Beginning June 1, Malaysia’s Ministry of Tourism and Culture will introduce a new hotel classification and rating system, which trade players generally believe is fairer and more representative than the existing star-rating system.

The new classification houses categories of city hotels, highland hotels, island/beach/lake/river resorts, innovative hotels and boutique hotels. Further details of the new rating system are not available at press time.

Brinchang town, Cameron Highlands

Shaharuddin M Saaid, executive director, Malaysian Association of Hotel Owners, who was on the committee to review the classification criteria, said the old rating system – in basing its requirements on city hotels – put island and hill resorts at a disadvantage.

Citing examples, Shaharuddin said: “Based on the old system, a hotel needed an executive floor and lounge to be rated five stars. This was alright for a city hotel which received business travellers, but not necessarily for island and hill resorts where guests were holidaymakers.”

Hotels also needed to have a swimming pool to be rated four stars and up, although the criteria was not as important in beachfront hotels or hill resorts, he added.

The Frangipani Langkawi Resort & Spa’s managing director, Anthony Wong, said: “In the past, hotels must have two restaurants to be classified as a four-star property. We only had one and were classified as three-star under the local rating, although TripAdvisor and travel agents rated us as a four-star.

“We didn’t see a need to have more than one restaurant as there were many restaurants outside our hotel, giving visitors plenty of choices.”

Ganneesh Ramaa, manager at Luxury Tours Malaysia, similarly opined that the new classification will provide a more accurate picture to agents and partners.

“Based on the old system, Cameron Highlands only has two properties that fit the five-star category, when (in reality) there are many more hotels that provide the services of a five-star. The old system of one-shoe-fits-all simply cannot be applied.”

Having recently acquired India-based Track Holidays for over RM1 million (US$234,239) with share swaps, Malaysia-based online travel portal Travee.travel is seeking expansion through more M&A moves in the coming months.

Ankur Jakhwal, co-founder & group CEO of Travee.travel, said: “(Buying Track Holidays) is a strategic acquisition, as it gives us strong base in India to further grow Indian outbound business to other Asian markets, particularly to Malaysia, Thailand, Indonesia, Singapore and upcoming markets like Japan and South Korea.”

Track Holidays has over 40 staff across five Indian cities (Delhi, Kolkatta, Bangalore, Hyderabad & Kochi) offering B2B services in ticketing, inbound and outbound holiday packages, and MICE business, among others. It represents airlines such as AirAsia, Air Arabia and Druk Airways and is the channel partner for Expedia B2B in India.

By end-2017, Travee.travel hopes to also have a physical presence in Indonesia, the Philippines, Singapore and Nepal. “We plan to achieve this mostly through mergers and acquisitions. We will be creating a lot of ‘noise’ in the market in the coming months,” Ankur said.

Headquartered in Kuala Lumpur, Travee.travel is a travel management and travel technology company established in 2012 by Pardip Kumar Kukreja.

The average spend of Chinese shoppers, at 330 euros (US$360), may just be half of that of the Middle Easterners (600 euros), but the former’s prolific numbers and sheer growth certainly makes both markets, in addition to Russia, key ones for Value Retail, the creator and operator of Chic Outlet Shopping Villages in Europe and China.

The Chinese market, in fact, has been nothing short of “fantastic”, registering double-digit growth in gross sales each year, according to Desirée Bollier, chair, Value Retail Management, who spoke to TTG Asia on the sidelines of the recent WTTC Global Summit in Bangkok.

“(Growth for) England and Italy are skyrocketing, while others are seeing good double-digit growth,” she remarked. England is always “a success” with Chinese consumers while in Italy, a relatively new destination for this market, growth has soared to “triple digits”.

Value Retail has no intention to open new Villages in Europe but will expand and upgrade its current nine outlets in the continent. “We change 25 per cent of our retail space each year to give customers reasons to come back,” said Bollier.

The flagship Bicester Village in the UK last year welcomed its own train station, with direct services from London, and will soon see 30 additional boutiques, while Fidenza Village, just outside Milan, recently underwent a 30 million euros expansion.

But opportunities to tap the lucrative Chinese market doesn’t lie just on European shores.

Within China, Suzhou Village – its first outside Europe and launched in 2014 – is undergoing a second phase of expansion, as part of a government-sponsored masterplan that also features luxury hotels and resorts including a Banyan Tree, a film studio themed park by the Huayi Brothers, among other facilities.

