Unbundling the distribution landscape

July 26, 2013

GDSs have finally started to roll out airline ancillary products, but has it been a game-changer for all stakeholders in the trade? Lee Pei Qi finds out

Slowly but surely, GDSs have finally begun to make available airline ancillaries, a move that has been hailed as “revolutionary” in the current evolving GDS environment.

While GDSs traditionally serve airlines by reserving seats for travel consultants, it is becoming increasingly common among them to distribute ancillaries in their quest to bridge the divide between travel consultants, airlines and travellers.

Amadeus, which claims to be the “first GDS in the world to offer an ancillary service catalogue”, has allowed travel consultants to view airlines’ services offerings in real time since 2010.

Martin Symes, vice president, marketing, Abacus International, said likewise to keep up with global competition, the company started offering ancillaries like excess baggage, meals, premium seats and Internet access through its Abacus Air Extras function introduced in 2012.

Ian Heywood, head of global supplier strategy for Travelport, said: “Travellers today are expert shoppers and are expecting to get more from their purchase.”

Travelport has recently unveiled its new Travelport Merchandising Platform in April this year, enabling travel consultants to access the full range of airline products and ancillaries.

Apart from GDS-pioneered initiatives, IATA is also seeking to “modernise air travel distribution” with their New Distribution Capability (NDC) introduced last October.

Although still in its trial stage, this new XML-based standard will provide identical retail capabilities across all channels, enabling travel consultants to sell the same products and services that often can only be found on airlines’ brand websites.

Unbundling trend driven by LCCs
According to Travelport, the number of LCC passengers in Asia-Pacific is expected to almost double from 171 million in 2010 to 318 million in 2016.

PST Travel Services’ CEO Ngiam Foon has seen the demand for LCCs from his clients grown from a zero base to 25 per cent over the past two years.

Likewise, BCD Travel’s vice president, sales & account management for Asia Pacific, Todd Arthur, commented that the demand for LCCs is “growing strongly” throughout Asia-Pacific.

He said: “We now have to offer LCCs in our proposition to our clients because we need to provide a complete package to show a full comparison of prices.”

The entry of LCCs is interlinked with the provision of ancillaries because budget airlines are highly dependant on them as a source of revenue.

Evan Kruse, manager of trade distribution, Jetstar Airways, said: “Merchandising is crucial to us because as a LCC we need to have low-cost fares to be competitive in the market.

“Ancillaries are critical for us in our business model because only by making money from them can we then continue to keep our fares low,” he said.

Emphasising the importance of ancillary revenue, Kaneswaran Avili, commercial director of Tiger Airways, said: “It will be a huge loss to us if we cannot distribute ancillaries through the GDSs because there is untapped demand there.

“We have observed that our customers will always make use of ancillary items be it to opt for baggage or an advanced seat selection,” he said.

Travelport estimated that the airfare ancillary market will be worth US$45 billion by 2015 to underline the rising importance of merchandising in the industry today.

Accessing ancillaries on the GDS
Will Horton, analyst at CAPA – Centre for Aviation, said: “Ancillary development was previously stymied by the lack of GDS’ ability to fully support ancillaries, but now as they better support ancillaries we can see that airlines will develop more.”

Horton pointed out Travelport’s new merchandising platform as an example that is “better at accommodating ancillaries”.

Through this platform, currently already live, travel consultants are able to sell ancillaries within their screen as well as aggregate on a single screen fares connected via ATPCO as well as an API connection.

Previously, travel consultants had to grapple with the additional workload of having to leave their workflows to find products and services from the individual airline’s websites.

Travelport is due to launch on the same platform the ability for airlines to let consultants see photos and details of their products by the end of this year. With this “revolutionary platform”, Heywood expects other GDSs to follow suit.

(From left) Arthur, Ler, Ngiam and Miyauchi opined that travel consultants should be
compensated for helping airlines sell their ancillaries.

What lies in store for travel consultants?
As airline ancillaries are increasingly integrated into the travel distribution landscape, travel experts that TTG Asia spoke to acknowledged the rising demand for ancillaries from travellers but also appeared ambivalent about the unbundling trend at the same time.

