India’s surprise demonetisation of its Rs500 (US$7.35) and Rs1,000 bills in November 2016 has rattled the travel trade, as inbound and outbound travellers grapple with a cash crisis that sees no respite in sight.

The sudden move by the Indian government to crack down on corruption, counterfeit currency and black money has effectively made 85 per cent of India’s cash illegal tender overnight while the circulation of the new Rs500 rupee and Rs2,000 bank notes have lagged behind demand.

The liquidity crunch has badly hit Indian outbound sector. Hitank Shah, Gujarat’s chapter chairman of Travel Agents Federation of India (TAFI), said: “Demonetisation has affected travel industry adversely with business down by 30 to 40 per cent.”

To address the issue, the Gujarat chapter has inked a MoU with a private bank to facilitate travel loans for customers of TAFI members. “We expect the move will help to boost business of our members who are fledgling post demonetisation,” added Shah.

Ashwani Sharma, CEO, Sheraton Travels, said: “In the mean time, outbound tourism is suffering from the demonetisation move. The leisure market especially has not taken the announcement positively.”

For the recent year-end travel season, Rakshit Desai, managing director at India’s FCM Travel Solutions, saw Indian travellers cancelling their longhaul plans to destinations such as the US and Europe in favour for countries nearer home.

The ripple effects of India’s demonetisation move are also felt in South-east Asia. Malaysian inbound agents have been caught in a bind over this, with Andy Yow, director of sales and marketing at Vivanta by Taj – Rebak Island Langkawi, seeing a 10 per cent year-on-year drop in bookings from India in November and December 2016.

Leisure tourists from India have also shortened their stay to two nights from three nights, added Yow, which he attributes to travellers exercising greater caution in spending amid the current cash crunch.

“Our business was badly hit during the Indian peak travel season in November and December 2016. We were down around 30 per cent year-on-year,” said Arokia Das, senior manager at Luxury Tours Malaysia, who still expects a 20 per cent year-on-year drop in 1Q2017 business.

He noted: “Three-star hotel packages are currently selling better than four- and five-star properties. Indian holidaymakers are being thrifty as they don’t know how long this issue will persist.

“We are trying to make up for the revenue shortfall by intensifying efforts to get more regional business. There is a host of air connectivity options from LCCs linking South-east Asia’s capital and secondary cities to Kuala Lumpur.

“However, yield is minimal compared with the Indian market who purchases fully loaded tour packages. South-east Asian travellers prefer to sightsee and move on their own, rather than rely on a travel agent.”

Another Malaysian inbound agent, Nanda Kumar, managing director at Hidden Asia Travel & Tours, said Indian FITs business was down 40 per cent during the peak travel season in December while five incentive travel groups from India had postponed their trips in December 2016 to 1Q2017 due to payment issues.

Kumar told TTG Asia that Hidden Asia has since extended credit terms for some Indian business partners from 30 days to 60 days, and he hopes the demonetisation storm will pass before the Indian peak summer travel season starts in April. – Additional report from Rohit Kaul

Bangkok International Trade & Exhibition Centre

The MICE industry is finally getting its attention at the regional level, with ASEAN member states placing increasing attention and rolling out concerted efforts to develop the sector further.

Wiparat Tharateerapab, director, government and corporate affairs department, Thailand Convention & Exhibition Bureau (TCEB), said: “In the past, ASEAN governments are more focused on leisure tourism (but) there are many hotels and venues with events facilities, and many players in the MICE value chain.”

Nichapa Yoswee, TCEB’s director of MICE capabilities development department, told TTG Asia: “The existing Thailand MICE Venue Standard (TMVS), adapted from international ISO quality standards, is used to incentivise MICE operators to upgrade themselves. It already sees more than 400 meeting rooms certified in Thailand.”

TMVS covers three categories – meeting rooms, exhibition venues and event events – with the meeting rooms standard being further divided into three groups of hotels and resorts, convention centres and public facilities.

