2015 travel forecast

January 14, 2015

How will the tourism market hold up in the year ahead? The region’s travel business leaders gaze into their crystal balls and predict where the sunny, cloudy and stormy spots will be in 2015

SINGAPORE By Paige Lee Pei Qi

Judy Lum
Group vice president of sales and marketing, Tour East

UK tour operators have reported double-digit growth in forward bookings compared with last year, and we are also seeing improvement in some parts of Europe. As our core markets are primarily longhaul, this is good news for Tour East.

The Russian rouble has devalued to an all-time low since 1998 and this will affect the growth forecast for this market. Sanctions from Europe and the US are affecting the Russian economy and although the government is looking to Asia, the adverse economic impact will remain for a long while.

MALAYSIA By S Puvaneswary

Mona Abdul Manap
Sales & marketing manager, Planet Borneo Tours & Travel Services

Arrivals from Singapore and Europe are expected to increase in 2015 due to our targeted marketing efforts towards these markets in 2014. In Europe, we expect an increase from France, Poland and the UK; we noticed an increase in interest for Borneo among smaller tour operators from these countries at trade fairs.

Apart from Singapore, the ASEAN market is likely to be so-so, due to our focus on adventure tours, which are not of particular interest to ASEAN travellers.

The China market is expected to continue to fare badly in 2015. This market has declined drastically in 2014, after the disappearance of MH370 and we expect a slow recovery.

INDONESIA By Mimi Hudoyo

Umberto Cadamuro
COO, inbound, Pacto

India and the US are going to shine as they did in 2014, given their rebounding economies. Indonesia might not be the cheapest but it is definitely the best value-for-money destination in the region, and these guys know how to travel in style!

After a strong performance in 2014, a quickly weakening euro against the US dollar might push Europeans towards Thailand – which, unlike us, uses local currency for quotations – plus the rupiah is weakening against the US dollar as well. Does this sound like (a reason to) waive the visa on arrival for the Europeans?

16jan-stormy I do not foresee any (rainy season) in 2015. I would just keep an eye on how low the Aussie dollar will go against the US dollar – 0.80 might spell trouble!

VIETNAM By Xinyi Liang-Pholsena

Tan Robert
Business development director, Lac Hong Voyages

South-east Asia and India, as airlines are adding more flights from these areas. With LCCs and full-service carriers starting routes to Vietnam – eg. Royal Brunei Airlines has resumed services to Ho Chi Minh City (HCMC) in November 2014, AirAsia is flying direct from Johor Bahru to HCMC, and Singapore Airlines has started a third flight from Singapore to HCMC since December 18 – ASEAN will do well, barring any economical, natural or political crisis.

Europe, due to its unstable economic situation. Our strongest market in Europe was Spain, which has slowed down dramatically since early-2014 with only one or two bookings per quarter.

China, as Chinese outbound travellers are moving to other countries like South Korea and India, in addition to the political fallout between (China and Vietnam). The mainland Chinese are very patriotic, so no countermeasures can be done unless political ties improve. However, we are still maintaining contact with Chinese customers and keeping our fingers crossed that ties will improve soon.

MYANMAR By Oliver Slow

Aung Naing
Managing director, EPG Travel Company

Traditionally, the strongest countries for Myanmar’s travel business are central and northern Europe, the US and the UK. All these countries remain very strong both for group tourists and FITs.

Due to their ongoing economic issues, potential clients from countries like Spain and Italy are still ‘licking their wounds’ so to speak, and we do not expect much business from this area in the near future.

Myanmar, as an emerging market, does not really fall into this category at the moment.

THAILAND By Greg Lowe

Hans van den Born
Managing director, Diethelm Travel Thailand

The Scandinavian market is where we expect continued strong performance. We even have repeat (Scandinavian) customers who want to stay in the same resort each year, and if possible, the same room.