Steven Ler, senior vice president and head of supplier relations, UOB Travel, expressed his concern of the extra work and time now required on the part of travel consultants.

He said: “With all these merchandising in the picture, it means (consultants) have to spend more time explaining and promoting.

“In the past, perhaps you need just seven minutes to talk to the travellers, but now it may increase to 15 minutes and this will affect our productivity,” he added.

Echoing similar sentiments, Hankyu Hanshin Business Travel’s assistant general manager, Satoshi Miyauchi, said: “To provide more services means more workload for us because we have to invest time.”

Furthermore, there is a “lack of incentives and motivation” for consultants to put in the added work, said Miyauchi.

PST Travel’s Ngiam agreed that this will take a toll on manpower resources and urged airlines to reward consultants for the extra work.

He said: “Our commissions are already limited and this is going to further reduce our profit margin, so it would be adequate if airlines can reward us accordingly.”

Ler added: “We need to find a right balance and evaluate how this will impact the (consultants’) bottom line and then look at a way to compensate us for the extra services we are providing.”

A new GDS model of the future?
As GDSs begin to distribute ancillaries, airlines seem to be the triumphant ones reaping the benefits while travel consultants continue grappling with the “extra work”.

Horton said: “Travel consultants may not have a monetary incentive to sell ancillaries as this not only gives them no reward for their time, but no incentive to learn about the ancillaries.”

But nonetheless, Horton pointed that travel consultants may comply with the need to sell ancillaries to stay relevant.

PST Travel’s Ngiam said: “No one likes extra work, but we have no choice. I agree this is a good direction and we have to live with it but we have to see how we can be compensated better.”

Also applauding the model, UOB Travel’s Ler said it “looks good for now” but cautioned against hailing it as the new GDS model.

He said: “It is too early to testify its success because it is not tried and tested fully in the market yet, so we have to see how travellers will really respond to it then.”

Vacation rental sites home in on SE Asia

By Paige Lee Pei Qi

July 26, 2013

Short-term vacation rental websites are fast gaining popularity worldwide as more travellers are cosying to rental apartments or homes in place of the traditional hotel experience

Short-term vacation rental websites are fast gaining popularity worldwide as more travellers are cosying to rental apartments or homes in place of the traditional hotel experience.
These emerging online models are founded on a simple concept – providing a platform for travellers seeking a place to stay and owners with a spare space to connect.

Based on individual requirements and preferences, whether it is to rent an entire apartment or house, a private room in somebody’s home or a shared space on the living-room couch, be it for a night, a week or a month, guests can search for a place that suits them best and connect with the host from there.

Vacation home rental websites enter Asia
Hailed as the pioneer in the holiday rental apartment scene, Airbnb introduced its online peer-to-peer concept in the US in 2008 and has since expanded to more than 33,000 cities and 192 countries.

While well-known in the western market, Airbnb has been a bit slow to foray into South-east Asia but it has since made up for lost time by expanding its operations into Thailand, Indonesia, Malaysia, the Philippines and Singapore late last year.

As this wave of short-term vacation rentals has finally caught on in Asia, Asian players are now seeking their share of the pie with their local offerings. Competition is heating up with similar online rental platforms popping up to wrestle for this emerging market in Asia.

Travelmob, a Singapore-based startup that entered the vacation rental scene last July, operates similarly to Airbnb but sets itself apart as an Asia-Pacific specialist by offering regional content to a global audience.

Travelmob co-founder Turochas Fuad said: “We are a very Asia-versed service and product. Being based in Asia (makes us) the experts here, be it with the place, culture, or people.”

According to Fuad, the number of room listings in their website has grown by 200 per cent since the start of the year to more than 14,000 properties. He said the site has been gathering “amazing response” with several thousands of nights booked every month, ranging from corporate retreats to honeymoons and expatriates relocating to a new city.

Meanwhile, the US-based vacation rental site of HomeAway has just announced in July its acquisition of a majority stake in Travelmob to accelerate its expansion in Asia-Pacific.

Another Singapore-based player, BeMyGuest, which was launched in October 2012, offers a similar suite of services as Travelmob but provides local activities and sightseeing tours across Asia in addition.

