Sri Lankan hotel rates on the rise despite supply surge

May 3, 2018

colombo-at-dusk — With growing supply especially in Colombo, STR says rates may come under pressure going ahead

Hoteliers have managed to maintain pricing power despite slowing demand for hotel rooms in Sri Lanka, according to an analysis from STR, but growing supply especially in the upper-scale segments could begin putting pressure on rates.

Over the 12 months ending March 2018, Sri Lanka’s supply (room nights available) grew 6.2 per cent, while demand (room nights sold) increased 2.1 per cent.

While this saw occupancy fall 3.8 per cent to an annualised rate of 65.1 per cent, average daily rate (ADR) was up 7.2 per cent to 17,334 Sri Lankan rupees (US$109).

With growing supply especially in Colombo, STR says rates may come under pressure going ahead

“The last few years saw Sri Lanka become very popular with developers,” said Jesper Palmqvist, STR’s area director for the Asia-Pacific region. “Supply growth reached 6.8 per cent last year, and that came with demand basically flat year over year (+0.1 per cent). Hoteliers will need to develop impactful marketing campaigns to increase that demand and avoid a continued occupancy slide.”

Still, overall ADR has seen growth year over year for 30 consecutive months in Sri Lanka. The 1Q absolute level in the metric (19,868 rupees) was the highest for any first quarter in STR’s Sri Lanka database. Occupancy for 1Q grew one per cent after dropping 6.2 per cent for the whole of 2017.

“Hoteliers have been able to increase room costs to counter the declines in occupancy,” Palmqvist noted. “It will be key for those hoteliers to monitor the market performance in order to react prudently to more new supply.

“The Colombo skyline in particular continues to be busy with construction cranes. A lot of the new supply set to come online will be in in luxury and upper upscale segment, so we foresee interesting market dynamics ahead that will pressure occupancy and rate levels,” he cautioned.

STR’s hotel performance sample in Sri Lanka has grown to nearly 50 per cent of the 14,806 rooms in the country. Its census database shows 146 properties with another 26 across the under contract phases of the pipeline. STR’s March Pipeline Report showed 15 properties in construction comprising 3,450 rooms.

Our readers say: Regent’s unrealised potential; still paradise in Sihanoukville’s islands

By TTG Asia

May 3, 2018

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IHG taps Regent’s unrealised potential

With Steven Pan letting go of a majority stake in Regent Hotels & Resorts to InterContinental Hotels Group (IHG), will the new joint venture finally make a bigger Regent a reality? Readers weigh in:

Robert Williams, partner, head of hotels & hospitality Asia-Pacific, Withersworldwide, Singapore

IHG has wanted the right luxury and resort-capable brand for some time, and Regent fits nicely into its brand stack. Looks like maximising the positioning of Gaw Capital’s billion dollar Hong Kong asset and refurbishment was a major driver here too. IHG has its mojo back, and we expect to see more strategic M&As from them.

Anonymous

Just read the article on Regent, very good summary and to the point. Regent had bad luck as none of the last three owners put serious money and in particular a strong team. Our Taiwanese friend was the worse in terms of setting up a strong team.

Personally I believe that a motivated and well-compensated team can get new deals. Must invest in people first. Same message goes for many other hotel groups, Asians in particular.

Andrew Wood, president, Skal Bangkok

I believe there’s a lot of unrealised potential with Regent. IHG in my opinion is a good fit. Win-win if IHG can position it as a super luxury brand, but they have to be careful not to ‘confuse’ the market. IHG is a very good product and has a loyal customer base. I’m sure IHG knows what it is doing and has plans afoot.

Bill Barnett, managing director, C9 Hotelworks

Regent remains a work in progress and believes the brand under IHG will go forward. Look at how Waldorf Astoria has been spurred by Hilton, etc, so I think (Regent)’s not failed but good potential. New World made a strong buy of Rosewood and it’s become a global brand so think fundamentally this is a very good deal.

