PRICE-FIXING in the travel industry will no longer have a place in Hong Kong as a new government rule kicks into effect, but travel consultants are not all happy about it.

The government’s Competition Ordinance will be implemented later this year and the Travel Industry Council (TIC) has started to amend or revoke certain directives to avoid contravening the new ruling.

TIC rescinded its Directive number 215 on June 1, which set a price ceiling for service charges on outbound package tours, including the service fee that tour guides receive at the end of a tour that is not included in published package prices.

Yet Michael Wu, TIC chairman, predicted: “Though the Ordinance aims to offer fair competition in the market, I reckon there will be more consumer complaints in future as it creates chaos when (the tour guide fee) varies between one travel agency to another.”

Travel consultants in small- to medium-size agencies, such as Sef Lam, director of Via Vai Travel, prefer the previous system that had a guiding rate as it was easier, while others questioned the need to remove the practice.

Blue Sky Travel’s managing director, Angela Ng, commented: “This means big players have the liberty to charge freely. Why don’t we have a fixed pricing system? Travel consultants can then win the hearts of consumers or set themselves apart from the rest by the quality of their services or products.”

But at least one travel agency is keeping the tour guide fee unchanged. Sunflower Travel Services’ managing director, Cindy Young, said: “Our fee remains the same as before but we removed the phrase ‘Recommended by TIC’.”

Young said she would take a wait-and-see approach, adding: “Our concern is that some travel consultants will use the fee price to compete for business or poach quality tour guides by lowering their rebate rate of the fee.”

The rebate rate is the percentage of the tour guide fee that the tour guide owes the travel agency.

INFRASTRUCTURE development is the Bali regional government’s focus in the next four years as it aims to link the different regencies on the island and upgrade its ports.

I Ketut Sudikerta, vice governor of Bali said: “We are currently doing a feasibility study to connect Badung and Buleleng with a toll road. We expect to open a tender next year and then we can start development.”

Speaking to the media during Bali and Beyond Travel Fair 2015, Sudikerta said good accessibility will attract investments in other tourism infrastructure such as hotels and tourist attractions in the north, where a new airport has also been planned.

The regional government is also developing a ring road between Denpasar and Badung and improving existing main roads in several areas in the north.

“It is useless to build an airport now without good access,” he said.

In the meantime, the regional government also wants to upgrade its ports. Tanah Ampo port in Karang Asem is envisioned as a port for cruises while Benoa harbour continues to be developed into a turn-around port, according to Sudikerta.

The vice governor also took the opportunity to appeal to potential investors. “We all know that the economy is slowing down, but please do not keep your money in the bank. Please, continue to invest and develop Bali and keep the economic wheel rolling,” said Sudikerta.

IF ARRIVALS continue to grow at current rates, Chinese tourists to the US could reach four million by 2018 to become the country’s biggest source market.

Jay Gray, vice president of global marketing development, Brand USA, told TTG Asia e-Daily the 6.1 per cent year-on-year growth in Asian arrivals last year was outpaced by China’s 20 per cent increase.

Assuming China maintains the current rate of increase, it will reach 2.1 million visitors for full-year 2015 and 2.6 million next year.

Brand USA’s primary focus is still leisure and FITs, and the NTO will work with wholesalers to create more products for the latter, said Gray. So far, Brand USA has chanelled most of its efforts on Hong Kong, South China and Taiwan.

In order to continue driving Asian arrivals, Brand USA will launch its online training programme for travel consultants in India and China in late 2015.

The USA Discovery Program is comprised of 10 top-tier modules with information on the different regions within the US, and in-depth information on specific areas such as skiing, golf, and national parks as the US prepares for the 100th anniversary of its National Park Service.

“Even US partners like Cirque du Soleil have come to us and want to add their show to the module as a lot of people don’t know what is available,” said Gray.

The USA Discovery Program is available in six languages including English and Chinese.

A GROUP of 112 islands in South-east Maluku last week made a debut at Bali and Beyond Travel Fair 2015 following a slew of infrastructure and facility developments in the last five years.

“Kei Islands are a hidden gem; very few people know where we are and what we have to offer,” said Andreas Rentanubun, regency head of South-east Maluku.

“We have many dive spots, and five of them are WWF-certified. Visitors can walk or cycle along our two-kilometre Ngur Tavur beach at low tide.”

Andreas added that seasonally, visitors would also be able to meet the pelicans migrating from Australia, and leatherback sea turtles swimming in the sea.

Other offerings include cave trekking, and learning about the history and culture of the locals who originated from Bali. The islands also cultivate pearls and are rich in seaweed and fishery.

They have an airport currently capable of accommodating ATR aircraft. Garuda Indonesia, Wings Air and Trigana offer 90-minute daily flights between Maluku province capital Ambon and South-east Maluku capital Langgur.

