TTG Asia speaks with travel bosses in the region to get a sense of how market conditions are unfolding in 2017, and what they are doing to improve business in the year ahead
INBOUND
Dominic Ong
General manager, Star Holiday Mart, Singapore
Challenges and bright spots We foresee the slowdown in the number of Chinese tourists to impact our business. On that note, there needs to be more collaboration between the tourism board with airlines, hotels and theme parks for joint campaigns to woo them. The bright side is that new hotels coming online in 2017 will help to soften the room rates in Singapore.
Business to-do list We intend to roll out our own mobile apps this year to facilitate immediate communication with our travellers. With the app, guests will be able to retrieve their itineraries, e-tickets, maps and information ahead of their arrival in Singapore. Their pre-arrival experience will be vastly improved.
Confidence level 8 – Paige Lee Pei Qi
Vichit Prakobkosol
Owner, CCT Group, Thailand
Challenges and bright spots With the Thai government’s current quality tourism strategy, we seek to follow the policy and adjust our business in order to meet our 2017 targets. We are optimistic that China’s outbound tourism will continue to grow and believe that we still have room to grow in the mid- and high-end Chinese market coming into Thailand. If we are able to sell our luxury tour packages to just one per cent of Chinese quality tourists, I think we are successful as luxury tour prices are three to five times higher than normal packages.
Business to-do list We plan to expand into the meetings, incentives and FIT segments as the Chinese mass market is decreasing. We also see potential to grow in the medical, wellness and sport segments. We will create luxury tour programmes to attract the Chinese. Although high-end Chinese travellers like to travel to Europe, we are confident that luxury tourism products in Thailand can meet their demand if we do our promotions right.
Confidence level 8 – Chadamas Chinmaneevong
Saini Vermeulen
Executive director, Within Earth Holidays, Malaysia
Challenges and bright spots As a major B2B inbound player, a constant challenge is getting good deals from hotels to ensure the same playing field as bedbanks like GTA and Hotelbeds. Competition is intense now as more players are coming into the market with just minimal markups.
On the bright side, the weak Malaysian ringgit bodes well for the inbound sector as it makes us a competitive destination in this region. Malaysia is perceived by many as a value-for-money destination.
Business to-do list We want to diversify from our Middle East core to penetrate into the European and ASEAN markets. We also want to create connectivity with channel manager platforms to get best available rates and avoid rate parity issues. We also want more XML connectivity with wholesalers worldwide.
Confidence level 5 – S Puvaneswary
Michael Wu
Managing director, Gray Line Tours, Hong Kong
Challenges and bright spots OTAs are our key competitors, as they become big partners of hotels with consumers going direct to them for booking. The term hotel GSA will likely disappear one day as clients bypass the middleman and drive traditional agents’ profit margins to the lowest levels.
On the brighter side, I foresee a less pricey Hong Kong, in part due to stabilising room rates that will encourage overnight stays and lower airfares arising from stiffer competition between LCCs and legacy carriers.
Business to-do list I will roll out more user-friendly features on our website, i.e. a mobile site to enhance bookings via smartphones. I will also improve tour services, offering clients more free time for sightseeing than hopping around attractions.
Confidence level 6 – Prudence Lui
Bernadette De Leon
General manager, Amiable Intertours, Philippines
Challenges and bright spots The Department of Tourism has not laid out its marketing strategies and what it really wants to do for the Philippines, except to be busy with the Miss Universe beauty pageant that the country will host in January 2017.
The bright spots are that foreigners are now more aware of a “more peaceful” Philippines because of president Rodrigo Duterte’s strong drive to weed out crimes. The reconciliation with China also led to the lifting of its travel advisory against the Philippines.
Business to-do list To market unknown destinations – the pristine Kalanggaman Island in Leyte has strong potential. Batanes is now more affordable as Skyjet reduced its airfares from 28,000 pesos (US$565) to 17,000 pesos while accommodation including homestays have also become more competitive.
Confidence level 8 – Rosa Ocampo
Pankaj Pradhan
Managing director, Beauty of Japan
Challenges and bright spots The challenges are ensuring the availability of sufficient hotel rooms, guides and coaches, and building up the capacity of tourism staff amid the tourist influx. The appreciating yen against the dollar is another concern. I’m also apprehensive as the recent political developments in the West, and regional political disturbances, could impact the global economy and security. A natural calamity could have an immediate impact on Japan tourism too.
But there are plenty of bright spots. More visitors from traditional markets are telling friends and family members about Japan. The Japan National Tourism Association is engaging in an effective marketing campaign and local stakeholders are enthusiastic to showcase their offerings and authentic experiences to visitors.
