CLIA plans to engage Asian travel agencies

May 3, 2013

THE Cruise Lines International Association (CLIA) is looking to be “more robust” in Asia, according to president and CEO, Christine Duffy.

“With Carnival Corporation having this footprint in Asia, we’re looking at how CLIA can be more robust and engage the travel agencies in the region, providing education, training and certification and working with them to promote cruising to consumers through various activities. In North America, for example, we do a national cruise vacation week, and this is being embraced in the UK and Australia,” she said.

Seventy-six per cent of all cruises are booked through travel consultants, she added.

CLIA is also looking at certification programmes for the trade in Asia and Australia. It runs six certification programmes in North America, is rolling out a programme for Europe and is considering a global programme.

“Our metrics show that travel agencies certified by CLIA have higher cruise sales,” she said.

Currently, CLIA has “someone here (Singapore)” and works with the Asia Cruise Association. “We are looking at how we may evolve that, with Carnival Corporation having this footprint in Asia. You will see and hear more from us in terms of how we can further engage travel agencies here.”

Deputy chair of CLIA in Australia and Carnival Australia CEO, Ann Sherry Ao, said: “A lot of materials have already been developed for travel agencies in other markets that we think we could help agencies in this part of the world. There is a lot of benefit for the agency if you know the product well, understand how to sell it, how to link it to air and other forms of holidays. Cruising has made many agents from other parts of the world more profitable.”

Anthony Kaufman, SVP commercial affairs of Princess Cruises, encouraged Asian agencies to jump on board now. “As we expand rapidly, there is a big opportunity for travel consultants who really want to learn about cruising early on and create the space for themselves to become experts,” he said.

Duffy pointed that that the cruise market penetration in the US of 3.4 per cent (i.e. 3.4 per cent of its population takes a cruise) translated to 10 million cruise passengers. “If you think of that level of penetration for Asia, given your population, the potential is 40 million passengers – just imagine.”

Merged and marching on

By Raini Hamdi

May 3, 2013

He lives and breathes Kuoni, which he joined 17 years ago. Now, as CEO of the group’s biggest business unit following the GTA integration, Schafroth is raring to see Kuoni transform further. Raini Hamdi checks out his game plan

Rolf Schafroth, CEO, Kuoni Global Travel Services

Going by Kuoni’s recently released annual report 2012, Global Travel Services* has now overtaken traditional Outbound Europe as the biggest business unit in terms of turnover.
It’s just that this business has better growth prospects than the traditional tour operating business which we know well and is indeed the rationale why Kuoni acquired GTA in the first place.

Look at the FIT business – the prospects are bigger in Asia, though it is still big in Europe. We are looking to cater not only to Asian customers but Asian destinations – so Asia to Asia, Asia to Middle East, Asia to Americas. You don’t see these growth rates in the tour operating world.

(*Global Travel Services covers the FIT business through GTA, group business through a new brand called Global Travel Experts and MICE through Kuoni Destination Management.)

Is the tour operating model dead?
Hah! There is no straight answer because the tour operating business is not just one model. The committed business, charter airlines, works differently from the a la carte specialist model.

But I think if it’s just single components which consumers can buy everywhere – that model is under pressure because of the way it’s produced: way in advance, you print brochures, etc, when the consumer today can just go to the Internet and buy.

Would you say the Kuoni Group business model has changed?
If you look at Kuoni Group just five years ago, and Peter Rothwell (Kuoni Group CEO) has mentioned this too, majority of the business was tour operating. Today, Kuoni Group has gone through a transition; we have six to eight different business portfolios – specialist business, groups, FIT, VFS (Visa Facilitation Services*), etc.

Yes, we do have businesses that are under pressure, that’s why we announced last year the release of some businesses where there was no value-add to the customer (these divestments included Ski Verbier UK, operations in the Netherlands, Spain and Russia, Italy, Belgium, France and B2C online hotel platform Octopustravel).

This is never finished. There was so much change in the last five years and the next five will bring even bigger changes. But we are in a better position to try and grow with change.

Bottomline is, you can’t expect to grow a business which in itself does not grow. But that does not mean you give up. You say, okay, if you can continue doing it, do it, but at the same time try and build the future of the company in different areas.

(*VFS Global snapped its biggest contract to date, in volume and scope of services, last August, to process visa applications for Saudi Arabia. At the end of 2012, VFS provided external consular services for 42 governments in 88 countries through 802 visa application centres. Around 14.6 million visa applications were handled during the year, 27 per cent more than in 2011.)

