Business travel stakeholders discuss how recent political events are affecting the global landscape and share their outlook on Asia’s business travel sector. By Xinyi Liang-Pholsena and Paige Lee Pei Qi

From left:
Olivier Jager, CEO, ForwardKeys
Benson Tang, regional director, Asia Association of Corporate Travel Executives
Choe Peng Sum, CEO, Frasers Hospitality
Kevin Croley, senior vice president, marketing, Pan Pacific Hotels Group
Kiran Vinchhi, regional managing director, India, ATPI Group
Michael McCormick, executive director and COO, Global Business Travel Association
Suyin Lee, managing director, Flight Centre Travel Group Singapore

What impacts do you see the Brexit vote and the new Trump administration having on business travel?

Jager ForwardKeys’ data already shows a significant global reaction to Trump’s travel ban, but whether it’s detrimental overall is still evolving.
Business bookings from the Middle East to the US were down 31 per cent for the week of January 28 to February 3, 2017 (the travel ban was announced on January 27), compared with the same week last year, with Egypt (-29 per cent), Saudi Arabia (-37 per cent), Qatar (-53 per cent), the UAE (-33 per cent) and Iraq (-87 per cent).
Also, US border control is requiring travellers to declare all trips made to Iran, Iraq and Syria since 2011 when applying for visas or entry permits under the visa waiver programme.

McCormick The longer-term impact of Brexit still remains to be seen. Specific impacts on business travel include new waves of uncertainty, and the end of open skies for European carriers may result in fewer flights and higher fares, among other issues.

Tang It is too early to tell… but we are cautiously optimistic about their impact on corporate travel. Trump has just become US president with no real policy formalised yet; the timeline for UK official triggering of Lisbon Treaty article 50 is yet to be determined; and France’s election is still in the early stages.

(That said), the highly-probable reinstatement of “US Protectionism” by Trump could impact the import and export industry (and hit business travel).

Croley 2016 was undoubtedly a tough year for corporate travel, and the geopolitical situation around the world looks to continue in 2017. Expectations for the greenback to appreciate further will impact travel to the US, while Britain’s exit from the EU poses uncertainties to the pound as the UK government negotiates access to the European aviation market, travel within the EU, etc.
There’s a general cautiousness across most sectors, with businesses managing their budgets more carefully. Banking is one sector affected by political events, e.g. London’s status as the financial capital of the world will be impacted because of Brexit. The oil and gas sector has also been affected, although the outlook may become more positive with recent gains in petroleum prices. Overall, managed travel is under greater pressure.

Lee Global trade has fuelled growth for the past decades. (With events that disrupt global trade relations), economies and corporates may take some time to adapt to a new normal, including through the possible development of new free trade agreements and regionalisation of economies. It is still too early to see any impact on corporate travel.

Choe Despite global uncertainties in the geopolitical and economic environment, the MICE industry has been a key driver of growth in business travel in recent years and there is no indication of a slowdown on that front.
Have these uncertainties affected your business?

Kiran India is feeling the effects of a global slowdown and the coming year may prove to be a particularly challenging one. We have been impacted by reduced demand in the energy sector plus the broader implications of security threats and political uncertainties.
Safety and security is of crucial importance to any travel programme as compounding geopolitical disturbances across the globe and travel managers understand that no location is immune to
risk.

Tang We are not seeing any impact yet. However, senior leaders of firms are closely monitoring the global economic and political situation. (Having experienced shocks before), e.g. Asia financial crisis, close-down of Lehman Brothers, etc, firms are more ready to levy any travel policy changes if need be.

Choe Our properties in certain countries such as the UK were affected by short-term market jitters and uncertainty in 2016. When we decided to enter Europe, we selected specific cities for their long-term investment prospects. In Barcelona, we managed to secure our property at a 25 per cent discount of what it is today. We also entered Frankfurt as it is emerging as a global financial hub, and are seeing occupancy at around 90 per cent, 20 per cent higher than forecasted.

Croley With the bulk of our portfolio across Asia-Pacific, we expect to benefit from intra-regional travel; especially as key source markets for both our brands are from within Asia.

Lee Overall, business remains very resilient. Some industries including banking, oil and gas, and marine have rationalised their travel spend. However, we are seeing a significant growth in travel spend from companies investing in Asia.
How do you perceive Asia’s business travel prospects?