Shanghai Village opened its doors in May 2016, and now a third location in China is expected to be confirmed within this year, according to Bollier.
Value Retail also has many partnerships inked with Chinese companies, including Air China, China Eastern Airlines, Ctrip and UnionPay, to offer exclusive privileges for its Chinese clients.

The combined presence in Europe and China helps to reinforce the awareness of Chic Outlet among Chinese consumers. “The Chinese discover us in Shanghai and Suzhou and then visit us in Europe or vice versa – there’s cross fertilisation.”

While one tier of Chinese shoppers is relatively immature in expenditure and seeks just traditional luxury brands to satisfy cravings, Bollier notes on the other hand the rise of the sophisticated set who has been to Europe several times and looks towards novel experiences and undiscovered brands.

“The Chinese learn and adapt very fast, and are disruptors in many ways,” she observed, citing key opinion leaders that the company engages as marketing ambassadors – “basically rainmakers” who can influence the Chinese masses.

And even as FITs increasingly make up a bigger share of its Chinese market than tour groups, Value Retail still sees the importance of travel agents by dangling benefits such as private sales and gift vouchers for them.
“Seeing the need for education (among agents and operators on Chic Outlet), we have 70 tourism officers educating agents and working closely with NTOs for promotion,” Bollier said.

Hit by a spell of uncertainty following recent events, the Philippine Department of Tourism (DoT) has signed an agreement with the Federal Agency of Tourism of Russia outlining intentions to monitor situations and exchange information relating to the safety of tourists, among other goals.

The Joint Action Program of Tourism Cooperation, one of nine bilateral agreements inked by the two countries, is aimed at spurring tourism exchange on education and training, in addition to information and expertise.

Tulfo-Teo at the signing in Moscow (photo credit: DoT)

The agreement is a follow through of the two countries’ first agreement signed 11 years ago also in Moscow, and is likewise expected to expand tourist flows between the Philippines and Russia with both parties agreeing to assist each other in establishing contacts between their respective NTOs.

DoT secretary Wanda Tulfo-Teo further disclosed that the Russian government is exploring the possibility of organising a Russian language training programme for Filipino tourism industry workers.

Teo commented: “The Russians are coming though – they are very particular about safety and security in any prospective destination. The agreement signifies Moscow’s confidence in the Philippine government’s capability to resolve peace and order issues.”

She noted that Russia is among the destination’s “high growth markets” posting 9,152 arrivals in January-February period this year, a 29.2 per cent increase from last year.

The proprietor of a Russian travel and tour agency VAND International, Svetlana Muromskaya, observed that the country has a growing Russian clientele. “Fifty per cent of Russians who go to the Philippines become repeat clients. They come back after a year or two.”

An agreement with Alipay will see Carnival Corporation offer the Chinese mobile payment option in Asia, kicking off on Costa Cruises in June.

With the roll-out on Costa Cruises, passengers will have the option to use their existing Alipay accounts as a payment method for cabin folios. All onboard spending – including shopping, activities, excursions, food and drinks – will be added to each guest’s cabin folio as the purchase is made, and cleared on a nightly basis via their Alipay account.

Costa Serena

Alipay will debut on Costa Serena in China before potentially expanding to additional ships in the Costa Asia fleet, including Costa Atlantica, Costa Victoria and Costa Fortuna in China, and Costa neoRomantica, which has been homeported in Japan since April this year.

Carnival’s Princess Cruises might also begin offering Alipay onboard the new Majestic Princess, which begins its first homeport season in Shanghai in July 2017 as the company’s first cruise ship tailor-made for the Chinese market.

Michael Thamm, group CEO, Costa Group and Carnival Asia, who oversees operations in China for Carnival Corporation, said: “As we continue to grow interest and demand for cruising within the larger vacation market in China, this is another example of being able to stay close to our guests – understanding their needs and tailoring our offerings to their preferences.

“Alipay is a leading payment service already used by (450 million) Chinese consumers, so we see this as a natural fit for us in China and a great opportunity to make onboard purchases even more convenient.”

Carnival Corporation has six ships based in China across its Costa and Princess brands, representing four million passenger cruise days and nearly half of the overall Chinese cruise market.

The destination marketing organisation for the US, Brand USA, faces the axe in president Donald Trump’s proposed fiscal 2018 budget issued last week, provoking an outcry of alarm from the US travel & tourism industry.

