THE global adventure travel market has grown at 65 per cent annually since 2009 and is estimated to have been worth US$263 billion last year, excluding airfare, reported a new study.
The consumer report 2013 Adventure Tourism Market Study, produced by The George Washington University conducted in partnership with the Adventure Travel Trade Association (ATTA), studied the three key outbound regions of Europe, North America and South America, which account for almost 70 per cent of overall international departures.
According to the study, the exponential growth in adventure tourism over the years reflects the surge in international tourism and can also be attributed to the increase in the percentage of European and South American travellers classified as adventure travellers.
An increase in average spend by adventure travellers globally – from US$593 per trip in 2009 to US$947 in 2012 – and the emergence of new source markets also boosted the adventure tourism market.
The report also highlighted the following trends:
– 45 per cent of adventure travellers intend to use a tour operator on their next trip, compared to 31 per cent of non-adventure travellers
– Almost 54 per cent of travellers plan to take up an adventure activity on their next trip; a rise from the present 42 per cent
– The average length of a soft adventure trip was 10 days in 2012, up from eight in 2009
– 73 per cent of adventure travellers plan to do a new adventure activity on their next trip, while 22 per cent will participate in the same activity
ATTA is calling for more travel consultants who deal with adventure travel products to sign up as association members (TTG Asia e-Daily, July 17, 2013).
Thailand is also seeking to tap the growing segment, having promoted itself as an adventure travel destination at this year’s Thailand Travel Mart Plus (TTG Asia e-Daily, June 11, 2013).
DESPITE recent reports of further radioactive leakages at Tokyo Electric Power’s Fukushima nuclear plant, Malaysian travel consultants spoken to have recorded no cancellations or postponements in year-end travel bookings to Japan.
Cooper Huang, CEO, Malaysian Harmony Tours & Travel, said: “The (affected area) is far from popular tourist spots such as Hokkaido and Osaka.”
Instead he noted: “We’re getting new bookings for tour packages to these destinations, and also more enquiries from the Muslim segment for our autumn and winter tour packages to Japan.”
Huang also expected that AirAsia X’s conversion of its four-times-weekly Kuala Lumpur-Osaka flights to a daily service (TTG Asia e-Daily, August 23, 2013) would further stimulate the FIT segment, as the company would “benefit from selling ground packages to them”.
At the same time, Apple Vacations & Conventions’ group managing director, Desmond Lee, reported that the company had not received any enquiries from customers regarding safety issues.
Japan continues to be a hot-selling destination for high-income groups looking for a leisure destination as well as for the incentives market due to the visa waiver in that came into effect in July (TTG Asia e-Daily, June 26, 2013), he said.
To capitalise on growing demand for Japan tours, the company has organised six charters to Hokkaido between December 4 and 29 to coincide with the year-end school holiday period.
Meanwhile, one hotel company TTG Asia e-Daily spoke to said its hotels in the Tokyo area continue to see strong rates and bookings.
Kenji Goto, representative director of Hotel Okura, said: “Our group is on target to see at least a 10 per cent year-to-date increase in revenue versus the same time last year. Higher occupancies (rather than higher room rates) are definitely a factor as we have seen more overseas visitors (this year).”
The group, whose stable of brands comprise the four- to five-star Okura Hotels & Resorts and Nikko Hotels International and the three- to four-star Hotel JAL City, has posted strong occupancies of between 75 and 97 per cent at its Tokyo properties.
THE regional hospitality sector has remained resilient in the face of tumultuous global financial conditions, with ARR increasing in 31 out of 35 of Asia-Pacific’s top 50 cities during the January to June period.
According to Hogg Robinson Group’s (HRG) latest HRG Interim Hotel Survey, Tokyo was the top performer in terms of rates in the local currency, with ARR jumping 19 per cent year-on-year to soar from 22,281 yen (US$226) to 26,514 yen. However, the increase was muted by exchange rates and registered a mere one per cent rise in the British pound.
Meanwhile, rates in Mumbai and Bengaluru strengthened both in the Indian rupee and British pound, growing nine per cent and six per cent respectively. HRG credited growth in Bengaluru to the lack of new openings, and Mumbai’s growth to strong demand from the outsourced IT sector and growth of the SME sector using best available rates.
Rates in Beijing rose three per cent when measured in yuan and doubled in pounds. Meanwhile, Singapore remained flat in the local currency while inching up four per cent in pounds.
Hong Kong and Singapore also maintained their positions within the top 20 most expensive hotel room cities, despite not being megacities.
Overall, the survey stated that Asia posted modest growth in 1H2013, which masked the large swings each way in key cities. The regional ARR shifted from 165 pounds (US$257) to 167 pounds.
Margaret Bowler, director, global hotel relations, HRG, said: “The early sign of recovery in hotel prices is encouraging; what is a surprise however, is that in certain key cities the rates are not as high as the market had expected – in many cities this is attributed to new supply.
“On the whole, occupancy is increasing faster which, coupled with continued high demand, means we will be likely to see rates climbing in certain markets in the second half of the year and beyond.”
TRAVEL solutions provider Amadeus today launched the Amadeus Notification Suite, reducing the need for travel consultants to monitor booking changes or deadlines manually by sending automatic notifications.
Comprising Amadeus Flight Notification, Amadeus SMS Solution and Amadeus Ticketing Timeline Advisor, the product is available at a single price.
Amadeus Flight notification alerts the travel consultant/traveller whenever a major change to a booking takes place; Amadeus SMS Solution keeps travellers posted on their travel itineraries, e-ticket information and more via SMS; and Amadeus Ticketing Timeline Advisor monitors, notifies and moves up ticketing deadlines so consultants do not miss ticket issuance deadlines.
Bruno des Fontaines, vice president customer solutions group, Amadeus Asia-Pacific, said: “Today, our travel agency customers are constantly competing with online booking options, so the ability to deliver a timely and highly personalised service for a seamless experience is a key differentiator.”
MARRIOTT International officially launched Courtyard by Marriott Pune Chakan last week in the automobile and manufacturing hub of Chakan, making it the city’s maiden international business hotel.
