WHILE room oversupply continues to be a recurring theme in Thailand’s hospitality landscape, hoteliers are confident of the sector’s outlook for 2013 amid strong tourism growth.

During the Thailand Hotel Leaders Summit panel discussion at the Thailand Tourism Forum 2013, InterContinental Hotels Group COO, Asia Australasia, Clarence Tan, downplayed the issue of room oversupply, saying Thailand’s many destinations would be able to absorb high inbound numbers.

“Pricing is a bigger issue than oversupply,” he cautioned, pointing to Thailand’s low room rates.

Peter Henley, president & CEO, Onyx Hospitality & Hotels, concurred, likening Thailand’s room glut to “a ticking time bomb” as hotel construction still outpaced rates.

Furthermore, delivering sustainable income growth amid rising energy costs and challenges in recruiting staff and boosting productivity was one of the “rain clouds” looming over the hospitality landscape, he added.

But opportunities abound to tackle the challenges facing the Thai hotel industry too, the speakers pointed out, especially in a market mix whose centre of gravity is increasingly shifting from Europe and the US to Asia.

Tan remarked: “China is a big source market, and Chinese customers are trading up rapidly to the upscale segments. Hong Kong experienced (the changing profile of Chinese travellers) within five years, and Thailand will see that too. Increasingly these customers will be chasing (high-end) experiences.”

Minor Hotel Group CEO Dillip Rajakarier, who observed a growing sophistication among the spending habits of Chinese and Russian travellers, agreed: “Chinese used to spend little when they visit our property in the Maldives, even carrying their own water from Malé, but today they are spending three to four times more on F&B and spa.”

At the same time, emerging South-east Asian economies will play a bigger role in Thailand’s tourism future.

Chanin Donavanik, CEO, Dusit International said: “(As) domestic tourism grows and more flights connect to Southern China, Laos and Cambodia, more destinations will open up in Thailand, particularly cities along the border.”

Meanwhile, Henley believes that Thailand’s corporate travel segment still has potential for growth. “There has been significant development of corporate hotels and destinations like Pattaya. Attracting meetings and corporate travel business should be the way forward.”

RUSSIA has piqued Macau’s interest as a new source market, with the number of Russian tourists on package tours skyrocketing by 122.9 per cent last year, though from a small base.

Arrivals from Russia are likely to continue soaring, given the visa-free pact signed by Macau and Russia’s authorities in 2012 that came into effect on September 30, allowing tourists a 30-day visa-free stay.

Gray Line Tours of Macau’s managing director, Andy Wu, urged MGTO to hold promotions in Russia to generate awareness of Macau as a destination.

Wu said: “(Macau) could be an add-on stop for Russians when they plan week-long visits to Hainan Island (in China).”

However, he acknowledged some difficulties in tapping the Russian market. “As (Macau is) a small city, it is hard to persuade (Russians) to stay long. We also face challenges such as (having to) train tour guides (to cater to Russian visitors) and the lack of direct air access between Macau and Russia,” he said.

To get to Macau, Russian visitors must travel via Hong Kong.

The new director of Macau Government Tourist Office (MGTO), Maria Helena de Senna Fernandes, said: “We are still testing waters. Promotions will be implemented step-by-step, so we can’t expect (too much) at this stage.”

She said MGTO would appoint a new marketing representative in Russia.

Fernandes was speaking at the MGTO Annual Press Conference 2013, where it was revealed that Macau would continue to explore different tourist segments and tackle overcrowding at key attractions.

“We hope to divert tourists from jam-packed attractions to other interesting spots in Macau,” she explained.

Wedding tourism is also on MGTO’s rader, having launched a wedding incentive scheme last November. Couples whose nuptials bring at least 50 non-local guests staying two consecutive nights at Macau’s hotels will receive tourism information kits, welcome gifts and other perks to help them better experience the destination.

SINGAPORE-based Asiatravel.com Holdings last week inked an agreement with China Xinhua Travel Network Services to supply the latter’s online wholesale system and provide XML integration of its database for a period of three years.

Xinhua, which has 30 branches and more than 400 retail outlets in major Chinese cities, will adopt Asiatravel.com’s online wholesale system, TAcentre.com, to book hotels, tours, attraction tickets and flight packages.

Asiatravel.com will also supply its global data of travel products to 51you.com’s system, a travel site owned by Xinhua.

Asiatravel.com’s executive chairman and CEO, Boh Tuang Poh, acknowledged the growth of international travel from China and added that “Xinhua Travel’s extensive network of agencies and business travellers will help us strengthen our presence in China”.

Xinhua Travel CEO Su Zhi Yi said: “As more Chinese traveller are seeking overseas destinations, we see a need to provide them with the most accurate data, price and inventory within the shortest possible time, and having this supply from Asiatravel.com will boost our operational and customer service efficiencies.”

