FAIRFAX Financial Holdings, which owns Thomas Cook India and is backed by billionnaire Prem Watsa, is on the prowl for more acquisitions even when the ink is barely dry on its recent purchase of Kuoni Group’s travel businesses in India and Hong Kong.
Thomas Cook India’s managing director Madhavan Menon told TTG Asia e-Daily the company was looking at Asia “more actively”, particularly at “niche” travel businesses which it could buy, such as its acquisition of Sri Lankan DMC Luxe Asia Travels last July.
The purchase of the Kuoni businesses in India, comprising outbound travel brand SOTC and DMC Sita, and the Hong Kong tour operating, made through Thomas Cook India, along with Luxe Asia, was “a way to mitigate the risk for Thomas Cook”, whose foreign exchange business was “exceptionally large”, Menon said.
The company would also be losing the Thomas Cook brand name in 2025 as part of the agreement when it was acquired by Fairfax from the Thomas Cook Group UK in 2012.
“The value of SOTC, 59 years old, and Sita, 55 years old, is far higher. More importantly, by acquiring them (we are acquiring) exceptional management teams, people such as Depak Deva (CEO, Destination Management India and South Asia of Kuoni Travel India) and Vishal Suri (CEO, SOTC).
“With the Hong Kong acquisition, we’ll grow organically. Asia is where the action is going to be. China, Indonesia and India are primary travel source markets for the next few years, while South-east Asia is also going to be a stronger inbound market. So now, we will expand further into Asia by looking at other opportunities. But while we will be a mass market player in India, we want to be niche in Asia.”
Menon is eyeing “well-run” niche travel businesses which will be allowed independence post-purchase. “We don’t have the ability to run them. It’s never our policy to interfere. It’s the same when we were acquired by Fairfax and it’s exactly what we’ll replicate,” he said.
SOTC, Sita and Kuoni Hong Kong will remain independent, he said. The Kuoni name is licensed to Fairfax/Thomas Cook India for one year in India and five years in Hong Kong, but brands such as SOTC, Sita and Distant Frontiers are transferred.
“For businesses that are retail and customer-facing, I don’t want to tangle with the customer. Let them choose which (brand) they want to buy from.”
Asked about the future of tour operating, since Kuoni wanted out, he said: “There’s a future absolutely. Kuoni sold off for totally different reasons: it wants to concentrate on the B2B space and focus on its DMCs. I don’t have a problem with that. I believe there is a future as a packaged tour provider, and when it comes to complex itineraries, you need the balance between bricks-and-mortar and digital. That’s what we will provide.”
BRAND USA will intensify its focus on emerging South-east Asian markets like Vietnam, Indonesia and Thailand following its success in growing the brand in this region.
The US welcomed 9.6 million Asians last year, up six per cent from 2013.
The main markets, in both size and growth, were China, India, Japan and South Korea. But markets such as Vietnam, though still small, are conspicuous by their stellar rises. There were 86,000 travellers to the US last year, a 34 per cent year-on-year increase. In particular, the number of Vietnamese travellers to New York shot up by 113 per cent to 32,000 last year, from 15,000 in 2013.
Makiko Matsuda Healy, senior vice president, global tourism development of NYC & Co, said: “One of the reasons could be that the economy in these emerging South-east Asia markets is stabilising and there is a rising middle class population.”
Tom Garzilli, senior vice president-global sponsorships for Brand USA, said in addition to Brand USA’s current promotional efforts and educational seminars launched in countries like Singapore, Malaysia, Indonesia, the Philippines and Thailand, it would be “following the emerging economies closely”.
Plans are also underway to extend the USA Discovery programme to these countries, but no definite timeline was given.
Additionally, Brand USA will soon launch an online education and certification programme for the trade in Southeast Asia, said Garzilli.
The growing Asian market is also whetting the appetite of more US exhibitors to learn more about the market. Garzilli said new US exhibitors at ITB Asia this year include the Philadelphia Convention & Visitor Bureau and the Los Angeles Tourism & Convention Board.
IN light of a greater proportion of mobile savvy FITs emerging from China, the Singapore Tourism Board (STB) has announced a bevy of digital services to better connect with and attract such visitors to Singapore’s shores.
While this is not the first time STB is penetrating China’s digital and mobile space, it is the most comprehensive initiative yet, comprising four first-time partnerships and two new product launches with current partners.