Business to-do list I want to scale up our range of small but deluxe products across the country so we can cater to clients of all budgets. We will work closely with small- and medium-sized ryokans, hotels and family-run inns to provide an authentic experience at affordable prices. We plan to introduce unique experiences in major cities to our trade partners, and continue to work directly with local communities to promote less-visited parts of the country.
Confidence level 8 – Julian Ryall
Edwin Briels
Managing director, Khiri Travel Myanmar
Challenges and bright spots The biggest challenge for Myanmar is to convince more people to visit the country during the green season (from May to September). The tourism and hospitality sectors need to have business throughout the year to stimulate investment in further expansion that is needed for growth in the high season too.
On the bright side, Myanmar has the perfect climate for travel year-round and my favourite months are July, August and September as it’s greener, cooler and cheaper.
Business to-do list One of them is continuing to support local entrepreneurs in Myanmar, especially those in the remote areas, to become sustainable quality suppliers for our clients. We also want to develop more products in Myanmar that are different from classic temple sightseeing, i.e. nature, food, soft adventure, culture, community or a combination of all.
Besides that, Khiri Travel Myanmar wants to handle more international TV crew as it’s a niche market we are experienced in. Plus, it’s good to share the beauty of Myanmar with a worldwide TV audience.
Confidence level 9 – Xinyi Liang-Pholsena
Jo Crisp
General manager, Peak Cambodia
Challenges and bright spots Many people want to travel to Cambodia during the winter period, which coincides with Christmas, New Year, Chinese New Year and Tet. Each year, having sufficient hotel rooms, group leaders, guides and vehicles during the high season becomes a little harder.
Intrepid Travel has seen solid year-on-year growth in business since the economic downturn in 2008, so I am positive about 2017 and beyond. Cambodia is increasingly connected with the rest of the world, and better infrastructure development is making it possible to venture out in comfort to remote areas of the country.
Business to-do list In Cambodia, the guiding profession is traditionally dominated by men. It wasn’t until 2008 that we recruited our first female group leader. From a crew of 60 in those early days, we have maintained a core of approximately 10 females. I think we can do better. In 2017, we will concentrate on recruiting and retaining more female talent.
Confidence level 10 – Marissa Carruthers
Tran Gia Bach
Regional general manager, Buffalo Tours Vietnam
Challenges and bright spots Our main challenges are the stalling of the ratification of the Trans-Pacific Partnership (TPP), which will help to promote tourism and business from TPP members, and monitoring the impact of Brexit on outbound tourists to our region. We are optimistic about the stable political regime, more investment in infrastructure and hotels, and the launch of the e-visa service in Vietnam.
Business to-do list Growth in luxury travel is outpacing the rest of the market and that trend is expected to continue over the next few years. We will develop unique luxury product ranges featuring behind-the-scenes access, exclusive encounters and culinary highlights and set up a dedicated luxury team to create new positioning across all touch points.
Confidence level 8 – Michael Tatarski
Sarah Keenlyside
Founder and CEO, The Bespoke Travel Company, China
Challenges and bright spots The continual reports on China’s air pollution is damaging its reputation. Most visitors come for a cultural experience, not a beach holiday, so it’s not an issue unless the traveller has a respiratory problem. The instability – caused by terror attacks, Brexit, the US election, etc – is the worst I have seen and going into 2017, there is more nervousness over travel plans.
As for bright spots, I think people will need to travel more than ever before for business and holidays. I hope the 2022 Winter Olympic Games and the opening of more resorts will create some buzz.
Business to-do list We have to be creative to inspire travellers to visit China because it is a fascinating place. We are also revamping our website to showcase our signature tours and experiences, and to engage more with corporate clients.
Confidence level 7 – Caroline Boey
Subhash Goyal
Chairman, STIC Travel Group, India
Challenges and bright spots The greatest challenge is overcoming the negative publicity of India, which often impacts leisure travel demand. Terrorism in another major challenge; even though India is a peaceful country, terrorists can strike anywhere.
This year will be good for tourism with prime minister Narendra Modi’s demonetisation move to counter black money. Many Indians, instead of hoarding money, will be inclined to spend on travel. I expect inbound tourism will grow as the government is looking to expand the e-visa facility to medical tourism and MICE sectors.
Business to-do list We will continue to promote India to our overseas partners. A large country like India has many diverse tourism products and guests should explore destinations beyond the Golden Triangle and Kerala to lesser-known states like Madhya Pradesh and Gujarat.