McCormick Sustained economic uncertainty and mixed results among major business travel markets will drive continued moderate growth, but as GBTA expects drastic differences in the relative performance of business travel markets around the globe.
Both India and Indonesia will average double-digit growth in business travel spending over the next five years. China’s economic growth continues to moderate and GBTA forecasts its business travel market will be the fifth fastest-growing major market in the world over the next five years – a vast departure from their first average ranking over the last 15 years.

Despite declines in growth, China remains the largest single market opportunity for travel suppliers and marketers as their US$291 billion market size coupled with 8.4 per cent average growth will lead to the largest gains in spending of any major market by far.

Croley Intra- and inter-Asia travel are looking more optimistic, as China is working with the EU to facilitate travel, and destinations such as Japan
and Thailand are relaxing their visa policies.

Corporate travel spending in Asia is expected to grow four times as fast as the US and more than twice the rate in Europe in the next decade, while China will continue to be one of our most important source markets. To deepen our engagement with Chinese consumers, we launched a Pan Pacific online storefront on Alitrip and invested in new digital marketing resources in Shanghai.

Choe Business travel to and within Asia-Pacific will get a boost from two key factors. Firstly, the region is home to some of the world’s fastest-growing and most populous economies like China, India and Indonesia. As growth in developed markets in the West slows, companies are turning their attention to these markets resulting in a jump in business travel to the region.
These are key growth markets for us. We have a portfolio of 25 properties including those in the pipeline. Secondly, the rapid growth of budget carriers has made travel more affordable. That has helped boost travel and will continue to do so, especially as airlines open up new routes.

Lee Asia has become the largest business travel region in the world by volume (China alone has overtaken the US) and intra-region traffic is very high. Airlines are opening new routes and launching more flights, giving travellers more options. Also, most new hotels opening in Asia are targeting business travellers.
Politics aside, what factors will have a bearing on business travel this year?

Lee Technology will remain a big driver for optimisation of travel programmes this year. We see a big jump in the adoption of online booking tools across the region (which usually drive higher compliance and cheaper fares booked). Innovative mobile apps are increasingly helping travellers throughout the trip duration, acting more like a personal concierge. Consolidation is also a growing trend for corporations in Asia.

McCormick The sharing economy will continue to impact managed travel. A recent GBTA global study reveals that half of travel programmes now allow ride-sharing and 30 percent now allow home-sharing within their policies. We also expect a blurring of lines as we see traditional companies expand to offer sharing-type services.
Other areas include innovation in travel programmes with the rise of personal incentive programmes, which will challenge companies to decide whether or not to adopt incentive programmes within their travel policies.

Croley “Bleisure” will be an increasingly important segment, with four in 10 business travellers having extended their business trip in the past 12 months.
Mobile will become increasingly prevalent as an information and booking channel, as millennials in particular have have emerged as a new breed of business travellers who are more flexible and last minute with their travel plans than other groups.

Choe The hospitality industry is facing stiff competition from the growth of aggressive disruptors like Airbnb. While they haven’t affected business travel in a big way, serviced apartment providers like us need to be nimble and adapt to ensure we continue to retain our loyal client base.
The changing profile of the business traveller will also have an impact. While historically business travellers put a lot of emphasis on brand promise, the new generation is attracted more by engagement and relevance.

Kiran Fragmentation and personalisation of travel programmes are major issues. Fragmentation impacts areas such as travel costs, accuracy of reporting, as well as travel risk and duty of care. Unlike non-compliant bookings – in which travellers purchase airfares directly – content fragmentation involves purchases from suppliers that may not be fully available through a company’s preferred booking technology.

The Indian economy is slowly coming to terms with the recent demonetisation move, which will impact GDP growth for at least two quarters. However, most analysts see this as a normal trend and are confident that the economy will grow after this temporary setback.

Jager One to watch: China’s “One Belt, One Road” policy promises more business travellers to China.

This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.

Long viewed as Gili Trawangan’s little brothers, there’s evidence that Gili Air and Gili Meno are becoming a force to be reckoned with in tourism. By Mimi Hudoyo

Gili Trawangan, one of the islands north-west of Lombok, has successfully transformed itself from a backpacker paradise into an upscale tourist destination, spurring neighbouring Gili Air and Gili Meno (the trio makes up the three Gilis) to play catch up in infrastructure development and attract more tourist footfalls.

Bill Barnett, managing director of C9 Hotelworks, observed: “Destination fatigue (of Bali), urbanisation and a change in travellers tastes towards more natural locations are spurring the move.

“We have seen a similar pattern in Phuket, where a growing number of return visitors are heading to Khao Lak and islands in Phang Nga Bay to seek out a less-crowded beach-oriented holiday.”

