Travel companies in the region share their projections
Inbound
Inbound operators are hopeful for a stronger performance in 2014, barring any greater fallout from the political unrest in Thailand.
“It’s hard to predict the performance for 1Q2014, especially with the current protests and upcoming elections (in February),” said Hans van den Born, managing director of Diethelm Travel (Thailand). “However, my outlook is not negative at all. Thailand’s inbound market looks set to be steady, based on past experience. We have invested a lot in mature markets, which have been quite steady for inbound (demand).”
This year also brings higher expectations for business volume and profits, said van den Born, as Diethelm will sharpen its focus on the high-end segment, invest more sales efforts in existing consultants worldwide and maximise revenue from mature markets such as Germany, France and Australia. “We expect 10-15 per cent growth for 2014, which is a challenging but realistic goal for us,” he added.
Destination Asia’s Thailand managing director, Addie Hirunkate, also painted a rosy outlook for 2014. She commented: “We are projecting more market share and revenue this year. We will continue to expand market share in our historic markets – Australia, the UK/Europe, the US/Canada – as well as South Africa, Scandinavia/Nordic and Latin America, which are potential growth markets.”
Since opening its doors, neighbouring Myanmar is offering a trove of opportunities for Destination Asia, which is currently developing numerous multi-country itineraries combining Thailand and Myanmar as well as Indochina, Addie pointed out.
But with greater regional integration also comes more competition. Said van den Born: “Many DMCs and (consultants) just want to capture market share by competing on price, pushing down prices which may compromise the quality of service. Margins are already low in Thailand compared with neighbouring countries; quality of service remains my top concern.”
Outbound
Neither the political crisis nor a weakened Thai baht in recent months will dampen Thais’ desire for overseas travel, said Thanapol Cheewarattanaporn, managing director of Quality Express.
He said: “This year, we are projecting an overall 20 per cent increase for outbound travel to South-east Asian countries, with growing media coverage prompting greater travel interest among Thais as the AEC 2015 approaches.”
“Within the region, Myanmar is netting the strongest attention among Thai travellers – a growth of 20 per cent for this market is likely this year,” he added.
Thailand’s political turmoil aside, rising competition poses a key challenge. Said Thanapol: “Our business volume is likely to grow this year, but we do not expect a huge jump in profits; instead we project a revenue growth of between five and seven per cent.” – Xinyi Liang -Pholsena
Inbound
Hong Kong’s inbound tourism players have a mixed outlook for the market this year.
China Travel Services (Hong Kong), general manager for sales centre – Hong Kong and Macau, Ng Hi-on, said: “It’ll be a better year for shorthaul markets, especially South-east Asia, but longhaul markets like Europe and the US are still not good. Last year, Indonesia performed well with more than 10 per cent growth and this trend will continue in 2014.
“With additional new hotel supply and a more flexible rate strategy adopted by hoteliers due to diminishing Chinese group business, we are able to tap more (inbound) traffic so volume will be up by more than 10 per cent while yield is estimated at a single-digit growth,” Ng added.
Holiday World Tours, managing director, Paul Leung, was less optimistic. He said: “I don’t expect a good year for 2014 as a couple of my key markets like Thailand and the Philippines are suffering from political issues. Indonesia is the only one doing okay.
“Rattled by years of fierce competition, I hardly see the chance to grow yield. Operations costs keep escalating as our suppliers raise their prices.”
However, new infrastructure such as Hong Kong’s Kai Tak Cruise Terminal and the Xiamen-Shenzhen high-speed railway could spur more inbound traffic, especially in the FIT segment. Leung said: “We may be able to pick up some business from overseas travellers flying into Hong Kong to board the cruises.”
China Travel Services also hopes to make stronger waves among Chinese cruise travellers, having entered talks with Hong Kong’s MTR Corporation to roll out a cruise package that includes Guangzhou-Kowloon through-train tickets. “We’ll invest more resources in regular online promotional offers and additional FIT packages through partnerships with Chinese travel consultants,” Ng added.
Outbound
Hong Kongers’ interest in regional destinations will likely stay robust, said Jason Wong, general manager of Hong Thai Travel Services.
“In 2013, we recorded eight per cent growth in volume, with turnover up 15 per cent. Overall, growth in 2014 may not be the same as last year owing to an uncertain global economy,” he said. “Still, consumers continue to spend more, especially for Japan, which has recovered while the yen has depreciated.”
Wong expects the new Xiamen-Shenzhen high-speed railway to boost outbound traffic to China, while the debut of Chimelong Group’s latest theme park on Hengqin Island in January 2014 is a potential new hotspot.
He added: “In 2014, we will reinforce our online platform with more in-depth products and tour options. Since launching our first flagship retail store in Shenzhen last November, we are able to market Hong Thai’s outbound products to mainland Chinese (travellers).” – Prudence Lui
Inbound
With growing air connections into second- and third-tier cities, inbound operators are seeing opportunities in lesser-known destinations and experiential travel.
“Visitors are moving towards experiential holidays, since many have done the New Delhi-Agra-Jaipur route. Kerala, Goa and new destinations in south India are emerging, which are likely to yield higher revenues for us,” said Koushik Goswami, general manager of Travelcorp. “We have received enquiries from new markets like South America and greater interest from Australia and Turkey.”
For Survottam Travels, which expects 10 per cent growth in revenue this year, business models must be built on special interest groups, said managing director, Rajendra Churiwala. “We also expect MICE events to increase as a result of more international flights into the country, and pre- and post-event tours can be a sizable market to lean on.”
The Kolkata-based operator is crafting special programmes in high-yield niche segments such as wildlife, Buddhist, LGBT, medical and women-only tours, Churiwala revealed.
Similarly, Travelcorp has created Ayurveda healing and Muziris heritage packages in Kerala, tea tourism packages in Darjeeling hills, cultural packages in former colonial destinations like Kolkata and Puducherry, plus wine and gastronomy tours, according to Goswami.
While emerging cities may “give higher yield”, the less-developed infrastructure and lack of skilled human resources in these destinations could result in “higher costs to put a good package together”, he added.
Churiwala urges airlines to reintroduce commissions to boost domestic revenues for inbound agencies. “IndiGo has already confirmed two per cent commission for (consultants). We expect other airlines to follow suit as trade representations are being made by IATA Agents Association of India.”
Outbound
Gainwell Travel & Leisure’s general manager, Seema Ahmed, is projecting a stronger business outlook on the premise of greater political stability in India following the upcoming elections this year.
“Based on conservative estimates, 2014 should yield 20 per cent growth in real volume and nett yield with rationalised airfares and more competition in the (Indian) skies,” he said.
Gainwell will promote more cruise offerings and roll out more multi-country tours. “We will focus on more customised tours for small- and mid-size groups, honeymoons and weddings. Other niche segments like 25th wedding anniversaries and 50th birthday celebrations are emerging as lucrative business,” Ahmed added.
On the other hand, the expected withdrawal of AirAsia’s flights from Kuala Lumpur and Bangkok this March and the current turmoil in Thailand may crimp Indians’ desire to travel overseas, he shared. – Shekhar Niyogi
This article was first published in TTG Asia, January 17, 2014 on page 1. To read more, please view our digital edition or click here to subscribe.