Confidence level 8 – Rohit Kaul
Krishan Balendra
President leisure sector, John Keells Holdings, Sri Lanka
Challenges and bright spots The biggest challenge is attracting a mix of mid- and high-end markets from China and Europe. We have relied on old-fashioned, over-the-counter-business through partners and agents, but this should change to grow business through digital platforms
Rising tourism arrivals in 2017 will be a bright spot. With 1.7 million arrivals in 2016, Sri Lanka can do much better to draw high-end travellers with the entry of more global hotel brands.
Business to-do list We will develop our digital platform to cater to customers booking online. To better engage tour operators in China and Europe, we are planning online platforms for these markets.
Confidence level 7.5 – Feizal Samath
William Lu
General manager, Best Travel, Taiwan
Challenges and bright spots The shaky Taiwan-China relations as well as the policy of mainland Chinese tours are challenges, but I understand the tourism bureau is trying to address the situation.
The bright side? Universiade Taipei 2017 in August will bring in visitors and offer business opportunities for agents.
Business to-do list It’s to strengthen our overseas promotion beyond Singapore, Malaysia and China to South Korea and Japan, and if possible, India too. I’ll also create more diverse products for domestic travellers to compensate for the loss of business from mainland Chinese groups.
Confidence level 8 – Prudence Lui
OUTBOUND
Anthony Chan
Group managing director, Chan Brothers Travel, Singapore
Challenges and bright spots The travel industry is constantly at the mercy of health epidemics, natural calamities and political unrest, among a whole host of possible travel disruptions that can wipe out months of sales collection. This is further compounded by the uncertain economic outlook. Economic challenges, however, also present opportunities to review certain aspects of the business, rework product mix and pricing to cater and adapt to trends.
Business to-do list For a mature travel market like Singapore, a constant challenge is keeping in pace with the dynamism of the industry, from rapidly changing customer needs through continual product innovation and service differentiation to challenging business environments yet managing the bottom-line of all businesses – sustainability and profitability. We are thus implementing strategies to leverage technology to improve service, increase efficiency, broaden market reach and change our business model.
Confidence level 6.5 – Paige Lee Pei Qi
Jason Wong
General manager, Hong Thai Travel Service, Hong Kong
Challenges and bright spots The challenging global economy, the exchange rate of Hong Kong vs the US dollar in the wake of the US presidential election, plus higher interest rates as that would affect consumers’ travel desire and spending.
The cruise market is a bright spot, as more vessels are homeporting or deploying ships to Hong Kong, translating into more choices for outbound travel.
Business to-do list We’ll continue to create new products and itineraries. As a 50-year-old traditional travel agency, more resources will be channelled to our online business platform in view of the changing buying and travel patterns of our clients.
Confidence level 7 – Prudence Lui
Katsumi Sakurai
President, Rikisha DMC Japan
Challenges and bright spots Japanese travellers are very sensitive to the possibility of terrorism and that is going to put a lot of people off going to areas where they fear something might happen. In Europe, the situation is perhaps made even harder by the high unit price of trips, which have reduced sales. This is something that we must work hard to change this year. On the other hand, the strong yen is very positive for Japanese outbound travellers.
Business to-do list Business travel is performing particularly well for us at the moment, so I would like to build on that sector. Our inbound business for 2017 is already at 150 per cent of 2016 levels and we would like to see a similar performance for outbound operations.
Confidence level 7.5 – Julian Ryall
Chotechuang Soorangura
Associate managing director, NS Travel & Tours, Thailand
Challenges and bright spots The tourism direction of the government will be a key challenge of our business in 2017. Some policies such as the zero-dollar tour crackdown disrupt tourism, and and the purchasing power of locals will not recover this year. Above all, competition in outbound tourism remains high, so I have not seen any positive point in 2017.
Business to-do list To deal with the negative factors, we will select tour packages from travel wholesalers instead of creating own tour programmes to reduce risks from price wars. The economic downtrend causes many companies to reward effective dealers with overseas trips, so we will seriously focus on the incentive market because we have seen good traction in this segment.
Confidence level 8 – Chadamas Chinmaneevong
Abdul Rahman Mohamed
General manager, Mayflower Holidays, Malaysia
Challenges and bright spots The weak Malaysian currency will affect travel to medium and longhaul destinations as it makes the cost of travel more expensive. Regional tourism will benefit as more travellers opt for holidays within South-east Asia. However, if the ringgit and Malaysian economy improve in 2017, we foresee travel demand will also improve.
Business to-do list We will draw up an effective budget that fits the business environment for 2017, review our current line of business – which will likely lead to consolidation of manpower to optimise operating costs – and look for something new related to tourism that we can venture into.
