Pacific Roland Jegge talks to Raini Hamdi about changes in the independent hotels market as he marks 20 years of heading Worldhotels in the region

What’s the Asia-Pacific market like back when you joined then SRS Hotels in 1996 as regional head?
There were very few players in the market. We had a portfolio of 23 hotels in Asia-Pacific in 1996. This has grown to almost 100 hotels today and we have also evolved into a full service provider, i.e. our range of services go beyond just sales and distribution to quality certification, training, revenue consultancy and even branding and procurement.

What was your biggest challenge in increasing marketshare then?
When I started with the company, electronic bookings from Asia-Pacific markets comprised a small percentage, as the massive regional wholesalers were controlling and channelling both the leisure and business bookings via their networks. We had only three sales offices in the region and we were working with a number of GSAs representing us in key markets. We had to expand our own sales offices and footprint, and attract the best sales talent in the region to support our hotels.

What was your biggest break in growing Worldhotels in the region?
There wasn’t a single big break. When I came (to Singapore) we had 23 hotels of various levels and quality. I had to first establish the confidence that we were the right partner, work on our image and curate the portfolio.

A source of pride for me today is that we work with and support many of the finest and largest independent hotels in the region, and important national/regional hotel groups such as Stamford Hotels in Oceania, RIHGA Hotels in Japan and The Lalit in India.

What’s had the most impact on independent hotels in the last 20 years, forcing them to evolve?
The entry of the Gen Y traveller was probably the most prominent force. They desire instant gratification (even in instant booking) and to evolve a trip into an experience.

These travellers started to seek out the unique, individual experience and they continue to explore the world of ‘non-cookie cutter’ hotel models and a way to communicate that was more personal. A chain hotel was no longer a first choice but just one of many being considered. Have you ever seen so many chains trying to create ‘independent’ or ‘boutique’ offerings in their portfolios than now?

So how have Asian independent hotel owners changed?
They are getting younger and are very savvy as they have travelled the world and many of them have studied overseas.

They are bringing a breath of fresh air and a new perspective into our industry with new concepts and designs, and the desire to do things differently.

It is hugely exciting to work with them and to share with them the experience I gained over the years of looking after entrepreneurial independent hoteliers.

What was your goal for the first year at then SRS Hotels and what is it now?
My goal has always been to have happy stakeholders at all levels – be they the hotels, our clients, the large multinationals, travel agencies or OTA partners, and finally my stellar team, of which the senior members all count 10 years and more with the company. It is about being truthful, transparent and sincere, building long-lasting relationships based on knowing and trusting each other.

What is your challenge today?
To be innovative and stay ahead of the curve at all times in a fast-changing environment, and continue driving value to our hoteliers.

It is vital, in the current environment, to ensure that we continue to evolve and provide the best resources. I would say that the speed of evolution seems a lot faster today than years ago.

What are you working on currently to stay ahead of the curve?
This year, we are rolling out a programme called ‘Start with the Why’. We are building the blueprint or the story of each of our independent hotels together with the owner, general manager and senior management team. This helps us bring out the essence and origin of each of our hotels and tell this story to the world.

It is a major project and it involves a certified coach sent from Performance Solutions, a training company, to work with each hotel. We are planning to roll this out over the next two years, as it takes time and resources to meet with each hotel team.

This year, I’ve also had the privilege to design and launch World Luxury, a strictly by-invitation-only collection comprising the most iconic independent hotels that share the same principles, vision and values. We are partnering LRA by Deloitte to certify (these) hotels.

Every independent brand is now focusing on ‘telling the story’. What’s the next stage of telling the story?
It is not just about telling the story, it’s about customising the story into the different distribution channels and for each audience.

This adds spice and relevance to each stay. It also differentiates us from the cookie-cutter experience of the mainstream brands who only ask their own people/staff members to deliver the experience they want them to deliver. This is also why a standalone hotel has a brighter future ahead as customers nowadays are not only looking for a place to stay, but a place to experience and feel something.

And when will you launch World Luxury?
It is being rolled out in stages, starting last January with a workshop for several handpicked hotels from our existing Deluxe Collection of five-star hotels. We will launch it to the world during the upcoming ILTM Asia in Shanghai.

This article was first published in TTG Asia, May 6, 2016 issue, on page 10. To read more, please view our digital edition or click here to subscribe.

The fight for hotel bookings

By Paige Lee Pei Qi

May 5, 2016

The financial stakes are high, so it’s no wonder that hotels now want to wrestle back control of travellers’ bookings from intermediaries, especially as OTAs are becoming consolidated and more powerful than ever.