According to the budget document, the revenue of Brand USA would be made available to the US Customs and Border Protection.

Thompson

Contacted for comment, Brand USA’s president & CEO, Chris Thompson, reminded that the matter was still uncertain. “It is important to note that the budget any administration presents is a statement of priorities – not a budget that is presented to Congress to vote on. The administration’s proposal serves as a way to outline the priorities of the administration, but it is ultimately up to the Congress to formalise and vote on a final budget,” he said in an email to TTG Asia.

Brand USA was approved by Congress in 2010 and began operation in 2011. The most recent study by Oxford Economics shows that Brand USA’s marketing initiatives over the past four years have generated 4.3 million incremental visitors, US$13.6 billion in incremental visitor spending, US$29.5 billion in total economic impact (including indirect and induced impacts); nearly US$3.9 billion in federal, state and local taxes; and an average of 50,900 incremental jobs supported each year.

Brand USA returns to the US economy an average of US$27 for each US$1 spent on marketing activities, according to the study.

“Brand USA’s story is a compelling one that clearly demonstrates the significant impact the organisation has had on fuelling the nation’s economy by bringing millions of incremental visitors and billions of incremental dollars in spending to the US,” said Thompson.

An outcry as reported in the US trade media shows an industry caught by surprise – and horror – that Brand USA faces elimination. In one publication, US Travel Association president & CEO Roger Dow was quoted as saying the move would “surrender market share at the worst possible time”.

Already Brand USA has its work cut out for it in promoting the US as a friendly destination amid conflicting messages arising from Trump’s immigration policies.

In an interview in Bangkok on the sidelines of the WTTC Global Summit, before this latest development, Thompson told TTG Asia “what we’re dealing with is a perception issue versus the reality”.

Said Thompson: “The reality is everything that has made the US an aspirational destination all these years – nothing of that has changed. As a matter of fact, the brands that deliver the product – the hotels, retail attractions and experiences – are finding new ways to innovate themselves; the people who deliver those experiences, i.e. the US citizens, open their arms to visitors. Nothing of that has changed.

“As you and I are talking today, nothing legally has changed about how anybody in the world has to acquire visas to visit the US. The only thing that has changed as it relates to entry policy, legally, is the electronics that you can carry onboard, i.e. the laptop travel policy which affects 10 countries in the Middle East. While the number of visitors from those countries is small, the countries are gateways for many visitors, from Asia or otherwise, to the US, and we do know that there has been an impact. But that’s the only thing that has legally changed. Otherwise, a lot of the things have only been contemplated.”

– Read the View from the top with Brand USA’s Chris Thompson, TTG Asia, July 2017

Uzbekistan Airways is offering special airfares up to October for outbound agents in Malaysia and Indonesia in a bid to fill seats on its underutilised Kuala Lumpur-Tashkent sector.

Sherzod Akmalov, general manager for Malaysia, Uzbekistan Airways, said: “The airline’s load on the Tashkent-Kuala Lumpur sector is high with tourists from Uzbekistan and CIS countries visiting Malaysia, but outbound load of Malaysians and Indonesians travelling to Tashkent from Kuala Lumpur is low.

Bukhara, Uzbekistan

“The special airfares offered are aimed at correcting the imbalance as well as creating interest among holidaymakers and those on Muslim pilgrimage,” he added. Uzbekistan Airways recently deployed its Dreamliner on this route on March 31, replacing the Boeing 767 aircraft.

The airline’s efforts will support Uzbekistan’s goal of doubling arrivals from Malaysia, up from 3,000 last year, said Anvar Sharapov, chairman of the State Committee of Uzbekistan for Development of Tourism.

He added that the country wants to attract more Malaysian and Indonesian Muslims to travel for Hajj and Umrah via Uzbekistan, with a stop of several days to visit the historical attractions in the country.

Sharapov last week led a delegation of six tour operators to Kuala Lumpur and Jakarta to conduct product presentations for the Malaysian and Indonesian trade and media.

Ulugbek Yunusov, counselor on Trade and Economic Affairs at the Embassy of the Republic of Uzbekistan in Kuala Lumpur, said e-visa facilities offered to Malaysians are flexible, with different pricing based on length of stay. It costs US$55 for seven days, US$65 for 15 days and US$75 for 30 days.