Bhavana Gupta, marketing director of BeMyGuest, said: “Apart from accommodation, we also offer authentic activities that are less commonly known to tourists like prata-making or Chinese tea-appreciation classes to give them a taste of the local culture.
“These unique experiences will appeal especially to the second-time visitors because it is unlikely for them to have done these before,” she added.

Who are the short-term renters in Asia?
As the online rental space heats up and become more mainstream, they present a potential to lure travellers away from traditional hotels with their proposition to provide guests real connections with their hosts as well as immersive local experiences in the destinations.

Business models like BeMyGuest are especially attractive to the “new millennial customers” between 30 and 45 years old, remarked Bhavana.

She said: “This group of people are seeking a differentiated tour and cultural experience because they are no longer satisfied with the usual hotels and sightseeing.”

Similarly, Roomorama, another Singapore-based short-term rental player founded in 2009, also observed a younger demographic among its clientile. Users are “savvy travellers” between the ages of 25 and 55 and are often looking for a “value-for-money and unique experience”, said Jia En Teo, COO and co-founder of Roomorama.

And unlike hotels, they can provide guests the comforts of a regular home with a full suite of amenities like kitchen, laundry facilities and entertainment systems, she pointed out.
In addition, Roomorama provides greater cost savings, according to Teo. She said: “Roomorama offers about 30 to 40 per cent savings compared to a typical hotel in the same location with the same standards.”

Nevertheless, such social stay models are unlikely to threaten the hospitality sector, opined these travel technopreneurs.

“We offer a new type of travel experience which is different from hotels,” said Bhavana. “We want to see ourselves as an added choice for travellers and view it is a good opportunity for us and hotels to work together and learn from each others’ offerings.”

Teo agreed: “The concept of short-term rentals has a positive impact on the travel industry and we have made travel more accessible to those who may have been constrained by the lack of affordability previously.”

Opportunities ahead, but not without challenges
However the popular practice of vacation rental may still take time to permeate through the Asian market, given that Asians’ travel habits tend to be more conservative.

While Roomorama is currently more popular in cities like Beijing, Tokyo and Bangkok and Bali, Teo highlighted that one of the challenges they face is drawing awareness to this concept.

She said: “We have to convince Asian travellers that staying in a hotel-alternative can be simple, and very safe.”

Faud added that Asians do not like to host or stay in people’s homes, and “education is needed” to change that perception. But he also pointed out that there are many affluent Asians who invest in secondary homes, which then offer them the chance to monetise that property in such business models.

As for BeMyGuest, Bhavana said travellers today are more “experimental” hence they do not face much concern on this aspect.

There is no doubt that Asia is warming up to this peer-to-peer holidaying concept, and with that travellers can now exercise the option of seeking immersive local experiences which literally promises a “home away from home”.

Asia grows as hotspot for exhibition M&A

By Paige Lee Pei Qi

July 25, 2013

MERGERS and acquisitions (M&A) activities are intensifying in Asia as more international exhibition organisers are drawn to the region in search of growth opportunities, with the number of such transactions rising from 42 in 2010 to 74 last year.

Steve Monnington, managing director of Mayfield Media Strategies, who presented the data at the Singapore MICE Forum on July 18, said the transactions were primarily for B2B exhibitions and valued under US$10 million.

Monnington identified Asia as the next hotspot for M&A in the exhibitions sphere, adding that China led the trend with nine transactions while India, Malaysia and Indonesia had five, four and three respectively in 2012.

Attributing this trend to the weak European economy, Monnington said: “International companies with exhibitions in mature economies have found it difficult to maintain growth in Europe due to the Eurozone crisis, hence the focus now on new markets with higher GDP growth.”

While China continues to draw great interest from exhibition organisers, Monnington said countries in South-east Asia would be the ones to watch, especially Indonesia due to its 240 million population and “many new venues that are coming up and transforming the business”.

UBM Asia has performed many transactions in South-east Asia in recent years, acquiring in 2011 trade shows related to water, livestock, energy, and mechanical/electrical industries in Malaysia, Vietnam and the Philippines from AMB Exhibitions. Last February, it acquired the Malaysian International Furniture Fair and became the largest exhibition organiser in Malaysia.

