No winner in sight as travel industry stuck in limbo over Brexit

March 8, 2019

Uncertainties abound in the UK travel sector with the outcome of Brexit still up in the air weeks ahead of its planned deadline, but buyers and sellers at ITB Berlin are cautious in speculating what this may mean for business coming into Asia.

In January, IATA warned that up to five million flights would be at risk if the UK leaves the EU without a deal. A no-deal Brexit was feared to see airlines capping flights at 2018 level, although tickets for 2019 routes were already on sale. Late last month, the EU reportedly stated its intentions to lift this cap.

It may be premature to speculate on Brexit’s impact on travel, but bright spots are few

More recently, research by a product comparison website claimed that half of British holidaymakers could ditch European mini-breaks as a result of Brexit, with higher flight costs a concern.

Frank Wiegand, director of team sales Europe at Focus Asia, said: “There could be some legal problems for a short while, leading to certain Europe flights (operated by UK airlines) being unable to continue – but these will be solved.”

On whether these uncertainties could translate to speculative buying of Asian holidays in the short term, Wiegand was doubtful. “Asia is more expensive. I don’t think a family in Birmingham originally intending to visit Spain will decide on Thailand instead. (Those choosing Asia and Europe holidays) are different markets.”

Particular segments of Brits may even choose to travel closer to home. “I think the concern about being close to home is valid, particularly in the months immediately after Brexit. Our clients tend to be decision-makers within their business. They want to feel they can react quickly to any crisis. You can do a conference call but sometimes you feel the need to be present,” said David Kevan of Chic Locations.

Paul Gorman, senior manager – owner engagement, of Luxury Escapes, which is plotting its move into the European outbound market, said: “Whether Brexit will have an impact depends on what the result is. At the same time, (a great deal of) airline capacity is coming out of Europe into Asia and vice versa. The barrier to getting to places now is so much less, you can fly between Singapore and Berlin (on an LCC, for example). Ultimately it’s about (the desire to travel). I don’t think Brexit will slow that down. “

As for intra-Europe travel, he said: “Nobody knows how it’ll be in terms of operating licences. Guys who have UK or Irish operating licences like Ryan Air and EasyJet may have to reapply for landing rights. I suspect that will be worked out before (the deal is final), (but it is still) a big risk to a lot of companies.”

Perhaps, a potential slump in the UK economy and currency are larger concerns.

“Nobody knows yet what the result of Brexit might be. Does it happen in March, June, or ever? Will they hold another referendum? The only risk I see is there might be less Brits travelling at all, whether to Europe or to Asia,” said Wiegand.

If or when the pound takes a hit, “travel everywhere will get more expensive”, Wiegand explained. “It happened in Russia years ago, and there could be a similar crisis ahead of the UK.”

“Brexit opens up two levels of uncertainties. On the consumer level, travellers are not sure what’s going on and how it would affect them personally; on the trade level there will be more uncertainty over currency issues, with the pound already hit really hard a bit ago, will there be even further impacts?” said Willem Niemeijer, CEO & co-founder, Khiri Travel.

With travellers’ spending power affected, Kevan suggested that the UK’s travelling demography may shift towards those age above 35.

“Like with everything, a door closes and another opens. There will be problems and opportunities in equal measure. I would probably be much more concerned if (over half) of my business came from under 35 year-olds .”

Myanmar tourism pins hopes on European comeback

By Xinyi Liang-Pholsena

March 8, 2019

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The Myanmar trade is taking on a more positive outlook of the European market, as they believe that the plunge in Western visitor numbers to the country due to the international media coverage of the Rakhine conflict has bottomed out.

May Myat Mon Win, Myanmar Tourism Marketing’s (MTM) chairperson is seeing signs of recovery from the European market.

Myanmar Tourism Marketing has launched the a new campaign highlighting the country’s lesser-known destinations such as Putao (pictured) in Kachin State

“2018 was a challenging year, but we saw improvement in January 2019, with five per cent drop (in European numbers) instead of a 35 per cent (drop for same period last year),” she said.

Edwin Briels, managing director of Khiri Travel Myanmar, is also observing an uptick in interest in Myanmar from the Netherlands and Scandinavian markets since January this year.