General manager Ritu Chawla said: “There are a number of high-profile delegates who visit Chakan. Earlier, there was no property of international standards that could serve the luxury business traveller, but with the opening of our property, this gap has been filled.
“This belt has great potential for F&B too as presently there are no outlets that can serve corporate clientele. The all-day dining restaurant (in our hotel), Momo Café, offers an interesting mix of international, Indian and local specialties.”
The brand’s 10th property in India features 175 rooms including 12 residential suites and 1,089m2 of indoor and outdoor meeting space.
Rates at the hotel start from Rs6,000 (US$95), and the hotel’s management hopes to exceed 50 per cent occupancy by next year.
Rajeev Menon, area vice president, South Asia, Marriott International, said he expects up to 65 per cent of business to be driven by foreign guests, with domestic travellers making up the rest.
“However, we expect the domestic share to increase as we move ahead. As we sit today, 67 per cent of (Marriott’s) business across the country is driven by Indian customers. We foresee Indian consumers accounting for 70 to 80 per cent of business for the Courtyard and Fairfield brands in the near future,” he shared.
Marriott is planning fam trips for travel trade partners as part of its marketing strategy.
Pune has seen hotel supply surge in the last four years and now has the fourth-largest supply of rooms in the country. Occupancy has also grown year-on-year, rising 12 per cent between 2011 and 2012, said Chawla.
The group is aiming to have 23 operating hotels in India in its portfolio by end-2013 and 50 by 2017. It also hopes to introduce the Edition brand to the country and is mulling the debut of Autography.
THE Ascott will open the first Citadines Apart’hotel in Hangzhou in late 2014, hot on the heels of new contracts announced for Hefei, Chongqing and Xiamen (TTG Asia e-Daily, August 15, 2013).
To debut as Citadines Intime City Hangzhou, the 100-unit property is situated in West Hangzhou, close to three major central business districts in the city and part of the mixed-use development Intime City.
Kevin Goh, managing director for North Asia, The Ascott, said: “Citadines Apart’hotel, which provides independent travellers with flexible services to suit their lifestyle needs, has been enjoying very healthy occupancy since we launched it in China in 2006.
“With a fast-growing demand for serviced residences in Hangzhou, we are confident that Citadines Intime City Hangzhou will perform well. As the capital city of Zhejiang Province, Hangzhou’s economy and foreign direct investment have grown respectively by an average of more than 10 per cent and 12 per cent annually in the last five years.”
Citadines Intime City Hangzhou will offer residents a range of studio to two-bedroom apartments with a fully equipped kitchen and separate working and sleeping areas.
Other facilities include a business centre, meeting room, laundry room, gym, sauna, as well as breakfast and residents’ lounges.
The Wildlife Reserves Singapore (WRS) CEO, Lee Meng Tat, who joined in March 2012, admits he is not ‘an animal kind of person’, but he keeps his ear to the ground to bring fresh perspectives and expertise in helming the organisation. By Lee Pei Qi
Did you imagine you would be helming WRS?
No. I have never been an animal kind of person. But I believe things always happen for a reason and the previous appointments were opportunities that (led me to the present job).
So how did you land this job?
After 12 years at F&N (Fraser & Neave), I felt it was time to move on and started looking out for opportunities.
When the headhunter first put this portfolio on my table, I told him he must be joking and said: “Let’s have a good laugh and move on.” But I decided to really take a look at it and it took me a weekend to decide that I wanted to take this up.
You were at F&N for 12 years. How has that helped your current role?
At F&N, it was about getting the right product and brand across. Here, I am working with the marketing people to get our branding right.
We have four parks under the WRS umbrella brand that promise everyone the ultimate wildlife experience in a safe and controlled environment.
If you want a day experience, we have the Singapore Zoo and the Jurong Bird Park for bird lovers; for the night experience, we have the Night Safari. Now, with our latest River Safari, you can see giant fishes in a freshwater environment.
We have a mix of everything for everyone. So this is the brand I want people to know when they think of WRS.
How has the past year been?
In the beginning, it was all about learning and getting to know the people. You can’t get going until you know the people and what they have done.
It is important for me to understand the business first. Apart from my weekly staff lunches, I also make it a point to walk around the park to put my ear to the ground.
WRS has been very well-run and has done a great job. The key thing is not to be a CEO who comes in to change everything. We continue what works and tweak what needs to be improved. Over the past year, we have been busy getting our River Safari up and running so that is where I have been spending most of my time on.
How do you ensure your parks stay as Singapore’s top attractions?
I am currently looking at a 10-year masterplan to refresh and rejuvenate our parks. We have just agreed on the framework and a timeline so we are now at the first stage of implementation.
What we are doing first is to review our animal and exhibit collection in the parks, which has been around for 40 years. We want to look at which are the ones to keep, why, and what is the conservation value. Then we want to make sure we can create an immersive experience.
This masterplan has a 10-year cycle so when I talk about change, it is not a dramatic reconstruction but a programme that will introduce things in phases so we can have a continuous refreshing experience to bring people back after their first visit.
What makes WRS stand out from the other attractions?
We already have the product, but the differentiating factor is our service excellence. This is something simple to say, but difficult to execute. The product is always there but how you deliver it is our winning edge. Our people are the difference. We do not pay the best salaries but we get the most committed and passionate people who love animals and service.
What else is new in the parks?
We are now inviting our guests to come backstage to see how we care for animals and to have rare, close encounters with our reptiles or baboons.
We did not show them before but these are actually fascinating experiences that we can share and which we are promoting now, to much success.
What are the challenges with handling animals?
These living exhibits move around, so you may not see them all the time.
We do try to design our spaces in such a way that visitors can see almost everything, but if the animals want to rest in a hidden spot, we need to give them the space to rest. We cannot be poking the animals to wake them up because they have a right to sleep too.
The animals are living their lives and we should appreciate the fact that they may be asleep. People need to understand we are not showcasing an exhibit that is always there and that we are participating in the animals’ way of life.
