TOURIST expenditure on shopping came up tops in 1Q2015, according to first quarter receipts released by Tourism Malaysia today.
Tourist expenditure on shopping took the top spot from accommodation during this period, increasing 10.8 per cent to RM4.9 billion (US$1.29 billion) against the same period last year. While shopping comprised 28.1 per cent of total tourist receipts, accommodation garnered a 26.3 per cent share.
Growth in shopping expenditure was dominated by regional and mediumhaul countries such as Brunei, Singapore, Japan and Thailand.
Based on a survey by Tourism Malaysia, clothing/apparel constituted 49.6 per cent of items purchased by tourists, followed by handicraft/souvenirs at 45.5 per cent and shoes at 21.7 per cent.
The average per capita expenditure of foreign tourists also grew, rising 3.5 per cent year-on-year to RM2,700.
Tourists from Saudi Arabia were the biggest spenders with an average per capita expenditure of RM9,637, followed by travellers from New Zealand and Australia trailing far behind at RM4,213 and RM4,133 respectively.
In addition, four markets – Japan, Thailand, Singapore and Canada – showed an increase of over 20 per cent in average per capita expenditure.
Meanwhile, the average length of stay (ALOS) of foreign tourists rose from five nights to 6.7 nights as compared to the same period last year. Visitors from the Netherlands charted the highest ALOS at 11.7 nights, followed by the UK at 11 nights and Saudi Arabia at 10.5 nights.
Factors that contributed to these positive results include the favourable exchange rate, which encouraged tourists to spend more. Moreover, the drop in tourist arrivals in 1Q2015 had compelled hoteliers to offer cheaper rates, leading to tourists staying longer and spending more on shopping than on accommodation.
LUXURY vacation rental service LuxuryVilla.com is now offering villa rentals in Phuket, its first South-east Asian destination.
Each villa rental in Phuket features lush tropical gardens, stunning architecture, original art and designer furniture, as well as views of the beach.
Guests can experience the five-star amenities of staying in a hotel, but with the added privacy and comfort that comes with a luxury home rental.
“We help our clients find the best villa, tailored to their specific needs, whether it be incredible views and a private pool, or spacious interiors and state-of-the-art kitchens,” said Samuel Cohen, CEO of LuxuryVilla.com.
“Our rentals are the perfect fit for families who want to enjoy the best that Phuket has to offer with easy access to activities and local attractions,” he added.
THE Indonesian government’s intention to open up the destination by giving 30 additional countries visa-free access have received international applause, but the trade finds grey areas in the implementation that may cause a backlash to its tourism sector.
Although the presidential regulation stated the facilities were eligible for government services, educational activities, social cultural affairs, tourism, business, family visits, journalistic duties or participate in a transit stay en route to a third country, the implementation guideline issued by the Directorate General of Immigration to its offices and checkpoints is not quite the same.
The guideline states that visa-free facilities were eligible for “tourism purpose only”, which was interpreted as “leisure travel only” by frontline officials.
Alan Chong, sales & marketing manager at Orex Travel & Tours in Kuala Lumpur, pointed out that his Japanese business clients in Malaysia still needed to apply for visas on arrival when travelling for business to Indonesia.
“An officer at the airport will ask tourists their reasons for entering the country and then guide them to the right queue,” said Chong.
“Business travellers are told to get a visa-on-arrival first before they go through immigration. If they were travelling for leisure, they can go straight to the Immigration counter and get their passports stamped.”
However, TTG Asia e-Daily have been told that a Caucasian business traveller was able to sail through immigration without a visa.
The guideline also stipulated that travellers were “allowed in and out” from five international airports and four seaports, namely the airports of Jakarta, Bali, Medan, Surabaya, Batam, and seaports of Sekupang and Batam Centre, Batam, Sri Bintan and Tanjung Uban Riau.
I Ketut Ardana, chairman of the Association of the Indonesian Tours and Travel Agencies (ASITA) Bali Chapter, said: “The problem our inbound tour operator members face is that travellers, especially those longhaul ones, have held their tickets long before the new regulation implemented.”
“It is common for travellers to arrive in Bali and leave from Yogyakarta or Lombok, which are not visa-free entry and exit points. In such cases, travellers still need to pay for visa on arrival, although they are here for leisure,” he adds.
Ricky Setiawanto, director of business development, Panorama Destination, said: “We have travellers who were stopped from leaving Indonesia from Lombok airport because it was not a visa-free gateway.”
“Some immigration officers do not check tickets and they let travellers in without a visa. If they had checked, they would have noticed planned departures from non-visa-free exit points and would be able to advise travellers to apply for a visa-on-arrival, which is cheaper (US$35) and less (troublesome) than having to reroute their tickets back to Bali.”