“These are more conservative markets, but even families are asking about Myanmar. If family trips are coming back, everyone is coming back,” he remarked.

This positive sentiment is providing impetus for Myanmar tourism to step up its charm offensive at ITB Berlin. The Myanmar Tourism Marketing (MTM) yesterday launched the 9 Enchanting Discovers of Myanmar, highlighting the country’s diversity of attractions and natural beauty by focusing on nine lesser-known destinations of Kyaing Tong, Loikaw, Mergui Archipelago, Mogok, Mt Victoria, Mrauk U, Putao, Hpa An and Hsipaw.

Minister of hotels and tourism Ohn Maung told TTG Asia that the latest campaign, which will leverage digital media to target different groups and segments, will place a stronger emphasis on experiential travel.

“Myanmar is not just a cultural destination; there’s more than the classic four of Yangon, Mandalay, Bagan and Inle Lake,” he stressed.

Austria, which has greater market awareness of Myanmar thanks to heavy marketing of the country since some 15 years ago, is flagged as a “niche market”, particularly for trekking and diving, according to the minister.

Ohn Maung also shared that several European governments, including Czech Republic and Poland, have submitted formal requests for visa-on-arrival for their respective citizens into Myanmar.

In response, the Myanmar government is currently planning visa relaxation to selected European markets to facilitate travel as well as investment into the country.

Meanwhile, Scandinavian airlines have also indicated their interest in launching flights to Ngapali, and in response the Myanmar government is now upgrading the domestic airport in Ngapali, plus four others in Kawthaung, Dawei, Heho and Pakkuko, into international ones.

Furthermore, Italian carrier Neos Air begun direct flights from Milan to Yangon since last October, driving up optimism of faster recovery of the Italian market, May Myat Mon Win added.

Dissatisfied with OTAs, hoteliers seek diversification to reduce reliance

By Pamela Chow

March 8, 2019

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DBS_Panel_Managing_OTAs — Panellists speaking at the Direct Booking Summit last week. (From left): Onyx Hospitality Group's Chetan Patel; GCP Hospitality's Michael Belanger; The Surin Phuket's Claude Sauter; and Eastiny Pattaya's Ayudh Nakaprasit

Hoteliers have come forth to express disgruntled sentiments about hostile treatment from ever-expanding OTAs’ growing presence, and their desire to reduce their reliance on the digital booking platforms.

This paints a different picture from their relationship in early 2001, when OTAs first emerged as a “new opportunity” for hoteliers to deviate from wholesalers who were “dictating the rates”, said Claude Sauter, general manager, The Surin Phuket.

Panellists speaking at the Direct Booking Summit last week. (From left): Onyx Hospitality Group’s Chetan Patel; GCP Hospitality’s Michael Belanger; The Surin Phuket’s Claude Sauter; and Eastiny Pattaya’s Ayudh Nakaprasit

Some hotels like The Fullerton Hotel Singapore & The Fullerton Bay Hotel Singapore have adopted a “defensive” approach, making use of OTAs for their “billboard effect” to guarantee visibility and capture guest awareness, shared Jeff Crowe, the hotel’s executive assistant manager, sales & marketing, at the Direct Booking Summit in Singapore last week.

However, a large number of hoteliers has grown dependent on OTAs for a majority of their bookings. Michael Belanger, vice president revenue & distribution, GCP Hospitality, admitted: “The trouble is that we are too often over-reliant on a single source, whether it’s OTAs in general or a single OTA. That’s when it becomes dangerous.”

A “healthy” percentage of room reservations coming from OTAs should be about 50 per cent, with the other half from direct bookings. However, some hotels – in particular smaller independent hotels – attribute 90 per cent of their bookings to OTAs, observed Adrian Caruso, founder and managing director of Fastrack Group.

Leaning too heavily on OTAs has resulted in some hotels being taken advantage of, lamented Ayudh Nakaprasit, owner of Eastiny Pattaya.

Nakaprasit said: “My relationship with OTAs is not the best. At the moment, the commission rate that I pay is roughly between 15 to 17 per cent, but taking into account the amount of abuse and harassment – I probably get it every other day – it is not good.”