How do you measure success at WRS?
We are a self-funded organisation, which means we must (earn) our own keep.
All the revenues we get must go back to taking care of our animals, exhibits and staff, so we need to balance between doing good and doing well.
If you talk about doing well, we look at the commercial part and it is of course about visitor arrivals. For the financial part, are we making enough money to be self-sustaining?
But on doing good, it is not about money but about the types of conservation projects we have and how we are contributing to the sustainability of wildlife. It is a bit harder to quantify the doing good part because there is no monetary value; it is more about making sure all animals are well taken care of.
Some have commented that your entrance tickets are too expensive. As a self-funded organisation, we have to make sure that whatever we earn is sufficient for whatever we spend and that we have enough left over for the rejuvenation of the parks.
We need to make a profit but the key thing is we are not profiteering. We have done benchmarking exercises on entrance tickets with the rest of the attractions in Singapore and we compare well in terms of pricing and the experience we provide.
Where do some of the costs go?
We need to feed our animals. You won’t believe the amount of fruits and vegetables that come through our zoo everyday. We have more than 13,000 animals in all four parks and each of them must get their nutrients. We need to buy the right food for the animals because they are living things too and they cannot just eat anything.
How do you cultivate a relationship with travel consultants?
There is definitely a lot of dialogue going on and we like their valuable input and innovative ideas. We have good relationships with the consultants to make sure their programmes dovetail well with what we can offer. And we make sure we invite them for fam trips and provide them with updated information (for their) packages.
So having been a non-animal lover, has that changed now?
(Laughs) No, it’s a bit hard to change that given that I have not been an animal kind of person all my life. But I can say that coming here has provided me a new perspective and taught me how to appreciate animals better.
Prospects are buoyant as more Asians start to see the beauty of cruising With additional reporting from Lee Pei Qi, S Puvaneswary, Greg Lowe, Mimi Hudoyo, Prudence Lui and Marianne Carandang
While a string of disasters at sea recently has somewhat taken the shine out of cruising, particularly in the world’s biggest cruise market North America, in Asia the waters are anything but murky.
With cruise companies reporting healthy increases in the number of Asians getting onboard their ships, expectations that the size of the Asian cruise market will expand to 3.7 million by 2017 are looking within reach. Currently, there are around 1.2 million Asian cruise passengers, according to the 2012 Cruise Industry News Annual Report.
Royal Caribbean Cruises Asia-Pacific regional director, Kelvin Tan, said: “The number of our Asian guests have increased by an average of 20 to 30 per cent year-on-year since 2007. As the region grows increasingly affluent, cruise vacations are being viewed as a fresh, alternative holiday option to the traditional land vacation.”
Eileen Oh, head, marketing & communications, ASA Holidays Singapore, said: “Our cruise business has been seeing a healthy year-on-year growth of at least 20 per cent. In 2012, the total sales figures generated from cruise packages grew almost twofold compared to 2011, largely spurred by increased take-ups in longer-haul cruises which cost an average of about S$6,000 (US$4,730) per person.”
Singapore-based Chan Brothers Travel’s spokesperson, Michelle Yin, said: “On average, we see a 30 per cent year-on-year increase in demand for regional cruises from Singapore and fly-cruises from port-of-calls beyond Singapore. This trend was evident since 2010, when we started to focus on international or fly-cruises.”
Said Imam Syafii, president director of Menara Tudjuh Sembilan, Costa Cruises’ GSA in Indonesia: “The regional cruise (business) increased 30 per cent in 2012 from 2011 since Costa Cruises deployed Costa Atlantica in Singapore last year. Between 30 and 40 per cent of the market are first-time cruise travellers.
“Indonesia is a sleeping giant. While the longhaul (cruise) traffic will continue to grow it will remain niche, while shorthaul cruise destinations will be big (for Asian passengers),” added Imam, who projected the market to expand a whopping 40 per cent this year.
Multi facilities net diverse travel segments
Michael Goh, Star Cruises’ senior vice president of sales, said: “Asians enjoy holidays that bring them to several destinations, allowing them to experience different food and cultures all in one go. Cruising offers them the most convenient way of exploring multiple exotic destinations in a single holiday.”
Regional cruises are also well-received among Asian travellers who dislike longhaul flights or have tighter budgets. “Asian cruises are attractive to families with young children, first-timers and incentive groups with lower budgets and time limitations,” said Sukanya Rattanavadee, GSA general manager, Regale International Travel Thailand.
Added Cooper Huang, CEO of Malaysian Harmony Tours & Travel, which sold 100 per cent more South-east Asian cruise packages in 1H2013 than in first-half 2012: “You can take a three-night cruise for below RM2,000 (US$614), inclusive of city tours.”
Huang continued: “Many families with children book these cruises during the school holidays whereas working adults travelling with small groups of friends may take a few days’ leave from work to go on a cruise. For the elderly, the attraction is visiting different places without having to lug around luggage.”
Abdul Rahman Mohamed, deputy general manager, channel management of Mayflower Acme Tours, promotes SuperStar Libra, homeported in Penang, for its easy accessibility. The Kuala Lumpur-based firm recorded a growth of between 15 and 20 per cent in South-east Asian cruising in 1H2013, driven mainly by the Muslim market since the ship launched two halal restaurants – Spices and Blue Lagoon – earlier this year.
He added that most cruise clients were either first-timers or had been on Star Cruises in the past, hence they were usually keen to experience shore excursions in a new destination and facilities on board a “moving five-star hotel”.
“Compared with the longhaul market, travellers in the region take cruises because they want to try new big ships which offer more facilities and entertainment on board than the destination itself,” noted Edhi Sutadharma, general manager of Golden Rama Tours & Travel Indonesia, which has set up a separate cruise division to tap the growing cruise market.
Shorter cruises in demand
As Asian travellers warm up to cruising, the trade is seeing a surge in interest for shorter and more affordable itineraries.
“Due to (Asians’) lack of familiarity with cruising, they prefer to cruise in South-east Asia as it is closer to home. As a result, they also prefer shorter cruise itineraries of three to five days for their first cruise,” said Ong Huey Hong, cruise director of Singapore Tourism Board.