With increasing consolidation in the online travel space as booking giants like Expedia and Priceline strengthen their positions through organic growth and acquisitions, major hotel chains like Hilton Worldwide and Marriott International are pushing back aggressively at third-party distribution channels to reclaim direct sales market share.

In February this year, Hilton launched the Stop Clicking Around global marketing campaign in an attempt to change consumer perception, assuring potential guests that the lowest room rates can only be enjoyed through direct bookings on its websites.

Geraldine Calpin, chief marketing officer at Hilton Worldwide, commented in a press statement: “Our customers do not need to worry about sorting through a dizzying array of websites, enduring hundreds of clicks and wasting hours of time.”

On top of the lower rates, Hilton is also offering direct booking benefits such as free Wi-Fi and digital check-in with room selection.

In a similar move to counter OTAs, Marriott has rolled out Marriott Rewards Member Rates in April, promising its loyalty members the best rates.

Karin Timpone, global marketing officer at Marriott, said in a statement: “We want to help dispel the myth that other travel websites offer better rates for our hotels.”

Marriott even promises that if a guest finds a better rate within 24 hours of booking direct, they will match the lower fare and provide an additional 25 per cent discount.

These bold moves come on the back of the love-hate relationship between hoteliers and OTAs. Even as these online intermediaries help hoteliers to fill their rooms, they are also eating massively into revenues as commission rates paid to the latter can range from 10 to 30 per cent.

In response to Hilton and Marriott’s direct booking campaigns, Mark Okerstrom, chief financial officer, Expedia, said: “We know these hotels are taking steps to compete with OTAs and are watching (the hotels) very closely.”

These hotels risk losing their market share and credibility as the OTA booking ecosystem is already entrenched in consumer behaviour, cautioned Okerstrom.

It will not be surprising to see adverse impacts on their bookings through the Expedia website. Based on Expedia’s sorting order, hotels will fall to less optimal positions and their conversions decline with less aggressive participation on Expedia sites.

Moreover, with other rival brands ready to take over with competitive prices, Hilton and Marriott will stand to lose even more in the online marketplace, he added.

Okerstrom said: “Consumers are coming to (Expedia) because they do not know which hotel to stay. If they make an online search and do not find the hotel offering their best prices, they simply will not choose the hotel. That is the power of the marketplace.

“It is going to be difficult for big chain hotels to have a broader selection of hotels than Expedia. People will continue to come to us to look for their perfect hotel at the best prices,” he posited.

Expedia’s CEO Dara Khosrowshahi even goes as far as to label Marriott and Hilton’s global push for direct bookings “a mistake”.

“I completely understand that the hotels want to grow their customer loyalty but they are not going the way consumers want,” said Khosrowshahi.

“Consumers want to have all the choices and content out there,” he added, highlighting OTAs’ fast growth over the past five years as a testament to what sells in the market.

And Expedia offers more than just hotels today.

Last December, Expedia acquired vacation rental site HomeAway for US$3.9 billion in its largest-ever acquisition. This means that the online travel giant will no longer be watching the thriving shared economy space from the sidelines as it muscles into the lucrative market for apartments and vacation homes.

Explaining the decision to venture into this “new business segment”, Khosrowshahi said: “Our consumers are telling us they love alternative accommodation and we can see that home owners are going to get significantly more travellers.”

He elaborated: “The more inventory we present to customers, the happier they will be.”

The Expedia-HomeAway combination has since displaced Booking.com (part of the Priceline Group) as the world’s largest lodging seller in terms of numbers of hotels, vacation rentals and apartments as Expedia now offers at least 1.5 million properties compared with Booking.com’s 893,000.

This acquisition concluded Expedia’s mega shopping spree last year, which saw the company also acquiring Travelocity, Orbitz Worldwide and Australia’s Wotif.

When asked if Expedia will still be snapping up any more companies this year, Okerstrom said: “Our focus this year is about integrating a lot of the acquisitions we made but we are still aggressively expanding into the huge opportunities which will give us a massive runway.”

Despite all the major acquisitions, Khosrowshahi emphasised that Expedia’s focus is on organic growth.

He said: “If I think about the long-term value creation of this company, it is organic growth and it will always be the top driver of our growth. Inorganic growth will always play a part but it will serve as a complement rather than as a core part of our strategy.

“That said, we will be very opportunistic as the company delivers well over one billion dollars of cash flow a year and I have to do something with that money,” he laughed.

This article was first published in TTG Asia, May 6, 2016 issue, on page 4. To read more, please view our digital edition or click here to subscribe.