Muthiah Gandhi, managing director of UBM Asia, said: “Acquisitions are extremely important when you are entering a new market especially in an Asian country because you do not want to be seen as being too aggressive, so you partner instead of compete with the local brands.

He expects the formation of the ASEAN Economic Community, set for 2015, to bring greater growth potential due to closer integration between countries.

Reed Exhibitions is also keen on South-east Asia, according to Paul Lee, vice president, marketing & business development. It announced a joint venture with Panorama Group to establish Reed Panorama Exhibitions in Indonesia last June.

While there are concerns that these international players may eventually take over local companies, Monnington said more parties were taking on “equitable partnerships” today.

MyCEB reaches into China with local representative

By S Puvaneswary

July 25, 2013

MARKETING company Travel Link Marketing (TLM) had been appointed China representative for the Malaysia Convention & Exhibition Bureau (MyCEB).

TLM, which has offices in Beijing, Shanghai and Guangzhou, plans to open a new office in Chengdu.

TLM provides a strong local team that understands the goals and objectives of MyCEB, and possesses the capacity and expertise to develop leads and provide an extensive network of China’s business event stakeholders, according to a press statement by the bureau.

Zulkefli Sharif, CEO of MyCEB, said: “This advancement into China is in line with Malaysia’s growing business events industry.

“We are confident that this partnership will further assist us in our mission to position Malaysia as Asia’s business events hub.”

Malaysian Inbound Tourism Association deputy president, Adam Kamal, said: “Setting up representative offices in China is a smart move as China is too big a destination for MyCEB to cover on its own. Being a local company, TLM will know the market requirements, the trends and have good contacts with corporate companies and MICE operators in China.

“China has a lot of business tourism potential. It is an important MICE market for Malaysia due to direct flights and close proximity.”

Reliance Sightseeing general manager, Fu Kei Cheong, said Malaysian MICE players pursuing the Chinese market would benefit from this appointment as business leads from TLM to MyCEB would be shared with local industry partners.

Phuket aims to mix business with pleasure

By Greg Lowe

July 25, 2013

PHUKET is strengthening its MICE offering by incorporating more customisable leisure components into its meeting and event packages in response to rising demand for “bleasure” products, according to travel trade experts speaking at a recent roundtable event.

Corporate clients were increasingly looking for ways to add more leisure activities into what were traditionally business focused meetings, noted Andre Gomez, general manager of Hilton Phuket Resort & Spa, which organised the roundtable.

“Travel used to be seen as an incentive in itself, but this is no longer the case as so many people are travelling for work these days,” he said.

“Clients are realising this and many companies are trying to help employees achieve a better work-life balance. We are seeing more demand for an increased leisure component in our MICE activities as a result.”

Gomez said the precise mix of business and leisure would vary with each client.

The hotel, however, has seen some general trends with clients from longhaul markets such as Australia and Europe enabling delegates to bring their family, while those travelling from within South-east Asia are increasingly offered the chance to access discounted room rates for extended stays before or after an event.

Meeting times are also generally being reduced with the increased leisure and teambuilding elements helping to raise productivity by keeping delegates more engaged, according to Gomez.

James Drysdale, group director of Inspired Events Travel Asia, said the “bleasure” trend helped clients to leverage their spending and build employee loyalty at the same time.

“Many of them are now actively encouraging delegates to bring their family which can make the whole trip more pleasurable for all. We are working with hotels and local suppliers to arrange activities for the delegates and their spouses, partners and children, both onsite and offsite.”

Pornthip Hirunkate, secretary-general of Thailand Incentive and Convention Association, said the island’s unique mix of MICE facilities and leisure products, such as water sports, island trips, soft adventure activities, meditation classes, spa and cooking schools, was a key driver of the “bleasure” trend.

“Incentive groups typically don’t return to destinations, but Phuket gets a lot of repeat business because of its combination of business and leisure products,” she added.

Thailand Convention and Exhibition Bureau will be doing more to actively support Phuket’s “bleasure” products including promoting local trade partners at AIME next February.