Thailand, as the ASEAN lead coordinator for MICE venues, will remodel TMVS for use at the regional level as the new ASEAN MICE Venue Standard (AVMS). According to Nichapa, the 45th Meeting of ASEAN NTOs at ATF will see the adoption of AVMS’ final version (in the category of meeting rooms in hotels) as well as its Audit and Certification Manual. ASEAN NTOs will discuss whether to expand the certification to exhibition venues or event venues next.

Following an audit training in March, auditors from each ASEAN member state will then nominate certified venues in their country for the first AVMS Awards at ATF 2018.

Nichapa hopes to get at least 10 nominees from each country.

ATF 2018 will also see the launch of a MICE Forum, which will feature seminars and a small exhibition, according to Wiparat.

Meanwhile, Indonesia Ministry of Tourism, as the coordinator for Mutual Recognition Arrangement on Tourism Professional (MRA-TPA), has drawn up proposals to adopt and incorporate MICE competency standards at the ASEAN level. Ani Insani, director, tourism institutional relations at the Ministry of Tourism, said the standards will ensure the same experience at any 10 ASEAN countries.

The Philippines has also devoted more attention to MICE. Said Baby de Luna-Landan, who helms the MICE department at the Tourism Promotion Board: “MICE and Events Tourism is (one of the priorities) of the National Tourism Development Plan of the Philippine Department of Tourism.”

To stay competitive, Singapore Tourism Board’s Business Events in Singapore fund has been expanded to support industry-driven business development initiatives and provide funding for local association members to start lobbying activities prior to biding for events. STB also recently collaborated with CNN, Bloomberg and other online platforms to establish Singapore as a premier MICE hub anchored on thought leadership and business opportunities.

On the other hand, Manivong Sounh, director general of Laos’ Tourism Marketing Department, says going niche is the way for the country to pursue its MICE ambitions. “We do not have the capacity or resources to cater to big events (so) we will focus on small-scale events and develop the relevant skills and knowledge,” he said.

Lending a hand to Laos’ MICE plans is the 2017 Mekong Tourism Forum (MTF), which will be organised by Mekong Tourism Coordinating Office (MCTO) in Luang Prabang this June. Said Jens Thraenhart, executive director of MCTO: “We wanted to look at how smaller destinations can compete with cities for big events, so we came up with the answer of (showcasing) experiential events at MTF.”

City Hall and promenade in London

Despite the pound sterling taking a beating against major currencies, forward bookings from the UK market to South-east Asia are ahead of figures at the same time last year, allaying fears of a UK sales slump post-Brexit.

ForwardKeys CEO, Olivier Jager, said: “Looking at the UK bookings for travel to South-east Asia in 1H2017, we observe that leisure and group bookings to Malaysia are currently more than 80 per cent ahead of the equivalent time last year. Bookings to Indonesia for the same period in the same segments are currently more than 50 per cent ahead.”

This peak winter season from January to March is also something to write home about, a check with UK tour operators shows. Darren Lancaster, director One World – Travel Sales & Marketing, said many UK operators are reporting stronger business, with some even expecting the peak booking period will lead to their best-ever summer arrivals in 2017.

“People in the UK are still happy to spend money on leisure activities, including overseas holidays. They believe they work hard and therefore deserve to treat themselves. This shows that the fears of a post-Brexit UK sales slump are deeply unfounded,” Lancaster said.

David Carlaw, head of longhaul product at Premier Holidays, has not seen any Brexit impact on winter booking patterns so far and tipped that destinations outside Europe might well see a demand spike as travellers decide to opt for destinations farther afield than traditional European resorts.

Lancaster added that Asia, already unrivalled in offering exceptional value, “now looks even better versus the European and Caribbean/North America destinations”.

Tour operators said this is an opportunity for ASEAN NTOs to target a bigger share of the UK market, warning against complacency amid stiff destination marketing competition.