Don’t paint Sihanoukville with a broad brush

Our recent story about Sihanoukville received quite a few comments on the state of tourism in the Cambodian beach destination:

Luzi Matzig, chairman, Asian Trails Group

Thank you for the April 5 article in TTG which, I believe, has a totally misleading headline, giving a wrong impression on trends by European visitors booking beach holidays in Cambodia.

While I fully agree that Europeans are now less interested staying on Sihanoukville’s mainland beaches due to pollution, heavy building activity etc., there is a very much a growing trend for overseas visitors to Cambodia to now visit Sihanoukville’s many islands and stay at new resorts like the Royal Sands Koh Rong, the upcoming Alila and Six Senses Resorts, etc.

All these islands belong to Sihanoukville Province so saying Sihanoukville falls “off radar” for Europeans is a misnomer and not up to TTG’s usually high standards of reporting. Thank you.

Disappointed tourist

Well done Cambodia, you sold out to the Chinese and screwed your own people… many lost homes, jobs and businesses. After visiting last week and talking to the locals it is saddening to hear and see the mess that has become ShmuckVille.

Ex Expat

It won’t be long before the authorities realise that the Chinese have already spent their money there building hotels and roads and since they only spend their tourist dollars with Chinese business (unlike Europeans) then they no longer are required to be there.

More to the Philippines than just Boracay

In response to our story on ‘When beautiful turns ugly‘, a reader opined that there remains pockets of beauty in the Philippines, and why more action is needed:

Mark-Anthony Villaflor

My wife and I own a boutique glamping site in El Nido, Palawan. We are looking to help change the narrative of our own tourism hotspot, with the recently US$10,000 grant received from the UNEP and the ESTEL Magazine (Eco-Sustainable Tourism EL Nido) print magazine we produce.

We’re into permaculture, self-sustainable waste and water management practices, education for our guests and climate resiliency. We believe there is a lot light to be shed from all the tourism disaster news we keep receiving.

Thank you for your article.

Singapore Rugby Sevens

By Pamela Chow

May 3, 2018

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A triumphant Jerry Tuwai, captain of this year’s winning squad Fiji, poses with excited fans

WHAT
Since its debut in Singapore three years ago, the HSBC World Rugby Sevens Series has gained a following of veteran and new fans of the sport. This year, organiser Rugby Singapore sought to increase its popularity among the general public – including non-fans – by billing the event as the “Family Sevens” leg of the HSBC World Rugby Sevens Series.

It did so by expanding its family-friendly carnival offerings, including a 20,000m² FunZone featuring Hasbro brands, The Transformers, Nerf and My Little Pony.

It also signed on more partners such as official apparel partner Headhunter Sport, dining and retail outlets, musicians and performers, tourist attractions and entertainment venues, as well as booth vendors for its fringe events.

The promotions worked. The two-day event from April 28-29 attracted a total of 55,000 spectators, a marked increase from last year’s 36,000.

WHY
A weekend at the games is contagious fun, and now with vibrant and lively tents of fringe activities and street food, as well as live performances for both kids and spectators adding to the atmosphere, it is easy to get caught up in the rugby rave.

As the headlining act, popular band Village People, took to the stage, leagues of fans cheered and danced on the bleachers. Others used the intermission to mingle with each other over drinks and grub. Some others – mostly children – took the chance to try their hand at the sport.

Outside the stadium, visitors drawn to the festivities also thronged the non-ticketed Singapore Rugby Carnival, where children could ride on Strider bikes and even race it out in a Spartan Mini Race.

Those seeking further fun and food outside of the event could also enjoy exclusive promotions from event partners, and these included dining options at Pan Pacific hotels in Singapore to special admission prices to AJ Hackett in Sentosa.

After the games, shuttle buses were at the ready to whisk attendees over to Clarke Quay, where the official Music After 7s after-party took place.

HOW
The fringe activities, booths and stalls set the tone for the sports weekend and festival atmosphere the organisers were gunning for. What it could greatly benefit from is even more support and partners, in order for the event to achieve a scale large enough to put Singapore Rugby Sevens on the country’s event calendar.

VERDICT
If this year’s carnival is a good indicator, the Singapore Rugby Sevens could grow into a festival weekend that entices overseas travellers – and not just fans – to fly into the country for.

