ITB Asia 2016 opened yesterday morning at Marina Bay Sands, with Singapore minister for trade and industry (industry) S Iswaran (centre) as the guest of honour

Messe Berlin (Singapore), organisers of ITB Asia, has decided to stay put in Singapore for the next few years, said Martin Buck, Messe Berlin’s senior vice president.

An MoU to affirm this commitment was signed between Messe Berlin (Singapore) and the Singapore Tourism Board (STB) yesterday.

He elaborated: “Singapore as a city still offers the convenience when it comes to organising a tradeshow – be it the availability of hotels, and convenient access to both airport and tradeshow location.

“We’ve enjoyed a constructive and fruitful cooperation with STB for almost a decade, and it’s obvious we don’t have a reason to leave the city.”

When asked about future editions of the tradeshow and what it might hold for both buyers and exhibitors, Buck told TTG Asia that they were working on a matching process to create situations where appointments will bear a higher likelihood that deals will be struck.

“This is based on a steadily improving matchmaking system which tries to include more relevant information about what a buyer wants, and what an exhibitor has to offer. This strategy – which is more of a steady improvement process rather than a dramatic change of the format itself – is one that we will continue over the years to come,” he added.

As for the inaugural ITB China happening next year in May, Buck explained that the event would focus exclusively on Chinese buyers there, making it unique.

He shared: “We have already done up agreements with five of the biggest Chinese online tour operators such as Ctrip, Alitrip and Tuniu to bring their buyers to our show.”

Skyline of Shanghai, China

Despite the massive injection of hotel rooms across many Chinese cities in recent years, China remains an attractive market for international hospitality companies looking to intensify their reach in this vast market.

Pan Pacific Hotels Group (PPHG), for instance, will debut Pan Pacific Beijing in 1H2017 while Amara Hotels & Resorts will launch the Amara Signature Shanghai early next year.

Acknowledging China’s saturated market, PPHG’s CEO Bernold Schroeder chalked up the current oversupply in some cities to the building boom during the lead-up to mega events such as the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

“Today, there are 2.4 million hotel rooms in China, just half of that in the US. However, China’s population is four times larger than that of the US, and with robust growth projected in domestic and international travel, there is still room for expansion in the long run.”

He added: “As a company however, we are investing for the long-term. China is a huge, emerging market which at the same time is fragmented, with global hotel brands being relatively lesser-known. This presents an opportunity for smaller hotel groups such as PPHG to strengthen our brand presence in China.”

“Brand recognition” is also an important factor driving Mövenpick Hotels & Resorts’ development strategy in China, said Asia senior vice president Andrew Langdon.

As China is typically among the top five feeder markets for the group’s resorts in Asia, the presence of Mövenpick properties in tier-one Chinese cities will influence Chinese outbound travellers’ choice of stay abroad, he informed.

Amid slowing international arrivals and intense competition in China, Dawn Teo, director of strategic planning and corporate development of Amara Holdings, still sees China as “an attractive destination with great market potential”.

“While China’s (recent) growth story is muted, its GDP growth of over six per cent is still enviable compared to the rest of the world,” said Teo. “The total demand from both international and domestic travellers will outpace the current supply. We expect China to be among the fastest-growing hotel sectors.”

Meanwhile, the fierce competition in China’s first-tier cities has also led hotel groups to shift their expansion focus to secondary and tertiary cities.

InterContinental Hotels Group (IHG) has over 222 hotels in its China pipeline, of which more than 90 per cent will be located are in second-, third- and fourth-tier cities, according to Kent Sun, chief development officer, IHG Greater China.

He said: “These cities still have vast available areas for developing new hotel projects. Many local governments and developers are looking to build landmark structures to boost their (respective) city’s image and reputation which has provided good opportunities for us to expand our portfolio in China.”

China’s secondary and tertiary cities are also of “particular interest” to Hilton, Asia-Pacific president Martin Rinck told TTG Asia. “This is owing to the significant gap between existing hotel supply and the exponential increase in demand – particularly in popular leisure destinations such as Yunnan, Guangdong, Shaanxi and Sichuan,” he added.