First-time partners are online travel services Alitrip and Tuniu, and social review sites Dianping and Mafengwo. All of them signed a MoU with STB on October 21, 2015, agreeing to curate and distribute content on Singapore, over a period of two to three years, to their users.
Meanwhile, current partners WeChat and Baidu have both launched new products. The digital partnerships will feature attractions such as the River Safari and Gardens by the Bay in a new YourSingapore WeChat account, while offerings at the Sentosa HarbourFront precinct will be detailed in a new Baidu Connect service. More partnerships will be announced at a later date.
Khoo Shao Tze, chairman of Sentosa Harbourfront Business Association, said: “We still utilise publicity tools through traditional media to access the Chinese market, but if Chinese tourists want to go deeper, then there is that limitation. Baidu Connect will allow that depth”.
Singapore has seen a 19 per cent year-on-year increase in Chinese arrivals in the January to August 2015 period, and the partnerships are aimed at fuelling this growth.
In 2014, 1.7 million visitors from China visited Singapore – the second largest contributor of international arrivals – and this contributed to tourism receipts worth US$1.8 billion. Out of the total number of Chinese visitors, 80 per cent were either FITs or free-and-easy travellers.
“We are seeing more Chinese FIT visitors in recent years. Besides the need for comprehensive information for trip planning, they also desire real-time useful tips, navigation, payment and translation tools to explore a destination independently,” said Edward Chew, STB’s regional director (Greater China).
Darren Oh, director of business development at Gardens by the Bay, is sanguine about the partnerships. He said: “Chinese visitors are among the top five markets for us and we are seeing a huge growth in that segment. For us, we have lesser resources compared to larger attractions in the country, so going onto online platforms will really help us get the message across.”
BANYAN Tree Hotels & Resorts has revealed its fourth and newest hotel brand, Dhawa, a casual and modern full-service concept, in conjunction with the group’s 21st anniversary celebrations.
According to Ho Kwon Ping, founder and chairman of the hospitality group, the new brand is targeted at a younger clientele, and is “hip, cool and contemporary”.
In line with the concept, bedrooms at the hotel are dubbed Cocoons, featuring plush beds, oversized pillows, movable bedside tables with built-in power plugs, and of course, internet connection. Bathrooms are called Pods, equipped with rain shower, LED mood lighting, spa-branded amenities and bluetooth music speakers.
There will also be communal spaces named Nest, which encourages strangers to interact and relax over complimentary refreshments such as hot beverages, sodas, snacks and ice-cream. The lobby, called Void, will offer relaxation pods, while the all-day restaurant and bar Nook provides an array of breakfast, lunch and dinner options. Other facilities include a spa, a fitness centre and kids club.
The first Dhawa-branded hotel will open in Bo’ao, China, in March 2016. Dhawa Bo’ao will be a 346-key establishment featuring the above amenities as well as banquet and meeting facilities. The 516-key Dhawa Cayo Las Brujas in Cuba will follow, slated for an opening in July 2016.
“We have signed projects for this fourth brand in China, in Pu’er, Leishan and Luo Yang, and we will likely open one of our own in Phuket,” added Ho.
Dhawa sits alongside the group’s sister brands Angsana, Banyan Tree and Cassia.
SWISSOTEL Resort Phuket is offering exclusive rates for the travel trade industry on two separate periods; the first running from October 15 to November 30, 2015 and afterwards from December 1 to December 20, 2015.
For the first period, the cost of a one-bedroom deluxe suite and a two-bedroom deluxe suite will be 1,700 baht (US$48) and 2,700 baht (US$76) per suite per night respectively. Following that, the cost would be 2,000 baht (US$57) and 3,000 baht (US$85) per suite per night respectively.
Rates are inclusive of complimentary daily breakfasts for two persons staying in the one-bedroom suites and for four persons staying in the two-bedroom suites.
The offer also comprises a 20 per cent discount on food and beverages as well as spa treatments. Complimentary stay for a maximum of two children under the age of 12 will also be included, plus a 25 per cent discount for kid’s room setup and a free diving trial.
Guests will be welcomed with a fruit or flower basket in their suites and early check-in and late check-out will be subjected to availability.
ACCORHOTELS has chosen Garth Simmons to replace Gerard Guillouet as the new chief operating officer in Malaysia, Indonesia and Singapore.
Simmons has been with the company since 2007 and has more than 30 years of experience in the hospitality industry.
