Indonesia’s hotels still troubled by government guidelines on meetings

May 14, 2015

ALTHOUGH the Indonesian government has issued a clarification in late-March on its guidelines for the hosting of official events, which spelled out a need for greater accountability instead of an outright ban on events held in privately owned venues, hoteliers in the country are lamenting that the damage has been done to their business.

Hoteliers told TTGmice e-Weekly that government agencies had already cut their meeting and travel budgets for the year and it would take some time to apply for a revised budget.However some hoteliers are expecting to see a turnaround in government business by 3Q2015.

Meanwhile, hoteliers are devising ways to keep their meeting facilities filled.

JW Marriott Hotel Surabaya, for example, has come up with short-term offers for event and conference organisers who confirm a minimum of 10 guestrooms at Rp990,000 (US$75.60) per deluxe room.

Satriya Tanuwidjaja, the hotel’s director of sales, said such prices were unprecedented. “It is a challenging time. Apart from government regulations, the economic situation in general is also affecting corporate spending.”

Suprapti Suprobo, general manager of Dyandra Convention Center Surabaya, pointed out that the new regulation have hit companies involved in government projects, which also meant fewer meetings in commercial venues.

To ride out the poor situation, Linda Muhlis, board member of Indonesia Hotel and Restaurant Association Jakarta Chapter, suggested that hotels focus on drawing more domestic and regional business events that could be timed to coincide with Jakarta’s festivals such as the Jakarta Great Sale.

However, some trade experts are saying that Indonesia’s business events sector is not all gloom and doom.

Bank Danamon Indonesia’s senior vice president – card business head, Lukas Djoesianto, said: “Looking at our corporate card transaction, we have not seen any decline in corporate spending for the year. In fact, we are expecting a growth of 25 per cent in sales this year.”

Djoesianto added that Indonesia was still seen as an attractive business destination by international companies.

“Besides, companies usually have more meetings to strategise, plan and consolidate when the economy is slowing down,” he opined.

Fajri Roesman, director of sales at The Westin Resort Nusa Dua, Bali agreed, pointing out while spending by oil companies was down, bookings from pharmaceutical and insurance companies were still doing well.

ICCA’s 2014 rankings deliver no surprises

By TTG Asia

May 14, 2015

THE world’s top five cities for meetings have held their ground in 2014’s ICCA ranking.

Paris remains champion with 214 meetings conducted in 2014. Vienna and Madrid traded places with a two-meeting difference between them – Vienna with 202 meetings and Madrid with 200. Likewise, Berlin came ahead of Barcelona this year with 193 meetings, while the latter scored 182 meetings.

Singapore was Asia’s highest-ranked city and came in seventh with 142 meetings, right behind London’s 166.

Beijing, Seoul and Hong Kong came in consecutively at 14, 15, and 16 for hosting 104 ,99 and 98 meetings respectively, while Taipei wrapped up the top 20 list with 92 events.

The same results were reflected in the international list where there was little change. The US (831 meetings), Germany (659) and Spain (578) remained top scorers in 2014, while the UK (543) and France (533) swapped into fourth and fifth place respectively.

From Asia-Pacific, Japan held seventh place for its 337 meetings and was followed by China with 332. South Korea hosted 222 meetings in 2014 and thus came in 17^th place.

According to an ICCA press release, the association relooked its historical data over the last one year to weed out all meetings that did not meet its three-country rotation criterion as well as single meetings that appeared to be multiple, separate meetings before.

While this dampened growth levels, ICCA said it believes growth remains robust.

However, CEO Martin Sirk, commented: “Most commentators are naturally focusing on the new 2014 rankings, but the nature of this business means that we always continue to identify many qualifying meetings long after each annual announcement. We can’t stress this point strongly enough: ICCA’s rankings are a snapshot of a moment in time of a database designed for sales and marketing purposes, for a very specific segment of the market, a segment moreover where decisions are made three to six years in advance.

