NATIONAL flag carrier Korean Air is getting serious about its Chinese ambitions with four new services to begin in 1H2015.
On March 30, it will launch a five-times weekly service from Incheon to Hefei, the capital of Anhui province. Flights depart Incheon at 08.30 and arrive in Hefei at 10.10, with return flights leaving at 11.10 to touch down at 14.40.
Also out of Incheon, Korean Air will introduce thrice-weekly flights to Nanning beginning May 11. Flights depart Incheon at 18.55 and arrive at 22.50.
The new service connecting popular Jeju Island and Guiyang also begin on May 11. Flights will run three times a week, taking off from Jeju at 21.55 to touch down in Guiyang at 00.45 the next day.
On June 22, Korean Air is scheduled to start Daegu-Shenyang flights. Running three times a week, Shenyang-bound flights leave at 10.00 to touch down at 11.10.
Boeing 737-800 aircraft will be deployed on the routes to Hefei, Nanning and Shenyang.
AS PART of its goal of achieving 200 hotels in Asia-Pacific by 2020, Carlson Rezidor Hotel Group Asia-Pacific is looking at opportunities in Indonesia beyond its joint venture with Panorama Group.
Thorsten Kirschke, president, Carlson Rezidor Hotel Group Asia-Pacific, said Carlson Rezidor has strengthened and redeployed a fully dedicated development department to pursue growth.
Kirschke said: “The joint venture with Panorama Group is the backbone of our activities in Indonesia… but we see a multitude of avenues to pursue our growth target both within Carlson Panorama Hospitality (CPH) and complementing that with direct market penetration with our own brands.”
“There is increased interest in our new brand, Radisson Red, that we have just launched, as well as Radisson Blu,” he said. At this point, Kirschke is looking at three to four Radisson Blu hotels and four to five Radisson Red properties in Indonesia.
CPH was formed two years ago with a target of running 20 hotels within five to seven years under the Radisson and Park Inn by Radisson brands. It currently has four ongoing projects, three of which are expected to start operation by end-2015 in Bali, Batam and Lampung.
Budi Tirtawisata, group CEO of Panorama Group, said CPH is in the process of taking over the management and/or ownership of properties in Indonesia, having been approached with offers. “We will probably need to renovate or upgrade the properties to meet the brand standard, but this will be faster and more economical than building from scratch.”
IN ANOTHER instance of the private sector achieving what ASEAN itself has failed to do, AirAsia Group has introduced a new regional travel pass that will pave the way for more intra-regional travel.
AirAsia launched the AirAsia Asean Pass and AirAsia Asean Pass+ in Bangkok yesterday, the idea for which was first mooted in November last year.
Both passes work on the same credit system and enable pass holders to enjoy fixed-rate flights to more than 148 destinations in all 10 ASEAN countries on AirAsia’s network.
Flights shorter than two hours will cost travellers one credit; all else will be priced at three credits per flight. While no processing fees apply for flight redemptions, passengers are still subject to the relevant airport taxes and fees.
The AirAsia Asean Pass, which is priced at S$209 (US$154), comes with 10 credits and the AirAsia Asean Pass+, retailing for S$369, comes with 20. Both are valid for one year.
Flights can be redeemed on AirAsia’s various regional airlines – AirAsia Malaysia, Thai AirAsia, AirAsia Indonesia and Philippines AirAsia – to destinations only in South-east Asia.
The passes are now on sale at AirAsia’s website.
Tony Fernandes, CEO of AirAsia Group, said: “As a truly ASEAN airline, we are extremely proud to introduce the AirAsia ASEAN pass, which is a product specifically designed to further liberalise and encourage travel among the ASEAN community. The pass allows us to bridge communities and attract more foreign tourists to the region – it’s the perfect instrument to promote ASEAN integration.”
With the year-end implementation date of the ASEAN Economic Community approaching, there has been little progress in achieving the longstanding wishes of the travel community including a “true” Open Skies system, and a single visa for travel within the entire bloc.
ENGAGEMENT is the keyword in AIME’s new strategic direction, which will be executed across the show’s three pillars of networking, business and education.