More regional travel, last-minute bookings during festivities

By TTG Asia

May 5, 2016

Lunar New Year celebrations in Bangkok

ASIA’s travellers are heading to destinations closer to home and are booking their holidays with lesser lead time during traditional celebratory periods, according to a report by travel marketing solutions provider Sojern.

Sojern’s Q1 2016 Global Travel Insights Report indicated that 31 per cent of South-east Asia travellers are looking to stay within the region during the Ramadan period, including during the Hari Raya Puasa, Eid al-Fitr and Sugar Feast holidays.

The figure is expected to rise as more last-minute travellers search for quick, regional trips. Sojern also predicts this to be one of the fastest-emerging holiday seasons.

During the Lunar New Year period earlier in the year, Asia-Pacific travellers initially searched for Tokyo most, with Bangkok coming in second. However, last-minute bookings affected results enough to switch the rankings at the eleventh hour. Osaka then came in as the third-most sought after destination during that celebratory period.

Meanwhile, Singapore travellers searched the most for trips to nearby Bangkok, Kuala Lumpur and Manila during the Lunar New Year holidays.

When taking into account the entire first quarter, Tokyo ranked as the top destination for Asia-Pacific travellers – due to the Cherry Blossom season – followed by Singapore and Bangkok.

Buffalo Tours audits elephant camps in SE Asia

By TTG Asia

May 5, 2016

BUFFALO Tours has audited 38 elephant camps in five of its destination countries – Thailand, Indonesia, Laos, Cambodia and Myanmar – and have validated that 20 of those camps meet welfare and safety requirements.

The company based its assessment using 81 criteria encompassing seven broader aspects, namely safety and management; elephant care; conservation and breeding; elephant working conditions; elephant in musth; local community support; and staff working, training and knowledge.

They were then graded under six classifications, with those falling under the bottom three grades not being recommended or sold by Buffalo Tours.

“One objective of the project was also to empower camps to improve and respect captive elephant welfare. Once camps are committed to ethical operations, they have a better chance to afford sustainable revenue,” said Graham Harper, educational travel manager and chairman of Buffalo Tours’ responsible travel advisory board.

“We are now confident to advise our global partners like Flight Centre, Vakanties, Wendy Wu and Topdeck where they should send their clients,” he added.

The audit, which involved external parties and which took over a year to complete, is part of Buffalo Tours’ policy to protect the welfare of Asia’s wildlife.

Marriott-Starwood merger raises loyalty programme concerns

By TTG Asia

May 5, 2016

WITH Marriott’s acquisition of Starwood still in flux, concerns are being raised about the future of the two hospitality giant’s existing rewards programmes, according to a study by Phoenix Marketing International.

About two in three Marriott Rewards and Starwood Preferred Guest (SPG) members have voiced various concerns, with 58 per cent worried that rules will get more complicated, 57 per cent concerned that points will expire sooner, and 56 per cent thinking it will be harder to reach elite status.

When looking at elite members, 68 per cent of Marriott Rewards users overwhelmingly wanted the new programme to still come under Marriott Rewards, as opposed to 41 per cent of SPG users who stated they prefer the new loyalty programme to maintain its current form.

In fact, 45 per cent of SPG’s elite members indicated their preference for the Marriott Rewards programme.

Commenting on the findings, David Pluchino, vice president, Phoenix Travel & Leisure, said: “Marriott has always been a leader in guest rewards programmes, and often sets competitive baseline requirements for the benefits that members receive, with other programmes following their lead.

However, as more hotels consolidate, it will be important for Marriott to “strike the right balance between the two programmes to avoid loyalty churn and status matching with other programmes”, he stressed.

New hotel managers association formed in Indonesia

By Mimi Hudoyo

May 5, 2016

Jakarta

LEADING Indonesian hoteliers have set up a new professional association, the Indonesian Hotel General Managers Association (IHGMA), which debuted recently in Bali.

The new association, whose members comprise Indonesian hotel managers and general managers, is set up with an aim to improve the quality of hospitality professionals in the country.

Irmansjah Madewa, advisory board member, IHGMA, said: “The explosion of hotel developments in Indonesia (in the last five years or so) has created a big demand for general managers. As a result, we witnessed ‘instant’ managers leading properties, professionals who are not fully ready to take the posts.

“Therefore, we feel the urgent need to improve the competency and capacity of hotel top management.”

Reza Sunardi, chairman, central board, IHGMA, said: “We do not want to improve the quality of Indonesian GMs just to fill job vacancies, but also to enable them to compete internationally.”

According to Reza, the plan is to work together with the Indonesia National Tourism Professional Board and the Hospitality Executive Learning Centre to train and create qualified managers, and in the long run, set up a school to do so.