INDIA’S Airports Economic Regulatory Authority (AERA) has approved a raft of fee hikes impacting both airlines and passengers at Mumbai and Kolkata’s international airports, a move akin to shooting itself in the foot say trade players.

At Mumbai’s Chhatrapati Shivaji International Airport, fees will rise 154 per cent across the board. Domestic airlines can expect to pay 40 per cent more while international carriers will have to shell out 120 per cent more.

Passengers are not spared. Since February 1, passengers have to factor in the new user development fees in addition to a current airport development fee. Passengers on international flights now have to pay Rs692 (US$13) on top of an airport development fee of Rs600. Those on domestic flights will have to fork out an additional Rs346, on top of a Rs100 airport development fee.

Slight relief will come between April 1 this year and March 31, 2014 when the new user development fees are reduced to Rs274 on domestic tickets and Rs548 on international tickets.

Meanwhile, AERA has also approved a hike in user development fees at Kolkata’s Netaji Subhash Chandra Bose International Airport. With effect from February 16, domestic and international fliers will pay Rs400 and Rs1,000 respectively. This fee will creep up to Rs424 and Rs1,060 from April 1, 2014 and again to Rs449 and Rs1,124 a year later.

AERA based its revised tariffs on air traffic projections for the next four years. It expects a 10 per cent annual growth at the Kolkata airport until 2015/2016.

Industry players were dismayed by the news.

“We are concerned that Indian airports are emerging as the most expensive in the world. How will it be possible for airlines to create hubs here?” said Tom Wright, chairman, British business group, Cathay Pacific Airways.

Rajendra Churiwala, director – eastern region, IATA Agents Association of India, observed: “The pressure on travel consultants is immense as clients demand cheaper airfares…Such high increases (in airport fees) will be counter productive.”

Delhi International Airport raised charges by 346 per cent in 4Q2012, only to have the Indian government order a return to previous rates on January 1, following an outcry from the both passengers and aviation players.

WARY of escalating commission rates that OTAs command, hoteliers are aggressively building their own direct platforms, with many of them noting phenomenal year-on-year gains in online sales.

Giving the keynote address on Asia’s travel trends, Minor Hotel Group senior vice president, commercial operations, Michael Marshall, pointed out that while hotels paid around 10 per cent of commission to OTAs back in 2009, this figure could be as high as 27 per cent now.

“(OTAs) are a great partner. They give you much wider distribution, but you need to manage them and you need to drive your own website,” he said, adding that his company chalked up an additional US$1.5 million from web bookings last year following a revamp of its website, which now features a new booking engine.

Dusit International COO, David Shackleton, took a similar view. “Based on my experience, larger hotel companies I’ve worked with are (also) desperately trying to move away from OTAs and move business onto their own websites and applications,” he said. “I don’t think OTAs are going to go away…but when you look at 40 per cent commission in five years’ time, nobody wants to pay that kind of price.”

He told TTG Asia e-Daily that Dusit was currently redesigning its website as well as mobile and tablet offerings, the first time after some four years. Less than 10 per cent of the company’s sales now comes directly from the website, a figure he is hoping to push to double digits.

Centara Hotels & Resorts has also recently revamped its website. Its director, online distribution, Phensiri Charoensuk, revealed that the group saw a 25 per cent increase in direct sales in 2012.

While recording good growth from third-party online bookings, she warned hotels about diving into tactical promotions with their OTA partners.

“Be careful because a lot of them are asking for deeper discounts. On top of the 25 per cent commission, if you lower your price by 20, 30 or 40 per cent, you can calculate how much you have in your pocket by the time you put all this together.”

OTAs, however, were unruffled.

HotelTravel.com, chief information officer, Olivier Dombey, believed that there would still be a role for the middleman. “Although you can aim for 100 per cent direct, it is never advisable because in any business, you’ve got to spread your risk. If you have a boutique hotel with a limited number of rooms, it’s possible. But for the vast majority of hotels to have such a strategy, it’s probably costly and damaging.”

As for commissions climbing further, he said: “This is rubbish. A hotel will never ever pay 35 or 40 per cent to OTAs…Commission levels are settling down. Those that are too expensive are starting to reduce their claims. (Across OTAs), we have the same hotels and same rates, so the commission level will have to adjust.”

– Read more in TTG Asia February 22 issue’s Travel Distribution report

TUNE Hotels is pushing into new territory with a new brand look, an upcoming F&B brand of its own and 70 hotels in the pipeline until 2015.

Speaking to TTG Asia e-Daily, Tune Hotels CEO Mark Lankester said the rebranding was a version 2.0 of the budget brand.

Currently, three properties in the chain bear the new look, including a revamped logo and colour palette, a lobby with more congregation space and a booking website that has been simplified.