The MICE tradeshow kicks off today at the Melbourne Convention and Exhibition Centre with a new direction, and will transform the AIME experience for both exhibitors and buyers.
Karen Bolinger, CEO of Melbourne Convention Bureau, said that as the traditional exhibitions model is being challenged, AIME is redefining its business and evolving from a two-day event to year-round engagement with its community to deliver increased levels of expertise, knowledge and exchange of ideas among before, during and after the event.
AIME’s new direction is supported by a new logo and the tagline Where inspiration begins, to show that the AIME community is driven by collaboration and developed by the industry.
New initiatives in development include pop-up networking and education events, and regular focus groups throughout the year. New on-site experiences include a central community hub area and a wide range of business development coaching workshops.
“These changes to AIME have been done firmly with our customers in mind. It is about remaining relevant and implementing new ways to continually increase the value to exhibitors, buyers and visitors,” Bolinger said.
“The value of face-to-face networking is consistently reinforced by business and industry professionals and the desire to meet is human nature,” she said.
“However, due to technological innovations and new digital media the way we now conduct business has shifted to a hybrid of face-to-face and digital touch-points to connect and converse.”
A NEW report has revealed that business events contributed A$23.1 billion (US$18 billion) to the Australian economy in the last financial year, but industry insiders say the country can still do better.
According to The Value of Business Events to Australia, 37 million people attended more than 412,000 business events held across Australia, generating 179,357 jobs.
Released by the Business Events Council of Australia (BECA) at AIME, the report provided “compelling evidence” of the direct and indirect impacts of business events on the Australian economy, said BECA chairman Matt Hingerty.
Sharing the study findings during a press conference, Karen Bolinger, CEO of the Melbourne Convention Bureau, said: “Business events is a quiet achiever but this new report from BECA, with support from the business events industry, presents a very strong business case to government and industry stakeholders to continue to increase its support and investment in the sector.”
Elaborating on BECA’s next actions following this report, Hingerty said: “Going forward, we will take this report and go to the government to ask for money. We are targeting two sectors that we will be concentrating on for the next few years – health and medical, food and agribusiness.
“For example, we have the new medical research fund announced last year. It could be massive for our sector when you think of the spin-offs we can have, like exhibitions and conventions…and that is an insight on where we are heading for (when we approach the government),” he said.
Yet, Australia has slipped from 13th in 2012 to 16th in 2013 according to ICCA’s yearly rankings.
“The report gives strong evidence of the power of our industry, however, on a world stage, we are losing market share. We believe that business events sector is the ‘sleeping giant’ of the Australian economy. With an end to the mining boom and the decline in manufacturing, the sector has the ability to be a leading force for Australia’s future prosperity,” said Hingerty.
Emphasising the need for government support, he added: “(This further shows) that the business events industry and governments must work together to leverage this great opportunity before us.”
FACED with challenges like a prolonged economic downturn and consolidation in the hotel sector, Banyan Tree Hotels & Resorts (BTHR) is biting the bullet and restructuring the company to be fit, a process that began late last year.
The Singapore-listed parent company is also making large write-offs for doubtful debts such as delinquent payment of management fees, in order to face an uncertain economic environment with firmer footing.
A Project Zero late last year saw the group examining legacy costs, processes and structures with a view towards being flatter in hierarchy, more productive and agile. A Project One, currently on-going, sees the group rebuilding new structures.
Ho: Flatter hierarchy for Banyan
But the restructure is not just about cutting costs, but building the right platform that will enable BTHR to swim in new currents, according to Banyan Tree Holdings’ chairman, Ho Kwon Ping.
Corporate roles that are traditionally standard for a chain – regional vice presidents of operations, and a corporate vice president of sales and marketing – have been eliminated and replaced by new positions. Operational clusters of hotels based purely on geography have also been re-structured to reflect clusters by common ownership of hotels.
Raini Hamdi talks to Banyan Tree Holdings chairman Ho Kwon Ping about how he’s doing it.
Why Project Zero?