What sort of pressure comes with being the ‘star’ business unit in Kuoni Group?
We understand the responsibility we have for the growth of Kuoni Group; it’s not about being a big division, or being so important and all that.

We have gone through a successful 18-month GTA integration, so what’s next is to grow. This cannot be the end, certainly not in a market that offers growth and opportunities.

I’ve been with Kuoni now for 17 years. I remember when we were the small incoming unit; we should be substantially bigger now. I have big plans and put high targets on myself, I must say. The other parts of Kuoni also have to grow.

“You can’t expect to grow a business which in itself does not grow. But that does not mean you give up. You say, okay, if you can continue doing it, do it, but at the same time try and build the future of the company in different areas.”

What’s your game plan to grow?
(Long pause) I don’t want to reveal too much, but suffice to say, through the integration, we achieved a lot of synergies and efficiencies that put us in a position to grow the FIT and group business, so we’re not looking to go out and buy, say, another online wholesaler. But we don’t mind buying another business if it is something we don’t have and can add to the division; I’m thinking of the MICE business, for instance, which we do but don’t make a big fuss of, yet it has so much potential.

Divisions can build new businesses.

What were the biggest synergies?
One was the profitability, sometimes just by putting things together, for instance, bringing together the customer base of GTA and Kuoni Connect (which has been axed, its content merged into GTA). Another was infrastructure savings – we don’t need two FIT systems, for example.

Did the integration turn out as expected?
The integration was a success. You read that 50-60 per cent of integrations fail and, frankly, knowing what I know now, or what could have gone wrong, it’s scary.

Before the acquisition, I was a little afraid because we had been competing with GTA head-on for 30 years and people always talked about ‘cultural’ differences. But during the integration, I realised these (GTA and Kuoni) are global companies, even though they might operate differently in some geographical areas. Plus, they are also realistic people.

As well, the GTA people knew Kuoni was serious about the business, i.e. it wanted to build and invest in it, not take it apart. So the integration was not about moving units together then slashing costs, but about how to make the organisation fit for further growth. The concern among people thus was more about what would be changing than whether they would lose their jobs. Of course there were some organisational adjustments, but it was not because we needed fewer people, but because we moved some of the businesses to a different place.

What was your biggest fear when integrating?
My biggest fear when we started integrating was the sheer amount of work we had to go through and how it would affect the BAU (business as usual).

When you merge, the benefit is not immediate and it does not give me one additional customer. So how could we still achieve growth while going through a big transition was my concern.

In the end, the transition did not stop us from growing. I think it’s because we tried not to paralyse the organisation. There were a lot of people involved with the integration, but we did not involve people who should not be involved. They carried on doing the business and had the support of central integration teams.

What did you learn from this experience?
I learned that integration can be a success if you know why you are doing it, are clear about what you want to achieve and set ambitious but realistic targets and expectations.

Planning is also important, especially when it comes to systems and organisations – you can’t just take the approach of ‘we’ll find out as we integrate’.

Beyond these technical stuff, communication is important. When you change something, you have to go in-market and take people through change and celebrate the success stories so that they feel something is happening and understand why they have to go through it.

As well, execution. There will be people who will tell you a million ways why it will fail, but if you believe in it, you just have to push through and execute; don’t back off.

This article was first published in TTG Asia, May 3 – 16, 2013 issue, on page 7. To read more, please view our digital edition or click here to subscribe.

Moving their game online

By Paige Lee Pei Qi

May 3, 2013

Surprise, surprise. Customers seeking longer stays are shopping on the web too, and serviced residences are quick to accommodate by making their rooms bookable. Lee Pei Qi reports

Both Frasers Hospitality and Ascott have launched mobile-optimised websites over the last one year, catering to consumers on the go

Believing that online channels are the way to go, Asia-based serviced residence operators have been scuttling to extend their footprint in the space in recent months.

Having unveiled its mobile-friendly website and online chat facility last year, Ascott opened up its global inventory to major OTAs through a web-based connection in April.

Meanwhile, Frasers Hospitality rolled out its mobile website in February, while Far East Hospitality’s (FEH) brand website went live late last year.

Pan Pacific Hotels Group is also intending to relaunch its website by June, targeted to drive more business for both its hotels and serviced residences.

Shifting importance
Frasers Hospitality group director sales and marketing, Joanne Ang, said: “Our shift towards online channels has been substantial over the past three years, and is expected to increase further in tandem with the industry.”

