Asia air travel demand continues to soar

March 1, 2016

THERE was robust growth in international air passenger demand for Asia-Pacific carriers in January, according to preliminary traffic figures for the month released by the Association of Asia Pacific Airlines (AAPA).

A total of 24.5 million passengers were carried by the region’s airlines in January, a strong 9.2 per cent increase compared to the same period last year.

The availability of affordable airfares, coupled with the rise in leisure travel ahead of the Lunar New Year period, helped boost passenger demand, resulting in a 9.9 per cent surge in revenue passenger kilometres (RPK).

Growth in demand continued to exceed capacity expansion, with load factors climbing 2.1 percentage points higher to reach 79.6 per cent in January in spite of a relatively firm 7.1 per cent expansion in available seat capacity.

Andrew Herdman, APAA director general, said: “For the region’s carriers, the continued strong growth in passenger demand was a very welcome start to the year, against a backdrop of volatile markets and an increase in global economic risks.”

He added that while travel demand outlook remains broadly positive for the coming year, airlines are expected to be vigilant in closely monitoring regional economic developments and managing costs due to the highly competitive market conditions.

India’s railway to receive extensive upgrades

By TTG Asia

March 1, 2016

INDIA’s railway minister, Suresh Prabhu, announced in the 2016-2017 railway budget a slew of measures to modernise and improve India’s railway infrastructure and facilities.

Among the improvements put forward are the launch of Tejas, high-speed trains that will operate at speeds of 130 kmph and offer onboard services including entertainment and Wi-Fi connectivity, overnight double-decker trains to service busy routes, as well as a ‘Clean My Coach’ service for passengers on SMS request.

Train services will also be launched to connect the states of Mizoram and Manipur to the rest of the country and Wi-Fi will be extended to 400 railway stations. Within the next three months, e-ticketing facilities can be expected as well.

Agents interviewed expressed enthusiasm over some of the new plans. “We are delighted with strategic initiatives like Asha circuit trains to connect important pilgrim centres in the country, as well as the introduction of Tejas,” said Madhavan Menon, managing director, Thomas Cook India.

Subhash Goyal, president, Indian Association of Tour Operators, said: “We welcome the idea to adopt Japan’s high-speed bullet trains on the Mumbai-Ahmedabad route. We need such trains for all major tourist routes.”

InterContinental Singapore completes renovation works

By TTG Asia

March 1, 2016

INTERCONTINENTAL Hotels Group, in collaboration with design firm Fbeye International, has completed a major five-year renovation of InterContinental Singapore.

The redesign sees the enhancement and continuation of the hotel’s colonial and Peranakan heritage theme, with the hotel lobby, lobby lounge, all-day-dining restaurant Ash & Elm and the 316 tower rooms and suites overhauled.

Fbeye also previously redesigned the hotel’s executive club lounge, 67 ‘shophouse’ guestrooms and suites, as well as Cantonese restaurant Man Fu Yuan.

South Korea to develop IR at Incheon airport

By TTG Asia

March 1, 2016

Mohegan Tribal Gaming Authority Project Inspire — Phase I of Mohegan Sun's Project Inspire is estimated at US$1.6 billion, with a commitment total of US$5 billion over multiple phases (PRNewsFoto/Mohegan Tribal Gaming Authority)

SOUTH Korea plans to develop an integrated resort at Incheon International Airport, with the government awarding the licence to US-based operator Mohegan Tribal Gaming Authority (MTGA), along with developer KCC Corporation and partner Incheon International Airport Corp (IIAC).

MGTA, operator of the Mohegan Sun properties throughout the US, has named the multi-phase development Project Inspire, which will include the construction of a 1,350-key, three-tower luxury hotel complex. A 20,000m² retail and F&B space is also in the works, as well as a 4,500m² South Korean cosmetics and beauty hub.

Further plans include having a 100,000m² Paramount Studios Themed amusement park; a 33,000m² Eco Adventure Park featuring indoor rock climbing, zip lining, an indoor rainforest, and an archaeology experience; an entertainment arena with 15,000 capacity; and a 20,000m² casino with 250 tables and 1,500 slot machines. As well, an adjacent private air terminal is on the cards.

Phase one of Project Inspire is estimated to cost US$1.6 billion, with the total development projected at US$5 billion.

No major setback for Nok Air after pilot strike

By TTG Asia

March 1, 2016

TRAVEL agents interviewed are unfazed by Nok Air’s pilot strike in February and are continuing to offer the LCC’s flights in their tour packages.

The cancellation of Nok Air flights have persisted since the strike, but Patee Sarasin, Nok Air’s CEO, said that “more than 90 per cent of problems are expected to be addressed by March 10.”