In his earlier positions, he was the regional general manager for AccorHotels NSW and ACT properties before he became senior vice president New Zealand, Pacific Islands and Japan.
“I look forward to being part of our excellent teams in Asia and to building our position as the largest and most dynamic hotel group in these countries,” said Simmons.
BEST Western Hotels & Resorts has signed an agreement to launch its first boutique hotel, Vib, in South-east Asia in 2018, to be located in Vientiane, capital of Laos.
“When we first revealed the Vīb concept to the world earlier this year, it was clear that this unique, contemporary product would work extremely well in South-east Asia – one of the world’s most dynamic regions,” said Olivier Berrivin, managing director of international operations, Asia at Best Western Hotels & Resorts.
Located in the centre of Vientiane and close to the night market, Lao National Museum, Black Stupa and Patuxai Arch, Vib will feature 70 rooms with free Wi-Fi . In addition, a social lobby area, “grab n’ go” snack station, and a “zen zone” for relaxation will also be offered.
“Vīb is an incredibly exciting new concept for Best Western, and we have seen a high level of interest from developers across the world,” said Ron Pohl, senior vice president of brand management at Best Western Hotels & Resorts.
“We are delighted to have signed our first Vīb hotel in South-east Asia, and I am confident this will mark the start of a strong regional roll-out for the brand.”
CARNIVAL Corporation has formally entered into a joint venture with China State Shipbuilding Corporation (CSSC) and China Investment Corporation (CIC) to launch the first world-class, multi-ship domestic cruise brand in the Chinese market.
With this new agreement, Carnival Corporation and CSSC plan to purchase and operate both new and existing cruise ships to homeport in China.
Meanwhile, the CIC will be involved as a significant investor, hence reinforcing China’s commitment to expanding the Chinese tourism market.
“This cruising joint venture is a significant step forward for the cruise industry in China and a tremendous opportunity for us to work together with CSSC and CIC to grow awareness, interest and demand for cruise vacations among domestic Chinese travellers,” said Buckelew, global COO for Carnival Corporation.
He added: “Cruising is a relatively new vacation experience in China, and we believe this collaborative approach with our partners is critical to not only developing the country’s domestic cruise business, but also supporting China’s goal to become one of the world’s leading cruise markets in coming years.”
The joint venture comes in the wake of recent news that Carnival Corporation is extending its overall market presence in China in the next two years.
VISIT Finland aims to build “solid” tour operator and travel agency partnerships in Asia to develop Finland as a stopover destination for Asian passengers travelling via Helsinki Airport to other destinations in Europe.
It will be introducing a new Stopover Finland programme by May 2016, consisting of 50 attractive packages in Helsinki and beyond that range from five hours to five days. The NTO also plans to increase its visibility at ITB Asia in 2016 in order to build trade partnerships.
Visit Finland’s Stopover Finland programme director, Heli Mende, said: “The success of Stopover Finland requires solid tour operator and travel agent partnerships. By investing in the visibility at ITB Asia 2016, Stopover Finland wants to invite new partners to consider selling Finland as a stopover destination to their clients travelling from Asia to Europe.”
Travellers can experience Finnish highlights from Northern lights to midnight sun, relaxing in Finnish forests, lakes and sauna, shopping for Finnish design items, and meeting popular characters like Moomins and Santa Claus.
Finland’s two largest Asian markets, China and Japan, which accounted for six to seven per cent of total arrivals in 2014, are expected to grow further when Finnair adds two new routes to North Asia in summer 2016.
Starting from May 7, 2016, Finnair will launch a thrice-weekly route to Fukuoka, Japan. In addition, there will be a four-times weekly service from Helsinki to Guangzhou, China, but that seasonal route will operate only from May 6 to October 29, 2016. The two new routes will both use the Airbus A330-300.
Fukuoka will be the fourth Japanese city that Finnair flies to, after Tokyo, Nagoya and Osaka. Guangzhou is Finnair’s sixth destination in Greater China after Beijing, Chongqing, Hong Kong and Shanghai and Xi’an.
Finnair will also take delivery of its first four A350 XWB orders this year, while another seven will be delivered over the next two years. For its Asian network, the A350 XWB will be deployed to Shanghai from November 21, progressively to Beijing and Bangkok by the end of 2015, and to Hong Kong and Singapore by the first half of 2016. The Airbus A350 XWB will replace the A340s currently plying these longhaul routes.