World Tourism Conference heads to Malacca this October

By TTG Asia

July 25, 2013

THE Ministry of Tourism and Culture Malaysia, United Nations World Tourism Organization and Malacca state government will organise the World Tourism Conference (WTC) at Hotel Equatorial Melaka from October 21 to 23.

Themed Global Tourism: Game Changers and Pace Setters, WTC is expected to bring together world leaders in tourism, high-level policymakers, specialists and experts from public and private sectors to share experiences, propose valuable ideas and provide guidance for tourism development.

Over the three-day conference, 10 specific and topical subjects under the umbrella of Beyond Mass Tourism, Innovative Marketing and Directions for Tourism Product will be presented by authoritative individuals such as Travel Google US’ Rob Torres, VisitBritain’s Christopher Rodrigues, Korea Tourism Organization’s Lee Charm, China National Tourism Administration’s Du Jiang, Air Asia X’s Azran Osman-Rani, Tourism Australia’s Andrew McEvoy.

Some 1,000 delegates are expected to attend WTC, according to Zarina Md Yusuf from the Ministry of Tourism and Culture Malaysia’s Strategic Planning and International Affairs Division.

Yokohama bags two major events

By TTG Asia

July 25, 2013

JAPANESE port city, Yokohama, has won the bid for two association congresses – the 12th International Stereotactic Radiosurgery Society Congress (ISRS) in 2015 and the Asian-Pacific Hepato-Pancreato-Biliary Association (A-PHPBA) Regional Congress in 2017.

Motohiro Hayashi from the Tokyo Women’s Medical University and chair of the local organising committee for ISRS 2015 said the International Stereotactic Radiosurgery Society had selected Yokohama over Hong Kong because Japan would host related meetings to boost attendance at the congress and possessed a living knowledge of how to decrease the dangers of radiology from nuclear plants, following its recovery from the March 2011 earthquake and tsunami.

ISRS 2015 will be held at PACIFICO Yokohama, the flagship facility of the city.

Japan also defeated Indonesia to clinch the hosting rights for A-PHPBA Regional Congress, which will be co-hosted by the A-PHPBA and the Japanese Society of Hepato-Biliary-Pancreatic Surgery (JSHBPS).

To be hosted in Yokohama, the congress is expected to attract over 3,000 researchers from Japan and beyond.

Kana Nomoto, chief coordinator, convention sales department of the Yokohama Convention & Visitors Bureau, said: “Winning ISRS 2015 and A-PHPBA 2017 is testament to Yokohama’s pull as the nation’s centre of innovation and research. We are proud that our city’s Japan’s First Port of Call image is strong and gives confidence to association planners around the world.”

Meet and explore the city through InterContinental Kuala Lumpur

By TTG Asia

July 25, 2013

INTERCONTINENTAL Kuala Lumpur is offering customisable meeting packages that combine accommodation with event facilities and exploratory activities in the city and surrounding areas.

Priced from RM200++ (US$63++) per person per day for a half-day meeting with lunch, the InterContinental Commerce & Culture package features activities such as bird watching in Kuala Selangor Nature Park and beginners’ rock climbing in Batu Caves.

Full information on available activities can be obtained from the concierge.

The package is valid until December 31 this year.

TCEB inks MoU with Philippine trade

By Marianne Carandang

July 25, 2013

THE Thailand Convention and Exhibition Bureau (TCEB) yesterday inked a memorandum of understanding (MoU) with two major private business organisations, the Philippine Chamber of Commerce and Industry (PCCI) and Chamber of Commerce of the Philippine Islands (CCPI).

The MoU aims to enhance bilateral trade between Thailand and the Philippines in the areas of MICE, trade economy information and trade exchange missions. TCEB will tap PCCI’s and CCPI’s business networks comprising veteran companies, mostly established for 25 years or longer.

The Philippines was the third country, after Vietnam and Laos, to be selected as a strategic MICE partner because of its size and overall potential, said TCEB president Nopparat Maythaveekulchai.

“In the last few years we’ve seen more businessmen from the Philippines attending trade fairs in agriculture, food, FMCG (e.g. cosmetics), energy, medical and healthcare,” he noted.