In the past few years our hotel management business has grown reasonably, with steadily rising management fee income. But corporate expenses grew even faster, so that the operating margins of the management company declined. This is like a hotel which enjoys increasing revenue but declining GOP margins. It is neither acceptable nor sustainable and the GM would have been sacked.
Even though we currently operate 40 hotels and have another 20 in the pipeline, we need to find increasing economies of scale. After all, with the recent spate of hospitality consolidations, the massive global giants are going to be even leaner than before. What pressures will that impose on the small guys like us?
We are in a unique dilemma: we are neither as small as we used to be, nor as big as we should be, to justify our global structure. We also do not have a “sugar-daddy” parent-owner in the form of say, a big property developer, conglomerate, or private equity, which is quite common in Asia. For example, brands like Langham, Rosewood, Six Senses, Alila, Pan Pacific, Meritus, Mandarin Oriental, Shangri-La, are all owned by larger, very deep-pocketed conglomerates or private equity. We are one of a few independent brands.
So late last year we launched Project Zero, which was to literally start from Zero, to examine all the ways we did things, with a view towards being flatter in hierarchy, more productive in people, and quicker to respond to market trends.
Then we launched Project One, which is to build new structures on the same foundation. The tagline for Project One is ‘One Team, One Goal’. It may sound (cheesy) to people but in our case, our hotel management structure was too fixated on itself and not providing enough synergies for our other ventures in property sales, spa and gallery operations, holiday clubs, etc.
What’s a good example of a legacy cost, process or structure?
Example one: A few years ago, we decentralised all support functions across our various BU’s (Business Units) so that each BU, from spa to gallery to hotels to property sales to architectural/interior design, all had their own relatively independent HR and Finance functions. This was to make each BU more accountable in theory, but it also resulted in an unnecessarily large number of senior managers and non-optimal use of people. So now we have recentralised group support functions to become Group Shared Services.
Example two: We organised our hotels entirely by geographic region, but never by ownership status. In an increasingly globalised world with more capable and assertive owners (including our own asset managers), it makes sense to organise by ownership status also. Our Clusters now partly reflect this.
Interesting that you got rid of VP Ops – why is it not needed and how is a chain better served with new positions?
We need a more de-layered hierarchy and regional VPs which constituted an entire layer of decision-making have been replaced by regional directors of operations who coordinate matters between the field and HQ, but are not a separate, decision-making hierarchy or authority unto themselves. Corporate HQ and the GM in the field now deal direct, but facilitated by regional directors of operations.
Will more cost-savings occur at corporate? Where are the other big areas?
I hope we’ve taken care of the big areas and we will digest the changes made before we do more.
One point to note, which we are proud of, is the fact that in the Project One exercise, 18 people have been promoted or have additional concurrent appointments. All of them are internal promotions, demonstrating a key Banyan Tree value, which is that we try to develop our own talent.
There’s less emphasis on marketing and more on sales and business development? What’s the thinking there?
No, not at all a reduced emphasis on marketing. We’re simply delayering. In recent years and in the digital economy, sales and marketing have become very complex disciplines in themselves. Because sales is the lifeblood of a company, we have created a VP Sales role to reflect its importance. Marketing will now report directly to the MD.
What are the challenges specific to BTHR today and, apart from the restructure how are you reinventing the business?
I would be arrogant and presumptuous to say I’m re-inventing the business. Re-invention requires a vision that I don’t think I have. I only try to see some future trends and be prepared for them.
The operating environment is not getting easier for small, independent management companies, with pressure on fees, rates and occupancies, particularly in China. As a response, we launched two more brands to broaden our market reach and we will spend some time to see whether this has traction. We also ventured more into hospitality-related property development and will need time as well to digest this business.
But of course, as we always tell our associates, change is the only constancy. Every five years or so, we need to make changes – some big, some small – to remain relevant.
INDIA’S Ministry of Tourism has announced that six more countries are on track to be granted e-visa services this year, namely China, Malaysia, the UK, Spain, France and Italy.
The six countries were recommended by the tourism ministry, and the Ministry of Home Affairs is expected to approve this soon, TTG Asia e-Daily understands.