In the meantime, the airline is dealing with the crisis by offering 16 charter flights per day from VietJet Air and Lion Air and transferring passengers on cancelled flights to their alliance airlines such as Thai Airways, Thai Smile Airways and NokScoot Airlines.

A number of travel agencies in Thailand are continuing to offer Nok Air flights in their tour packages as well. Tangmo Tour for instance, is still offering Burmese tour packages with Nok Air flights included.

Kritchanat Meesamran, vice president of the Thai Travel Agents Association, who is also travel managing director of Sun Smile Holidays, expressed that the strike is a minor crisis that will not dampen the travel industry significantly and that travel agents are confident in Nok Air’s ability to handle the situation.

Singapore tourism revenue fell nearly 7 per cent in 2015

By Paige Lee Pei Qi

March 1, 2016

EVEN though total arrivals in Singapore increased 0.9 per cent to 15.2 million in 2015, tourist receipts declined 6.8 per cent to S$22 billion (US$15.6 billion), resulting in a “mixed tourism sector performance” last year, according to a statement by the Singapore Tourism Board (STB).

The decline in tourism receipts was largely due to a six per cent fall in BTMICE visitor arrivals, with a corresponding eight per cent drop in per capita expenditure.

According to STB’s chief executive Lionel Yeo, while 25 per cent of the total number of visitors to Singapore belong to the BTMICE pie, their expenditure can be double that of a leisure traveller.

Yeo said: “As the average BTMICE visitor spends about two times more than the average leisure visitor, the fall in BTMICE visitor arrivals and spending due to companies cutting back on both travel and trip budgets has had a significant impact on our tourism receipts.”

Nevertheless, Yeo said: “But we take heart that we are still attractive as a leisure destination as we saw an increase in leisure visitor arrivals.”

Indonesia once again emerged as Singapore’s largest source market with 2.7 million visitors, despite registering a year-on-year drop of 10 per cent.

Visitors from Malaysia, Japan and Australia also declined by five per cent, four per cent, and three per cent respectively, due to macroeconomic factors such as currency depreciation and an uncertain economic outlook.

On a positive note, China, which is Singapore’s second largest source market, brought in 2.1 million visitors – a 22 per cent jump from 2014.

Yeo: 2016 an uncertain year for Singapore tourism

Looking ahead, Yeo said: “For 2016, we will be cognizant of the uncertainty and volatility that lies ahead.”

STB expects tourism receipts to grow between 0 and 2 per cent in 2016, to reach between S$22 to S$24 billion. It also anticipates visitor arrivals to be in the range of 15.2 to 15.7 million, a growth of 0-3 per cent.

Rocking and rolling in Asia

By Raini Hamdi

March 1, 2016

Are you having a rocking good time expanding Hard Rock Hotels?
Oh yes. I’ve set a goal of 100 Hard Rock Hotels – opened or signed agreements – globally by 2020, when I’ll be 60 years old. This will be my last stop after 32 years in the hospitality business and I love the brand, so I’ve my heart set on that target.

How far are you with it and how does Asia figure in it?
We have 22 opened hotels, including our casinos, and 18 executed agreements, so there are 60 left to be done.

Of the 60, I figure 50 per cent will be in the US, 25 per cent Asia and 25 per cent in the Middle East and Europe. We’ve brought in senior vice president hotel development (Asia & India), Leong Wy Joon, a few months ago, to look at expansion in key resorts and key global cities in the region such as Hong Kong, Tokyo, Beijing and Shanghai.

Why did it take Hard Rock so long to place that role here so you could grow?
That’s a correct assessment. But nobody saw Lehman coming and things went kind of dormant for everyone from 2007 to 2011.

After that, we all needed to reconstruct and reposition ourselves for new growth. Hard Rock did a tremendous undertaking to get our backbone – the operating standards, manuals and other essentials – right.

There was still growth at the time but it was slow, methodical, with iconic additions such as a collection of all-inclusive hotels in Latin America that has been immensely successful. So we got the fundamentals right. You can’t push greatness; it has to happen when its moment comes.

Why is Hard Rock still relevant?
Music will always be relevant. We consider ourselves a lifestyle hotel, but we didn’t go out to create a brand to fit a ‘lifestyle’ niche. We are all about the music, and we create our hotels around music. We are the largest curator of musical memorabilia, with 80,000 original pieces in our collection, and they cut across generations, genres and cultures of music. We don’t only have Beatles guitars or Michael Jackson’s jacket, but an entire collection, from Shakira to Asian artistes now. We’re a music museum with rooms and we appeal to people from eight years old to 80. Who does not love music; it is the international language of love.