Budget also plays a key consideration as many first-time cruise travellers in Asia do not wish to fork out prices beyond HK$20,000 (US$2,579) for European and American cruises, pointed out Kevin So, deputy general manager of Sightseer (HK).
He said: “It’s also typical to see experienced Asians cruise travellers sail in their backyard because they enjoy the cruising experience and look for affordable shorthaul trips, for example a six-day journey under HK$10,000.”
Menara’s Imam added: “The advantage of these short cruises is that travellers can decide on a short getaway at the last minute, provided the cabin is available, since there’s no need for a visa.”
He said short cruises of between three and five nights were a favourite among Indonesian travellers, with the Costa Victoria roundtrip Singapore-Penang-Langkawi-Phuket itinerary departing on December 28 as the bestseller since it would berth in Phuket on New Year’s Eve.
As Asian travellers take to the seas in rising numbers, cruise lines are also venturing into more remote waters in the region, steering the course to hitherto less visited destinations like Sabah and Myanmar.
Apart for the popular 4D3N itineraries in its portfolio, Goh said that Star Cruises had rolled out a special 7D6N cruise departing from Penang to Krabi, Yangon and Phuket this month. It would also homeport the 1,511-pax SuperStar Aquarius in Kota Kinabalu from November, with calls at Brunei’s Bandar Seri Begawan and Sarawak’s Bintulu, he added.
Meanwhile, Silversea Cruises is developing new regional itineraries and experiences to attract more Asian travellers. “Three of our ships (Silver Whisper, Silver Shadow and Silver Wind) are returning to Myanmar in 2014 and will each incorporate a special multi-night stay in this mystical and undiscovered destination,” said Asia regional director, Melvyn Yap.
Meetings market growth
While cruises are undeniably suited for leisure travellers, the trade also sees cruiseships’ strong potential for the MICE market, especially with the recent launch of Marina Bay Cruise Centre Singapore and Hong Kong’s Kai Tak Cruise Terminal.
Star Cruises’ Goh said: “Many corporations see cruising as a great tool for team building, breaking free from traditional land-based venues. The setting out at sea is serene and perfect for brainstorming and exchange of ideas.
“A good number of sizeable corporations as well as special interest groups have organised MICE events onboard SuperStar Libra, such as a 4D3N destination cruise for 1,000 guests for an India-based incentive group,” he added.
Said Royal Caribbean Cruises’ Tan: “For Indonesia and India, MICE business makes up almost 50 per cent of our total sales. Incentive travel is a popular trend for companies in these markets.”
MICE cruises make up a small but growing segment for Jebsen Travel Hong Kong, according to cruise section assistant sales manager, Crystal Wong. Such cruises were particularly “hot” for investment banks, which would invite their clients and hold seminars on board” she added.
Wally Cervantes, general manager for Arpan Air in the Philippines, remarked that the incentive segment presented immense potential for cruising and that business was only “hindered by the current deployment of ships and how creative the principals are”.
When faraway seas cast their spell
While Asia is set to be a hotbed for cruising in coming years, a significant number of South-east Asians, particularly the high-end segment, have passed over the opportunity to sail in their own backyard for the distant shores of the Mediterranean, Alaska and the Antarctica, according to cruise experts in the region.
Melvyn Yap, Asia regional director at Silversea Cruises, opined that the desire to explore exotic realms was a key motivator. “A holiday destination that offers a contrast in culture, cuisine and sightseeing than found locally can often appeal. Most South-east Asians are keen to explore a different world from what they are used to,” he said.
Added Sukanya Rattanavadee, GSA general manager of Regale International Travel Thailand: “Most experienced Thai travellers have been to most Asian countries by land, so they seem to lose interest in returning to the same cities, (where) they can easily travel by themselves probably at lower fares.”
Faraway destinations were deemed more fascinating, she said. “Our most popular cruise destination is Alaska. Thais like to enjoy cool weather, different scenery, especially glaciers and fjords and wildlife.”
Celebrity Cruises’ European and Mediterranean itineraries had sold well among Filipino cruise travellers, said Marilen Yaptangco, president and CEO of Baron Travel. She added: “The US (market) is tired of Alaska, but Asians aren’t – they can’t get enough of it.”
Similarly, Alaskan and Mediterranean cruises are popular among high-income Malaysian travellers, with bookings typically made for one cabin (two people) and duration lasting one or two weeks, according to Abdul Rahman Mohamed, deputy general manager, channel management of Mayflower Acme Tours Malaysia, which saw a five per cent year-on-year growth in cruises outside Asia in 1H2013.
He added luxury cruiseships such as Silversea, Queen Elizabeth and Princess were favoured by high-end customers, but the numbers were limited due to high cruise fees. He said: “To encourage high-end travellers to cruise within Asia, Asian NTOs have to attract more luxury cruises to make Asia their port-of-call.”
WITA Tour Indonesia director of sales and marketing, Rudiana, said: “To the Indonesians, Asian destinations like Singapore, Phuket and Penang are not new; they have been there a number of times before finally deciding on taking the cruise. Generally, people are trying the ships, enjoying the facilities and programmes (on board) rather than choosing a destination.”
More efforts are hence needed to promote regional cruises among Asian travellers, industry experts pointed out.
“Many Asians still have the mindset that cruises are more suitable for retirees or families with young children,” said Eileen Oh, head of marketing & communications at ASA Holidays Singapore. “We are exploring ideas with various stakeholders to reach out to different clientele such as the young adults and luxury travel segments.”
Urging greater efforts to demystify cruising, Tina Cortez, president of Travel People Philippines, remarked: “While pricing is always a key driver to attract markets, awareness campaigns should address (misconceptions) by highlighting cruising’s unique value propositions: all-inclusive pricing, free entertainment, activities for all members of the family, etc.”
Ong Huey Hong, Singapore Tourism Board cruise director, concurred, adding that many Asians were “surprised” to learn of the diverse offerings available on board and considered cruises to be a “value-for-money vacation choice”.