Likewise, resort destinations in second- and third-tier cities are attractive to IHG. Said Sun: “Their booming prospects are backed by favourable government policies including more public holidays, annual leave encouragement and a boost in domestic consumption.”

David Scowsill

Tourism will likely remain a bright spot for South-east Asia in the coming years, with forecast investment to total US$782 billion, accounting for 7.4 per cent of total investment in the region in the next decade, said World Travel & Tourism Council (WTTC) president/CEO David Scowsill.

However, some South-east Asian countries are notably lagging in terms of infrastructure development to meet the needs of estimated tourism growth rates of 6.2 per cent per annum until 2026, he added.

Citing WTTC’s latest Travel & Tourism Investment in ASEAN report, Thailand is classified as ‘future focus critical’, as investment spend has fallen significantly since its 2006-2007 peak while tourism demand has spiked in recent years.

Infrastructure is also constrained in Myanmar, Cambodia and the Philippines and forecast investment does not meet the needs of future demand. Vietnam and Laos, in comparison, are faring better with infrastructure improving in tandem with growth prospects.

On a more positive note, investment in Malaysia and Brunei are well balanced while Singapore and Indonesia stand out in being able to roll out infrastructure ahead of demand.

This varying performance of South-east Asian countries in future tourism and travel preparedness also reflects the fragmented pace of development that long characterises the region.

When asked if the current economic slowdown in parts of Asia would impede tourism growth, Scowsill remarked: “Technically we have been in recession for the past seven to eight years… Travelling has become part of people’s psyche and they are unlikely to cut back on travels.”

Also working in the region’s favour, besides its strengths in culture diversity and price competitiveness, is the perception of South-east Asia as a “safe destination”, especially when compared with Europe which suffered a string of terror attacks in the last 18 months, Scowsill pointed out.

Recent terror incidents in a number of popular European destinations, such as France, Belgium and Germany, have dented overall Asian interest in the region and created new favourites on travellers’ wish list.

Ganesh Rao, general manager of Ascon Holidays in Hyderabad, said Europe bookings we’re down 40 per cent due to a mix of terror threats, a softer economy and visa issues. Demand has shifted to Australia and New Zealand where “the NTOs have been proactive (in supporting the trade)”, he remarked.

Demand for Europe slipped 20 per cent for Baywatch Chennai since six months ago. A recent survey by the Japan Association of Travel Agents also found that outbound sales for Europe fell while Asia and Oceania numbers rose.

HIS Co’s team leader of Kanto regional sales, Atsushi Okamoto, said “sales are not good”, while Nippon Express Travel spokesperson Kazuya Fujinaga observed a stronger client preference for nearby Asian destinations. Both declined to quantify the slip in bookings.

Also bemoaning “flatlined” business to Europe this year is Jonathan Tran, managing director of Lac Hong Voyages in Vietnam. “I don’t expect bookings to improve for 2017 unless airlines dish out huge discounts,” he said.

For some Asian buyers at ITB Asia, Turkey has turned out to be the biggest European loser.

“Turkey was our best-selling destination but we had at least three groups cancelling their trips there this year after the terror attacks,” said Farisyah Yaakub, Best Star Travel Malaysia’s director of marketing and product development.

Ahmad Mahadzir Shaffirin, vice president of Malaysia’s Konsortium Sepang, also reported many cancellations and postponements for Turkey this year, besides a “general weaker demand for Europe”.

For Amaresh Tiwari, managing director of India’s A T Seasons & Vacations, Turkey’s location next to troubled Syria had unsettled his clients, although they had maintained their love for France and Belgium.

However, Asian travellers are not giving the whole of Europe a wide berth. Instead, demand has simply shifted away from trouble spots to cities that are perceived to be safer.

Baywatch CEO Manish Kriplani said: “Travellers are avoiding sensitive (destinations) and are now picking Spain and Switzerland as well as cities such as Prague and Budapest.”

The Balkans has gained favour among Farisyah’s clients, while Rao noted that Paris and Swiss cities are still considered “a must” for his clients’ incentive programmes and that interest in Greece is up.