Russia is still there for us as our clients are at the wealthy end of the spectrum and tend to be less reliant on the rouble and exposed to the current problems in their economy. That said, they will be affected to some extent.

s with 2014, it will be the Middle East, not so much Dubai and the Gulf states but countries like Lebanon and Syria. We have a number of clients in those markets, but given the current instability there and the likelihood of these problems continuing for some time, those markets will remain weak.

HONG KONG By Prudence Lui

Michael Wu
Managing director, Gray Line Tours

China, thanks to the strong same-day FIT traffic from Guangdong province. However, the Individual Visit Scheme covers only 49 cities in China so growth for overnight arrivals will slow to about five, six per cent this year.

The Philippines is a very stable market already and Filipinos love visiting Hong Kong Disney-land. However, the Philippines is not a hot destination for Hongkongers so air seat demand is not huge. This has means a sufficient supply and affordable airfares for the Philippine leisure travel market.

The Japanese market won’t do well due to the depreciating yen. The impact of Occupy Central on the Japanese market is obvious because of the emphasis the nation puts on security. Travel operators still remain cautious and it may take another six months to see whether they send their groups again.

MACAU By Prudence Lui

Andy Wu
Managing director, Gray Line Tours of Macau

South Korea will continue to rise this year as Macau is a popular destination for Koreans. The stable Korean won will help to push more traffic.

Malaysia is a big market and has been a stable source for years, so we don’t expect any dramatic change. Malaysians love coming to Macau, especially for gourmet experiences.

The serious yen depreciation weakens Japanese consumption power overseas as well as their desire to go abroad.

PHILIPPINES By Rosa Ocampo

Marjorie Aquino
Inbound sales and marketing manager, Blue Horizons Travel and Tours

The UK has grown significantly in volume in 2014 because of Philippine Airlines’ direct Manila-London flights. We have been getting a lot of enquiries from the high-end markets in Germany, Switzerland and Italy, plus enquiries from Spain as its financial crisis seems to be over.

Asian markets including Singapore, Malaysia and Thailand are steady; we have not really seen an increase in volume. We have clients from Hong Kong but they are mostly expats.

China, unless the travel advisory against the Philippines is lifted, and Russia, due to its economic uncertainties.

CHINA By Caroline Boey

Olivia Au
Deputy general manager, Century Holiday Travel Group Shenzhen Office

India is likely to do well as many (Indian visitors) are crossing to the Pearl River Delta (from Hong Kong), due to convenient transportation, ease of entry, the number of Indian restaurants and stable hotel rates. Vietnam is also expected to do well for the same reasons.

Mature South-east Asian markets such as Singapore and Thailand have direct air access to many countries, and travellers consider China as a destination they can visit any time.
Although there is strong demand for travel to Hong Kong and China from the Philippines, traffic is being affected for political reasons.

INDIA By Rohit Kaul

Subhash Goyal
Chairman, STIC Travel Group

Germany, as it has been a traditional key market for India. The extension of e-visa services to tourists from Germany in 2014 will further boost arrival numbers.

The US economy is still recovering, plus the US is one of the 43 countries that the Indian government last year extended e-visa facility to.

France was not included in the list of 43 countries allowed e-visas in 2014. If France is not added to the list soon, I expect inbound from France will be stormy.

This article was first published in TTG Asia, January 16, 2015 issue, on page 3. To read more, please view our digital edition or click here to subscribe.

Additional reporting from S Puvaneswary, Mimi Hudoyo, Xinyi Liang Pholsena, Oliver Slow, Greg Lowe, Prudence Lui, Rosa Ocampo, Caroline Boey, Rohit Kaul

Rouble rouble toil and trouble

By Raini Hamdi

January 14, 2015

The impact will be far-reaching. Industry members who adopt a “it is not my problem because I don’t do Russia” may want to think twice.

Russian travellers have fuelled (oops, no pun intended) demand for many destinations, but thanks to Vladimir Putin’s dependency on the energy industry – devastasting when oil prices whittled by half over six months – and sanctions on his economy following the Ukraine crisis, the rouble has all but collapsed and, along with it, a darling outbound travel market.

