THE Ministry of Transportation has set the minimum price for airfares by Indonesian airlines at 40 per cent the cost of the highest priced ticket, a move likely to negatively impact travel business, say Indonesian travel agencies.

The rule was signed into immediate effect on December 30, 2014 and announced just after Indonesia AirAsia’s ill-fated flight QZ8501 accident.

This has stirred speculation that the government believes in a co-relation between fare price and safety compliance, which Muhammad Alwi, director of air transportation, Ministry of Transportation, has refuted.

He said that the increase of the floor price was due to escalating airline operational costs from the devaluation of the rupiah against the US dollar. “The Ministry has planned the revised regulation since October, (so) it has nothing to do with the recent accident,” he said, adding that it was done to help airlines maintain safety measures even in the face of rising operation costs.

The Indonesian travel trade expects the increment to affect LCCs the most. Edwin Himna, chairman of the Association of the Indonesian Tourist and Travel Agencies (ASITA) Jogjakarta Chapter, said: “Those who will need to travel will travel anyway, but it will be difficult to achieve the target growth of international and domestic travel set by the national government in the next five years.”

Currently, Edwin said, the cheapest fare during low season could be as much as 70 per cent below the ceiling price.

Rudiana, director of sales and marketing, WITA Tour, was pessimistic. “I have not seen any country setting lowest airline price but Indonesia. As a travel company, we do not benefit from LCCs as they distribute through their own website or OTAs.”

Rudiana predicts that travellers’ buying power would drop as a result of the regulation and in turn, passenger numbers.

TRAVELPORT today announced its acquisition of a majority stake in German tour operator distribution company travel-IT, significantly increasing the company’s presence and reach in the German leisure travel industry.

Travelport’s participation in the equity of travel-IT was part of a wider transaction which also saw some leading German tour operators invest alongside.

Juergen Witte, Travelport’s managing director in Germany and Switzerland and managing director of travel-IT commented: “This is an exciting investment for Travelport. It will allow us to offer a full range of product and content for the largest economy in Europe, to both traditional and online retail travel agencies, supported by several of the leading tour operators in Germany.

“travel-IT offers some significant innovations to both travel agencies and tour operators which make the distribution and sale of leisure travel products better than older incumbent offerings.”

Gordon Wilson, president and CEO of Travelport, added: “This latest tuck-in investment in travel-IT for Germany is consistent with our strategy to address the previously unmet needs of our customers and to redefine travel commerce using newer and better technology to enable unrivalled access to travel content through empowered selling systems.”

Said Michael Kalt, CEO of travel-IT: “Travelport’s investment marks a new milestone for our company and will increase revenue and growth for travel-IT and its partners. We plan to shake up the leisure sector and bring increased choice, flexibility and efficiency to tour operators, travel agencies and consumers.”

THE stellar growth trajectory in international arrivals to Myanmar continued into 2014, with the country attracting over three million foreign visitors last year to surpass the government’s expected three million.

President Thein Sein announced this during his New Year message on January 1.

Zeyar, deputy director of Myanmar tourism promotion and international relations, Ministry of Hotels and Tourism, confirmed that there had been significant increase from 2013.

“There has been an increase in visitor numbers to Myanmar and hotel occupancy rates are increasing,” Zeyar told TTG Asia e-Daily. “We are currently finalising the (exact) figures but I believe the top markets are China and Thailand. From Europe, the majority of visitors come from France, the UK and Germany.”

Myanmar officially recorded 1.1 million and two million international arrivals in 2012 and 2013 respectively and the country’s tourism industry has seen major growth in recent years, in part brought about by economic and political reforms that have made the country an attractive tourism and investment destination.

Figures released by the Union of Myanmar Travel Association (UMTA) show that 2.8 million visitors entered Myanmar in the first 11 months of 2014, with 1.8 million entering at border points, and one million via airports in Yangon, Mandalay, Nay Pyi Taw and Moulmein.