While creating qualified managers is its main goal, the association also aims to be a place for Indonesian hotel managers to share ideas and solve common problems, as well as becoming a pressure group for the government.

IHGMA’s central board is based in Bali and now has 18 chapters and growing in Indonesia.

KTO to boost Korean DMZ’s tourism allure

By Julian Ryall

May 5, 2016

PLANS are in place for South Korea to better position the Korean Demilitarized Zone (DMZ), its heavily fortified border with North Korea, as a tourist destination.

The Korea Tourism Organisation (KTO) hosted a one-day workshop last month near the border, telling travel trade attendees and government officials that it intends to organise new programmes for the DMZ.

Plans include turning the former US military base Camp Greaves into a tourist destination. Locations used in the filming of popular TV series Descendents of the Sun are also being earmarked as attractions.

Welcoming the move, Seo Tae-won, director of Seoul-based Suhyun Tour, said: “The DMZ is one of the most popular destinations for foreign visitors and hundreds of people go there every day.”

He added: “But at the moment, most of the existing tours are not very sophisticated. They are rather routine and mostly involve visitors getting aboard buses and going to observation points where they can look through binoculars into the north.”

Some tours do take tourists to the Joint Security Area at Panmunjom, where the two sides meet periodically for discussions, but most tours “lack true insight,” remarked Seo.

“We need to take them to new areas, away from the stretches of the DMZ that are closest to Seoul and show them the reality of the hostility and tension that exists between the North and South,” he said.

GM appointed for first Oakwood property in Singapore

By TTG Asia

May 5, 2016

SHARON Seong has been appointed general manager of the upcoming Oakwood Studios Singapore, Oakwood’s first property in the country, set for a November opening.

In her new role, Seong will spearhead the opening of the serviced apartment, bringing to the table her experience in sales and marketing, pre-opening, branding, positioning and strategic market penetration.

She was most recently general manager of boutique property Club Hotel in Singapore, and had previously held roles such as country cluster director of sales & marketing for Thailand for the Ascott Group, as well as cluster director of sales of Ibis Hotels Singapore.

Photo of the Day: Halal Tourism Conference 2016

By TTG Asia

May 5, 2016

Delegates including Mahir Ünal, minister of culture and tourism of Turkey, during the opening ceremony of the second Halal Tourism Conference 2016 taking place from 3-5 May at the Dedeman Convention Centre in Konya.

Hundreds of delegates from over 30 countries, including more than 110 buyers, took part in Halal Tourism Conference 2016, the world’s biggest international halal tourism conference. Topics discussed at the event include halal tourism and technology, opportunities and trends among Muslim women and youth, meeting the demands of the 21st century Muslim traveller and many more. The inaugural edition of the conference took place in Andalucía, Spain in 2014.

Global social dining platform wants to feed Asian event groups

By Karen Yue

May 4, 2016

A SOCIAL dining company which connects hosts across the world with travellers keen on enjoying homemade flavours of the destination in a local home has begun its courtship of the corporate events market, encouraged by a 20 per cent monthly increase in corporate event bookings.

Since coming into operations in 2014, VizEat now has a network of 17,000 hosts in more than 100 countries including Italy, the US, India, China, South Korea and Taiwan.

While the VizEat website now caters to leisure travellers seeking and booking social dining experiences, cooking classes or market tours, the company will soon debut an online support for corporate events.

Jean-Michel Petit, co-founder of VizEat, told TTGmice e-Weekly: “In the coming weeks we will have a separate section on the website where corporate event planners can connect with our team and describe the type of event they are looking to organise. Based on the information provided, we will then select the hosts and set up a co-branded website with the organiser.”

VizEat’s track record in putting together major events built around the social dining concept includes the Airbnb Open in Paris last November – said to be the world’s biggest event of its kind – where more than 1,000 Airbnb members from all over the world dined that evening in local VizEat hosts’ homes in the French capital.

The company will run OuiShare Fest for 1,000 participants this month, and a dining event for a major insurance company as part of an annual meeting in June, with more than 2,000 delegates expected to attend.

While the bulk of corporate bookings comes from Europe, Petit said the company is determined to expand its reach into Asian source markets and had participated in IMEX Frankfurt last month to build awareness of its specialisation.

“We are also planning to (establish) strong curated host communities in Singapore, Hong Kong and Seoul by 4Q2016 (because these destinations are most active in securing corporate events) and expand quickly across more key Asian cities by 1Q2017,” Petit said, adding that VizEat will work with the local tourism bureau to promote the experience to corporate clients.