Ardana said ASITA Bali had sent a letter to the Immigration office and the tourism minister, requesting for the guidelines to be simplified.
Arief Yahya, Indonesia’s minister of tourism, acknowledged that tourism “includes MICE, business travellers who are here for meetings, visiting projects etc; they are different from expatriates who live here to work”.
He agrees that the visa-free facility should be made available to “these people” and shared that his office is now in talks with the immigration office for solutions.
Additional reporting by S.Puvaneswary and Greg Lowe
PLATENO Hotels Group is planning to launch a new luxury resort, the Portofino Ocean’s Edge Resort, in Boracay, in June 2016.
Located on Isla de Carabao, sister beach to Boracay, the resort will be accessible from both Caticlan and Kalibo International Airports via the resort’s own ferry services. Alternatively, a helicopter service is available from Caticlan.
The resort will feature 44 grass-thatched roof villas with spacious private terraces and plunge pools overlooking the horizon. The villas will be ornately furnished with hand-crafted coral stones, dark Philippine mahogany for its wood accents and locally woven fabrics for upholstery.
Amenities will include a clubhouse with reception; restaurant, lounge and bar overlooking the pool; private beach cove with beach bar and jetty, spa and watersports activities including a dive shop.
Isla of Carabao boasts long, secluded beaches with some only accessible by boat, as well as pristine dive sites with crystal-clear water.
You’ve been on a buying spree – the latest was German tour operator distribution company, travel-IT, last January. This followed Hotelzon and Locomote in June and August 2014 respectively, and increased investment in eNett. What’s the strategy behind these buys?
First of all, we’re clear and focused about what we are. We are a travel commerce platform. We take content, put it onto our platform, then distribute it out to the market. We are not an IT solutions company for airlines or hotels – our competitors do that, they are good at it, let them do it. We’re in the forward, front-facing distribution part of the business but on a much more holistic and broader basis than our competitors.
Gordon Wilson
So we’re buying to extend our platform. For example, travel-IT gives us that extra tour operator content in a state-of-the-art level technology. Hotelzon fills the gap of negotiated rates of independent hotels which we didn’t have.
Any regret then that you sold GTA to Kuoni – surely that’s a lot of content?
Not really. You have to bear in mind that what I’m about is distributing the content, not amassing it, which GTA does. It has a huge group business for a start and all these people contracting the hotels and putting in the rates into the system. That’s good business but I’m more interested in distributing and to do that I would need more content than GTA had on its own. I distribute GTA today and the other wholesalers, but I don’t need to own them to do that. So I don’t regret selling it at all; it’s not core to what I am.
How does eNett fit in?
It’s what Bain Consulting, which helped us with our strategy, called ‘adjacencies’ , ie, businesses that are not completely alien to us and are a natural extension. We do all these transactions but not the payment piece (of the puzzle). That’s when we started looking at eNett, at the time an electronic funds transfer company, but which we have transformed into a Virtual Account Number company.
We decided to increase our stake in eNett to 76 per cent because it’s such a fantastic growth engine for our business – growing 50 per cent year over year and we still feel we’re just scratching the surface of what that business can do. And as a result of the deal, we have rights to use the eNett platform above and beyond travel.
Will you?
Not in the near term, because we have a huge target of US$810 billion of B2B travel payments which eNett is seeking to service. But at some point in the future, we may decide to go into B2B payments outside of travel.
Will you continue to buy?
Yes, being public(-listed) and having less debt means we have more money to do other acquisitions.
In 2014, I paid about US$300 million in interest payments but this year, I should pay around US$140 million to US$150 million in interest payments. That’s cash I now have to pay dividends to my shareholders and do more investments internally and externally.
Now that isn’t saying that the sole strategy is to acquire, but having a core strategy on how we build up the travel commerce platform through organic growth or inorganic investment, where we see may be somebody has technology or some content which makes sense for us to put into our platform. And I want to stress it’s not all inorganic; we also continue to invest US$170 million a year in our own activities which have been successful for us.
What might be the unmet needs now?
Areas such as expense management, mobile, other services to corporations, automation of meetings and incentive travel, and marine and mining travel.
Are there opportunities in Asia?
There are Asian companies which are doing good things in mobile, expense management and obviously, something unique to Asia – for instance, a lot of corporate travel is uniquely booked through secretaries clubs in Asia. We’re not restricted in our horizons, that whatever we buy must be American or European or whatever. We take the best we can find.