UMTA figures pinpoint Thailand (176,899), China (113,078) and Japan (73,499) as Myanmar’s biggest source markets. Outside of Asia, the US (54,987), France (36,587) and the UK (36,183) sent the highest number of visitors.

“In December, we saw double the number of bookings that we had for the same period last year,” said Thet Zin, director of Living Irrawaddy Travel Services.

“Bagan is still very popular, particularly boat trips between Mandalay and Bagan, but many people are also interested in newer destinations such as Mount Victoria in Chin State, Ngapali beach and Hsipaw in Northern Shan State,” she added.

RUSSIAN arrivals to Thailand could plummet by up to 65 per cent this year as a result of Russia’s political and economic crisis compounded by the collapse of the rouble at the end of last year, said a major inbound operator.

Kubilay Atac, general manager of Pegas Touristik Thailand, said arrivals halved at the end of 2014 and will likely slide further to 65 per cent.

While Atac had predicted the crisis, the devaluation during the peak season was a “big slap in the face” as it was “the one period we had to recover losses from last year”.

Pegas, which brought 506,000 Russians to Thailand in 2014, is now forecasting between 150,000 and 165,000 arrivals this year. “I don’t think Thailand will receive more than 500,000 to 600,000 Russians this year, certainly not the 1.9 million the Tourism Authority of Thailand predicted for last year.”

Bill Barnett, managing director of C9 Hotelworks, said the worse is yet to come and that Thailand was paying a price for its over-reliance on mass tourism. “The full impact won’t be felt until peak season 2015/16, as a lot of packages (arriving in November and December) were booked and prepaid in early 2014.”

He added that hoteliers would have to offer discounts of 20 to 30 per cent to fill the shortfall. “We can be sure that RevPAR will come under a concerted attack. It’s too early to say by how much it will decline, but it will be significant.”

EU sanctions over Russia’s involvement in the crises in Ukraine and Crimea have dragged on the country’s already flagging economy. The situation was exacerbated by the recent collapse of oil prices which sent the rouble spiralling and significantly cut Russian spending power.

Atac said Russia’s crisis would affect all markets in the region, including Bali, Vietnam and Thailand.

Read the full story in TTG Asia January 16 issue

THE National Geographic Society this week rolled out a collection of boutique hotels and luxe accommodations with a strong focus on sustainability and local experiences.

Already a brand name in the adventure, travel and lifestyle markets for its travel magazines, books, photography courses and expeditions, National Geographic has marked its debut in hospitality with the National Geographic Unique Lodges of the World, a portfolio of 24 properties across six continents.

This includes Three Camel Lodge in Mongolia, Zhiwa Ling Hotel in Bhutan and Sukau Rainforest Lodge in Malaysia. Three Australian properties have been listed as well: Lizard Island, Longitude 131º and Southern Ocean Lodge.

Many of the properties within the collection are equipped with renewable energy solutions, prioritise locally sourced food and share the benefits of tourism with the local community, according to its press release.

Lynn Cutter, executive vice president for travel and licensing, National Geographic, said: “The National Geographic brand is universally recognised for its commitment to exploring and protecting the planet, so we are uniquely positioned to unite and promote these exceptional properties and to set a new standard for tourism.

“These lodges share the Society’s vision of preserving the planet for future generations and they demonstrate that sustainability and a world-class guest experience can go hand in hand.”

A highlight of staying with each National Geographic Unique Lodges of the World is the free unique experience that comes as part of it, whether a private sunset wildlife cruise at British Columbia’s Nimmo Bay Wilderness Lodge or a research outing with an on-site scientist at The Brando in French Polynesia.

Travellers may also book a National Geographic Expedition or one of the new Private Expeditions, which is newly developed in partnership with Virtuoso, an international network of luxury-focused travel agencies and advisors.

Lodge owners who are interested in joining the collection may apply at www.nglodgesapplication.com.