Finnair’s country sales manager, Singapore, Malaysia and Indonesia, Nick Naung Naung, said: “The A350 XWB aircraft is 25 per cent more fuel efficient and quieter than the A340s, and the extra wide body of the A350s offers more space and wider seats for greater passenger comfort. The Finnair A350 XWB has 297 seats – 46 in business class, 43 in economy comfort and 208 in economy class.”
It has been a year since Tourism 2025 was first announced at TRENZ 2014. What has TNZ achieved so far in aligning its activities to the goals of the framework?
It is very important to first understand that Tourism 2025 is owned by the industry and co-created by the industry along with the government. It is unusual in that aspect as most tourism strategies are government-led. It is a good thing though, as we now have the private sector understanding that they need to own it and the framework will outlive political cycles.
Kevin Bowler
What have we achieved? Firstly, to achieve the framework’s objectives, we need to maintain a growth rate of about six per cent, and in the last 12 months we’ve had about 20 per cent growth in international visitor spend and about 6.9 per cent increase in the number of visitors. We’re in pretty good shape.
One of the components of the framework is to foster air connections and that has been going very well. I think this is a chicken and egg situation. We have the demand so the airlines are supportive, and their support is in turn driving more demand and making airfares more competitive. We have seen great growth since the joint venture between Singapore Airlines and Air New Zealand.
Air New Zealand will add year-round services to Houston and Buenos Aires this December, so this air connectivity piece is going strongly for us.
The second component is to achieve high-value visitors, and our growth in value is exceeding our growth in volume.
Another component is visitor experience, and we are making headway in adjusting for new markets. Our China readiness focus for the industry is an example of efforts we’ve taken.
The fourth focus in the framework is productivity. We are emphasising the shoulder season now, which is a big change from what we’ve been doing. If we can increase demand during the shoulder season when there is excess capacity, we will increase productivity considerably. To achieve this, we are focusing on markets that have a lower high season profile. India is a great example: the peak travel season for Indian travellers to New Zealand is November to December and then April to May, which fits perfectly with our shoulder season.
We are also investing in MICE and special interest markets like golf and cycling, which tend to be outside peak (period).
The final point is the insights. There has been a big programme on improving market data but there’s still much to be done before we can come out and say we’ve got great insights.
Tell us more about what you are doing to get ready for China.
TNZ has been very active in running workshops around New Zealand to help operators understand the needs of the Chinese market – not just travellers from China, but those from other parts of Asia too – and what changes should be made in terms of food, language and activities.
The Chinese love shopping and they often say to us that the shops in New Zealand open too late and close too early. We are increasingly conscious about having to adjust that. We are also aware of the need to adjust food service that suits the Chinese. Here’s a good example: we are working with our premium golf courses to provide hot lunches because wealthy Chinese golfers like to have a little hot meal whereas New Zealanders will be quite happy to grab a sandwich.
The Hurun Report recently noted that young, wealthy Chinese prefer experiential travel and exotic destinations. This should excite TNZ since it wants to grow its value of tourism.
I must say that the rate of change in China is extraordinary. Five years ago most of our Chinese travellers came for low-value shopping trips, mostly on Australia and New Zealand itineraries.
We are getting a different profile these days although only a few of them are in the ultra-premium segment – less than two per cent of the business at our luxury lodges are from China.
Frankly, the expansion of our focus on high-end travellers hasn’t really extended to China. Where we are getting our value improvements from China is from longer-length stays and more travelling around the country. I think part of this is because the ultra high-end Chinese customer is still looking for traditional luxury accommodation as opposed to lodges which are more rural. New Zealand has a more rural perspective around luxury accommodation which may not be what everyone is looking for. Some of these lodges are very small, with only six rooms, quite different from a six-star hotel in the Middle East.
Our view is that our high net worth traveller market will develop and (our luxury lodges will) target travellers who like outdoor activities. Now we are still at the very beginning of that phase.
The other challenge we have (in attracting high net worth travellers) is that because these lodges are small, they sell out pretty fast. I’ve been informed that they are almost all taken for the next summer peak period, mostly by US visitors who really like this experience.
Wealthy Indians are also desiring the same. Are you seeing the same shifts in this market yourself?
Oh yes, a little bit more so for the Indian market. We are already catering strongly to the Indian market, especially the honeymoon segment which favours our luxury lodges. We are very encouraged by the results in India – we’ve almost doubled our Indian arrivals in the last five years.