The US received the biggest share of e-visas at 24.3 per cent, followed by Russia at 15.1 per cent, South Korea at 11 per cent, Ukraine at 8.2 per cent and Australia at eight per cent.
THE government of Myanmar’s Mon state has green-lighted a local company’s plans to build a US$12 million hotel and beach resort zone in Ye Township, with work on the first resort to begin this year.
Aurum Company, which was awarded the government contract, will construct the first resort along a 12.9km stretch that starts at Ka Byar Wa Village in the township and reaches down to the mouth of the Ma-kyi-chaung stream.
Besides accommodations, Aurum has announced it will carry out local development projects to upgrade road infrastructure and build healthcare services, libraries and markets, etc.
Other long-term plans include inviting more domestic and foreign investment to the area, and nurturing nature tourism, environmental protection and marine research schemes, ethnic literature and cultural development.
IN A marriage between two of Asia-Pacific’s established hotel companies, Thailand’s Dusit International and Prince Hotels Japan have tied up in a marketing alliance.
Aiming to grow both companies’ reach in the region and beyond, the partnership, signed last week in Bangkok, will allow each side to benefit from the other’s local expertise and sales and marketing resources, while providing a platform for cross-selling, marketing and promotions.
Masanori Kobayashi, president of Prince Hotels, which is Japan’s largest hotel chain, commented in a release: “We expect that the synergies between Dusit, a company that delivers the ‘Gracious Hospitality’ of Thailand, and Prince Hotels which fosters the spirit of Japanese omotenashi hospitality, will successfully enhance international awareness of both brands.”
Likewise, Chanin Donavanik, managing director and CEO, Dusit International, said: “We are pleased to enter into his partnership with Prince Hotels as Japan is a key feeder market for Dusit across the group. This is especially significant as we prepare to launch our highly anticipated Dusit Thani Guam Resort in 2Q, the tallest building on the island and the newest resort to open since 1999.”
Dusit has long been keen to tap the Japanese market, which is among the top three inbound markets for Thailand and Dusit Hotels and Resorts. The hotel group established a Japanese centre at its Bangkok headquarters in 2002 and opened a regional sales office in Tokyo in 2013.
Prince Hotels operates some 51 hotels internationally, with properties also in China, Taiwan, Malaysia and Hawaii, and runs a further 28 golf courses and 10 ski resorts.
SOUTH Korea is plugging medical tourism in its new tourism offensive throughout Asia, hoping to leverage the popularity of K-pop and the relative affordability of its services.
The Korea Tourism Organization (KTO) last Friday went on a marketing sortie to the Philippines for the first time, bringing a host of medical tourism suppliers.
One supplier, Youngjin Kwon, senior researcher, Daegu Medical Tourism Promotion Institute, said one of KTO’s aims in visiting Manila is to network and find a local travel agency partner.
“We have no partner agency in the Philippines although we do in other countries. We don’t have that many Filipino clients yet but we do get a lot of foreigners, including those from China, Canada, Vietnam and Cambodia,” she said.
KTO’s ramped-up approach towards in this segment can be seen through the recent launch of www.visitmedicalkorea.com and its new slogan for medical tourism: Let’s talk beauty and fun: Trust Korea, the new heart of medical tourism in Asia.
“We want to attract more people in Asia and we are doing this through the new medical tourism website, marketing and promotions, leveraging the popularity of K-pop culture,” said Jiwan Kweon, English manager, The Alliance of Korea Medical Tourism, which has 78 hospitals and 38 travel agencies as members.
She also observed that medical costs in South Korea, while higher than Thailand’s, are slightly lower than Singapore’s. According to KTO, the same service costing US$100 in South Korea would be priced US$75 in Thailand, US$105 in Singapore, US$149 in Japan and US$338 in the US.
KTO statistics show that medical tourism grew at an annual rate of 50.6 per cent to welcome 211,218 arrivals in 2013. South Korea aims to have a million medical tourists by 2020. Major markets are China, the US, Russia and Japan, while South-east Asia takes up only 4.8 per cent of market share.
KTO has conducted similar showcases in Russia, Vietnam, China and Japan, and will visit Indonesia and Malaysia in March.