The impact will be far-reaching. Industry members who adopt a “it is not my problem because I don’t do Russia or have little exposure to it” may want to think twice.

The fact is, in its wake, there is a huge capacity that needs to be filled, considering that not only is Russia a volume market, its travellers have a healthy length of stay (in Thailand, an average of 11 nights – see page 7).

Already, a UK tour operator I spoke to said getting space in Thailand and southern Vietnam, two destinations that have focused on the Russian market, “is certainly much easier” now, and while hotels at present aren’t panicking with rate reductions due to a still-strong regional business in the first couple of months, he believes that from March onwards, “the hotels will have to be really aggressive and I fully expect the lower spring rates to kick in early in many places”.

As DMCs, hotels and destinations that have relied heavily on the Russian market scramble to find alternative volumes, protecting market share is the name of the game. Besides, it is not as if the pie is expected to grow by leaps and bounds. Japan is in a recession, the eurozone is trying hard to avert a deflation, China’s economic growth is slowing and Australia is struggling to rebalance its economy away from mining investment-led growth. It is also not as if there are new emerging markets to count on, the way Russia and China had saved the day for many players and destinations in recent past crises. Where are the new darlings? India and Indonesia are indeed promising but they will take some time still to bloom.

So, do expect the competition to be in full swing as soon as the first tradeshow of the year, the ASEAN Tourism Forum, opens next week in Myanmar. Do come prepared with a sound strategy.

South-east Asia itself needs to do more to gain market share. The region chalked up the smallest growth in international arrivals compared with other regions in the world in the first 10 months of 2014 over the same period in 2013, according to the latest UNWTO data. Its two per cent growth is below the five per cent growth in international arrivals overall.

But that’s another opinion.

Travelport appoints new GM for Malaysia

By TTG Asia

January 14, 2015

TRAVELPORT has appointed Nicholas Kong as its new GM for Malaysia with immediate effect.

He brings with him 20 years of account management and sales development experience, and has been with Travelport since 2011.

In his new role, Kong will lead in the execution of Travelport technology, as well as oversee Travelport’s commercial operations to drive growth across the region, while reporting to Carole Oh, Travelport’s commercial director for Singapore, Malaysia & Philippines.

Prior to joining Travelport, he worked for a number of other technology companies in sales and account management including Abacus, Amadeus, Creative Advances Technology and E-globalfocus.

KidZania Singapore to open in 2H2015 on Sentosa

By Amos Low

January 13, 2015

KIDZANIA, an indoor family education and entertainment centre offering job role-playing opportunities for children aged four to 14, has confirmed the launch of its Singapore version for 2H2015.

According to owner and developer Themed Attractions and Resorts, 23 local industry partners have been secured at press time, such as SPH Radio’s Kiss92, 7-Eleven and Abbott. The company aims to have at least 30 industry partners by the attraction’s opening.

The 7,600m² KidZania Singapore on Palawan Beach in Sentosa will be the brand’s first free stand-alone KidZania building and will be able to accomodate up to 1,500 visitors, with a 500,000 visitor population base expected annually.

When asked about Kidzania’s collaboration with tour operators, Leong Yue Weng, mayor of KidZania Singapore, said: “We are already working with WTS Travel, one of our local industry partners, offering role-playing opportunities for children.

“We are in the process of seeking partnership with inbound travel agencies for packages by which we can reach out to regional countries.”

Pricing has so far not been confirmed as TTG Asia e-Daily understands, but family and birthday party packages are already in the pipeline. Collaboration with local schools is also being discussed with a separate package in the making.

Including Singapore, KidZania facilities are under development at eight locations in London, Moscow, Manila, Doha, Busan, the US and New Delhi.

Melco’s second IR to greet Macau in mid-2015

By Prudence Lui

January 13, 2015

MELCO Crown Entertainment is set to open its US$3.2 billion cinematically themed gaming, entertainment and leisure destination resort, Studio City, in Macau the middle of this year.