Carlaw said destinations with the most proactive NTOs and airlines will come up tops. “Thailand is our number one seller, for example,” he said.

Lancaster pointed to airlines’ role: “Vietnam will continue to grow with VN flights switched to Heathrow on newer planes, and the ‘city and beach’ FIT market to central Vietnam via Danang will increase steadily on the back of direct flights from Bangkok.

“Similarly Qatar’s new route into Krabi will develop growth in the south of Thailand. Bali is also doing well as the traditional ‘bottleneck’ when flying via Singapore is now eased with more indirect flights via the Middle East, plus Garuda’s service from Heathrow via Jakarta.”

Amid the prevalent optimism, David Kevan, director of Chic Locations, warned against “perennial blue skies thinking”, as British holidaymakers will now exercise more frugality in their decision making.

“Clients used to travelling in the winter will not suddenly switch to summer, but they will consider March rather than February if there is a rate reduction – typically this happens in Phuket, for example. Repeat clients will find the garden view just as attractive as the ocean view, but a free upgrade would be kindly accepted,” he said.

Suzuki: no big change in culture

Tour East Holdings does not see the departure of three of its senior management team as a blow, even though it risks losing accounts in the future as two of these leaders have joined competitor Diethelm Travel Group.

Industry members TTG Asia spoke to see the loss of Judy Lum in particular as a blow to the company because of the decades of relationship the former Tour East senior vice president sales & marketing – international has built with overseas tour operators, which reportedly made Singapore its second highest revenue earner after Australia.

Premier Holidays UK, which uses Tour East, said it does not have plans to change any of its ground agents and have contracts signed through to 2018.

“However, we do a review each year as standard procedure,” said David Carlaw, head of longhaul product.

Lum, along with Yvonne Wong, former Tour East general manager Singapore, both served the company for around 30 years. Both will join Diethelm Travel Singapore, effective February 4, 2017, as general manager and business consultant respectively. Tour East also lost its general manager Malaysia, Stephen Chan.

The departure of these loyal leaders has caused the industry to speculate that a different culture, mindset and approach since JTB took over Tour East two years ago might be a reason.

Tour East Holdings CEO & president Shigeyuki Suzuki does not see the resignations as a blow.

When asked how the general managers are adapting to the new JTB ownership, Suzuki believes they are “on the same page in business direction and strategies”.

He said: “I do not see a big difference in culture between the former management and us. Each company has its own corporate culture and strategy. However, I think the ultimate goal for a DMC – i.e. to provide the best services and hospitality – is exactly the same even if a different approach is taken,” he said.

Commenting on the loss of three leaders in a row, Suzuki said: “It happened by chance at the same time. Staff turnovers always happen in the industry and we simply adjust and adapt.

“As Tour East Singapore has more than 40 years of experience and have many talented staff, I’m confident that we can continue to promote Tour East as the number one DMC brand in Asia-Pacific (15 countries), and have a diversified client base and business portfolio.”

Tour East has promoted its manager inbound Francesca Cheah to general manager of Malaysia. Daniel Tam, general manager of Tour East Hong Kong, is made concurrent chief of Tour East Singapore.

When asked what sort of support he would give to Cheah and Tam, Suzuki said: “As Daniel has a lot of regional management experience and expertise, I’m confident that he will be able to manage the additional role by working closely with the head office (Tour East Holdings). As for Francesca, the head office will provide her with JTB’s higher management training course to enhance her management skills and provide day-to-day management support if necessary.”

Meanwhile, when contacted by TTG Asia, Lum said of her decision to leave Tour East: “It has been an amazing journey with Tour East. They are all set for the next phase while I am ready for my next challenge.”

She added: “Together with Yvonne, our immediate task is to set up procedures and standards to make sure they are aligned with the rest of the Diethelm network. It’s a young and small office and we’ve got to make sure they are ready for the expansion to come.”