According to a poll at the summit, the average OTA commission rate can range from 10 to 20 per cent. Sauter chimed in that “it’s very hard to negotiate, but we need them”.

To counter this treatment and protect their rate parity, hospitality players have developed various defence mechanisms. For example, as part of Triptease’s programme, its hotel clients have implemented a “three-strikes policy” before cutting off hostile OTAs.

This strategy has reduced the hotels’ rate of being undercut to 4.1 per cent, and raised the average daily rate up by 12 per cent, and website bookings by 22 per cent.

Some hotels have also taken steps to diversify.

Belanger explained: “For independent hotels, we need to learn to diversify our portfolios in terms of drawing corporates, MICE, other OTAs and direct channels. Once you have a very diverse portfolio, you can pick and choose, and go back to the ones that aren’t playing fair and dictate what you want.

“What the hotel companies have to realise is that we’re not great at technology, so we need to partner with the right providers or invest tons of money,” he noted.

“We’ve been very, very slow at doing that, and that’s where the OTA model has been much more rapid in terms of evolving. It’s going to continue to evolve, and it has (come down to) whether hoteliers can recognise that and stay ahead of that curve by investing in a similar fashion.”

Indonesia sticks to 2019 arrival target despite not reaching earlier goals

By Mimi Hudoyo

March 8, 2019

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Tourism Indonesia media event — recent media presentation publicising the ministry’s 2019 marketing programme in Lombok.

Indonesia’s Ministry of Tourism will continue to target 20 million arrivals this year, despite its failure to meet its volume goals two years in a row.

Instead, the tourism authority has set an even more ambitious target, stating that half of the total should be reached within the first six months of the year, despite Indonesia’s peak season traditionally falling in the second half.

Speakers at a media presentation publicising the ministry’s 2019 marketing programme

Visitor arrivals to Indonesia totalled 14.1 million in 2017, when the target was 15 million arrivals. Last year, the country welcomed 15.8 million arrivals, down from its target of 17 million.

Nia Niscaya, Indonesia’s deputy minister of marketing development area II, attributed the shortages in 1.2 million arrivals for 2018 to the earthquake in Lombok, as well as the tsunamis in Palu and Sunda Straits. Earlier in 2017, inbound numbers to Indonesia were massively affected by Mount Agung’s eruption.

She added that when Bali was hit with a natural disaster, the impact was felt more keenly, as 40 per cent of international arrivals were to Greater Bali. Islands surrounding Bali, such as Lombok, were also inadvertently affected.

“The Lion Air accident also had a big impact, especially on the China market. Lion Air had a lot of chartered services from China, where many were cancelled after the accident,” Nia lamented.

While she acknowledged the target set out this year is challenging, she believes the figures are realistic.

“We are working all out to meet the 10 million target (by June), and hit the 20 million mark by the end of the year,” she shared during a recent media presentation publicising the ministry’s 2019 marketing programme in Lombok.

The ministry has also prioritised tourism programmes – such as boosting border tourism, creating strategic hub and developing LCC terminals – ints push to achieve the 10 million arrival mark.

According to Nia, Singapore is a strategic hub that Indonesia will be leveraging as several of its top markets (China, India, South Korea and Japan) are also Indonesia’s market focus.

The ministry is planning to leverage on Malaysia and Thailand as well, to lure outbound traffic from India. However, while China is Thailand’s top source market, the distance between Thailand and Indonesia has not made it easy to twin the countries.

To encourage more sales to Indonesia, Nia shared that the ministry was working closely with major wholesalers, OTAs and airlines on co-branding and incentive programmes. As well, they are also encouraging more LCCs to operate routes to Indonesia.

In 2017, 55 per cent of arrivals to Indonesia was on full-service carriers, while the rest arrived on LCCs. Internationally, passenger growth on full-service carriers stood at 12 per cent, while LCCs was 21 per cent.

“We hope to encourage more LCC services by providing promotional support,” Nia revealed.

To support potential growth, the ministry has also negotiated with airport authority Angkasa Pura II to convert several of their terminals to LCC terminals.