It’s interesting how travel companies are growing through ‘adjacencies’, you with eNett, Kuoni with VFS Global (visa facilitation), etc. A CEO needs to think more broadly today.
Yes. My job is to set the strategy for the company with my board and also go out and realise it. A strategy is a living thing though, especially when you are in the travel and technology business, which is so dynamic and so fast-changing that you have to think sideways and forward and seize the opportunities.
Were there challenges in integrating the companies you’ve bought?
Yes, especially when you bring in the smaller companies, as they have different culture and dynamics. Sometimes you can’t swarm small companies with too much big company love, or with too much big company practices. But equally, when you are a public-traded company as we are, you’ve got to make sure things are done appropriately – compliance, etc. So we have to find the right balance.
Over the years, even during my Cendant days as you know, we have bought a lot of companies. I like to think we’ve learnt a lot and sometimes the hard way (laughs). We lost some of the enterpreneurship and dynamism of the companies – the very thing we were buying – because we got it wrong.
But that’s in the past. Look at eNett for example. Effectively we control it, but we run it as a separate company. It has its own CEO, management team and a board of directors, and obviously the joint venture partners are in there as well. We consolidate its numbers into ours of course and we work closely together all the time, but it’s got its own identity, independence and is self-financing. That’s a good model going forward.
We look at other people who have been successful (in integrating), such as the Priceline Group with Agoda, bookings.com, etc, and they’ve kind of done that too, ie, not overly integrate the companies’ independence into the management of the bigger group.
Beyond Air:Air revenue ratio is about 21:79 per cent for you now. What will the ratio be in the future?
Beyond Air grew 14 per cent last year. The acquisitions we’ve made have been in the non-air (sector) and we’ve said publicly that we earned US$424 million Beyond Air revenue last year and I’d be disappointed if in next three years it would not be US$1 billion, because of growth in eNett, hotel bookings, travel-IT and we may well do some other things in that space going forward.
Air will continue to be big but less as a percentage to the total. Beyond Air will also grow at a faster rate.
This article was first published in TTG Asia, July 17, 2015 issue, on page 9. To read more, please view our digital edition or click here to subscribe.
Chains and independent hotels to me are an oxymoron…For one, independent hotel groups tell the stories of their individual hotel members, while chains spend enormous dollars telling their own story, or that of their storied brands.
As the big hotel chains sashay their way into the turf of independent hotel groups (see page 16-17), who will prevail in this new competitive space?
Starwood Hotels & Resorts, Best Western International (BWI), Hilton International and Carlson Rezidor Hotel Group are all looking to Asia as a fertile market for their newly-launched Tribute Portfolio, BW Premier Collection, Curio and Quorvus respectively. Will they give the likes of Preferred Hotels & Resorts, Worldhotels, Relais & Chateaux, Design Hotels, etc, a run for their money?
I think the chains have some work to do if they were to steal some of the marketshare of these players, let alone elbow them out of the room. Chains and independent hotels to me are an oxymoron. Strange bedfellows. But you would argue: Aren’t groups that represent the indies also a chain? No, there is a big difference.
For one, independent hotel groups tell the stories of their individual hotel members, while chains spend enormous dollars telling their own story, or that of their storied brands. For another, I can imagine that when independent hotel owners in groups such as Preferred, Worldhotels, etc, get together, there is a real sense of being in a singles club and they exchange notes on everything from which supplier is best for curtains to how they pamper their most loyal guests. In chains, they probably grouse about the chain itself – chaining them to some SOP, charging them hidden fees, blah, blah, blah, so smart these Asian owners have become.
Thirdly, the independent hotel groups are honing their skills further in story-telling and are evolving to cater to changing customer demand for ever more experiential journeys – read what’s behind Preferred’s revamp, Design’s Brand Lab and Worldhotels’ new direction Dream, Dare, Do (on page 18), for example.
I believe however that chains this time round do understand the market has changed and that to have a real go at independent hotels, they need to (a) be clear about where their collection sits (b) be transparent and competitive about their fee structure (c) be sincere in promoting the independent hotels and not the chain’s independent hotel brand and, most importantly (d) just let independent hotels be – i.e., leave them alone, because their quirkiness and imperfections are what make them unique.
Starwood for example has professed that it will be promoting Tribute a little differently from its other brands, with the focus being on the individual hotels’ stories, while BWI has a unique pay-for-performance scheme and if it does not perform, owners have the right to leave BW Premier Collection. Read all about it in our guide.
Best of all, the singles in Asia have a room full of suitors and can take their pick of the handsomest.
