THE Indonesian government will not abandon Europe in its marketing and promotional efforts in favour of other volume-generating markets closer to home, said tourism minister Arief Yahya.

Speaking to the Daily, the minister sought to address concerns among the Indonesian trade and hotel industries, especially those handling European markets, that the government was not giving up on this longhaul sector.

Having looked at tourism statistics, Arief acknowledged that the European traveller’s average spend is twice that of other tourists.

He observed: “While the number of arrivals from Russia declined, arrivals from the rest of Europe increased with Germany growing 7.7 per cent last year.”

More flight access was also on the way, in a likely boost to inbound traffic from the continent.

“There is good news that Emirates is going to begin flying from Dubai to Bali in June, and that will open up connectivity not only with the Middle East but also to many European destinations,” he said. “(This adds to) Qatar Airways’ existing services linking Doha to Bali and Jakarta.”

“I believe that this will stimulate business into Indonesia and, with the market growing, Garuda Indonesia will also improve its network in Europe.”

He reassured the trade: “We will continue to participate at big events in Europe such as ITB Berlin, WTM London, and will also do sales missions.”

Participation at ITB Berlin last year was estimated to have materialised Rp3.9 trillion (US$300 million) worth of business for Indonesia, and Arief expects an increase of 10 per cent for this year.

At the ASEAN Tourism Forum in January this year, the minister had told TTG Asia that the ministry would allocate its promotional budget proportionately to its new goals.

Read the full story in TTG Asia-ITB Berlin 2015 Daily

TOUR operators are seeing “very attractive offers” and discounts of 20 to 30 per cent coming through from the Maldives, which recorded a 7.8 per cent decline in arrivals in the month of January – the fourth consecutive month a decrease was recorded.

China, which in recent years edged out Europe to become the Maldives’ top source, has been in the doldrums since September, declining by 1.7 per cent in September, 3.5 per cent in October, 4.9 per cent in November, 12.2 per cent in December and a whopping 33.1 per cent in January.

Adding to the woe, Russia unsurprisingly was the worst performing market in January, dipping 38 per cent, latest figures from the Maldives Ministry of Tourism shows.

All this saw Europe back as the number one market to the Maldives, its market share rising from 43.9 per cent in December to 54.1 per cent in January. Italy rose 16.9 per cent in January, the UK 6.6 per cent and Germany 8.7 per cent. With Lufthansa looking to operate twice-weekly Frankfurt-Malé flights, Europe is likely to hold on to its regained position.

David Kevan of Chic Locations UK, said the offers, in the form of extra free nights, room or meal upgrades, etc, help as the British pound has fallen against the US dollar, the hotel currency in the Maldives.

Mohamed Riyaz, managing director of Lets Go Maldives, said hotels have been discounting 20-30 per cent since January and are planning more discounts for summer. He said this would help bring back the volume, particularly travellers who have stayed away because of prices.

Holidays in paradise have never been cheap. Said Kevan: “We are upfront and tell clients the Maldives is an expensive destination and they need to budget US$300 daily if the booking includes breakfast only.”

Andrew Drummond, general manager of Maalifushi by Como, believes a real luxury market will remain for the Maldives. But he noted that resorts heavily dependent on markets such as China have already started to put out strong offers in the market, “diluting the value of potential business prospecting for a bargain”. – Additional reporting by Feizal Samath

Read the full story in TTG Asia-ITB Berlin 2015 Daily

THAILAND’S Diethelm Travel Group is flaunting new dynamism as it rejuvenates the brand, introduces new products and launches a core reservations system to move the business model “from static to dynamic”.

CEO Maarten Groeneveld, who took over the 57-year-old company last October after the abrupt departure of Richard Brouwer, said “the Diethelm team is on the right track not only for 2016, but for today”, when asked if the slew of initiatives was expected to turn around the company next year, if not this year.
Central to the gameplan is the introduction of Diethelm Distinctive and Diethelm Design, new product lines that rely on specialised expertise in order to add value for clients.

Asked about the difference between the two, Groeneveld said every Diethelm Distinctive journey will be “a hands-on experience” for guests.

Clients will have a sense of time being well spent as they will acquire new knowledge about local people and their way of life, culture and traditions, and the flora and fauna of the locality and its preservation.

Diethelm Design, on the other hand, creates high-end individual itineraries for a journey of a lifetime. A new department has been set up to curate these journeys, led by Sam Vincent, who has more than 20 years’ experience in the Asian travel industry.

“As the travel industry moves increasingly online, there is still the individual client who values personal attention, specialised product knowledge and a team who can create the journey of a lifetime for both individuals and groups alike,” said Groeneveld.

Meanwhile, Diethelm will roll out its core reservations system, Travel Studio, across all its 12 operations from April, with a targeted completion by December.

The system will broaden the company’s hotel and destination portfolio and will include XML links to suppliers, enabling Diethelm to offer dynamic rates.

Read the full story in TTG Asia-ITB Berlin Daily 2015

THERE is still a future for tour operating in Western Europe but this belief comes with the caveat that the business must evolve in order to handle the disruption caused by the Internet.

Kuoni’s decision to exit tour operating is by no means a sign the business is dead, said industry players, who are also not surprised by the announcement, given the several restructures Kuoni has been making over the years in a bid to survive a changing marketplace.

