THE TRADITIONAL group market from South-east Asia into Australia is being assaulted on all fronts, thanks to a number of reasons such as the entry of low-cost carriers and the strong Australian dollar.

The launch of new routes by airlines such as AirAsia X and Scoot is changing the face of the market from “a fairly group market to a fairly big FIT market”, said Gary Peterson, company director of the AOT Group, which owns inbound tour operator ETA.

He said: “We’re seeing more Malaysian (travel consultants) working with us for FITs, (but) you have to do a lot more FITs to do the same numbers. We will potentially see that now with Singaporeans having access to very low airfares into Gold Coast and Sydney.”

GTA Australasia noted a similar trend of decline in its group market.

Said inbound operations manager, Roxy Chan: “Last year, we had 59 groups from Indonesia in August (the peak travel season). This year, it will be somewhere between 40 and 50 groups.”

GTA Indonesia general manager, group sales, Tim Dyer, explained that this could be attributed to factors such as the appreciation of the Australian dollar and the ease of obtaining a European visa compared to before.

“Everyone can go to Europe so they are going to Europe. We’ve seen a huge surge in groups to Europe,” he added.

Both GTA and ETA, however, report fairly strong FIT numbers.

Wego chief commercial officer, Craig Hewett, told TTG Asia e-Daily that according to findings in a recent poll his travel meta-search firm commissioned, traditional group travel to Australia was in decline among Singaporean, Indonesian, Malaysian, Thai, Vietnamese and Filipino customers.

Some 47 per cent of the close to 700 respondents said ‘I like to make my own plans, booking my flights and hotels independently’ compared to 20 per cent who ‘prefer a packaged holiday, buying the hotel and flights as part of the package’ and 14 per cent who ‘like to travel as part of an organised group’.

He said: “This matches the behaviour that we’ve seen on Wego. Searches for packages are at an all-time low. In the last 24 months, it has dropped to four per cent of all our searches compared to flights and hotels. In the past, it was close to 10 per cent.”

– Read more in TTG Asia June 29 – July 5, 2012

FACED with a severe room crunch, Western Australia is taking steps to add hotel capacity in the capital city of Perth, while also working on spreading tourism to the rest of the state, aided by new airport developments.

Due to a mining boom and an influx of corporate travellers, hoteliers in Perth are enjoying dizzying rates and occupancies to the tune of a three-star room priced at A$300 (US$303), said one inbound tour operator, who cited the example of a “short-sighted” motel who wanted to cease room allotments.

Hyatt Regency Perth director of sales, Matthew Talbot, said the average rate at his hotel was poised to increase by 25 to 30 per cent this year.

“For the last 20 years we’ve worked on a flat leisure rate all through the year but now we’ve broken it down to a weekday and weekend rate,” he said, explaining that leisure visitors were now encouraged to arrive on Fridays.

Late last year, Western Australian became the only state to offer hotel development incentives, as the government “recognised that there was a failure in the market despite very favourable trading conditions”, said Tourism Western Australia CEO, Stephanie Buckland. These include the provision of Crown land at reduced market rates, flexible floor space bonuses and infrastructure grants. A prime site released is the downtown Fire Emergency Services Authority House.

Meanwhile, forthcoming inventory is set to ease the situation slightly, with three new hotels scheduled to open their doors later this year, namely the 236-room Fraser Suites Perth, the 56-room Quincy Boutique Hotel and 12-suite Terrace Hotel. Coming soon will also be an Aman hotel with over 40 rooms.

As part of a wider strategy to attract more leisure tourists to other parts of the state, new events are also being lined up such as the inaugural Margaret River Gourmet Escape in November, which will see the likes of Heston Blumenthal and Rene Redzepi attending.

In order to make the rest of the region more accessible, Buckland said the two priorities were the potential redevelopment of the Busselton airport in the southern wine region, and the establishment of international flights to Broome, the northern gateway to the Kimberley. Feasibility studies are being conducted for the former, with the intention for it to receive flights from the east coast and eventually, international ones. For the latter, which is already capable of handling international services, a link from Singapore is being targeted.

She added that financial incentives would be typically dangled, such as cooperative marketing funds and airport concessions.

AUSTRALIA’s flag carrier announced yesterday more services on its Sydney-Dallas (Fort Worth) and Perth-Melbourne routes, but remained tight-lipped about any further route cuts or additions to its international network.

After a first year of operation on the Dallas (Fort Worth) route and a successful codeshare with American Airlines on flights from around 60 destinations, Qantas will increase the frequency of the route from six weekly to daily from July 1. It is served by Boeing 747-400ER.

Qantas will also increase A330 services from 44 to 68 a week on the Perth-Melbourne connection from October 15, replacing flights currently operated by Boeing 767 aircraft.

As part of its restructuring efforts, Qantas has already dropped Singapore-Mumbai and Auckland-Los Angeles routes, as well as consolidated its A380 services from Sydney and Melbourne to London via Singapore. It no longer flies to London via Hong Kong and Bangkok, but now codeshares on those flights with its alliance partner British Airways.

These changes are already bearing some fruit, John Simeone, head of international sales, Qantas Airways, told TTG Asia e-Daily.

“On our Sydney-Singapore-London and Melbourne-Singapore-London flights, the A380s are performing above expectations. They are very popular with customers. Hong Kong and Bangkok are performing as expected.

“We’re also seeing good traction in terms of passengers transferring through Hong Kong and Bangkok. Now that we’re selling it in a different way, we’re seeing a different type of traveller, people who are using Bangkok as a layover for two or three days, both from Europe and from Australia.”

According to Simeone, Qantas’ Brisbane-Singapore service was also faring strongly, although he was unable to reveal load factors.

When asked if Qantas intended to expand its footprint in Asia, Simeone said: “We’re really at a ‘pick and stick’ phase at the moment…We need to focus on the core routes we have in terms of improving our international performance.”

As for plans to establish a premium airline in Asia following the failed talks with Malaysia Airlines, Simeone said: “We’re reviewing a variety of options…our international strategy is around our gateways – that’s probably the strategy we’re sticking to.”