This article was first published in TTG Asia, July 17, 2015 issue, on page 2. To read more, please view our digital edition or click here to subscribe
THE PATA Investment Forum is set to take place in Bangalore, India on September 7, prior to the PATA Travel Mart 2015. This year’s focus will be on topics of government and policy, as well as commercial and private interests for the development of tourism in India.
The announcement came alongside a reveal that PATA will be partnering hospitality consulting firm Horwath HTL for the organisation of the event.
Mario Hardy, CEO of PATA, said: “The state of Karnataka and the city of Bangalore have much to offer tourists, with its rich heritage and culture. There is tremendous potential for the responsible development of tourism in the state, which can be achieved with the right investments in place. The PATA Investment Forum will allow travel and tourism professionals in the state the opportunity to learn how to unlock this potential.”
Delegates can expect representatives from local government and private sector players to be present at the forum, allowing for open discussions on how to best develop India’s travel industry.
KHIRI Travel has put together a 4D3N itinerary to the Mogok gem area in northern Myanmar that sidesteps the well-trodden visit to a gem mine.
The new tour programme overturns perceptions that the only attraction Mogok has to offer is its gem mines. Instead, guests attend a 90-minute workshop on gems, where they can learn the differences between gemstones and the importance of colour, carat, clarity and cut.
Guests can also go trekking in tribal areas, join a street food session in Mogok, visit a botanical garden in Pyin Oo Lwin (formerly Maymyo) and take a river cruise from a pottery village to Mandalay, via the heritage site of Mingun.
Instead of taking the cruise, guests have the option to visit Shwebo and the newly declared UNESCO World Heritage site at Hanlin with a guide.
“Our aim is to let guests experience the essence of a fascinating cultural area defined by Lisu, Palaung, Gurkha and Shan tribes, tea and coffee plantations, and the gemstone-rich mountains,” says Edwin Briels, general manager of Khiri Travel Myanmar. “The legacy of British colonial influence also makes the Mogok area a unique experience.”
Travel trade prices for the trip in a private vehicle range from US$485 per pax in a six-person party and up to US$710 for a two-person party, based on twin sharing. The single room supplement is US$110 per pax.
ONLINE travel marketplace Responsible Travel has spoken out against the UK government’s negative travel advice towards Greece and on the media frenzy surrounding the inflated dangers of travelling to the country.
The company argues in a statement that the UK government’s travel advisory, while correct in pointing out the greater preparation required when visiting Greece during this period of economic crisis, however fails to point out the necessity of tourism as an industry in the European nation, which accounts for 18 per cent of the country’s GDP according to Responsible Travel.
Justin Francis, managing director of Responsible Travel says: “One of the best things we can do to support Greek people is to continue to travel to the country, however the tone of the messaging and advice from the UK government, and subsequently the mass media, completely contradicts this.”
“The government of course has a duty to advise its citizens, but the information is given out-of-context, deterring travellers with little thought given to the negative impact on the Greek tourism industry,” Francis adds. “Tourists couldn’t be more welcome than they are now.”
Christos Panagiotopoulos, general director of Responsible Travel member, Arkas Travel, concurs, saying “we the Greeks understand that we need tourism more than ever. Tourism is the strongest column of our economy and we do our best to support it.”
“We never heard of any incident with tourists, or any problems with supplies,” assures Panagiotopoulos, disputing the UK travel advisory which encourages holiday-makers to bring sufficient supplies with them for the duration of their trip to Greece.
A full list of Responsible Travel’s own travel advisory to Greece can be viewed on their website here.
ALILA Hotels & Resorts will debut Alila Solo in Surakarta Central Java this October.
A 15-minute drive from Adi Sumarmo International Airport, the hotel lies within easy reach of the city’s main attractions: two centuries-old Sultan’s palaces, Triwindu Antiques Market and the Laweyan Batik District.
Alila Solo offers 255 rooms and suites, all of which feature city views. The four Alila Suites (90m2) each extend to a private ‘hanging garden’ terrace with plunge pool, while the Presidential Suite (200m2) features a full service pantry, multi-functional room and 24-hour butler service.
F&B options include all-day dining restaurant Épice, rooftop bar Agra and the pool deck café, while recreational facilities comprise of the swimming pool, spa, gym, and children’s pool and club.
For meetings, Alila Solo provides 15 meeting spaces, and two ballrooms that can be combined to create a 2,100m2 Grand Ballroom to hold 3,500 pax. Its Executive Lounge offers full business centre facilities, secretarial services and all-day refreshments.
Chains and independent hotels to me are an oxymoron…For one, independent hotel groups tell the stories of their individual hotel members, while chains spend enormous dollars telling their own story, or that of their storied brands.