Entertainment options include the DC Comics’ Batman Dark Flight offering digital rides with a virtual reality Batman experience, the Golden Eye boasting a 130m ferris wheel; and a 5,000-seat multi-purpose entertainment centre with live magic shows at the House of Magic.

Other offerings include a 1,600-room hotel, a 300-seat live-audience TV broadcast studio, Pacha Nightclub, as well as retail and F&B outlets.

Located next to the 24-hour Lotus Bridge immigration point connecting Hengqin of Zhuhai, Studio City expects to attract customers through this easy entry point.

Melco Crown Entertainment co-chairman and CEO, Lawrence Ho, said: “Our move is in line with Macau’s tourism development and diversification. As our second IR in town, the Studio City will even feature more non-gaming elements than City of Dreams.

“Taking advantage of the location, we’ll expect people to walk cross the Lotus bridge to our premises. Still, our products are more premium than many of the resorts in Cotai right now; we have strong premium components with a mass focus.”

According to Macau Government Tourist Office director, Maria Helena de Senna Fernandes, the city is preparing for a second wave of new themed mega-complexes in the coming years to boost its allure as a tourist destination.

“These new complexes, coupled with other ongoing developments in the city such as major transport infrastructure construction, renovation of new heritage sites, and initiatives to reinforce our already-rich calendar of events, will continue to transform Macau into a world centre of tourism and leisure, providing visitors from around the globe more reasons to come and stay longer.”

CITS (Macau) manager of international department, Cooper Zhang, welcomed this new IR as a reinforcement to the city’s non-gaming elements to draw diversified arrivals.

Meier quits GHM for Como

By Raini Hamdi

January 13, 2015

VETERAN hotelier Hans Jörg Meier, senior vice president of GHM Hotels, has left the company to join Como Hotels and Resorts as COO, effective January 19.

He takes up the mantle from Kuno Fasel, Como’s founding COO of 15 years, who will remain consultant to the company.

Meier will be in charge of all executive, management and operational responsibilities for Como Hotels and Resorts, which last year opened three hotels – the Metropolitan by Como in Miami, Point Yamu by Como in Phuket and Maalifushi by Como in the Maldives – and is expanding further. The chain is expected to announce a new property acquisition soon.

It also recently streamlined its branding, with all properties in the portfolio now wearing the ‘by Como’ tag at the end, including the three Uma by Como resorts in Bali and Bhutan.

Christina Ong, founder of Como Hotels and Resorts, said: “We have much to benefit from Meier’s experience in both resort and urban hotels, in developed and developing countries. I have every confidence he will build on Fasel’s good work to steer Como Hotels and Resorts into the future, building strong teams and delivering memorable experiences for guests.”

Malaysia to lure tourists turned away by 2014 mishaps

By S Puvaneswary

January 13, 2015

TOURISM Malaysia will step up efforts in new markets and expand its traditional markets through its three-year integrated promotional plan that runs up to 2017.

New markets on the agenda includes North Africa, Russia, CIS countries, Argentina and Brazil.

The NTO will also continue to expand its presence in traditional markets such as ASEAN, North Asia and South Asia, including second- and third-tier cities in China and India.

While tourist arrivals from January to August 2014 grew 10.3 per cent year-on-year, the minister of tourism and culture Mohamed Nazri Abdul Aziz is not confident Malaysia that would meet its 2014 target, citing that arrivals might be short by 600,000.

Tourist receipts might also be less than the targeted RM76 billion (US$23.4 billion), “but they would be better than 2013”, he said, adding that the air tragedies last year and the kidnappings in Sabah certainly impacted visitor arrivals to Malaysia.

Meanwhile, he said details of the visa fee waiver for Chinese tourists would be released following confirmation of the Cabinet’s minutes of meeting, hopefully in time to leverage the Chinese New Year holidays.

“Last year, we lost 540,000 tourists from China last year – otherwise we could have reached our target of 28 million tourists easily.”