Andreas revealed: “We are planning to expand the runway to accommodate (Boeing 737 aircraft) next year and we are lobbying the airlines to connect Bali and Langgur.”

Alexander Wijono, board member of Maluku Tourism Board, said: “We expect the historic link between Bali and Kei Islands to help us promote the destination. We have been in touch with Bali Tourism Board for joint marketing and promotions in the future.”

He added that this year, Kei Islands would for the first time host the annual Darwin-Ambon Yacht Race.

RESURGENCE in visitor arrivals and the Tokyo Olympics on the horizon is placing the Japanese hospitality market in the spotlight.

Japan broke its tourist record last year with 13.4 million international arrivals and, according to a tourism white paper released by the Japanese government last week, spending by foreign visitors to Japan soared more than 43 per cent in 2014 from the year before.

The same paper said total income from the industry came to 2.03 trillion yen (US$16.4 billion), with most of the additional revenue from countries in the rest of Asia where incomes are rising.

Hotel operators here are saying they can already feel the lure of the 2020 Tokyo Olympic Games provoking interest in the destination.

“We have seen a noticeable increase in our occupancy rates over the last 18 months and we are very much hoping that will continue as we get closer to the Olympics in 2020,” said Akane Murakami, a spokeswoman for the Mandarin Oriental Hotel in Tokyo.

The games are still too far away for the hotel to be drawing up specific plans, she said, but given the notorious shortage of accommodation options in Tokyo it is unlikely that the Mandarin Oriental will have free rooms when the Olympics are on.

The Four Seasons Marunouchi is similarly unlikely to have vacancies, agreed Akiko Kikuchi, as “demand for high-end accommodation is always strong in Tokyo”.

Tokyo has seen new openings in recent months, including the Millennium Mitsui Garden Hotel and the Hotel Unizo, both in the Ginza district, and there have been suggestions that other international chains are also attempting to secure land in Tokyo for new developments.

Inbound tourism has also been boosted by the yen’s weakness against other currencies, relaxed visa regulations and expansion of Japan’s duty-free system.

FOR the first time, DreamWorks Animation is inviting the public to have a glimpse at what goes on in its studios, which churned out blockbuster animation films like Madagascar and Kung Fu Panda.

In a groundbreaking exhibition put together by the Australian Centre for the Moving Image (ACMI) and DreamWorks Animation, 31 films and more than 400 works including character designs, sculptures and will show visitors how ideas leap from initial sketches to the big screen.

The exhibition started last week at the ArtScience Museum in Marina Bay Sands, and is the first stop of a five-year international tour.

Chris Harris, senior manager, ACMI Exhibitions and Touring, said: “The line-up for the following months ahead is New Zealand, Korea, Taiwan and China, and each exhibition will last for around three to four months.”

Marina Bay Sands spokeswoman, Val Chua, said guided tours for corporate groups are available upon request with a minimum of 20 pax.

For groups larger than 30 pax, the museum will be able to provide an itinerary by breaking the group up accordingly, she told TTGmice e-Weekly.

Each 30-minute tour will give visitors first-hand insight into the creation of DreamWorks’ star characters such as Shrek and Po. While all tours are provided in English, Chua said there is a Mandarin option, at an additional cost of S$100 (US$74).

Visitors can also learn the basic principles of animation while creating their own short movie at The Animation Desk, using a simplified version of DreamWorks’ software.

Tickets to the exhibition, priced from S$21 for standard adults, are now on sale.

LUFTHANSA’S 16 euro (US$18) surcharge on all bookings made through intermediaries has elicited a motley of responses from travel agencies and airlines alike.

Taking effect this September, the Distribution Cost Charge applies to bookings on all airlines in the group, including Brussels Airlines and Germanwings.

“I think Lufthansa has struggled financially in recent years and they are trying to find an additional source of income, though I think this (new GDS change) is killing the consultants who give them big volume on groups. They are doing this perhaps mainly to sell direct to end consumers,” said Tony Soorangura, associate managing director of Thailand-based NS Travel & Tours.

Angela Ng, managing director of Blue Sky Travel in Hong Kong, said: “This puts us consultants in a difficult position, especially in the existing challenging business environment.”

The cost will be passed on to all but the most loyal customers, for whom Blue Sky Travel may choose to take on the cost, she said.

But if Lufthansa’s aim is to cut out the middleman and drive more direct bookings, then the fee may have had the opposite effect.

“To save travellers the additional cost, we will encourage them to fly with other airlines,” said Abdul Rahman Mohamed, deputy general manager, channel management at Mayflower Acme Tours in Kuala Lumpur. “The Distribution Cost Charge may also result in travellers making direct bookings with the airline. But when something goes wrong, they are on their own.”

Blue Sky Travel’s Ng said: “I sold fewer Lufthansa air tickets this month and tried to offer more airline options for clients.”

Meanwhile, other agencies appear unfazed.