But getting repeat Asian cruise travellers is a challenge. Rudiana said: “Indonesians want to see many places when they travel and spending more time on the cruiseship is not their type of vacation. Our surveys showed that while the majority of cruise travellers are satisfied and happy with the trip, the repeat level is low.”
Furthermore, it is not uncommon for experienced cruise travellers to opt for destinations beyond Asia for their subsequent vacations, noted Karl Wat, director of sales for Asia, Compagnie Du Ponant Yacht Cruises. “They started with Star Cruises or Costa Cruises from the outset, which helped nurture a group of mature clientele (heading further afield for their cruises),” he said.
Improving shore excursions is hence key to raise the allure of regional cruises. Ground operators could operate tours in various Asian languages, for example, Regale’s Sukanya suggested.
Developing supporting infrastructure and improving awareness of cruises and training across the travel trade would help convince more Asians to cruise within the region, added Silversea’s Yap.
Travel consultants are set to enjoy greater choices from more openings in Manila, continuing low room rates in Bangkok and Jakarta, prospects of lower rates in Kuala Lumpur and New Delhi, and possible service and product upgrade in Hong Kong and Singapore. Here’s your guide to the five-star market in seven key Asian cities
BANGKOK Supply overview
As at end 1H2013, there were 23 luxury hotels in Bangkok with a total of 6,800 rooms, up 12 per cent from the same period last year, according to CBRE
Thailand. Hilton Sukhumvit Bangkok and Park Hyatt Bangkok are due to open in the coming months, while Waldorf Astoria Bangkok and Edition Hotel Bangkok are due in 2014 and 2015 respectively.
According to Jones Lang LaSalle (JLL), most of the 5,918 rooms to come online in Bangkok from now until 2015 will be concentrated in the upscale and luxury segments, the latter comprising 36.9 per cent or more than 2,180 keys.
Andrew Langdon, executive vice president-Thailand and Indochina at JLL’s Hotels & Hospitality Group, said: “The market has seen a strong recovery in international tourism arrivals over the last two years on the back of a return to political stability. The anticipation is for the strong demand recovery to continue over the next few years. The expected growth in room supply, particularly in 2013, should be absorbed by continued recovery in demand.”
Demand overview
Luxury hotels in Bangkok performed strongly in 2012 with RevPAR rising to 3,396 baht (US$108.14), up 25.3 per cent from the year before, according to JLL. It rose a further 6.9 per cent to 3,987 baht during the first five months of this year, while average occupancy climbed 3.7 percentage points to 68.4 per cent. However, ARR nudged up a mere 1.2 per cent to 5,832 baht, compared with the same period the previous year.
While RevPAR currently remains below par, James Pitchon, executive director of CBRE Thailand, said: “It looks like the rate of supply (of new hotels) is finally starting to slow, so we’re expecting a record high season this year and we may start seeing room rates rise soon. Of course, that depends on whether rooms have already been contracted out or allocated at current market prices.”
Key challenges
Bangkok offers the lowest luxury hotel room rates in Asia, outside of Malaysia. The fact that one can stay in a Bangkok luxury property for a third of the cost of a hotel run by the same brand in Singapore or Hong Kong is great news for tourists. However, it dampens the sector’s earnings.
Pitchon said higher operational expenses, especially labour costs, would weigh on the sector’s bottomline, especially if properties maintained their current rates in a market where the local currency had weakened against the greenback and sterling in recent months.
The city’s over-reliance on key mass markets such as Russia and China also poses a risk to the accommodation sector’s profit.
Mandarin Oriental Hong Kong’s Lichfield Suite
HONG KONG Supply overview
As of 1H2013, there were 34 properties (17,522 rooms) in the High Tariff A category.
According to Victor Chan, chairman of Hong Kong Hotel Association, the number of luxury hotels in Hong Kong has not changed in the last couple of years, and the overall business environment in the city is not expected to cause noticeable fluctuations in the sector’s performance.
Currently, the conversion of Murray Building into a luxury hotel is expected to take a few more years to complete, while another new hotel might be expected at Disneyland.
Yet another, Rosewood Hotel, was also under construction, added Frank Sorgiovanni, vice president of Research Asia, Jones Lang LaSalle, who also expects no major new developments in the short-to-medium term in the five-star sector.
Demand overview
According to Hong Kong Tourism Board (HKTB), in 1H2013, High Tariff A category hotels registered an average occupancy of 84 per cent, up two per cent compared with the same period in 2012, and ARR of HK$2,368 (US$305), down 2.3 per cent.
Sorgiovanni projects strong arrivals from China to continue, but points out that arrivals from the majority of short- and longhaul markets are declining, based on latest data released by HKTB.
“Trading performance has been weak as at May 2013, but gaps in MICE demand are expected to be filled by strong Chinese leisure demand that typically arises in 3Q2013. Given the benign supply scenario in Hong Kong, upscale and luxury hotel performance is expected to remain stable.” he said.
Sherona Lau, director of marketing at The Peninsula Hong Kong which has just completed a major renovation, shared: “We were able to maintain the top RevPAR position in the city from 2012 until early 2013, showcasing a 22 per cent increase, with ARR up by 14 per cent. As we are now working with a full inventory, we expect a healthy performance, subject to the usual market conditions.”
Key challenges
Manpower remains the key challenge for Hong Kong as it impacts the consistency of high service standards. Chan said that staff turnover and the changing work habits of the new generation also made human resource management more difficult.
He summed up: “It’s about recruiting, training and retaining talented staff, which in today’s environment requires a great deal of leadership and management. F&B is another area where competition among new signature restaurants for the best chefs is ever increasing. Overall, operating costs are rapidly rising and profit margins are under pressure.”
Intercontinental Jakarta
JAKARTA Supply overview
Room inventory growth for upscale accommodation in Jakarta has been minimal in the last decade. The city currently has 13 luxury hotels, with 3,773 rooms. However, in view of Indonesia’s growing economy, at least seven new luxury properties are expected to enter the scene within the next three years, adding nearly 1,900 rooms.