Confidence level 6 – S Puvaneswary
Starry Wong
Deputy general manager, outbound, Century Holiday International Travel Group, China
Challenges and bright spots Chinese travellers, in particular the new generation, are more demanding and our challenge is to tailor-make programmes even for tour series packages. The market demand is there, but visa requirements for Chinese travellers mean they have to plan ahead even to popular shorthaul destinations like Japan and Singapore.
The China outbound market is steady and diversified and that to me is an inspiring bright spot. I’m cautiously optimistic because the global economic outlook in the coming months is not as stable as it was a year ago.
Business to-do list It is to speed up the outbound tour products transition, increase resources to develop new offerings with local partners in different destinations in Asia – e.g. taking young couples to Sabah to hold a traditional Malaysian-style wedding – and to identify relevant promotional marketing channels to target Chinese travellers.
Confidence level 6 – Caroline Boey
Seang Volak
Owner, Palm Tours, Cambodia
Challenges and bright spots An oversupply of tour operators offering low prices will be our biggest challenge. There are commune elections in June so we don’t know what effect this may have.
In 2016, a record number of Cambodians travelled abroad and this is expected to continue this year as the economy grows, so that is a positive thing for us. More direct flights connecting Cambodia with the region and the world are expected to start next year so that is good too.
Business to-do list As Cambodia’s economy as well as the middle class grow, we will look at developing more higher-end packages. There are more flights connecting to Chinese destinations, and relationships are strong between the two countries, so we will look at these markets too.
Confidence level 8 – Marissa Carruthers
Nguyen Huu Tuan
Sales & operations manager, In Out Tour Travel, Vietnam
Challenges and bright spots More travel agencies in the market have created stiffer competition, especially in terms of service prices. For example, a tour to Europe now costs only about VND45 million (US$2,000). As a result, travel agents must do more marketing and PR than was necessary a few years ago. Customers will benefit from having more options and lower prices.
Business to-do list I hope to launch new interesting itineraries that follow my policy of providing good service at a low price. This is the best way to compete with the big tour companies.
Confidence level 8 – Michael Tatarski
Karan Anand
Head, relationships, Cox & Kings, India
Challenges and bright spots India’s outbound tourism continues to face challenges due to capacity constraints in the aviation sector. We believe that the present capacity cannot cope with the surge in demand, especially during the peak summer season. Indian airports need to be upgraded quickly as there is a surge of Indians travelling overseas. Existing destinations are reinventing their offerings and new destinations are entering the Indian market to grab a share of the fast-growing outbound pie.
Business to-do list First, expand our product portfolio to meet the evolving needs of a new class of travellers. Second, enter into areas where we will have a first-mover advantage and fill the gaps in certain niche areas.
Confidence level 8 – Rohit Kaul
Simon Ang
Managing director-operations, Celebrate Life TLC, Philippines
Challenges and bright spots To get outbound tourists out of their comfort zone to explore new destinations and try experiential tourism. I believe outbound tourism will improve slightly but not much. This has to do with everyone testing the waters of how the new Philippine president will govern.
Business to-do list To explore Scandinavia as the next destination for outbound tourists from the Philippines. I will attend the Matka Nordic Travel Fair in Helsinki.
Confidence level 7 – Rosa Ocampo
Frank Yeh
General manager, My Tour Travel Services, Taiwan
Challenges and bright spots The key challenge is the sluggish global economy, which negatively impacts people’s travel mood and spending. I can’t think of any bright spots, and even new destinations for airlines are likely to benefit business travellers more than leisure tourists.
Business to-do list I will take the initiatives to develop more special outbound itineraries as well as high-end products for various destinations to wow clients, and upgrade our service level.
Confidence level 5 – Prudence Lui
Sasi Ganeshan
CEO, VMS Travels, Sri Lanka
Challenges and bright spots Our biggest challenge is getting visas for clients. Countries popular with Sri Lankan travellers like Malaysia and Thailand require more documents for visa approval. These countries are promoting in Sri Lanka extensively but their embassies want bank statements, birth certificates and identity cards, etc – a very cumbersome process.
The bright spot is that there is overcapacity in seats to Asia and the Middle East as the Gulf carriers have increased flights and SriLankan Airlines is concentrating more on these sectors than Europe. Airfares will become more competitive.
Business to-do list I will continue to improve visa and other related services to clients, which is the edge traditional agents have over OTAs. This kind of service is unmatched by OTAs.
Confidence level 6 – Feizal Samath
This article was first published in TTG Asia January 2017 issue. To read more, please view our digital edition or click here to subscribe.