“Any destination wishing to accurately present its true performance in the international meetings field needs to complement the ICCA statistics and rankings with its own robust measurement of all meetings business won for the future and hosted in the past year.”

State funding for Perth Convention Bureau slashed by 28%

By TTG Asia

May 14, 2015

WESTERN Australia today announced a shocking 28 per cent cut in funding for the Perth Convention Bureau (PCB), despite the CVB having surpassed its annual target for the last financial year and being on track to do the same for 2014-2015.

The reduction is specifically for the Business Events Marketing and Promotional Services Agreement with Tourism Western Australia for the financial years of 2016/2017 to 2018/2019.

“This substantial reduction of funding is discouraging, particularly in the context of PCB being one of the highest performing convention bureaus in Australia with an ROI to the Western Australian state government investment of 31:1 – double that of its east coast capital city bureau competitors,” said PCB’s CEO, Paul Beeson in a statement.

“Further, PCB has almost doubled its cooperative funding and activities with the tourism industry over the last four years.”

PCB delivered A$107.9 million (US$87.2 million) in direct delegate expenditure in the last financial year, reaching and surpassing the targeted A$104 million. This year, the CVB is expected to again exceed the annual target and secure A$106 million for the state.

Ian Laurence, chairman, PCB, expressed concern in a media statement that the state government’s move is counterproductive – business event delegates generate five times the economic benefits of a regular leisure tourist – also because of the ongoing growth in venue space and accommodation options in Perth.

“While we understand the straitened circumstances facing the state government at this time, a lower level of funding for PCB in future years will make the task of increasing our market share extremely difficult,” he added.

A PCB statement said that the CVB “looks forward to working with the state government over the next months to ensure the current level of funding is reinstated for its future contract period”.

Country Holidays launches 4 more Signature Departures

By TTG Asia

May 14, 2015

THE clandestine lives of monks in Ladakh, the heart of Persian civilisation in Iran, the running of the bulls in Pamplona and witnessing Amritsar through the eyes of an expert photographer are some experiences now on offer with Country Holidays’ four new Signature Departure itineraries.

Signature Departure tours were launched by the bespoke travel agency four years ago to offer travellers a more intimate and in-depth group travel experience.

These tours include stays at unique hotels and immersive experiences while avoiding the negative points that plague most travel groups – crowded bus tours, cookie-cutter hotels and visits to tourist traps.

Theng Hwee Chang, managing director of Country Holidays, explained in a press release: “By limiting the number of travellers to 16, we are able to source the smaller hotels in smaller towns and hence create a more authentic, off-the-beaten-track experience for the group.”

This year, Country Holidays’ Savouring Spain itinerary takes travellers and their stomachs on a traipse through the Basque region of Spain for wining and dining, and wraps up with a private balcony view of Pamplona’s running of the bulls and a dinner at three-Michelin starred Azark. The tour runs from July 10-18.

Closer to home, travellers embarking on the Ladakh –Mountains, Monks & Monasteries from September 19-27 will visit capital of Leh for an education in Ladakh culture before moving to a luxury tented camp from where they hike into the rural countryside.

Photography enthusiasts can have a look behind Michael Freeman’s lens in the India Photography Workshop with Michael Freeman itinerary, stopping at Amritsar and the holy city of Varanasi to learn and practice photography. The tour runs from November 22 to 30.

Lastly, tourists enter Iran – The Heart of Persia to learn about one of the world’s oldest civilisations, whose influence persists even in Islamic Iran. Seven of Iran’s 20 UNESCO World Heritage Sites are included in this itinerary, and travellers will be taken to Shiraz, Persepolis, Old City, the Zoroastrian Centre of Yazd and the architectural marvel that is Esfahan. Travel period spans September 24 to October 3.

Iran is the heart of the Persian civilisation – one of the world’s most ancient and long lasting. Though it has been under Islamic influence for nearly 1,500 years, the true spirit of Persia still prevails in the Iranians’ daily life today. There are now 20 UNESCO sites in Iran, 7 of which are visited on this trip.