Lankester also revealed during a session at Travel Distribution World Asia that Tune Hotels was cooking up its own brand of F&B establishments to be housed exclusively within its hotels. All F&B within the hotels are currently outsourced.

“We are still in early stages. We’re having people tasting the food and getting feedback from guests, as it’s all new space for us,” he said. “We’re trying to make it, dare I say it, as generic as possible for the market and testing the food in markets to see what is relevant.”

He added that it had not been finalised as to whether the new brand would take shape as a grab-and-go corner or restaurant for families, which may be dependent on the needs of each market. The brand would likely be launched sometime in 2013.

Tune is also on a development spree, with 70 new upcoming properties versus its 27 operational hotels. Ahmedabad, India will receive its first Tune Hotels on March 28 this year, while Tune hotels will open in Melbourne and Sydney in November 2013 and end-2014 respectively. Tune will debut in Japan between end-2013 to early 2014. Further openings within South-east Asia and the Middle East are also on the cards.

“But it’s really Africa that I’m excited about,” remarked Lankester. “It’s the fantastic growth. Sub-Saharan Africa’s GDP growth is outpacing everybody – except maybe China – at five to six per cent.”

With a focus on West Africa, including Nigeria, Kenya, Tanzania and Uganda, he said Tune would be opening its doors there in 2014 to tap domestic demand. Driven principally by domestic business travel from the oil and gas industries, Lankester said a burgeoning local middle class was part of the target audience.

“In Lagos for instance, if you were to attend a relative’s wedding, the infrastructure is so poor that you may not be able to return. You have to spend the night there, and a five-star hotel in Lagos costs US$500 a night,” he explained.

“Supply is poor, demand is soaring. We’re serving the underserved.”

He said he was looking at between 30-40 hotels to be set up in Africa within the next three to four years.

When asked why Tune was not focusing eastward in a time when China was booming, Lankester said: “We want to tread carefully. There are already six to seven major budget chains that are huge in China who will definitely defend their share of the market. It’s easy to make mistakes, but we are getting there in small steps.”

He said a hotel in China would come up in either 2013 or 2014.

“(China) is a country that we need to be in, even if it’s just in four to five major cities.”

AFTER setting up a Rapid Recovery Task Force (PRRT) in 2011 (TTG Asia e-Daily, May 12, 2011), PATA is now ready to deploy the initiative should a crisis take place in Asia-Pacific.

Speaking at the official launch of the PRRT at PATA’s head office in Bangkok yesterday, Bert van Walbeek, chairman of PATA Thailand Chapter, said: “Everything about the PRRT was on a trial basis until now. Today we are 100 per cent ready to go.”

The fledgling PRRT has already been “helping behind the scenes” in relaying important travel advisories, contending biased media reports and helping rebuild consumer confidence, van Walbeek pointed out, while recent crises such as the Japan earthquake and tsunami of March 2011 and the Thailand flood crisis in 2011 have also provided learning points for the task force to refine its communication strategy.

“We were in the beginning very much focused on websites but now we realised that social media sites like Twitter and Facebook are the fastest ways to communicate,” he remarked.

PATA CEO Martin J Craigs agreed: “Countering misleading information in media and social media is a key element of the PRRT brief. Perception is reality. The visitor economies in the PATA region have been made painfully aware of this on numerous occasions.”

Apart from the “reactive” post-crisis strategies, PATA would also take “proactive” steps to raise crisis management readiness among its members, said van Walbeek.

PATA’s Bounce Back crisis management booklet, which is already available in Chinese and Japanese, will soon be translated into different South-east Asian languages such as Thai, Bahasa and Vietnamese. Meanwhile, training modules will be ready by mid-2013 and will be presented during PATA Travel Mart 2013 in Chengdu.

Led by van Walbeek, other members of the PRRT include David Beirman, senior lecturer, University of Technology, Sydney; Emma Cashmore, managing director, Axis Travel Marketing, London; Martin J Craigs, PATA CEO, Bangkok; Walt Judas, vice president marketing communications, Tourism Vancouver; Alexander Kesper, security and safety executive, Bali Hotels Association; Ken Scott, managing director, ScottAsia Communications, Bangkok; and Rick Vogel, president, Include, Tokyo.

MALAYSIA is losing out on the growing outbound traffic from India due to the lack of flights between the two countries.

Mirza Mohammad Taiyab, director general, Malaysia Tourism Promotion Board, said: “The number one concern in India is flights. There was a cutback in (air access) when AirAsia pulled out from North India, affecting the tourist inflow. Indian tourists are hoping for an increase in flights.”

“Connectivity must be enhanced for better passenger movements between the two countries. Among Malaysia, Singapore and Thailand, Malaysia has the least flight frequencies to India,” he added.