In an October 2016 report, C9 Hotelworks recorded 675 registered accommodation establishments in Gili Trawangan, 321 in Gili Air and 82 in Gili Meno.

There are nine confirmed hotels totalling 278 keys in the pipeline, although these premium projects are not expected to affect the boutique nature of the three Gilis.

Barnett also noted that development is shifting from Gili Trawangan to Gili Meno and Gili Air. Gili Meno, the smallest island, is emerging into an upscale destination with the entry of larger-scale, international-standard hotels.

“Here, a new generation of posh offerings are newly-opened or under development. One notable project that is capturing overseas interest is Australian entrepreneur Greg Meyer’s upcoming Bask Gili Meno, which has been designed by noted architect Gary Fell,” Barnett said.

“Gili Trawangan has become too crowded for some travellers, so they look for a quieter destinations like Gili Air and Gili Meno,” said Andhy Irawan, managing director of Dafam Hotel Management,  which soft-opened the Mola2 Resort Gili Air Lombok last year. The property currently offers 20 rooms but will feature 48 rooms when fully launched in July.

Confident of Gili Air’s future prospects, he commented: We have been running on very high occupancy since our trial last August,  even before we uploaded the hotel information on our website. The number of walk-in guests has been overwhelming.”

Hotel developments aside, accessibility is also improving on the Gili islands.

While the Gilis were dominated by Australians and Europeans, the islands are gaining popularity with regional markets such as Malaysia and Singapore, thanks to the growing air links from both countries as well as from across Indonesia, said Awan Aswinabawa, managing director of A&T Holidays.

Fast boat links have been vital in liking Bali to the Gilis. Said Awan: “The many fast boats  – between 10 and 12 times daily, and can double during peak seasons – operating from (Padang Bai Port) direct to Gili Trawangan make it easy for travellers to visit the Gilis from Bali.”

Furthermore, two new fast boats with capacities of 180 and 120 pax are currently being built and will increase transportation capacity significantly when launched.

Following a boat explosion last September, travel companies have become more selective with the the fast boat companies they work with and use only those with reliable insurance, according to Iwan Sitompul, marketing consultant for Mahamaya Boutique Resort on Gili Meno.

As well, he shared that Bali travel agents are concerned with new government regulations requiring all fast boats to stop at Bangsal port in West Lombok instead of going direct to the Gilis, adding at least 20 minutes to the trips.

Overall, the trade is sanguine over Gili’s future prospects. “While the Bali connection remains key to current trading levels, longer-term C9 is eyeing an expected rise in direct international flights to Lombok which will in the medium- to long-term become a game-changer for access to the Gilis and create a strong underlying fundamental for sustainable growth,” Barnett concluded.

This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.

Ten years ago, Adam Goldstein unlocked the Asian cruise market potential for Royal Caribbean Cruises (RCC) and made Singapore the regional homeport for the line. Raini Hamdi catches up with the president and COO of RCC, recalls his views from the first interview over a decade ago and asks, what’s next?

Welcome back to Singapore, Adam.
It’s good to be back…I remember I was speaking at the first or second Seatrade (conference) in Singapore and the question was, ‘how many people will cruise in Asia in year 2000?’. Of course you’d want to say a big number as if you say a small number, you might not get invited to speak again. The market was then may be 200,000 passengers or not even for all of Asia and when we thought it would grow to a million, we assumed it must come mostly from Japan. That’s what I was thinking. Then I realised there was a map on the projection and I looked at it and noticed that China was not marked. Whoever made that map literally could not imagine that China would be a source market for cruises. And now it’s the fastest-growing market and spurring the growth in the region.

Looking back, what’s the one thing you wish the company had done?
Like anything that turns out to be a good thing, you wish you could have done it faster, that’s the nature of life (laughs).

If you ask what we were doing before 2007 when we declared Singapore as our regional headquarters in Asia, we were spending a tremendous amount of time building our presence in Europe, while continuing to build our presence in North America and the Caribbean. In the years prior, we were introducing all of the Voyager, Radiance, Celebrity and Millennium class cruise ships, so we were very busy. The last 10 years were really our time to focus on the opportunity here and also, to be fair, the rise of income level and outbound travel that have propelled this region to the forefront of travel & tourism has really occurred in the last 10-15 years. We’ve been a leader and beneficiary of that and we hope someday Asia will move down a path to be either the largest cruise region in the world or right up there.