ILTM Asia Pacific expands travel supplier list, introduces new components

By TTG Asia

March 8, 2019

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Luxury travel tradeshow ILTM Asia Pacific will be returning bigger in its second edition, taking place in Singapore from May 27 to 30.

The coming edition will feature approximately 550 luxury travel suppliers, an increase of around 10 per cent year-on-year. New participating exhibitors include Banwa Private Island in the Philippines, Makanyi Private Game Lodge in South Africa, Matetsi Victoria Falls in South Africa, Bahwah Reserve in Indonesia and the Ungasan Clifftop Resort in Bali.

ILTM gears up for another show in Singapore. Photo credit: ILTM Facebook

Returning exhibitors include Rosewood Hotels & Resorts, Belmond, Kempinski Hotels, InterContinental Hotels, Four Seasons, as well as destinations including Switzerland, New Zealand, Botswana, Japan and Singapore.

In addition to more exhibitiors, ILTM Asia Pacific will also expand its hosted buyer programme, where planners and agencies will be able to engage with suppliers to create more than 30,000 one-to-one meetings during the show.

Next, the participant programme this year will support the ILTM theme of health and wellness with morning ILTM bay runs and morning yoga in the host hotels. There will also be a designated area on the showfloor called The Retreat, and it’ll feature brands showcasing some of the latest health and wellness products and services.

Next Story Group begins new Sri Lanka and Vietnam chapters

By TTG Asia

March 8, 2019

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Kafnu_HCM_City_hotel_room — Rendering of the upcoming Kafnu Ho Chi Minh City

Hospitality company Next Story Group will soon expand into two Asia-Pacific countries with upcoming openings planned for Sri Lanka and Vietnam.

The Next Hotel Colombo will open in November 2019, marking the first Next-branded hotel outside of Australia.

Rendering of the upcoming Kafnu Ho Chi Minh City

Located within the 47-storey mixed-use development called the Colombo City Centre, the hotel will offer 164 guestrooms and suites over the 10th to 17th floors. There will also be sleep pods for guests who arrive early or require a late check out. Recreational facilities on the ninth floor include an outdoor pool, yoga room and gym. There will also be a speciality restaurant on the same floor, complete with a show kitchen.

Next Hotel Colombo will also be the group’s first hotel to feature Kafnu as part of its offerings, where guests can utilise the 750m² Kafnu Colombo, which will offer shared workspaces, meeting rooms and a lounge.

The group will also mark its entry into Vietnam in the first half of this year with the Kafnu Ho Chi Minh City. Housed in an eight-storey building close to Districts 1 and 2, the hotel will have eight hotel rooms, and boast a variety of workspace options, six meeting rooms and a multi-screen event space that can accommodate up to 150 guests.

A virtual fitness studio will offer members more than 1,500 classes to choose from, while F&B options will include Soy, a modern Asian restaurant, and Habitat Cocktail Bar, which features live music.

Since Kafnu’s launch in 2017, the brand has expanded its network to four operational properties. Conceptualised as an urban village for the new generation of creators, Kafnu comprises a shared workspace, hospitality, and a social community.

In Australia, Next Story Group just opened Kafnu Alexandria on March 1, 2019. Kafnu Alexandria is located next to The Grounds of Alexandria, within one of Sydney’s thriving creative and industrial hubs, and only five minutes from Sydney Airport.

New hotels: Six Senses Bhutan, X2 Pattaya Oceanphere and more

By TTG Asia

March 8, 2019

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Six Senses Bhutan, Bhutan
Six Senses Bhutan has opened its first three of five lodges in Thimphu, Punakha and Paro. Spread over the kingdom’s west and central valleys, each lodge will vary in style that takes after the valley it resides in. There will be 82 rooms in total, and each location will have its own spa & wellness centre. Activities offered include local farm activities in Gangtey; treehouse dining at Bumthang; and a private dinner in the 15^th century stone ruins at Paro. The next two lodges in Gangtey and Bumthang will open soon in the summer of 2019.

X2 Pattaya Oceanphere, Thailand
This all-villa resort in Bang Saray – between Pattaya and Sattahip – has opened with 59 one-bedroom pool villas and two-bedroom duplex pool villas. Ranging from 137m² to 257m² in size, each villa comes fully equipped with tropical living spaces, bathrooms, a kitchen, floor-to-ceiling windows, an outdoor sala, terrace and private pool. Amenities include a rooftop pool, the Ocean Bistro and a fitness centre.