She revealed that among all channels, direct reservations currently rank first, contributing 35 per cent of Frasers’ business. However, website bookings are catching up, with a close 30 per cent. The GDS, which is utilised by travel consultants and TMCs, stands at 10 per cent.

“Using e-channels forms a big part of our marketing strategy, and we have benefited greatly from working with OTAs and our brand website,” said Ang, adding that the company also receives a handful of corporate bookings from travel agencies’ web portals, which have started to feature serviced apartments in packages.

“This will enable users of OTAs to view real-time availability of our serviced apartments and receive instant booking confirmation.
Our focus is to ensure customers can make bookings as conveniently as possible.” – Anthony Khoo, Ascott’s senior vice president, brand and marketing, on sharing inventory with OTAs

Ascott, on the other hand, declined to reveal percentage breakdowns. Its senior vice president of brand and marketing, Anthony Khoo, would only let on that the performance for each distribution channel differs according to market demand.

He said: “For example, in Europe, where we have more guests on shorter stays, the bookings are mainly through OTAs and GDS. In Vietnam, however, where most of our guests are on long stays, bookings come mainly directly from the companies through phones or emails.”

At FEH, even though over 90 per cent of bookings come from email and phone enquiries, building awareness of its online sales channel remains a key initiative, shared COO, Raphael Saw.

He said: “The bigger online footprint has given rise to greater awareness of our serviced residences offerings. As a result, take-up rate through our website has grown noticeably.”

In addition, Saw pointed out that business had been coming in from OTAs too.

According to Andrew Donadel, general manager of Pan Pacific Serviced Suites Beach Road, the two Pan Pacific-branded serviced suites in Singapore receive more than half of bookings from corporates by phone and emails, 15 per cent from their websites and five to 10 per cent from OTAs and GDSs.

Despite the reliance on offline channels, he shared Saw’s sentiment. “The website is an important channel and we aim to drive more business through the website,” said Donadel.

From Left: Oakwood Premier Joy~Nostalg Center Manila, Ascott Huai Hai Road Shanghai, Far East Hospitality’s Orchard Scotts Residences Singapore

On screen attraction
Cost, convenience and the opportunity to gain new markets were reasons cited for wanting to pursue a more aggressive online strategy.

Oakwood Asia-Pacific senior manager, revenue management, Maybelline Teo, found the brand website to be the most effective channel.

From 2011 to 2012, Oakwood’s website saw booking volume jump by 99 per cent. To boost traffic further, an interactive campaign was launched last month to offer online exclusives.

“Not only are distribution costs lower than other e-channels, the opportunities for branding, cross-selling and upselling are easier and within our control,” said Teo.

“Online channels appeal to transient leisure travellers and the more IT-savvy corporate bookers. We are able to enhance their experiences with us at a lower cost and with a wider reach.”

Similarly, FEH’s Saw noted that direct bookings through the website or through calls/emails “generated more in terms of revenue percentage” compared to other channels.

The ability to move sales round the clock is another draw of online. Said Ascott’s Khoo of the group’s tie-up with OTAs: “This will enable users of OTAs to view real-time availability of our serviced apartments and receive instant booking confirmation. Our focus is to ensure customers can make bookings as conveniently as possible.”

Frasers’ Ang added: “The market currently favours both brand websites and online travel portals as they are always available and have their own host of unique navigational experiences.”

From Left: Joanne Ang, Group director sales and marketing, Frasers Hospitality / Raphael Saw, COO, Far East Hospitality / Maybelline Teo, Senior-manager, revenue management, Oakwood Asia-Pacific

In its early days
Despite the eagerness among brands to turn on the online tap, it seems the bulk of business still lies in offline for now.

FEH’s Saw explained: “As the duration of each stay is usually for an extended period, especially for longer-term stays which can be up to a few years, bookings are generally confirmed after enquiries are made over email or phone. Some clients will also need to view the serviced residences first.”

Donadel concurred. “Our focus is more on the longer-staying guests who can stay from one to three months and they tend to prefer contacting our sales managers first. GDSs and OTAs are mostly used by the travel (consultants) and FITs who are mostly short-stay guests.”

However, this situation is likely to evolve, given that more apartment operators are making inroads into the short-stay market and consumers are becoming more comfortable with web bookings.

When this happens, agencies with an online presence will be best suited to ride the wave, providing a comparison shopping option for residences.

From Left: Fraser Residence CBD East Beijing, Pan Pacific Serviced Suites Beach Road Singapore

This article was first published in TTG Asia, May 3 – 16, 2013 issue, on page 8. To read more, please view our digital edition or click here to subscribe.