Both Raffles and Fairmont Hotels & Resorts will debut in the city, with the 180-room Raffles Jakarta targeted to open this year and the 488-room Fairmont Jakarta, Senayan Square next year. Marriott International will add the 275-room JW Marriott Jakarta Kemang Village (2014) and the 208-room JW Marriott Jakarta West St Moritz (2015), while the 480-key InterContinental Jakarta Pondok Indah Hotel & Residences will open in 2015. Starwood Hotels & Resorts will follow with its 250-room W Jakarta and 125-room St Regis Jakarta, both in 2016.
Demand overview
Average occupancy has been stable in the last three years at about 64 per cent, while ARR and RevPAR in 2011 and 2012 saw double-digit growths, according to STR Global.
In 1H2013, ARR grew 9.5 per cent and RevPAR, 12.9 per cent, compared with the same period last year, the highest growth rate in South-east Asia. As at June, the year-to-date ARR was US$192.09 and RevPAR, US$124.29.
The Ritz-Carlton Jakarta, Pacific Place saw a successful first half and expects business to be strong till the final quarter. Grand Hyatt Jakarta is upbeat about the second half, noting a significant rise in rates and the market’s buying power this year. C9 Hotelworks managing director, Bill Barnett, notes that Jakarta’s hotel rooms are relatively underpriced. Citing STR Global’s data 2012, he said Jakarta’s RevPAR was similar to Bangkok’s US$90, lower than Kuala Lumpur’s US$94 and Manila’s US$99, and way behind Singapore’s US$234.
Key challenges
Barnett said Jakarta hotels were business-centric, so they needed to lower rates to fill rooms on weekends. He added that rates of the upper tier would not move up much “until Jakarta can diversify with a convention centre, strong infrastructure or demand generators like world-class amusement parks”.
Jakarta hoteliers are also seeing infrastructural limitations and increasing costs of labour and electricity.
Barnett said the future game changers would be the mass rapid transit and the skytrain the Jakarta government was now working on.
Taj Palace Hotel New Delhi
NEW DELHI Supply overview
According to HVS India, New Delhi is the second largest hotel market in the country in 2012/13, after Mumbai. It has around 11,500 rooms, of which 60-65 per cent are luxury and upscale.
Vivek Shukla, general manager of The Lalit New Delhi, said the supply of luxury hotels had been stable in general for the last few years.
Going forward, HVS India’s chairman, Manav Thadani, tracks close to 6,000 new rooms being planned for the next five years, with luxury and upscale hotels accounting for 40 per cent of this proposed supply.
Some of the new hotels to open include JW Marriott, MGM, Aloft, Dusit D2 and Hyatt’s new brand, Andaz. All these hotels are part of the Delhi Aerocity project.
Demand overview
According to HVS India, the average occupancy rate of Delhi’s luxury and upscale hotels in 2012/13 was about 60 per cent, with ARR at Rs8,000-8,500 (US$132-US$140). These hotels recorded a marginal decline in occupancy and a six to seven per cent decline in ARR in 2012/13 over the previous year.
The Lalit’s Shukla said currently, the average occupancy of luxury hotels in the city was 53.7 per cent while ARR and RevPAR stood at Rs8,362 and Rs5,000, respectively.
He said: “There has been a marginal increase in occupancy. However ARR has shown a decline of four to five per cent over last year.”
Key challenges
Industry players said the depreciating rupee, rising inflation and economic downturn in European countries had dulled business a little.
Gitanjali Singh, head-sales of The Royal Plaza New Delhi, said: “Rising costs and a decline in occupancy and room rates will shrink operating margins by 16-20 per cent in 2013 and 2014.”
In the last two years several high-end hotels have opened in East and West Delhi. Coupled with additions to supply in Gurgaon and Noida, traditional city-centre hotels have thus seen demand bottoming out. This trend is expected to continue in the short-term.
Going forward, the pressure on occupancy and ARR over the next two to three years remains imminent with the entry of the Aerocity hotels.
JW Marriot Kuala Lumpur Lobby
KUALA LUMPUR Supply overview
According to the Malaysia Association of Hotels (MAH), as of May 2013, there were 25 five-star hotels in Kuala Lumpur providing a total of 10,544 rooms.
Ganneesh Ramaa, manager of Luxury Tours Malaysia, said: “Over the last few years, the trend has been the opening of more five-star hotels rather than the lower-category hotels in the city.”
Moving forward, inventory for the five-star category is expected to increase by 12.2 per cent, or an additional 1,283 rooms between 2014 and 2016. New brands debuting in Kuala Lumpur include St Regis Kuala Lumpur, scheduled to open in December 2014 with 208 rooms and 160 residences; Banyan Tree Signatures Pavilion Kuala Lumpur with 50 suites, scheduled to open in 2015; and W Kuala Lumpur with 150 rooms, scheduled to open in 2016.
Adam Kamal, managing director of Tina Travel & Agencies, said these new brands would grow the number of meeting spaces.
He added: “It is also a bonus that these hotels are located a short distance from the Kuala Lumpur Convention Centre, which would help the destination attract more high-end conferences.”
Demand overview
According to MAH, the average occupancy of five-star properties in Kuala Lumpur in 2012 was 71.6 per cent, while their ARR and RevPAR were RM297 (US$93.75) and RM213 respectively. In 2011, average occupancy stood at 74.5 per cent, ARR at RM315 and RevPAR at RM235. Up-to-date statistics are not available as MAH is no longer collecting them due to the Competition Act.
But going forward, Christina Toh, MAH’s vice president, expects a positive outlook for all hotels in Kuala Lumpur, as Malaysia Airlines, AirAsia, AirAsia X and Malindo Air continue to expand their network from their hubs in Kuala Lumpur International Airport. Average occupancy is expected to rise with an expected increase in arrivals from India, China, South Korea, Australia and Dubai.
Key challenges
Anna Olsson, director of sales and marketing at YTL Hotels, said: “The main challenge would be the ever-increasing competition from neighbouring countries, particularly from Bangkok whose MICE initiatives are becoming strong. Locally, stiff competition is also expected with the addition of more five-star properties over the next few years.”