Trio of Princess ships to sail from Taiwan this year

By TTG Asia

May 3, 2018

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Majestic_Princess_arrives_in_Taiwan — Majestic Princess visiting ports in Okinawa, Ishigaki, Nagasaki, Sakaiminato, Osaka, Miyazaki, Kagoshima and Busan in South Korea

Princess Cruises is this year deploying three ships to Taiwan for the first time, with Majestic Princess, Sun Princess and Diamond Princess offering over 50 sailings for 140,000 domestic guests and 14,000 international fly-cruise tourists.

Accounting for half of this season’s voyages is the Princess’ newest ship, Majestic Princess, currently homeported in Keelung for sailings to Japan until July.

Majestic Princess visiting ports in Okinawa, Ishigaki, Nagasaki, Sakaiminato, Osaka, Miyazaki, Kagoshima and Busan in South Korea

The 143,000-ton Majestic Princess, with a capacity of 3,560 guests, is expected to attract over 8,000 visitors to the Port of Keelung in a single day.

From May 5 to 8, guests aboard the Majestic Princess will be able to enjoy gourmet cuisine designed by two Michelin-star chefs for the specialty restaurants – chef Richard Chen who designed the menu for the Chinese specialty restaurant Harmony; and chef Emmanuel Renaut who created the menu for the French bistro La Mer.

Sun Princess’ itineraries run over a shorter duration of three to four days. The ship will complete her dry dock in July in Singapore and sail to Keelung for her summer homeporting season from July to September. Guests for the Taiwan sailings will be the first to enjoy the enhanced facilities onboard Sun Princess including celebrity chef Curtis Stone’s Share restaurant.

In addition, Diamond Princess will offer departures from Taiwan for cruises around Japan in a series of fall itineraries to Japan’s major cities – Tokyo (Yokohama), Osaka, Nagoya and Okinawa. Guests will also enjoy elements of Japan onboard with features including the largest Japanese bath at sea, origami classes and a Japanese restaurant.

Former agency owner joins Virtuoso as business development manager

By TTG Asia

May 3, 2018

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Michele Saunderson, who recently sold Virtuoso agency Peninsula Travel, will from mid-May take on the role of business development manager at Virtuoso, working with members across Victoria, South Australia, Tasmania and Queensland.

Having spent 15 years as an agency owner, Saunderson intends to leverage her experience help Virtuoso’s agencies drive more sales and get the most from their membership

Saunderson’s appointment follows a number of recent strategic staffing changes for Virtuoso regionally, including the promotion of Evan Pierce and Cristina Magni to regional director roles for Asia and Australia/New Zealand respectively, along with the appointment of Adrian Clarke as the new head of marketing.

Inbound woes drive Philippine agents towards brisk outbound sector

By Rosa Ocampo

May 2, 2018

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Northern-Lights — Inbound business into the Philippines has dipped while outbound travellers to places like Scandinavia have increased; Northern Lights pictured

Philippine travel agencies are shifting their focus to the stable and robust outbound market as the inbound sector suffers a series of shocks, the most recent of which is the six-month closure of the island of Boracay beginning April 26.

Tellingly, the Network of Independent Travel and Allied Services Philippines (NITAS) will launch tour programmes for outbound and domestic markets only, but none for inbound.

Inbound business into the Philippines has dipped while outbound travellers to places like Scandinavia have increased; Northern Lights pictured

Explaining the move, NITAS vice president Angel Ramos Bognot said that inbound business into the Philippines is currently poor and requires bigger investments in terms of attending foreign trade shows and producing marketing collaterals. Moreover, Boracay’s closure might cascade to other destinations, she pointed out.

Philippine agents diversifying to outbound is not a recent phenomenon as the inbound sector has for years been mired in challenges including safety and security perceptions, stiffer competition from OTAs and suppliers, as well as inadequate destination marketing and promotions.

Bognot, who is also president and managing director of Afro Asian Travel and Tours, said she used to have more inbound business but is now 50-50 with outbound, echoing the experience of a growing number of agencies diversifying into the brisk outbound sector.