Travelport inks agreement with India’s Vistara

By TTG Asia

January 13, 2015

TRAVELPORT and Vistara today jointly announced a new distribution and merchandising agreement which will see the new Indian carrier distribute all its fares and offerings through Travelport’s Travel Commerce Platform.

As part of the agreement, Vistara will participate in Travelport’s suite of airline merchandising solutions via its Travelport Merchandising Platform, and will become the 85^th carrier to leverage Travelport’s Rich Content and Branding technology to establish and increase its brand presence across the globe.

Vistara CCO, Giam Ming Toh, said: “Travelport’s flexible approach to distributing content means that we will be able to customise the way we communicate our unique offering to travel consultants worldwide, enabling the seamless servicing of Vistara customers.”

Travelport vice president for global distribution sales and services Asia-Pacific, Damian Hickey, said: “Vistara will undoubtedly become one of the key carriers in the India region; we look forward to assisting them showcase their brand and products to our 67,000 travel agency subscribers worldwide, growing their bookings on a global scale.”

Skilled labour shortage plagues China’s hotel industry

By TTG Asia

January 13, 2015

NEW hotels are opening in China at breakneck speed but the development of human resources has not kept pace, found the Institute for Hospitality and Tourism Education and Research, a division of the Chaplin School of Hospitality and Tourism Management at Florida International University, in a new white paper that details the labour situation in China’s hospitality scene.

Titled Managing Growing Pains of China’s Relentless Hotel Development Pipeline, the white paper acknowledged the shortage of skilled talent in China’s vast labour pool, the perception of work within the service industry as a menial job among the Chinese, and that Chinese hotel owners do not necessarily make enough investments in talent acquisition and development.

Firstly, the paper recommended that a different approach be taken towards education and training through the implementation of mentoring and coaching programmes.

Mentoring would ensure future leaders receive enough training to ensure they move up the organisation, while coaching programmes would teach them how to handle conflicts and develop coping skills.

Next, public perception of a hospitality career could be improved by building a good reputation and industry image for prospective students, college applicants and their parents, and college recruiters.

This could be done by highlighting possible career paths for front and back of house tracks, and putting in place incentive plans and showing potential hires pay scale increments for skill enhancements.

Another key element, as hotel chains continue to expand in China, is the relationship between general managers and hotel owners.

The paper stated that the average hotel owner in China is a first-timer to the hotel business who gains knowledge and values through direct involvement in the businesses. Hence, owners could be educated on all operational issues through a certification process in company philosophy, systems and procedures, and related concepts. This would also improve communications with general managers.

Singapore rates expected to hold despite increase in room inventory

By Raini Hamdi

January 12, 2015

TOUR operators expecting rates to come down in Singapore this year may have that dream dashed following Cushman & Wakefield’s assessment of an optimistic outlook despite a challenging 2014 and a stream of 2,100 new rooms opening in 2015.

Cushman & Wakefield expects Singapore hotels to close 2014 at 84.3 per cent occupancy, down from 86 per cent in 2013, due to more rooms coming on line and a decline in tourist arrivals spurred by massively fewer Chinese visitors. Despite this, the ADR held steady, at S$260 (US$195), compared with S$258 in 2013.

Said Cushman & Wakefield’s regional director, Akshay Kulkarni: “Let us not forget that the current drop seems to be only driven by increased supply and not so much a drop in arrivals. It is estimated that (2015) marketwide occupancy and ARR will be marginally, say three to five per cent, higher than 2014 figures.”

In his opinion, recovery for Singapore’s hotel industry will come in the 2H “due to higher inbound traffic from an overall settling of economies around the region and an increase in the number of attractions and events in Singapore”.

Asked if a stream of 6,400 rooms expected to enter the market between 2015 and 2018 would derail recovery, he pointed out that, of this, just over 2,100 new rooms are planned to open over the course of 2015 and can be filled with the forecasted increase in inbound arrivals.

However, he warned that continued focus on establishing Singapore as a corporate hub, leisure destination and MICE centre is necessary to propel growth.