“My business is not affected as I rarely use the airlines… As far as I know, not many Thai consultants use their service, primarily due to their deposit and payment conditions,” said Soorangura.

Singapore-based Chan Brothers Travel’s marketing communications executive, Rebecca Chua, said impact to travel consultants in her company is “nominal” as they use Lufthansa’s online portal, which does not impose the Distribution Cost Charge.

“Lufthansa needs to understand that there are heaps of alternative airlines that we can select; if they push us hard, we just simply find alternatives and we are sure we can convince customers to follow,” said Soorangura, adding that he does not believe that other airlines will follow in Lufthansa’s footsteps.

However, when asked if Thai Airways International (THAI) is likely to take a cue from Lufthansa, a spokesperson told TTG Asia e-Daily: “It is under consideration since the implementation of the Distribution Cost Charges for GDS will affect many aspects of our airline business.”

GDS bookings make up about 70 per cent of all THAI bookings.

Most airlines that interviewed, such as AirAsia and British Airways, declined to comment on Lufthansa’s new fees.

Cathay Pacific Airways said that its “current practice with GDSs remain unchanged”, while Singapore Airlines said that it has “no immediate plans to implement extra charges”.

Additional reporting from S Puvaneswary, Prudence Lui and Greg Lowe

THE number of buyers and sellers at the second instalment of Bali and Beyond Travel Fair (BBTF) is fewer than half of last year’s, but organisers said the event saw better quality participants this time round.

BBTF 2015 attracted 176 sellers and 171 buyers from 28 countries, a significant drop from the inaugural edition’s 410 buyers and 475 sellers last year.

Explaining the decrease in buyers and sellers, BBTF organising committee’s vice chairman, Tanto Ruwiyadi, said: “On the buyer side, we were more selective this time. Buyers were requested to pay a deposit of US$500 for Platinum category and US$300 for Gold category, refundable upon completion of the event.

“This is to avoid the no-shows we received last year and (to ensure) only the serious buyers come.”

As to the drop in seller numbers, Tanto said the transition from the Ministry of Tourism and Creative Economy to the Ministry of Tourism had affected budget allocation, which resulted in the loss of funds equivalent to the participation of 100 sellers.

TTG Asia e-Daily also learnt that while it was mandatory for members of the Association of the Indonesian Tours and Travel Agencies to participate in 2014, this was not the case this year.

I Ketut Ardana, chairman of BBTF 2015, said: “As a new event, the committee is learning and continually improving. The new system is a way to do. (Although) there was a…decrease in the number of participants compared to that of 2014, we had better quality participants this time.”

The Ministry of Tourism meanwhile aims to turn BBTF into a regional event.

Speaking to the media at the second ever BBTF in Bali last week, I Gde Pitana, deputy minister for international tourism marketing development, said: “Bali is the major gateway to Indonesia and it was logical to have the event here, but the ministry will encourage (more) participations from other destinations in the country in the future.”

Tourism minister Arief Yahya had also expressed his hopes that BBTF will draw the participation of neighbouring countries, the way Malaysia’s MATTA Fair has, according to I Gde Pitana.

“Looking at the (potential) transaction of this year, the show this year is estimated to generate Rp9.5 trillion (US$707 million), a significant increase over last year’s, which was Rp6.3 trillion,” said Arief.

MAKING good on its long-standing promise to drop visa requirements, Indonesia has officially granted visa-free entry to citizens of 45 countries including China, Japan, South Korea and the US.

A Presidential Regulation signed by president Joko Widodo on June 9 was followed by a formal announcement posted on the State Secretariat website on June 13, stating that visa-free arrivals are valid for 30 days with no extensions allowed.

One tour operator in Indonesia, Panorama Tours Indonesia, confirmed with TTG Asia e-Dailythat their groups have entered Bali without visas, indicating that the new regulation was immediately effective.

Out of the 45 countries listed, 15 have enjoyed visa-free entry before while 30 others are new, including China, Russia, South Korea, Japan, the US, Canada, New Zealand, Mexico, the UK, Germany, France, the Netherlands, Italy, Spain, Switzerland, Belgium, Sweden, Austria, Denmark, Norway, Finland, Poland, Hungary, the Czech Republic, Qatar, the UAE, Kuwait, Oman and South Africa.

Passport holders from the countries above will no longer need a visa when entering through the airports in Jakarta, Bali, Medan, Surabaya, Batam, and seaports of Sekupang and Batam Centre, Batam, Sri Bintan and Tanjung Uban Riau.

The new facility is available for those entering on government service, educational activities, socio-cultural affairs, tourism, business, family visits, journalistic duties or transits.
Visa-free entry was already open to all ASEAN member countries plus Chile, Morocco, Peru, Ecuador, Hong Kong and Macau.

With visa-free entry in place for some of the world’s biggest outbound travel markets, Indonesia is targeting 10 million tourists to Bali by 2019.