Even agencies which previously were mainly handling inbound are making strides into the outbound sector. Said the manager of an agency added: “We used to have lots of inbound (business) but outbound is more stable and more reliable,” attributing this to heavy promotions by other countries, better air accessibility, and growing demand from the expanding Filipino middle class.

Meanwhile, business is bustling for outbound agencies in the country.

Adam’s Express Travel president Mamerth Banatin expects a 15 per cent surge in outbound business this year, from the 88 groups they sent abroad, mainly to Europe, in 2017. Repeat business is also high as those who travelled to Asia would explore mid-haul markets then opt for longhaul.

Laarni Yumul, manager at Royal Nordic Airline Services, which is the GSA of SAS/Iceland Air, also noted the brisk Philippine demand for sightings of the Aurora borealis in Scandinavia and in northern Europe fuelled by the healthy Philippine economy.

In addition, Turkish Airlines’ recently launched Manila-Istanbul route has become a new gateway to the Holy Land and Europe, said Arjun Shroff, managing director, Shroff International Travel Care Philippines.

Still room for hotels growth in Singapore to meet ‘frustrated demand’

By TTG Asia

May 2, 2018

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Concerns over the large supply of hotel rooms in Singapore has receded amid stronger tourist arrivals and stabilising corporate demand driven by firmer economic outlook, according to the Colliers International’s Hotel Insight 1Q2018 report.

The Singapore Tourism Board (STB) projects international visitor arrivals to Singapore to rise by up to four per cent to reach 18.1 million this year, following a record-breaking 2017 where the city-state received 17.4 million visitors.

This year, Singapore’s hospitality sector looks brighter and experts think that ADR will see an improvement

This growth represents a compound annual growth rate (CAGR) of four per cent between 2011 and 2018 (forecast). The stronger tourism performance was largely underpinned by an increase in visitation from North and South Asia, and in particular China, Indonesia and India, STB figures show.

Govinda Singh, executive director of valuation & advisory, Asia, at Colliers International, said: “Hoteliers in Singapore have weathered the lean years – particularly 2015 and 2016 – admirably, and the hospitality sector outlook is decidedly brighter this year as market sentiment turns up.

“Considering the data from STB, it suggests that Singapore still requires a significant amount of hotel rooms to accommodate its visitors, with growth in visitation being tempered by the low level of room supply especially at the mid-market to lower end.”

While Singapore has in recent years seen substantial increases in room supply – by over 5,500 rooms in 2015, 2,567 in 2016, and 3,400 last year – Colliers projects that this will slow dramatically to 628 rooms in 2018, and 1,300 rooms in 2019, which would allow the recently added rooms to be absorbed into the market.

Colliers anticipates the average hotel occupancy rate in Singapore, even taking fresh inventory into consideration, to remain at more than 84 per cent. A closer look at the room stock versus demand suggest that hotels in Singapore are full almost all the time during peak periods, and especially during Mondays to Thursdays, and Saturday nights.

Singh elaborated: “Our hotel needs analysis showed that the number of overnight visitors to Singapore has consistently outstripped hotel room stock since 2011, and is projected to remain so over the next few years. It suggests that there is a high degree of existing frustrated and latent demand, whereby visitors who wish to come to Singapore either cannot find rooms or have to turn to alternative accommodation providers such as serviced apartments or, dare I say, Airbnb.”

In view of the growth potential, Colliers believes it could be an opportune time to reconsider more development and investment in the hotel sector. Given the high level of “frustrated demand”, the slight increase in room supply over 2018-2019 is unlikely to weigh on occupancy rates.

Hoteliers in Singapore should see an improvement in ADR going forward, Colliers postulates, although the increase is not expected to be significant as long as the rupiah, ringgit and yuan remains relatively weak.

Singapore, a favoured destination among many Chinese tourists, is expected to be one of the key beneficiaries of China’s rising outbound tourism, driven by growing affluence among the Chinese middle class. Outbound trips are projected to increase sharply by 47.7 per cent, from 120.1 million in 2015 to 177.4 million in 2020.