INDONESIA’S National Search and Rescue Agency (BASARNAS) yesterday confirmed that a search-and-rescue (SAR) team has identified the tail of AirAsia’s QZ8501 aircraft, kickstarting attempts to retrieve the black box.

Divers from the SAR team yesterday carried out underwater documentation of the aircraft’s tail and small pieces of wreckage, and subsequently found the plane’s registration number among the debris. The tail was discovered within the additional search area approximately 30km from the primary site.

In his daily update televised live this morning, Bambang Sulistyo, head of BARSARNAS, said: “Our plan today is to find out if the AirAsia black box is still in its original position.”

A team of divers was dispatched this morning but limited visibility and fast-flowing undercurrents have hampered the attempt to retrieve the black box.

“If the black box is intact, BASARNAS will coordinate with the National Transportation Safety Committee to (further the investigation into the incident),” he said.

Following the latest finding, BASARNAS will focus later SAR operations in the same area.

Indonesia AirAsia flight QZ8501 went missing over the northern Java Sea on December 28 with 162 on board. There are no known survivors.

Seven Indonesian officials have been suspended so far as transport authorities review air transport operations in the country, which already suffers a negative image in terms of aviation safety. The officials are suspected of being involved in unscheduled flight approvals, stated Singapore broadsheet The Straits Times.

 According to the report, Indonesia’s transport minister Ignasius Jonan said yesterday that AirAsia Group CEO Tony Fernandes has admitted that AirAsia had no route permit.

Meanwhile, the carrier says it will offer US$100,000 in compensation for each passenger on the flight on top of the initial payment of US$24,000, according to CNN.

WITH Chinese tourists spending the most of all international visitors, Japan has created a new five-year visa for high-income Chinese tourists and relaxed existing requirements.

Fumio Kishida, Japan’s minister of foreign affairs, announced earlier this week that the income requirement for tourists who have visited Japan in the last three years will be lowered from January 19, aimed at promoting exchanges between the two countries, reported Xinhua.

However, Chinese tourists with these three-year multiple-entry visas must still spend one night in one of four designated prefectures – Iwate, Miyagi or Fukushima prefectures that were the hardest hit in 2011’s earthquake-tsunami disaster, or Okinawa, according to Japan’s NHK.

Each stay must not exceed 90 days.

A new five-year multiple-entry visa has simultaneously been rolled out for Chinese tourists with an even higher income, and the one-night stay requirement in the designated prefectures has also been waived, said the same Xinhua report.

According to the statistics provided by the Japan National Tourism Organization, the number of Chinese arrivals in Japan from January to November 2014 was 2.2 million, an 82.2 per cent increase from 2013 over the same period.

A study done in Tokyo also showed that the per capita expenditure of Chinese tourists ranked first among all nationalities visiting Japan, with an average of 191,741 yen (US$1,602).

INTERCONTINENTAL Hotels Group (IHG) raised the curtains yesterday on the 161-room Holiday Inn Express Bangkok Sukhumvit 11, its fourth Holiday Inn Express hotel to open in Thailand since the brand debuted in the country in 2012.

Located along Sukhumvit 11, adjacent to Sukhumvit Road in downtown Bangkok, travellers are a 30-minute transit away from Suvarnabhumi or Don Mueang airport. Both Nana BTS Skytrain and Sukhumvit MRT Subway stations are also within walking distance.

Alan Watts, COO, AMEA, IHG, said he expects a “busy” opening period for the property.

Holiday Inn Express Bangkok Sukhumvit 11 provides a choice of queen or twin guestrooms, including Wi-Fi access and free breakfast.

Retail options include nearby shopping malls such as Terminal 21 and Central Embassy, or Chatuchak Weekend Market, while the surrounding streets are lined with street hawkers and a couple of French restaurants.

The hotel is offering a special opening rate of 1,849 baht (US$56.20) for bookings from now until April 30.