We’ve just co-hosted the 2015 Cricket World Cup with Australia and that gave us a boost. Indians love cricket, and there are a number of New Zealand coaches in India. We have a little bit more of a cultural connection with India that way.
Which other Asian markets are top performers for New Zealand’s high-end travel segment?
Japan and Singapore. While these markets will remain strong, we feel that China will become a much more important source over the next five years.
Many Asian destinations are courting these source markets too. How will New Zealand stand out in the region?
New Zealand offers such different experiences from the rest of the region that we are probably more up against Africa or even South America. Africa’s luxury lodges and safaris, for instance, are the sort of products that we are competing with.
What drove the creation of TNZ’s Every day a different journey campaign and how does it serve the new framework?
It is an evolution of a campaign that has lasted for 16 years. 100% Pure New Zealand has a long history now and over the period of its life we’ve been able to continue to keep it contemporary and move messages to the opportunities we see. The most recent one was connecting New Zealand with Middle Earth. We had three years of emphasising how Middle Earth was 100% Pure New Zealand. We’ve been very successful. Of course, with the three movies all out, we needed to think what our next message would be.
Our research told us that a large number of people liked the idea of visiting New Zealand but there was quite a low level of awareness about the variety of things that could be experienced and as a consequence of that, we’ve done a campaign which emphasises the variety and diversity of activities one could do.
Our research has also found that different activities, places and things appealed to different key markets, and that drove the prioritisation of which ads are shown. They range from walking on ice glaciers, to swimming in subtropical beaches.
We use the line Every day a different journey to bring all that to life.
When you boil down the things that make New Zealand different from other parts of the world, two things stand out: diversity of activities and how easily accessible they are, and our indigenous culture.
Hence, the other part of our new campaign is to work closely with our Maori community to find ways to visually distinguish us from other destinations. We’ve worked with a Maori carver who’s carved our logo out of timber. The reproduction of our logo now comes from this wonderful piece of wood, allowing the grain to show up. The logo will appear on everything that we print and produce. It will be a lovely and more distinctive connection with New Zealand.
How is TNZ deploying this campaign to spread demand to shoulder season?
While we usually begin our media investments in September, this year we are running it from July to promote spring and autumn travel. In fact, 80 per cent of our efforts will now focus on the shoulder season. Previously, it was about 20 per cent.
I think it is the natural things that will also help us (achieve more footfalls in the other months). Prices will be more reasonable during the shoulder seasons and availability will be much better as well.
New Zealand is loved for its natural environment and rich culture. How does TNZ ensure that tourism development does not erode all that?
We have been fortunate there, as our arrivals are small compared to our land area. We have almost the same land area as Japan, four million inhabitants and about three million visitors. Furthermore, we have a strong legislative framework for protecting the environment. Expansion of businesses require a lot of permission, and a lot of care and consideration for the environment go into these decisions.
We are also a majority shareholder of a company called Qualmark, which deals in quality assessment of local businesses and issues the Enviro Award which encourages operators to accomplish a higher level of sustainability. We’ve had that programme for about seven years and are just reviewing it now. We may lift its standards further. We will know the outcomes of this review a year from now.
It is great that there are a lot of sustainability ambitions and aspirations in the industry. We are working very closely with industry players and getting excellent encouragement to continue to raise the benchmarks on sustainability.
How is the reconstruction of Christchurch coming along, and what other infrastructure developments are worth watching out for?
We are well into rebuilding Christchurch, but are probably four or five years away from restoring (its pre-earthquake) accommodation capacity. Once work is completed, Christchurch will be our most modern, most beautiful city.
Because of the nature of the earthquake, a lot of services that run underground such as storm water, sewage and electricity have taken many years to rebuild. We are only now starting on the buildings.
We are keeping the Christchurch airport operating at 100 per cent capacity so there is still a gateway to the South Island.
One of the biggest development to come is our convention centre in Christchurch, and that will stimulate the emergence of more hotels. It should be announced this year along with a completion date.
We have another convention centre in Auckland. It is in the design phase now, and will open in 2019 or 2020. It will have capacity for 3,500 people – the biggest that we’ve got at the moment.
SWISSOTEL Resort Phuket is offering exclusive rates for the travel trade industry on two separate periods; the first running from October 15 to November 30, 2015 and afterwards from December 1 to December 20, 2015.
Credit: Carnival Corporation