Singh noted: “The recent sabre rattling between the US and China may weigh to some degree on business and consumer confidence, thereby tempering demand growth especially if it escalates. However, intra-Asia travel and the growing domestic markets in a number of the larger destinations across Asia, is likely to continue to underpin demand.”

Direct Booking Summit on its way to APAC

By TTG Asia

May 2, 2018

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The Direct Booking Summit, is expanding beyond the Americas and Europe with an Asia-Pacific edition inaugurating in Singapore in February 17-29, 2019.

The event is expected to bring together hundreds of hoteliers, who will meet to network, strategise and learn. Direct Booking Summit: Asia-Pacific will focus on region-specific challenges faced by hoteliers, such as an OTA-heavy distribution landscape and the struggle to compete in a mobile-first world.

Attendees can expect talking points to revolve around direct bookings, OTAs, (mis)behaviour, and innovative startups

Tickets for the Singapore summit are now available via Eventbrite, with summit host Triptease offering a 50 per cent discount for early registrants.

Explaining its decision to launch in the region, Triptease said: “Asia-Pacific is a very unique market, and one that is growing and changing very quickly at the moment. The opportunities and challenges for hoteliers are very different to those in the Americas and Europe. It was clear to us that we needed to create an event specifically for hoteliers in Asia.”

Previous speakers and delegates have come from Hyatt, The Leading Hotels of the World, Deutsche Hospitality, Sonesta, Kempinski Hotels, trivago, Kalibri Labs, McKinsey & Company, ReviewPro and The Guestbook.

The first two events in the Direct Booking Summit series scheduled for 2018/19 will take place in Amsterdam (for EMEA markets), June 27-28, and Dallas, October 3-4, 2018.

Saurabh Prakash appointed as Radisson’s commercial VP for APAC

By TTG Asia

May 2, 2018

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Radisson Hotel Group has appointed Saurabh Prakash as its new vice president, commercial, Asia Pacific.

Based at the company’s Asia-Pacific headquarters in Singapore, Prakash will oversee all aspects of the region’s commercial activities, including sales, revenue optimisation, distribution, marketing and loyalty.

The veteran hotelier has over 15 years of experience, and has worked for numerous hotels across the Asia-Pacific. He spent a majority of his career with Marriott International, where he worked in India, Malaysia, China and Singapore.

Prior to this role, he was general manager & vice president, Asia-Pacific of TSA Solutions in Singapore.

Vistara joins IATA ahead of launching international operations

By TTG Asia

May 2, 2018

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Vistara-Airlines — Vistara Airlines at Mumbai International Airport

Indian full-service carrier Vistara – a joint venture of Tata Sons and Singapore Airlines – is now a member of IATA, joining the association of more than 280 airlines around the world.

The membership will further enable Vistara to collaborate with other international member airlines for codeshare and interline agreements, and offer an extended global network to travellers to and from India.

Vistara Airlines at Mumbai International Airport

In September 2017, Vistara successfully completed the IATA Operational Safety Audit or IOSA, a pre-requisite for an IATA membership, confirming the airline’s compliance with internationally approved aviation safety standards across parameters in operational management and control systems.

Leslie Thng, CEO, Vistara, said: “This membership couldn’t have come at a better time as we gear up to launch our international operations soon.”

In its three years of operations, Vistara has flown over 8.5 million customers, and today serves 22 destinations with over 730 flights a week, operated by a fleet of 20 Airbus A320 aircraft.

Sri Lankan hotel rates on the rise despite supply surge

Our readers say: Regent’s unrealised potential; still paradise in Sihanoukville’s islands

IHG taps Regent’s unrealised potential

Don’t paint Sihanoukville with a broad brush

More to the Philippines than just Boracay

Singapore Rugby Sevens

Trio of Princess ships to sail from Taiwan this year

Former agency owner joins Virtuoso as business development manager

Inbound woes drive Philippine agents towards brisk outbound sector

Still room for hotels growth in Singapore to meet ‘frustrated demand’

Direct Booking Summit on its way to APAC

Saurabh Prakash appointed as Radisson’s commercial VP for APAC

Vistara joins IATA ahead of launching international operations

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