The shift in choice destinations within the region has helped Dynasty Travel Singapore to avoid a downturn in Europe bookings. According to spokesperson Alicia Seah, Western Europe’s loss was Northern and Eastern Europe’s gain, and Europe is still the company’s top destination with a 35 per cent share in overall sales revenue.

Chan Brothers Travel Singapore observed a 30 per cent YOY growth in UK booking in 1H2016, and keener demand for “less mainstream destinations like Iceland and Scandinavia”, said spokesperson Joyce Tan.

Also offering a positive view on the situation, Robin Yap, Asia president, The Travel Corporation, said: “Travel to Europe is still growing from Asia, partly due to the attractive exchange rate and various airfare promotions. Following the incidents in Europe, our web searches returned to pre-attack levels very quickly. People still want to travel, but to different parts of Europe.”

Asia’s first travel wholesale alliance, Trip Affiliates Network, has been formed.

The alliance’s first members, and who have been integrated on a single distribution platform already available in the market, includes Westminster Travel, CN Booking, Bayu Buana, Aviation Services, Dragon Travel, InterAsia, Hotel Bank, Holiday Tours and Ark Travel Express.

Many more members are in the pipeline, according to the network’s co-founder Tan Huck Khim, who is also executive director of Travel Prologue, which developed the integrated technology solution for the alliance.

“There is a spiderweb of loose consortiums in Asia but there is no one to bring them all together,” said Tan, when asked for the impetus behind the network’s formation, adding that travel agents all face the same global competition and that banding together allows for economies of scale to come into play.

“Our aim is to provide top players in the travel industry with a single platform to share content across borders and agencies, and enable the delivery of good content and competitive wholesale pricing across Asia to travellers.”

The process for the alliance’s formation first begun when Tan and his co-founders went on a roadshow earlier in May to meet with potential partners in countries such as Indonesia, Hong Kong, Malaysia and the Philippines. It then snowballed into a full blown alliance after initial partners introduced more potential partners and sub-agents wanting to join.

“Not much convincing was needed to get members onboard. We have a long pipeline and will expand further once this phase is completed,” said Tan. “There is no limit to the number of alliance members.”

He believes small and medium sized agencies are driving most of the demand for the alliance’s formation and that the benefit of getting locally contracted rates for agencies without a presence in a certain market is definitely one of the key advantages for members.

With the combined content of its founding members, the alliance now boasts over 50,000 exclusive, directly negotiated hotel contracts and more than 150 airline relationships in the region, on top of a global stock of aggregated hotels and airlines inventory.

Tan hopes Trip Affiliates Network can one day match the scale of Travel Leaders Group in the US and The Travel Network Group in Europe.

Edward Liu

THE formation of the ASEAN Economic Community (AEC) last year will boost the appeal of Singapore as a hub for business events looking to attract South-east Asians, but more support can be provided to fully leverage this “immense opportunity”, according to CEMS’ group managing director, Edward Liu.

Elaborating to TTGmice e-Weekly, Liu who was speaking at the MICE in Asia panel session at ITB Asia today, said: “When we run our tradeshows in Singapore, many exhibitors lament that Singapore is such a small market. But with AEC, we have moved from being just a country of about five million people to a hub of over 600 million.”

As such, Liu urged organisers to utilise this advantageous position while promoting their tradeshows to international counterparts.

He said: “Our challenge now is how to position our tradeshows that will attract firstly exhibitors, then buyers. While we want to continue pushing Singapore as a centre of the MICE industry, my take is that organisers are much more pragmatic and frankly most of them have gone into other places like Indonesia in a big way.

“Hence, we have got to be aware and continue to raise the profile of our shows and make use of technology to reach our target audience to bring them to Singapore,” he added.

When asked what type of support is needed, Liu said: “If the Singapore Tourism Board (STB) can give us more funding then we can certainly host more regional visitors to Singapore, which can enhance our positioning. Also, the STB can mobilise their regional offices to promote our events to raise further awareness.

“On our part, we will ensure that we create content that will appeal and engage both Singaporeans and South-east Asian trade visitors, and structure our programme accordingly so they will have a reason to come to Singapore,” concluded Liu.