Other brands are trying to be relevant. If you were a lifestyle brand three years ago, how do you stay relevant? It scares me to see those groups that are trying to be relevant through design and technology – just look at the speed of change!

Yes, but has anything changed with Hard Rock? Surely you need to evolve to cater to the new generation?
Yes, absolutely, and I would point to our original cafes, which had a lot of wood and brass. Our newer cafes are more with the times.

Similarly, our hotels are contemporary and, as we open more of them, I’m excited for you to see some of the design aspects and how we’re integrating the whole music platform with modern technology and all the things people expect of an upper upscale brand today.

How are you relevant to millennials?
We’re very popular with millennials. My children love Hard Rock.

But of course, they are your children!
They love Hard Rock before I joined the company. In fact I beame much cooler once I got the job!

Are Hard Rock Cafes doing well in today’s proliferation of cafes?
I would point to you that the number one most collected item in the world is the Hard Rock T-shirt – 7.4 million T-shirts sold around the world per year. We have 15.6 million articles of merchandise with the Hard Rock logo – people are paying to exhibit our brand. I do a lot of high fives when I walk around airports (laughs).

We would not be as successful without the legacy of the cafes. There are some 160 cafes globally today.

You’re in charge of Hard Rock Hotels development. Is there synergy from the cafes development side?
Sometimes we integrate cafes into hotels. We also give each other leads. So it’s a tight community between restaurants and hotels. A restaurant developer may evolve into a hotel developer and many times a hotel developer may decide to do a restaurant, so there is a lot of crossovers between the two. That has helped us a great deal.

Are you seeking to franchise or manage hotels?
Both. Most of our 22 hotels in operation today are franchised, although we manage all of our casino hotels in the US. Of the 18 signed agreements, 12 are managed, six franchised, so as we grow there is a preference to manage, simply because we have a unique brand. Tell me one other brand that has a position in a hotel called a vibe manager? That’s a full-time position and the manager creates the ambience – the intensity of lighting, sound, the kind of music to play, infusion of smell, etc.

But hospitality schools don’t produce vibe managers. So it’s difficult to find a partner to manage a franchise or know the DNA of the brand as we do, although there are such partners. With the right owner and the right opportunity we are still open to franchising. Plus, when we franchise, we’re different from other companies in that we work really closely with partners to ensure the product matches the brand – we want to be iconic, edgy and inspirational.

So would a cool brand mean cool fees too for owners?
(Laughs) We are cool and hip but we are traditional in the way we do business, so don’t let the way we dress in jeans make you feel we are less serious or hardworking.
Models of management and franchises have evolved over time and the industry is fairly competitive in a small range of fees. Perhaps what’s cool is that our management contracts are not as long as everybody else’s or as boring.

What are the challenges of expanding Hard Rock in Asia?
The brand is mostly known for its cafes. Currently we have five hotels operating in Asia, so we need to build brand recognition for the hospitality aspect of Hard Rock. And Asia as you know is one of the most competitive markets in the world.

Uniquely Singapore staycations

By Raini Hamdi

March 1, 2016

Singapore’s small population base belies a strong domestic market which is helping hotels at a time they most need it.

A rich nation that has produced a bumper crop of vacation-hungry residents, Singapore is also now recognised as a domestic market in its own right, with local hotels sighting rising staycations over the last two to three years.

With global economic uncertainties expected to impact the local tourism sector, and as hotels brace for more downward pressure on AOR and ADR from incoming supply this year and next, the presence of a strong domestic market is a welcome sight for urban resorts, including luxury hotels.

CBRE’s latest research shows although arrivals to Singapore YTD November 2015 rose 0.4 per cent year-on-year to 13.8 million, hotel performance remains a challenge as ADR, AOR and RevPAR plunge across all segments to S$245.57 (US$175.42), 85.3 per cent and S$209.57 respectively.

“For 2016, visitor arrivals is expected to improve with STB’s (Singapore Tourism Board) marketing campaigns and strategic partnerships. However, global economic uncertainties will continue to impact the local tourism sector,” said the firm.

STB, hotels, tourism attractions and even inbound agencies may do well to give domestic travel marketing a makeover. Hotels are already having a heyday with it; in fact the local staycation market is a new driver of more creative programmes from the sector and some of these programmes apply to markets which agents can sell to, such as stopovers. Some examples:

• Shangri-La Hotel Singapore woos ladies with a Girls’ Night Out package (includes a bottle of bubbly, personalised wardrobes, facial treatments at CHI, The Spa and afternoon tea); a Families Stay Free scheme (includes a Saturday Night Pool Party with movie under the stars and pool games); and even tries to get social events guests who attend weddings or balls to stay the weekend at the hotel with preferred staycation rates.