Myanmar green-lights more hotel development on its latest tourism frontier

By Sid Dhartha

May 14, 2015

ANTICIPATING an increase in visitor arrivals, new hotel projects are mushrooming across Myanmar’s virgin Mergui archipelago, also known as the Myeik archipelago.

According to the Myanmar Investment Commission (MIC), 27 companies have proposed new hotel projects on Mergui and 13 were last week given the go ahead for developments on islands including Kyunphelar, Ngaman and Kayinkwa.

One of these is UAE-based investment company Gecko Holdings which, together with local Kyaw Win Phyo Company, formed a joint venture called Mokan to build a hotel on a 2,060ha site on Kyunphelar island.

Meanwhile, Singapore firm Zochwell Group is also expecting to sign a contract to develop a US$1.2 billion project, including a casino, on Salon Island.

TTG Asia e-Daily understands that the group has attained approval from the Thanintharyi regional government, but is awaiting consent from the Ministry of Hotels and Tourism and MIC.

Myeik Public Corporation last year said it is investing US$4 million in the development of a resort hotel on Kadan Island.

As of end-2014, Mergui had five hotels with a total of 196 rooms.

More foreign investors are coming in to invest in Myanmar, with most of them coming from Asian neighbours such as Singapore, Vietnam and Thailand, said Htay Aung, minister of hotels and tourism.

“The investment from both local and foreign investors in the (hotel) sector is expected to reach US$3 billion this year,” he added.

Located in Myanmar’s far south, Mergui is a priority area for development under the government’s tourism master plan released in 2013.

Destination Asia enters South American market with rep appointment

By TTG Asia

May 14, 2015

MAKING its debut in South America is Destination Asia, which has announced that Avant Garde will represent it on the continent.

The DMC representation company, founded by Sidney Alonso, will promote Destination Asia’s meetings and incentive, corporate meetings and leisure business as well as provide in-market support to customers.

It acts on behalf of Destination Asia’s offices in Thailand, Vietnam, Singapore, Japan, Indonesia, Malaysia, Cambodia, Laos and Myanmar.

Brazilian native Alonso, who helms the Avant Garde South America office in Argentina with the support of Rosina Gomes de Freitas and Ofelia Barrios in Avant Garde Mexico, brings with him over 25 years’ experience in the travel industry.

IATA plots agency-friendly initiatives

By Raini Hamdi

May 14, 2015

IATA is piloting a debit card-based system that allows agencies to continue issuing tickets even after they have maximised the bank guarantee. It is also exploring a global default insurance scheme, which will lower the cost of insurance for agencies.

The debit card-based system, Easy Pay, is being piloted in South Korea by IATA, Korean Air, Asiana Airlines, selected agencies including Modetour Network, and Woori Bank, which is the clearing bank for the service.

Said IATA’s regional vice president Asia-Pacific, Conrad Clifford: “An issue that agencies face is they cannot issue more tickets once they have maximised the bank guarantee. But sometimes they need to issue more tickets on a short notice, typically during peak periods.

“With Easy Pay, as long as they have credit in their debit card with the bank, they can issue tickets against that. So airlines are not exposed to any kind of credit risk while agencies can continue to issue tickets.”

The system was piloted in South Korea because a lot of travel consultants there are “very much card-based” while the card issuer is issuing the card at no cost. Other advanced card-based markets, such as Singapore, could be next if the pilot works, said Clifford.

IATA is also making RFPs to the big insurance providers for a global default insurance programme. Currently, the programme goes market by market. “What we’re trying to do is have a global instead of local programme, which should make it a lot cheaper for agencies,” he said.

The default ratio is low, said Clifford, “but obviously we’d like it to be zero, or if there is a default, we need to be insured against it”.