Another hotelier said five-star hotels in the city tended to drop rates to capture the MICE business. The source said: “As a result, the gap narrows between five- and four-star hotels. Once rates drop, it becomes difficult to raise them again.”
Luxury Tours’ Ramaa said the service level of front-office and F&B personnel of some five-star hotels was not up to five-star standard due to inadequate training.
Manfred Kurz, managing director, Diethelm Travel Malaysia, agreed: “There are many independent hotels in Kuala Lumpur that have received a five-star rating, but (their service standard) does not befit this category and are thus disappointing to tourists.”
MANILA Supply overview
Manila’s luxury hotel sector is growing at an unprecedented rate as the Philippines continues to enjoy economic and political stability. Data from the Department of Tourism (DoT) show that from 22 deluxe properties last year, Metro Manila now has 26, augmenting room inventory by 12.4 per cent, from 9,040 the previous year to 10,165 rooms this year.
Newcomers 500-room Solaire Hotel & Casino, 280-room Fairmont Makati and 32-suite Raffles Makati debuted in the first quarter while the 313-room Marco Polo Ortigas will be launched late this year.
Deluxe rooms are projected to expand by nearly 50 per cent to over 5,000 rooms by 2017. Of the glitziest will be the four integrated resorts at the Entertainment City. Aside from Solaire, which will open 300 more rooms next year, each of the three resorts will build a minimum of 800 hotel rooms by 2017.
Within the Bonifacio Global City (BGC) business district, the Ascott BGC service residences will open next year, followed by Grand Hyatt and Shangri-La at The Fort in 2015.
In Makati, Worldhotels and Residences will debut next year while Movenpick Hotel & Residences is targeted for opening in 2016. Newport City near NAIA will have a Hilton and a Sheraton by 2016.
Demand overview
Manila’s hotel industry showed mixed results in 1H2013, according to STR Global. Average occupancy dropped to 69.6 per cent from 73.9 per cent in 1H2012. However, ARR stood at US$138.76, or 6.3 per cent more than US$130.57 in 1H2012.
While the expanding hotel supply could have caused the drop in average occupancy, hotels nevertheless were able to maintain – and even increase – their ARR. Influenced by the occupancy and ARR, RevPAR increased ever slightly by 0.1 per cent to US$96.81, from US$90.59 a year ago. Eugene Tamesis, director of sales and marketing, Raffles Makati and Fairmont Makati, said the rising RevPAR could be attributed to “stronger demand from the business segment, leisure travellers and domestic tourism or ‘staycation’ bookings especially on weekends, helping boost the demand during otherwise quiet periods”.
For the rest of the year, RevPAR is expected to continue rising on the heels of the latest DoT report which shows a year-on-year 10 per cent growth in foreign arrivals.
Key challenges
Since a substantial number of hotels in the pipeline are also coming from the mid-market segment, the challenge is growing competition between deluxe and four- and even three-star hotels.
“There’s not much difference between the published rates of deluxe and four-star hotels and the gap will be narrower,” said Karlo Pobre, manager of research and advisory services, Colliers International.
Pobre added DoT’s It’s more fun in the Philippines brand was directed more at middle-income leisure travellers who were inclined to stay at limited-star hotels.
Tamesis cited infrastructural challenges, especially the need to address Manila’s congested international airport if the country’s arrival targets were to be achieved.
SINGAPORE Supply overview
As per OCBC Investment Research report published in June, as at end 2012, 57 per cent of the total hotel supply in Singapore belongs to the upscale and luxury tier, with a total of 28,845 rooms. The report forecasts another 3,981 upscale/luxury rooms from 2013 to 2015 and growth of 4.4 per cent per annum during this period.
One new property is Patina Hotels & Resorts, a luxury hotel chain, which will debut with a 157-key property in The Capitol, Singapore end-2014. Other upcoming developments in the next two years include The Westin, Sofitel So and an extension of Raffles Hotel.
Frank Sorgiovanni, vice president of Research Asia, Jones Lang LaSalle, said: “The proportion of five-star rooms has been down in recent years, with midscale and upscale (properties) seeing stronger demand. We forecast 633 five-star rooms over the next 12 months. One entrant is the 301-room Westin Marina Bay, opening end-2013.”
Demand overview
As per Singapore Tourism Board’s (STB) preliminary statistics for January to April, ARR for luxury hotels moved up slightly to S$423 (US$334), from S$421 last year. RevPAR rose to S$372, from S$344, while average occupancy registered 88 per cent, up from 82 per cent.
Chuck Abbott, regional vice president-South-east Asia of Starwood Hotels & Resorts, said Starwood hotels in Singapore had seen a steady increase in occupancy in the last few years and with the growth of the middle class in Asia-Pacific, the group had confidence in the Singapore market.
Similarly, Peter Mainguy, general manager of The Ritz-Carlton, Millenia Singapore, said the hotel’s ARR and RevPAR had been on the rise since 2010, adding that there was a large demand for luxury travel from emerging markets such as China and India.
Alicia Seah, senior vice president of marketing and PR, CTC Travel, said: “The luxury hotels in Singapore appeal especially to FITs and incentive groups as normal tour groups find the prices too high.”
Key challenges
Heng Li Lang, director of hotels, STB, highlighted manpower crunch as the key challenge.
“Luxury hotels have the delicate task of optimising lean manpower without compromising service standards,” Heng said, suggesting that hotels explore innovative ways to improve efficiency.
Another challenge, Mainguy opined, was the need to continually refresh the hotel’s products and services to live up to the five-star standard.
For Abbott, Singapore’s hotel prices can be a stumbling block. He said: “There is some price resistance when competing against destinations such as Bangkok. Our priority is to focus on personalising guests’ experience and maximising the overall value for them.”