Pullman Danang, Vietnam
The property has opened after a three-month-long revamp of the property’s 175 rooms and suites. There is also a new room type, the 122m² two-bedroom Family Suite (maximum occupancy of six guests), which comprises a master bedroom with an ensuite featuring its own Jacuzzi bath, a children’s room, and a living area furnished with the latest mod-cons.

Renovations have also been done to the swimming pool, which is now an outdoor ocean-facing infinity pool. Other facilities at this five-star resort include a spa, kid’s club, gym, three F&B options and a water sports club. Function spaces range from the Lotus Ballroom, which can host up to 650 guests, to the beach-fronting area.

Radisson Medan, Indonesia
Radisson Medan stands on Jalan H Adam Malik in downtown Medan, surrounded by corporate offices and retail malls. It features 215 rooms and suites, all equipped with complimentary Wi-Fi, LCD TVs with cable channels, and working areas with international power sockets. A majority of rooms feature views of Medan’s rising skyline.

The property also offers 1,500m² of meeting space over two floors, where event spaces include a ballroom, nine meeting rooms and a pre-function area. Other facilities include a business centre, gym, outdoor pool, lobby lounge and all-day dining restaurant on the seventh floor.

Fairfield by Marriott Goa Anjuna, India
The first Fairfield in Goa offers 130 guestrooms, alongside amenities such as a spa, 24-hour fitness centre, two F&B venues, a convenience store and a kids’ club. For events, the property in the green hills of North Goa offers 116m² of indoor meeting space, as well as a pre-function area.

Outrigger recruits VP for brand development

By TTG Asia

March 7, 2019

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Outrigger Hospitality Group has named Julia Davidson vice president, brand strategic planning and development.

Her role encompasses development of Outrigger’s global brand strategy, brand marketing campaigns and brand resources, including tools and systems as well as oversight of the brand intranet environment. She also supports the brand-related needs of property operations and project management teams.

Davidson has 13 years of hospitality and marketing experience working at Four Seasons Hotels and Resorts and InterContinental Hotels Group, and was most recently the director of marketing for IHG Army Hotels.

Europeans yearn for SE Asia’s quieter beaches

By Marissa Carruthers

March 7, 2019

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Phu-Quoc-Island — Sao beach on Phu Quoc island, Kien Giang, Vietnam

As overtourism takes a toll on South-east Asia’s popular beaches, travellers are increasingly eschewing popular beach hotspots for less crowded ones, especially as improving air access in the region is making it easier to do so.

Vietnam, in particular, is shining as a favoured destination among European visitors for beach stays.

Sao beach on Phu Quoc island in Vietnam is rising in popularity for Europe’s longhaul holidaymakers

Pham Ha, CEO of Luxury Travel Vietnam, said: “Originally, Vietnam established itself as a cultural destination for European travellers, but we are now seeing a trend where people choose Vietnam as a beach holiday or a combination of a week of touring and a week on the beach before flying home.”

He noted a rise in the last couple of years in repeat bookings from Spain, France, Germany and the UK.

David Kevan of UK-based Chic Locations, noted: “Vietnam is a hot destination at the moment. To many it might be seen as the new Thailand, and without a doubt it ticks all the boxes on exotic culture, cuisine and excitement.

“But to think Vietnam’s beach resorts are less developed than Thailand’s shows an incredible lack of product knowledge. Danang and Phu Quoc are just as busy as Phuket and Samui, if not more so. They might be new to UK travellers, but the Russians and Chinese have been there in huge numbers for several years.”

As Danang, Nha Trang and Phu Quoc are no longer fledgling holiday spots, Linh Le, managing director of Asia DMC, said emerging beach destinations in the country appeal more to repeat longhaul visitors who prefer to “see and experience the untouched”.

He predicts Quy Nhon will be a popular spot with the European market, while Con Dao has seen increased interest from Europeans seeking nature-based tourism.

Laurent Lerognon, sales manager at Diethelm Travel Vietnam, also flagged up Quy Nhon and Con Dao as destinations to watch with longhaul markets.