The travel agency sector still accounts for more than 50 per cent of airline ticket sales, the percentage believed to be higher in Asia-Pacific where there are many customers who still want a service provided by agencies. This is why IATA continues to innovate and experiment ways to support the trade, Clifford added.

– Better partners now – read the View from the Top, TTG Asia, June 19, 2015

Why you need to pay attention to heritage tourism

By TTG Asia

May 14, 2015

Credit: MyTravelResearch.com

HERITAGE and culture is everywhere but travel marketing firm MyTravelResearch.com is throwing the spotlight on importance of developing heritage products that will net dedicated history buffs and incidental heritage tourists alike.

In a travel opinion piece, co-founder Carolyn Childs explains that while visiting Starbucks or riding the metro can be considered culture, heritage and culture tourism is “when the trigger for the trip is to visit a place to understand aspects of its history, people, buildings, food, music and customs – its culture”.

These are the dedicated heritage and culture tourists, whom research has shown spend about 10 per cent more than general leisure tourists. The more experienced and educated ones in this demographic can blow up to 36 per cent more in travel expenditure than regular tourists, said Childs.

UNWTO data reports that heritage and culture contribute roughly US$327 billion every year in Asia-Pacific and supports the livelihoods of up to 70 million people, indicating the importance of heritage to tourism here.

As MyTravelResearch says: “Your culture is your brand.”

So how can a destination attract heritage and culture tourists?

Childs advises: “Work with your community to check suitability. Create an inventory of experiences. Ask yourself, is it feasible? The things you have to get right are: agreed objectives, financial planning, proximity to markets, quality and authenticity of products and experiences, interpretation and story telling.

“In short, plan it thoroughly, know your market, be distinctive, go for quality, tell stories, package and theme them, and then measure your progress.”

Childs’ full blog post, How Culture & Heritage Tourism Boosts More Than A Visitor Economy, identifies the economic, social and environmental benefits of heritage tourism.

Solving the labour conundrum

By Paige Lee Pei Qi

May 13, 2015

As Singapore’s thriving hospitality sector grapples with a tightening labour pool, hotels are embracing technological solutions to overcome manpower shortage

Despite Singapore’s land constraints, new hotels continue to pop up on the city’s hospitality scene, sending hoteliers scrambling to innovate their services to balance the labour equation.

According to a CDL Hospitality Trusts report, more than 3,200 new hotel rooms will come online in Singapore this year, and a total of 8,703 new rooms are expected to become available from 2015 to 2017. It added that new room supply will likely grow at a compound annual growth rate of 4.9 per cent from 2014 to 2017.

New hotels that debuted in Singapore last year include the 250-key One Farrer Hotel & Spa, the 134-key Sofitel So Singapore, as well as the 502-key Hotel Jen Orchardgateway Singapore.

Major openings this year include the 654-room South Beach hotel, the 500-room Genting Hotel Jurong, the 300-room Park Hotel Farrer Park and The Patina, Capitol Singapore with 157 rooms.

This begs the question of how hoteliers are coping with manpower shortage, an urgent issue that has plagued the industry over the past few years.

To tackle this, the Singapore Tourism Board (STB) recently launched the Hotel Productivity Centre (HPC) in March to help the hospitality sector achieve productivity-driven growth.

Set up as a dedicated competency centre within the Singapore Productivity Centre (SPC), the HPC is designed as a one-stop resource to help hotels address challenges through productivity and innovation solutions.

The HPC seeks to benefit hotel industry through applied research (prototyping and evaluating new technologies, services and solutions); consultancy (diagnosing and solving targeted challenges faced by hotels); benchmarking (comparing Singapore’s hotel industry against international standards); training; and sharing of best practices (educating industry on innovation and productivity best practices).

STB assistant chief executive, Yap Chin Siang, said: “Singapore’s hotel industry is at a critical juncture currently. With rising competition, labour constraints and changing workforce aspirations, hoteliers are facing more pressure than ever to innovate. It is thus timely that an independent, dedicated resource is launched to formulate sustainable growth solutions.”