Additional reporting from Prudence Lui, Mimi Hudoyo, Rohit Kaul, Rosa Ocampo, Lee Pei Qi
Royal Plaza on Scotts’ general manager, Patrick Fiat, shares the initiatives that make the hotel win Aon Hewitt’s Best Employer and Best Employer for Commitment to Engagement 2013 awards
Chillax Lounge Why it’s needed Royal Plaza on Scotts (RP) recognises the importance of upgrading the organisation’s hardware for associates to feel at home. This has spurred the hotel to create Chillax Lounge, a space equipped with a projector for associates to unwind while watching movies or television programmes and bond with each other. Massage chairs are also available for them to relax and pamper themselves during their free time. Those who prefer to spend quiet moments can surf the Internet, read books, newspapers and magazines or simply enjoy the view of the live aquarium. Associates were also involved in the logo design creation for the new lounge.
Key results Many associates expressed their happiness in having a space to chill out during their breaks and even before or after work. The happiness index at the workplace has increased as associates feel recognised by the management for their passion and efforts. We have been able to better retain our current associates, instead of using resources to attract talents.
Friday open-door sessions with the general manager Why it’s needed RP’s tagline – What Can We Do For You – reflects our service and this is demonstrated from the management to associates first. Engagement sessions with different age groups are conducted on a regular basis to find out what RP associates are looking for in an organisation. The highly-connected younger generations are enthusiastic and full of passion to make differences and bring new ideas into the company.
During these engagement sessions, associates can communicate directly with me. I would address their concerns and makes improvements in the hotel for both guests and associates, based on feedback or suggestions from associates. There is also an allocated timeslot for an open-door session every Friday, during which any associate may simply walk in and have a chat with me.
Key results Initiatives directed at the needs of RP associates are very welcomed, especially among the younger members. Associates feel more appreciated knowing that their voices are heard and their comments are taken in consideration and actualised. Some initiatives brought about include flexible benefits, children education subsidies and birthday leave. Quarterly people’s engagement forums Why it’s needed Associates are invited to attend quarterly people’s engagement forums, where the management will provide updates on the hotel and individual departments. Associates’ personal achievements and milestones such as graduations, marriages, birth of newborns and even successful attempts to quit smoking are also shared during these sessions. After each session, associates will be treated to a spread specially prepared by Carousel’s culinary team as a gesture of appreciation for their efforts.
Key results Associates feel a sense of ownership and belonging through these forums, where they are able to share the joy of their milestones and achievements. This has helped to foster more personal interactions between associates and better interpersonal relationships in the hotel.
Implementing activities to maintain a balance of work and play Why it’s neededAssociates are looking for fun in the workplace to keep their passion for work burning. Weekly delights which bring surprises to our employees could be a cup of fresh fruits hand-delivered to the offices or the back of the house area for all associates to indulge in or an additional signature dish on the canteen’s menu by Carousel’s chefs.
Key results These weekly delights bring joy to the workplace and associates become more inspired and motivated. With the fun environment that RP has created, associates shared that they look forward to come to work every day.
Celebrations Why it’s needed During special occasions such as Valentine’s Day, Halloween and Christmas, the hotel engages associates to join in the fun. Earlier this year, I specially geared up as God of Wealth to convey my well wishes to associates by distributing mandarin oranges and red packets in celebration of the Lunar New Year.
It is essential to continue to build on the organisation’s culture as associates are also looking for an emotional connection with their employers.
Key results We believe that all associates will be able to give back to the organisation through their service for what we are giving them. Associates feel regarded by the management as its internal guests and are more inspired to create positive and extraordinary experiences for our external guests. Ultimately, happy associates make happy guests.
Omitting clock-in, clock-out practices and submission of MCs Why it’s needed RP is committed to “trust and respect” its associates, an important value in the workplace. We are the only hotel where everyone across all ranks is not required to clock-in and clock-out. The submission of MCs was also omitted recently; associates just need to ring in and let their supervisors know that they are unfit for work.
Key results By demonstrating the level of trust and respect in our associates, they feel a greater sense of responsibility towards their work. In the first two months of implementation, we saw an increase of 10 to 15 per cent more medical leaves being taken – this was within our expectations. It has since decreased to only about two to three per cent more than the previous level before the implementation.
Empowering associates Why it’s neededEmpowering and entrusting RP associates to make decisions in their line of work makes them feel valued as every individual is able to make a difference at the workplace.
Key results Associates are inspired as they are able to make a difference in the organisation. As associates find fulfilment in their work, they put in extra effort to deliver seamless experiences for our guests. They are also more motivated to customise the experience for guests such as preparing thoughtful amenities to celebrate special occasions and milestones with them. These have helped to leave lasting impressions on our guests and keep them coming back to the hotel.
Star programme Why it’s needed Associates who provide service beyond expectations are awarded the “Star” title. Personalised posters of these individuals will be shared via various platforms, with a picture of them and the extraordinary experiences they have created for our guests. They will also receive shopping vouchers of their choice during the people’s engagement forums.
This programme allows the management and fellow colleagues to recognise how each individual can make a difference in creating refreshing guest experiences.
Key results Associates have embraced our brand values to heart and are committed to creating positive and extraordinary guest experiences whenever possible. As associates feel appreciated and valued for what they do, they are encouraged to go the extra mile to ‘wow’ our guests.
Engagement on a more personal level Why it’s neededThe hotel is engaging associates on a more personal level using Facebook. Associates of all levels are able to comment or simply “like” in response to initiatives that the organisation is rolling out.
The ability to continuously engage, stay current and respond quickly to evolving trends is fundamental as a long-term human resources strategy for RP.
Key results Initiatives to retain associates with our engagement efforts have been effective. We are pleased to share the honour of being Singapore’s Best Employer with our committed employees and guests. The hotel will continue to strive to create a fun organisation, where employees look forward to come to work and extraordinary experiences are created for hotel guests every day.
By Patrick Fiat, general manager, Royal Plaza on Scotts
Did you imagine you would be helming WRS?
Some have commented that your entrance tickets are too expensive.
shares the initiatives that make the hotel win Aon Hewitt’s Best Employer and Best Employer for Commitment to Engagement 2013 awards