AirAsia X’s four-time weekly Kuala Lumpur-Mumbai flight was suspended in January last year, followed by the withdrawal of its daily service to New Delhi in March. AirAsia currently flies daily to Bangalore, Chennai, Kochi, Kolkata and Tiruchirapalli, their focus being on shorter flights.

In 2012, Malaysia Airlines (MAS) operated 40 flights a week to India, with 12 weekly flights from Kuala Lumpur to New Delhi and seven weekly flights each to Mumbai, Hyderabad, Chennai and Bangalore from Kuala Lumpur. MAS’ direct flight to Kolkata was withdrawn after only a few months of operation.

Arvind Tandon, managing director of Mumbai-based Faraway Places, said: “Tourism Malaysia has sustained promotional efforts of several destinations like Kuala Lumpur, Langkawi, Penang, Malacca, Kuching and Kota Kinabalu, and trade players are well-geared to receive Indian guests’ requests. However, we do not have enough flights to plan many groups to Malaysia during the high season even though the visa regime has eased considerably.”

Guldeep Singh Sahni, president, Outbound Tour Operators Association of India, agreed: “The severe dearth of flights, specially from North India, is discouraging Indian outbound travellers and steering them away to other destinations in South-east Asia like Vietnam, Thailand and to some extent, Myanmar.”

THE Association of Ticketing Companies in Indonesia (ASTINDO) has expressed regrets over the bankruptcy of Batavia Air (TTG Asia e-Daily, January 31, 2012) and urged the Ministry of Transportation to develop a policy that will protect airline ticketing companies.

ASTINDO board member, Pauline Suharno, said: “The court’s decision to declare the airline bankrupt is another disaster for ASTINDO members. (It is regrettable) that ticketing companies have to bear the burden of (yet another airline default).”

The now-defunct Adam Air went bankrupt in 2008, while Mandala Airlines faced debt problems in 2011 before being taken over by Tiger Airways and Saratoga Group.

“We are demanding Batavia Air to return our deposits as they belong to ticketing companies and are not part of the airline’s assets.”

Suharno explained that non-IATA airlines required ticketing companies to pay a deposit before tickets could be issued. In her opinion, such arrangements meant that airline companies were operating with funds belonging to ticketing companies.

“Therefore, we are renewing our plea to the Ministry of Transportation to issue a regulation on escrow accounts, so that whenever an airline default happens, (airline ticketing companies) can take their money back,” she added.

ASTINDO and Raya Insurance recently developed an insurance scheme to protect members from loss caused by airline defaults such as the Batavia Air incident.

“This is our way to protect our business, but we also need a strong government law to protect (middlemen like) us,” she said.

SINGAPORE hotels delivered a stellar performance last year, boosted by a record 10.7 million tourist arrivals to the country in the first three quarters of 2012 as well as the debut of several attractions, according to the latest CBRE Hotels MarketView.

Hotel occupancy for the 12-month period ending November stood at a robust 86.5 per cent, on par with last year’s level. Occupancy reached as high as 90 per cent in the month of July. Demand for luxury hotels stayed strong in 2012 as occupancy grew by 2.6 per cent, while upscale hotel occupancy rose by a mere 0.5 per cent.

Both midscale and economy tiers saw occupancy drop by 1.3 per cent and 0.9 per cent respectively.

In the same period, average daily rate (ADR) was S$260 (US$213), up 7.1 per cent year-on-year. September rates hit a new high at S$282 due to the F1 races.

Of the four hotel tiers, upscale properties witnessed the largest growth in ADR of 8.7 per cent, registering S$300. Economy hotels on the other hand rose by a mere 1.2 per cent to S$111.

Revenue per available room (RevPAR) of Singapore hotels rose by 7.2 per cent to hit $225 – a muted increment compared to the 16.1 per cent growth seen the year before. Luxury hotels recorded the strongest improvement in RevPAR – 10.3 per cent ­– among all tiers.

The review noted that Singapore welcome 1,200 new rooms coming from eight hotels. This year, a further 16 new hotels with 4,000 rooms are slated to be opened. In the next four years, a total of 11,000 rooms are expected to enter the market, representing a 25 per cent increase in the stock of gazetted rooms as at end-2012.

Midscale hotels will supply the largest number of rooms at 4,100. In addition, hotel sites on the 1H2013 Government Land Sales Reserve list, if triggered and sold, could add 1,800 more rooms.

The sizeable room supply and slower visitor growth could lead to lower occupancy rates and slower ADR growth, resulting in very limited RevPAR increments. CBRE expects an occupancy rate of 80-82 per cent and ADR growth of three-five per cent in 2013.

Meanwhile, labour shortage and manpower costs remain the main concerns for hotel operators, which if unmitigated, could impact profit margins.