Yet in the 10 years, Asia has grown to around 2.2 million cruise passengers, a fraction of the 24 million worldwide. Shouldn’t it be bigger, considering the masses that travel by air?
We always think it should have grown faster, we’re impatient. We know what a great vacation a cruise is and what wonderful value it is, and we always think people should catch onto it faster. But life isn’t that easy and we have a lot of work to do to build up an appropriate level of consumer awareness and knowledgeable and supportive distribution.

If you think abut it, there’s something like 1.2 billion international person trips and 24 million cruise passengers, so that’s a two per cent share of international travel. There are a lot of options based on land around the world and we respect the fact people choose those options all the time. But we want to make sure people understand what the cruise proposition means and that they will choose it often.

I guess even in North America you are still developing the new-to-cruise market.
Yes, right now, even in North America, where there are about 12 million cruise passengers a year. We know there are millions of people in North America who have the wherewithal to cruise, would love it if they did and who almost certainly now have friends and family members telling them what a great thing it is – and still they haven’t cruised!

So obviously in Asia we have a long way ahead of us, but the sheer numbers that reflect the opportunity in this part of the world are so immense that it is well worth our effort to pursue that.

Is it a question of patience, or the industry doing a poor job at selling cruises?
One element is patience. We can’t expect that Asia will be this year everything it can be. Most people still don’t know what a cruise is. Most travel agents still aren’t comfortable to distribute them, recommend them. We’ve made progress and I’m sure we will make a lot of progress in 2017 as a company.

Here in Singapore for example Royal Caribbean (International) has its most extensive programme of cruises in a year, including a brand new ship, Ovation of the Seas. There’s going to be more capacity in Asia, more itinerary varieties, different types of ships, newer ships than ever before, so it’s going to be a year of progress in the region.

Can Asia be the biggest cruise market?
I know it’s exciting to talk about whether Asia can be the largest region of cruising or whether China as a country can be the largest source market. Right now with the US providing 12 million cruise passengers a year, and the rest of the world providing another 12 million a year, it’s clearly going to take a long time before any market displaces the US as the no. 1 cruising market. We don’t really obsess about that. We just know that the opportunity to increase the Asia cruise market by one to five million customers per year is real. Like everywhere else in the world our Asian customers love their cruises. We just need to do a better job of attracting them, of marketing and selling, of working with travel agents, to compete with all the other choices that they have.

But much of Asia does not have the ports to support the big ships you have.
It is absolutely clear that the continued development of cruise infrastructure is one of the most signficant challenges we face as an industry.

And because our industry isn’t so well understood yet, we have to be proactive in our outreach to governments and investors, to say what we believe the opportunity is, why the infrastructure is needed both in the homeports and in the ports of call, to discuss solutions to overcome these challenges. Because unless we have places we can take the customers to, where the right ships are capable of docking or anchoring, and the right tour products and destination experiences, we are not going to grow how we wish to.

Do you invest in port infrastructure and are you planning to in Asia?
Yes, we either are the most active cruise company in cruise-related commercial development, or we’re certainly right up there and we are constantly in a dialogue with governments and investor groups about finding solutions to infrastructure challenges.

Yes we are planning to invest in the region in commercial development without question and when the time is right to announce it, we aren’t shy to do so.

What’s your take on ASEAN specifically?
Singapore as a hub of the ASEAN region has an instrumental role to play in the overall development of the Asia-Pacific cruise sector. With Sydney in the south, Singapore more or less in the centre and China homeports in the north, these are the crucial centres of cruise activities. There will be other homeports and cruises over the course of time but these are the ones propelling the cruise industry today.

Singapore, like Sydney, needs to provide warm weather cruise options that complement the China cruise market. ASEAN too in itself has over 600 million people in it and is a growing region economically.

10 Need to Know’s about Adam Goldstein

Who’s in your family? My wife Cheryl, my son David and my daughter Julie.

What do you do for fun? Competitive running, table tennis, rowing and travelling

Your ideal vacation? Anywhere in the world with our ‘vacation gang’ of my law school friends and our families

How do you book your own leisure trips? My wife is a wizard at travel bookings, having once run the air/sea department at Royal Caribbean

What are you reading right now? The Economist, as always

How do you stay healthy? Constant training with my running coach

Favourite food? Pad Thai

A bad habit you cannot kick? Chocolate croissants

Your pet peeve, something that never fails to annoy you? When a colleague has no point of view on a way forward

Most people don’t know that you…have season tickets to the Philadelphia Eagles (American) football games despite living 900 miles from the stadium

This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.