To encourage growth in trade visitor numbers, TCEB will be employing its 100 A-Head trade visitor promotion programme, which offers a US$100 subsidy per visitor for groups of 15 to 500.

100 A-Head is offered to ASEAN countries, China, Taiwan, Macau, Hong Kong, India, Pakistan, Bangladesh, Nepal, Sri Lanka, South Korea, Japan, New Zealand, and Australia. So far only 1,500 to 2,000 visitors have availed of it, about a tenth of the total number from the Philippines.

The Philippines sent 16,745 MICE visitors to Thailand in 2012, mostly for incentives and corporate meetings, according to Supawan Teerarat, TCEB’s vice president, strategic and business development.

Teerarat projects a 15 per cent increase in corporate and business entity visits, particularly from Manila and Cebu, in the coming year.

TCEB will conduct a ‘business matching’ event next week, between 20 key Thailand MICE players and 100 to 150 Manila-based travel companies.

It will also hold a fam trip for select Philippine travel consultants next month, in partnership with the Association of Thai Travel Agents and Thai Airways.

Although foreign incentive groups are known to favour destinations such as Bangkok, Phuket, and Chiang Mai, TCEB hopes to increase traffic to Pattaya and Khon Kaen.

“Our focus for this fam trip is to find (new) products in Bangkok and the outskirts, for big incentive groups, luxury travellers, and corporations,” Teerarat added.

Enhancing travel for people with special needs

By S Puvaneswary

July 25, 2013

A wheelchair accessible van is part of Ace Altair Travels’ Travel Assist services for disabled travellers

WHO Incorporated in June 2004, Ace Altair Travels is licensed with the Malaysian Ministry of Tourism to conduct inbound, outbound and ticketing operations. The Kuala Lumpur-based firm boasts a central location at The AmpWalk in Jalan Ampang, attracting a lot of walk-in customers from the surrounding offices, residences and diplomatic communities in the area.

WHAT In January 2013, Ace Altair Travels expanded its range of inbound tour services to include travel products catering to the disabled and the elderly. Travel Assist, which has been trademarked and registered by the company, is a service specially designed to provide travel assistance for people with special needs, including the blind and hearing-impaired, in Kuala Lumpur and the surrounding areas.

Services include arranging suitable disabled-friendly accommodation, providing accessible transportation to the disabled, crafting tailor-made itineraries for guests with special needs and arranging trained personnel to assist the traveller on vacation. Upon request, the company is able to arrange for rental of equipments such as wheelchairs, ramps, hoists, portable toilets and portable shower chairs.

Late last year, the company has also purchased a van fitted with an automatic wheelchair lift, which is used to serve wheelchair-bound passengers during airport transfers and tours.

WHY Travel Assist is the brainchild of Ace Altair Travels’ managing director Antony Leopold, who has post-poliomyelitis syndrome in both legs. He said: “My travel experiences as a disabled person has inspired me to provide a dedicated disabled service as I sincerely believe that travel should be all-inclusive, encompassing the able-bodied, the disabled and the elderly. There have also been requests for such services from my travel partners overseas that have FIT clients with special needs.

“What I find sad is that Malaysia presents a great challenge for travellers with mobility impairments. Sidewalks are often in disrepair, curbs are high and curb cuts are often missing or inadequate. Wheelchair users will frequently find their path of travel obstructed due to poorly designed walkways, parked cars, motorcycles, stairs and trees, and will rarely be able to travel more than 50m without having to backtrack or divert to the road. In many areas of the city, it is virtually impossible to travel without some assistance.”

TARGET The company plans to expand its Travel Assist tour services to Penang, Langkawi and Johor Bahru within the next three years.

Leopold said: “This will involve working with tourism players such as hotels, restaurants and airlines as well as government agencies to ensure that their products and services are disabled-friendly and have trained staff to cater to the needs of our disabled clients.

“We also plan to start hands-on training programmes for the hospitality industry in the near future on how to assist the disabled person, as well as theoretical lessons on communicating with the disabled. We are currently working on the syllabus and hope to start this by this year-end. We will collaborate with the various associations working with the physically-challenged, the blind and the hearing-impaired in Malaysia.”