“Quy Nhon and Con Dao are classic tropical beach destinations but pleasantly unspoiled. (They) are certainly a long way off the overdevelopment that has completely ruined areas of other popular holiday spots, meaning now is the time to visit,” said Lerognon.

According to Ha, other emerging beach destinations seeing an increase in interest from longhaul markets include Van Don, Cat Ba, Phu Yen, Lang Co in Hue and Ho Tram in Vung Tau, where a swathe of new properties is opening and access is easier, thanks to new products, cruises, helicopter transfers and regional flights.

Said Ha: “We are keen to see a new wave of repeat holidaymakers to Vietnam, especially now that visas are no longer required for many countries. Travel experts should now position Vietnam as a (beach) holiday destination rather than just a cultural destination.”

The desire to seek out hidden beaches among Europe’s experienced travellers is also clearly played out in Thailand.

Observed Kevan: “Phuket and Samui are perceived as overdeveloped and lacking aspiration. Both are increasingly transit points for onward travel to Khao Lak and Koh Yao Noi, and Koh Phangan and Koh Tao (respectively), showing that clients are willing to travel a little more to find something less commercialised.

“(Tour operators) can still benefit from the improved infrastructure and increased flights that mass tourism has (brought), but use the gateways to move (clients) to somewhere easily accessible but much more exclusive 80 minutes’ drive away.” – additional reporting by Xinyi Liang-Pholsena

Expectations high for new Turkish connection to Indonesia

By Mimi Hudoyo

March 7, 2019

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The Indonesian trade is looking forward to the launch of Turkish Airlines’ thrice-weekly Istanbul-Bali service in July 2019, with expectations high that the new connection will improve the country’s accessibility from longhaul markets, particularly secondary cities in Europe.

Umberto Cadamuro, COO inbound of Pacto, said: “Given its large number of hubs in Europe, Turkish Airlines’ service to Bali will multiply opportunities (for the travel sector) as our business is all about accessibility at the end of the day.”

The new connection will help make Indonesia more accessible to Europe’s longhaul markets

While the new service opens up access to Turkey and its travel market, Go Vacation Indonesia executive manager product & contracting Marika Gloekler sees greater opportunity in the carrier’s extensive network through Europe.

“Turkish Airlines is not only flying from big cities, but also the secondary cities in Germany and other European countries, and with a short stop in Istanbul, travellers can fly to Bali.”

She added: “Travellers previously needed to travel by train to Frankfurt, Berlin or Dusseldorf to catch their flights, but now they can fly from the secondary cities (where Turkish Airlines flights are available), especially from rich cities such as Stuttgart where Mercedes-Benz is.”

Tour operators also hope that the new service will bring a breath of fresh air for Indonesia, as the country has been working to woo the international market back following the recent string of natural disasters.

“When the volcano eruption in Bali took place (in September 2017), the bounce back of travellers was quite fast. Recovery after the recent earthquakes and tsunami were a little bit (tougher). (European bookings) in 1Q2019 have been very slow but we see a big climb from April onwards. This means that travellers are not cancelling but they are just postponing their trips,” said Gloekler.

Trade members are also optimistic that the new connection will also bring along greater promotion and support from Turkish Airlines for industry initiatives like sales missions and fam trips.

Alpha Hotel Management (AHM), with the support of the Indonesia Ministry of Tourism and Turkish Airlines, has teamed up with 17 hotels and travel agents in Bali to conduct a roadshow to Munich, Prague and Budapest ahead of ITB Berlin this year.

No winner in sight as travel industry stuck in limbo over Brexit

Myanmar tourism pins hopes on European comeback

Dissatisfied with OTAs, hoteliers seek diversification to reduce reliance

Indonesia sticks to 2019 arrival target despite not reaching earlier goals

ILTM Asia Pacific expands travel supplier list, introduces new components

Next Story Group begins new Sri Lanka and Vietnam chapters

New hotels: Six Senses Bhutan, X2 Pattaya Oceanphere and more

Outrigger recruits VP for brand development

Europeans yearn for SE Asia’s quieter beaches

Expectations high for new Turkish connection to Indonesia

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