• One Farrer Hotel & Spa targets sophisticated adults with its concept of ‘total lifestyle environment’ (see page 30) of art, spa, farm-to-table experiences, culinary demonstrations, indoor shopping, even a personalised visit to one of Singapore’s few remaining wet markets nearby.

“Singapore is now a mature travel market. Even in their own city, Singaporeans want to live it out in style. This is the staycation market we’re after,” said Richard Helfer, chairman, One Farrer Hotel & Spa.

• Park Regis Singapore has a Weekend Wheel & Deal package for locals and stopover traffic. The hotel now offers bicycles for guests to explore Singapore on two wheels.

Allen Law, CEO, Park Hotel Group, which operates four hotels in the city, said the group’s latest hotel, Park Alexandra (see page 28), and Park Hotel Clarke Quay are particularly popular for staycationers, the latter due to its bustling riverfront location while the former unintendedly partly due to its proximity to Sentosa.

“People would rather stay with us than in Sentosa
which can be expensive during the weekends,” said Law. The hotel provides daily free shuttles to Sentosa.

“The staycation market became evident
from around two years ago; the word itself is fairly new. It’s become a uniquely Singapore habit; there is definitely a lot more potential,” Law added.

Hoteliers cited several factors for staycations to continue to rise this year.

Firstly, hotels themselves are hankering after the market as the business climate looks challenging this year. If times were good, it’s unlikely hotels will be coveting staycations as actively.

On the demand side, having been bitten by the travel bug, Singaporeans see staycations as a holiday sandwiched between overseas vacations.

Eighty per cent of the population also live in public housing where facilities such as a great pool are absent. Staycations are ideal for families, and for adults who feel the need to get away from families.

With a softer market, hotels are expected to encourage the growth of staycations further this year.

Shangri-La Hotel Singapore’s director of sales and marketing, Christopher Kang, said: “With the economic slowdown we expect in 2016, strong Singapore currency and increase in hotel room supply, we are definitely expecting a challenging year ahead, however we are very certain of the potential growth in the staycation segment.

“Currently, a minimal percentage of our business stems from staycations hence there is a great opportunity in this segment. We are seeing a 15 per cent year-on-year growth from 2014 to 2015.

“Aside from packages, we are working non-stop to enhance our product. With 15 acres (six hectares) of land, we feature one of the largest swimming pool facilities among Singapore hotels and this is extremely attractive to our guests.

“Moving forward, we will continue to boost our leisure facilities. An orchid grafting programme is underway, and it will be complemented with a self-guided orchid tour and the completion of The Orchid, an architectural wonder of an orchid greenhouse on our grounds,” Kang added.

Millennium Hotels & Resorts’ first M Social hotel, which will open soon in Clarke Quay, expects a fifth of business to comprise staycations, said Paul James, senior vice president global marketing and branding. The hotel, designed by Philippe Starck, has 100 loft-style rooms and 200 standard rooms of 20m2 average room size. Ninety of them residences.

Rates are expected to be well above S$200 for a start, said James.

Ovolo opens second Sydney property

By TTG Asia

February 29, 2016

Photo credit: Nicole England

HONG Kong-based Ovolo Hotels has partnered with international design practice Hassell to launch the Ovolo Woolloomooloo hotel in Sydney, which began operations in December last year.

Sited at a harbourside on the historic Finger Wharf, the 100-key, 10,500m² property, formerly the Taj Blue Hotel, is designed to appeal to design-conscious guests and provides technology and amenities that caters to work, rest and leisure needs.

Rooms and suites feature free Wi-Fi and snacks, flat-screen TVs, tea and coffee facilities, iPod docks as well as work desks. Suites come in two-level loft designs, with or without skylights, and include lounge areas and sofabeds.

Amenities include the Lo Lounge restaurant and bar, an indoor pool and fitness centre.

Ovolo also independently operates the Ovolo 1888 Darling Harbour in Sydney, Ovolo Laneways in Melbourne, as well as six other properties in Hong Kong.

Korean Air codeshares with India’s Jet Airways

By TTG Asia

February 29, 2016

KOREAN Air is launching a new codeshare agreement with India’s Jet Airways starting March 1, increasing connectivity between Incheon and Seoul with cities in India through gateway destinations such as Singapore and Bangkok.

Along with the codeshare agreement, a new frequent flyer partnership programme will take effect. This reciprocal scheme will enable members of both airlines’ frequent flyer program, Skypass and JetPrivilege, to earn and burn mileage on the combined networks of both airlines.

The South Korean flagship carrier currently operates an A330 aircraft from Incheon to Mumbai three-times weekly.

Korean Air also intends to expand more codeshare routes with Jet Airways by end-2016.