Said a UK operator on the condition of anonymity: “Most of the established conventional tour operators – particularly those that are trade-focused – have seen margins come under pressure primarily from OTAs, bed banks and, in many cases, hoteliers becoming more aggressive in trying to obtain direct sales.

“(However), there is still a place for specialist operators, maybe focusing on a few areas rather than trying to be worldwide.”

He added: “The challenge is ensuring those clients who have taken your time to obtain information actually book through you, rather than rushing to an OTA with the information so they can undercut.

“The OTAs here in the UK, and maybe elsewhere, are very tech-savvy and particularly good at selling distressed stock – attributes not usually associated with the more established operators.”

Asked about the future of the tour-operating business, Hotelplan CEO Thomas Stirnimann said: “We can only say that it is working out well for us, but you needed to adapt a couple of years ago. Today there is no more B2B or B2C business but only business with which you serve all channels.”
Hotelplan is a potential buyer, with Stirnimann in an interview after the announcement made by Kuoni saying “we are looking at it”, when asked if the company was keen to buy Kuoni Switzerland.

If a deal goes through, Hotelplan would consolidate its position in Switzerland, where it is the second-largest tour-operating company after Kuoni. Its overture was widely greeted as “logical” by the trade.

Chris Bailey, senior vice president sales & marketing of Centara Hotels & Resorts Thailand and a former tour operator, said there’s “absolutely” a future for tour operating.

Read the full story in TTG Asia-ITB Berlin Daily 2015

NEW owners of Kuoni’s tour-operating businesses can continue operating with the name, which carries a legacy of more than 100 years, confirmed Kuoni Group’s spokesperson Peter Brun when responding to queries from TTG Asia-ITB Berlin Daily.

Said Brun: “The main brand ‘Kuoni’ remains with the mother company Kuoni Group as we continue to operate with that name, for example, Kuoni Destination Management and of course Kuoni Group (itself). But potential buyers of the tour operating businesses can license the brand Kuoni from Kuoni Group and operate with that name.”

Brun added: “That’s why these businesses are so attractive because you can continue like before with your customers in your B2C interaction.”
Kuoni is seeking buyers through the course of this year for its traditional outbound tour operating businesses in Switzerland, the UK, Benelux, Scandinavia/Finland, Hong Kong/China and India.

Brun explained: “We already have such agreements successfully in place when we sold Kuoni Austria years ago. Same with Kuoni France and Spain two years ago. If you go to Paris you will find beautiful Kuoni retail stores with the same logo as we have in the UK, Switzerland and in Asia. For the specialisted brands like Voyage Jules Verne you mentioned, they normally go with the sale to new owners.”

Voyage Jules Verne is a brand under Kuoni UK, along with Carrier, Kirker, CV Villas and Journeys of Distinction. Aside from established brands, suitors are also buying its 50-year track record, a digital presence and 35 Kuoni-branded shops.

Asked who the potential buyers are at press time, Brun said: “We don’t speculate about any potential buyers. But we are convinced that our outbound tour operating unit with its valued brands can be further developed by new owners.”

To some, however, the announcement was a double-edged sword, as it was akin to Kuoni admitting prospects were better for B2B hotel and land wholesaling, destination management services and visa facilitation than tour operating.

Read the full story in TTG Asia-ITB Berlin Daily 2015

CONTRACTING with Kuoni Switzerland, UK, Benelux and Scandinavia/Finland is continuing as per normal, even as the Kuoni Group seeks to sell off these operations and its other traditional tour operating businesses in Hong Kong/China and India.

Kuoni’s contract managers from these markets are attending all tradeshows and locking horns with suppliers over rates and allotments as usual. Sellers interviewed also said the announcement by the Kuoni Group that it would exit the tour operating business would not impact contracting at all.

“One has to assume that it (Kuoni UK, Switzerland, etc) will be sold as a growing concern and that the new owners will have a passion and commitment to move the business even further forward than where it is today,” said Chris Bailey, senior vice president sales & marketing Centara Hotels & Resorts Thailand.

But Bailey did express the reservation that the announcement might impact Kuoni staff, however upbeat the message from the management might be, and that the competition would “cherry pick (Kuoni staff) and/or commercial arrangements”.

Kuoni UK is at pains to soothe any jangled nerves, with managing director Derek Jones issuing a statement saying the UK leadership team remained in place “to oversee the process (of the sale) and continue the ambitious plans for growth in the UK market”. He went on to say Kuoni UK would be “working closely with our colleagues in Switzerland to make sure we find the right buyers”.

In the meantime, Jones said: “It’s very much business as usual right now for all our staff and customers. This is the busiest time for holiday bookings and right now our focus is on continuing to deliver brilliant holidays and service for all customers.”

Like Jones, hotels and DMCs interviewed hoped the new owners of these businesses would be able to take the business forward, saying by no means was Kuoni’s move a reflection that the future of tour operating in Europe was dim.

DMCs are in fact salivating at the prospects of new accounts these sell-offs may bring. For example, only Tour East Singapore now handles Kuoni as the account in the rest of the region has gone to Asian Trails since the latter was bought by the Kuoni Group a few years ago.

Read the full story in TTG Asia-ITB Berlin Daily 2015