Indian carriers’ fare unbundling may not result in lower prices

By Shekhar Niyogi

May 2, 2013

INDIA’S Ministry of Civil Aviation has given the green light for Indian carriers to unbundle certain services and charge separate fees for each of them, including check-in baggage, seat preference, selection of meals and beverages, and carriage of sports equipment.

The government rolled out the new guidelines on the assumption that the basic fares will be kept low for price-conscious clientele, while enabling airlines to develop more sustainable operations in an increasingly competitive aviation environment.

To ensure transparency of charges, the ministry’s acquiescence also comes with a corollary that carriers will have to fix and announce their charges in advance.

Sanjay Maniar, director of Kolkata-based Travelaid, said: “With the abnormally high cost of aviation turbine fuel in India and state taxes ranging from five to 30 per cent, the ability to find alternate sources of revenue is paramount for the survival of the Indian carriers.”

Welcoming the move, IndiGo president, Aditya Ghosh, said in a media release that “this step will align India with global practices in the airline industry.”

However, Ravi Luthra, director, New Delhi-based Landmark Tours & Travels, was not optimistic about lower fares. “Eighty per cent of an airline’s costs are fixed so they have very little room to reduce fares. We hope that paying for the additional usage that has been unbundled will not raise the total payout for a flight for the traveller,” he said.

Garuda posts bigger Q1 loss

By TTG Asia

May 2, 2013

NATIONAL carrier Garuda Indonesia recorded a net loss of US$33.7 million in the first quarter of 2013, which was over 200 per cent greater than the same period last year.

Attributing this to lesser domestic and international passenger demand in the first quarter, Garuda president and CEO, Emirsyah Satar, said: “All airlines (in Indonesia) have experienced a similar downturn in traffic demand. It is actually part of an airline cycle to have a slow first quarter.

“However, the flooding in Jakarta in the beginning of the year and the (regional) extreme weather in the first three months of the year made it worse.”

Despite the loss, the airline’s revenue in the first three months rose 12.5 per cent from US$717.4 million to US$807.2 million.

As a group – including Citilink – Garuda’s passenger market share increased from 30.3 per cent to 35.2 per cent while total passenger numbers grew 20.7 per cent to about 5.6 million during the period.

Having received four Airbus A320 aircraft for Citilink and two Bombardier CRJ1000 NextGen aircraft for Garuda in the first three months, the group now boasts a 112-aircraft strong fleet.

Emirates ramps up Bangkok, Hong Kong services

By TTG Asia

May 2, 2013

EMIRATES is set to boost its capacity to South-east Asia with the introduction of a fourth daily Hong Kong flight and a second daily A380 service to Bangkok come October.

From October 27, Emirates will add a fourth daily service from Dubai to Hong Kong on an Airbus A330-200 aircraft in a three-class configuration before upgrading the route to a Boeing 777-300ER later in the year.

Operating as EK386, the flight will depart Dubai at 21.00 and arrive in Hong Kong the following morning at 08.05. The return flight EK387 will depart Hong Kong at 09.40, arriving in Dubai at 14.55.

The Dubai-Hong Kong route is presently operated with A380 and B777-300ER aircraft, and the fourth daily flight will enable Emirates to serve more than 10,000 passengers between the two cities each week.

“Since the launch of the third daily service in October 2012 (TTG Asia e-Daily, October 23, 2012), we have witnessed a huge demand in passenger capacity and flight frequencies,” said Edwin Lau, vice president, Emirates Hong Kong.

Also starting October 27, Emirates will also launch a second daily A380 service to Bangkok. EK372 will depart Dubai at 09.40 and arrive in Bangkok at 19.15, while the return flight EK373 will depart Bangkok at 21.20 and arrive in Dubai the following day at 00.30.

Salem Obaidalla, Emirates’ senior vice president, Commercial Operations Far East & Australasia, said: “Earlier this year we launched our fifth daily flight to Bangkok, and the passenger demand has led to the decision to upgrade one of the services to the second A380 on the route. Thailand has been part of the Emirates network for over 20 years, and in last December we added Phuket as our second Thai destination (TTG Asia e-Daily, December 14, 2012).”

First DoubleTree by Hilton in Bangkok takes root

By TTG Asia

May 2, 2013

HILTON Worldwide opened the DoubleTree by Hilton Sukhumvit Bangkok on April 30, marking the brand’s inaugural debut in the Thai capital and the company’s 100^th property in Asia-Pacific.