To kickstart the HPC’s programmes, SPC – which has experience and expertise in implementing productivity initiatives across the retail and F&B sectors – will also work with Republic Polytechnic to bring to the table expertise in capabilities and innovation.

Urging hoteliers to make use of the new HPC, Yap said: “The launch of the HPC is also a key milestone on the hotel productivity roadmap as we strive to foster a culture of innovation, and transform the industry through systematic improvements in productivity.

“We hope that hotels will fully tap on this resource to prototype new technologies and solutions,” he added.

For its first project, the HPC is working with Millennium & Copthorne’s Studio M hotel to devise a sustainable solution to overcome the hotel’s front desk and housekeeping service challenges, and roll out service innovations to enhance the overall guest experience.

Several hotels have already invested in technological innovations to reduce their dependence on workers.

Arthur Kiong, CEO, Far East Hospitality, said: “We must obviously look to technology to improve productivity. (However), this is much easier (to implement) in our new hotels that are currently in the design stage.”

With six hotels scheduled to open over the next three years in Singapore, Kiong said: “We are leveraging on our scale to streamline back end operations and processes. Technology adoption is done strategically and never piecemeal.

“To achieve the required productivity, innovation must start from the customer profile, expectation, product design and finally, the guest experience that we conceptualise,” he added.

Meanwhile, the Crowne Plaza Changi Airport has already started to replace part of its manual labour with new equipment since 2012 and automated some labourious cleaning work, which have since shaved 40 per cent off in time taken to perform related tasks.

For example, the hotel now uses ride-on scrubbers to substitue the manual task of mopping corridors and outdoor floors, as well as scrubbers to replace the task of cleaning toilet floors in guestrooms. Housekeeping staff are also provided with personal digital assistants loaded with information on rooms to clean for the day.

Dina Chong, Crowne Plaza Changi Airport’s director of human resources, said: “This is not just a more efficient way of working but also provides our staff with relevant skills training and knowledge.

“We now face an improvement in terms of our workforce and have sufficient manpower which is on par with what we have budgeted. There are still gaps to fill, but manpower supply is healthy across departments,” she said.

Ibis Singapore on Bencoolen has last year implemented a new mobile conceirge system for guests to access easy self-help solutions.

As 73 per cent of front-desk questions are regarding local recommendations and information such as weather and flight information, front-desk receptionists are often tied up with answering such questions from guests.

Said Jade Stunden, executive assistant manager at ibis Singapore on Bencoolen: “With this mobile concierge, (guests) can find all the information they need just by using this system and can take their time to also browse local eateries and attractions.”

However, Stunden emphasises that the option of approaching their hotel service staff remains available, as not every guest is tech-savvy.

She said: “As long as the guest has the choice of technology or people then you cannot go wrong. Removing all reception staff and having only automated check-ins, for example, would kill the industry.”

Kuoni’s sale logic

By Raini Hamdi

May 13, 2015

In selling your tour operating businesses because you want to focus on the divisions that have ‘attractive longterm potential’ – isn’t that admitting there’s little future in tour operating?
That’s not our message. Tour operating has a bright future. A lot of the business we want to focus on serves tour operators. GTD (Global Travel Distribution, a B2B provider of accommodation and land components, ie, GTA) and GTS (Global Travel Services, comprising Group Travel and Destination Management Specialists) have tour operators as customers, so we absolutely believe in that business model.

So why exit tour operating?
We believe that in a fast-changing environment, we’re better off focusing on the global B2B businesses where we have a leading position. It does not mean we’re becoming a single leg company: GTD, GTS and VFS (Visa Facilitation Services) are all different businesses. But selling the outbound units (Kuoni Switzerland, UK, Benelux, Scandinavia/Finland, Hong Kong/China and India) reduces complexity for us. It does not mean they are bad or there is something wrong with them. It’s like having children…or say, even for you as a journalist, can you can follow one, two, three companies? Yes. But can you follow a thousand?