Situated 400m from Phrom Phong Skytrain station on Sukhumvit Soi 26, the 23-storey hotel features 177 rooms and suites ranging between 28m² and 58m².

The hotel boasts such leisure facilities as an outdoor swimming pool and a 24-hour fitness centre, while meeting and event facilities include a 351m² conference room, a 56m² multi-purpose room and a business centre.

F&B outlets include Dee-Lite, an all-day dining restaurant serving Thai, Vietnamese and Western fare, and Mosaic, a poolside lounge and cocktail bar.

The company’s other upcoming properties in the Thai capital include Hilton Sukhumvit Bangkok, launching in July 2013, and Waldorf Astoria Bangkok, due to open in 2015.

Hilton Worldwide has more than 170 hotels and over 50,000 rooms in its pipeline in Asia-Pacific, and expects to triple its current portfolio in the next five years.

Malaysian association builds on hospitality training programme

By S Puvaneswary

May 2, 2013

THE Malaysian Association of Hotels (MAH) will conduct a six-month training programme targeted at school leavers and hospitality workers to ease the manpower shortage and reskill service staff.

Known as the National Dual Training System, the training programme will be conducted from June in the four cities of Kuala Lumpur, Selangor, Negeri Sembilan and Sabah.

This will be the second year that MAH is conducting these courses for the Ministry of Human Resources. The programme’s inaugural launch last year saw an intake of 200 apprentices.

Said MAH CEO, Reginald T Pereira: “We expect to train about 500 apprentices. The programme comprises 20 to 30 per cent theory while the rest is practical, with courses on housekeeping, food and beverage, kitchen and front office (operations). Upon completion, participants will be awarded the Malaysia Skills Certificate issued by the Ministry of Human Resources under the Skills Development Department.”

Apple Vacations & Conventions group managing director, Desmond Lee, said: “This is a good move that will not only address the manpower shortage but also create interest among trainees as they learn more about the hospitality industry. The staying power to be part of the industry will be stronger for those who have interest.”

Global leisure and corporate bookings in Q1 outpace 2012

By TTG Asia

May 2, 2013

HOTELIERS worldwide welcomed a promising first quarter as leisure and corporate travel bookings grew over the previous year in general, according to data from Pegasus Solutions.

Rates also delivered, with Q1 figures in the business and leisure sectors climbing past 2012 levels to rise 1.7 per cent and 1.4 per cent respectively.

Leisure travel bookings grew 5.1 per cent through the end of March, helped by an early Easter holiday and despite a shorter February (TTG Asia e-Daily, April 3, 2013). Global volumes in March increased 5.9 per cent year-on-year while rates grew 0.5 per cent. Length of stay and booking lead times were either on par with or gaining on prior year worldwide, indicating a promising consumer trend towards more international and longhaul travel.

“The stabilising or improved performance evident in leisure market indicators suggests hotels should emerge from daily survival mode to actually focus on the future,” said David Millili, CEO of Pegasus Solutions.

“When volume grows with rates, it means hotels aren’t pandering to win bookings by discounting. Instead, they are implementing and maintaining solid rate strategies with an eye to the future, making sure they are both available and bookable to seize a portion of growing demand.”

Corporate travellers also booked 2.4 per cent more reservations globally in 1Q2013 year-on-year, while staying within negative 0.3 per cent of March 2012. Rates for the segment also sustained, increasing by 1.7 per cent for the quarter and still growing slightly by 0.6 per cent in March. Average length of stay and reservation lead times exhibited marginal increases overall, which have held steady year-to-date.

Starwood lures meeting planners with more rewards

By TTG Asia

May 2, 2013

STARWOOD Hotels & Resorts Asia Pacific has rolled out a More Rewards meeting offer with more than 200 participating hotels across Asia-Pacific.

Under this promotion, participating properties will offer five per cent off the Master Account, a signing bonus of 1,000 Starpoints for every 10 roomnights booked and a choice of two value-adds from a selection that includes complimentary high-speed Internet in guestrooms, complimentary welcome reception with selected beverage and canapés for an hour, and two Starpoints for every US$3 spent.

Meeting planners who book at least 150 roomnights will also bag a two-night stay at the new Sheraton Macao Hotel, Cotai Central.

Besides offering additional rewards for holding events at Starwood properties in the region, the hotel group now allows members of the Starwood Preferred Planner (SPP) programme to combine group roomnights consumed in 2013 with those earned through the Starwood Preferred Guest programme. This move will speed up status upgrades for SPP members.