But you don’t have a thousand, only a handful of divisions.
Yes, but they are all very different businesses. Kuoni Switzerland for example operates in a mature market, while the tour operating model is different in the Nordics. Those six units don’t buy or sell together, so we have six IT systems, six ways of distribution, etc. And that’s only tour operating. Now add the GTD, GTS and VFS businesses, and the question becomes, can you handle that complexity?

Our conclusion was, sure we could develop the tour operating side, but if we develop everything at the speed of 40 while the world is changing at 50, we would be in deep trouble with all the businesses.

So you pick the few you can focus on and go at a speed of 50.
60! (laughs)

And you chose the ones with the most upside.
Yes, from our perspective, the growth in travel is clearly going to come from Asia, where the middle class is rising. We want to focus on businesses where there is more growth potential than those outbound units which are dominated by Europe, a mature market with limited prospects.

That’s the thing – so why should anyone buy them?
We’re not looking for someone who will have to fix a troubled child, but someone who can take the business to the next level.

It’s different back in 2012 when we exited some of our loss-making tour operating businesses in Europe, ie, Kuoni Italy, Spain, our activity in Russia, etc. In our view, they were far too small, did not have good standing in the market and would not make sufficient money even in good times. So we said at the time we’d either find new owners or close them.

In this case, the businesses are money-making. Sure, the business in the Nordics last year was not money-making for certain reasons, including a super perfect weather in the Nordics, but it was money-making for 10 consecutive years. Overall, the businesses have a certain size and position in their markets.

How much upside do they have?
There is a lot but of course it depends on the market. If you take the smaller markets such as Benelux or Hong Kong, of course it’s fair to say the upside is limited even though they have good market positions. If you take the larger markets like the UK, where the market is large and the brands are premium, the potential is good. We started some years back doing our own retail stores in the UK; we have a partnership with John Lewis (chain of department stores throughout Great Britain) and all this paid off.

When we informed the local management in the UK about the sale, they were not unhappy actually. They had seen in, say, budget discussions, when they wanted to open a couple more stores and we said, OK, you could do half, we like your plan – but your sister or brother has a better and more attractive plan. We’re not helping them at all and so it’s a big opportunity for them if an owner comes along and really focuses on that business – they can grow much faster than if they are second priority in the Kuoni group.

So who will buy you think?
I believe companies who have a similar agenda to us – they want to focus. They are already playing in those markets and they want to grow the business even more by buying something that has the same synergies or can be vertically integrated.

When you choose children to give away, does it hurt?
It is emotional, particularly Kuoni Switzerland – the mother of all our activities. But when we were in decision mode, the emotion had to stay outside of it. It is our job as managers to go by the facts, though it is important we respect those emotions. Investors could see the story but for those in Kuoni Switzerland, it was tough and they had a double shock as, the next day, the Swiss National Bank decided to give up the peg to the euro.

How do you continue operating something you know would be sold?
It’s important people don’t think once we’ve made the announcement, we put the brakes on the outbound businesses or hold back doing something thinking ‘maybe the new owners would not like it’. No, we continue with the plans and activities for all the divisions, including outbound, that have been defined in the budget we want to achieve this year. All the MDs report to Rolf (Schafroth), who is not at all involved in the sale.

What’s your plan for the ‘new’ Kuoni?
GTD, which is managed by Ivan (Walter), knows where it wants to run and will run fast. Similarly, VFS; I was in Dubai and again I saw how innovative they are. The new area is GTS; we want the Group Travel and Destination Management Specialists units to come together but this is something we can build on only after we have progressed with the sale of the outbound units.

With the proceeds from the sale, will you be on a buying spree to strengthen your GTD and GTS divisions or even create another new core business?
For this year, our priority is to find new owners of the outbound units. Once we’ve done that, we will look at what the potential avenues are.