Visit USA Committee woos Indonesians back to an old favourite

January 11, 2013

INDONESIAN outbound travel consultants are expecting stronger demand to the US this year with the recent formation of the Visit USA Committee by the US embassy in Jakarta.

Panorama Tours Indonesia managing director – corporate incentive management, Vidya Hermanto, said: “There have been no tourism marketing and promotional activities between Indonesia and the US in the last 10 years or so, and obtaining a visa has been difficult due to security reasons.

“The Visit USA committee has shown interest in enticing the Indonesian outbound travellers to the US again, not only from the leisure sector, but also from corporates and students.”

The US was one of Indonesians’ favourite destinations in the 1990s, connected with direct air services, including Garuda Indonesia. However, the market declined in the wake of the 1997 Asian financial crisis and Garuda’s suspension of its US services.

According to WITA Tour director of sales, Rudiana, the US embassy had recently eased the visa application process, such as waiving interviews for travellers who had been previously granted a US visa.

Smailing Tour vice president MICE, Lucky Albertinus, said: “The interest to travel to the US has never been totally dead for us – there are FITs, families or small groups. These are mostly (travellers) who already hold a multiple visa, so they just need to book a flight and go.

“There may not be a drastic change in visa application requirements in the short term, but we can generate more interest from Indonesian travellers with new products (in the US). Honestly, the products we have been selling are the same old ones, so we would like the trade in the US to introduce and promote new destinations and products here,” he urged.

“The Visit USA committee opens up (opportunities) to develop the market, not only for outbound but also inbound traffic from the US as well.”

Visit Malaysia Year 2014 campaign to formally launch Jan 19

By S Puvaneswary

January 11, 2013

WHILE 2014 may be still a year away, both the Ministry of Tourism and Tourism Malaysia are already making preparations for Visit Malaysia Year (VMY) 2014, vowing to look into areas such as tourism infrastructure, security and next year’s event line-up.

A target of 28 million tourists has been set for the VMY campaign, two million more than this year’s goal of 26 million, revealed tourism minister Ng Yen Yen during a press conference today.

Having received the green light from the Cabinet for the VYM 2014 since July 2012, it was not until October that a secretariat for the campaign was set up.

Ng said: “We don’t want to rush into things. We want to do it well and prepare the country to welcome the world. Hence, this whole year, we will be preparing the nation for Visit Malaysia next year. Areas we will look at include tourism infrastructure, security, and introducing new events in 2014 and hyping up existing events.”

From January 18, a three-day carnival will take place at the Bukit Jalil National Stadium in Kuala Lumpur to create awareness of the economic importance of Visit Malaysia.

The promotional campaign, together with its logo and theme song, will be officially launched by Malaysian prime minister Mohd Najib Tun Abdul Razak on January 19.

Insight Vacations starts 2013 with strong forward bookings from Singapore

By Karen Yue

January 11, 2013

A PERSISTENTLY weak euro and improved consumer confidence at the start of this year have led to stronger forward bookings for Insight Vacations’ European tours.

Sheryl Lim, regional director of Asia, Insight Vacations, told TTG Asia e-Daily that year-to-date forward bookings out of Singapore had risen some 30 per cent, compared to the start of 2012.

“Our forward bookings suffered early last year because the government had advised a possible recession in 2012, causing Singaporeans to think twice about spending. We saw Singaporeans holding back on their mid-year holidays. Fortunately, as the year-end approached, travel bookings came forth strongly. Perhaps Singaporeans realised that if they did not take any holidays by the year-end, they would not have had a proper rest for the whole year,” said Lim.

She added: “It helps that the euro’s exchange rate against the Singapore dollar is still very attractive, making tours much cheaper than before and shopping opportunities in Europe most appealing.”

Lim said as much as 30 per cent of travellers who had booked Insight Vacations tour packages were repeat clients.

“Some travel with Insight Vacations on an annual basis, while others return on a three- to five-year cycle,” she said.

Lim expects a clearer picture of bookings out of Singapore to form after the NATAS Travel sales fair on February 22-24.

“We hope to end 2013 with a 15 per cent increment in bookings out of Singapore – and that is a conservative expectation. Singapore is in fact Insight Vacations’ largest market in Asia, and if the euro continues to stay down, the year could turn out to be very good for us,” she said.

A Parkroyal ‘collection’ soft opens next week

By Raini Hamdi

January 11, 2013

PAN Pacific Hotels Group (PPHG) is fielding a Parkroyal “collection”, the Parkroyal on Pickering, Singapore, which will soft open on January 16.

PPHG’s CEO, Patrick Imbardelli, said this was not a new brand but a new title tagged to a “special child”.

Asked if this would be the start of a Parkroyal collection, he said: “Not necessarily. A lot of consumer brands bring out something that’s a special edition, a collectible, a collection.”

The 367-room Parkroyal on Pickering has a hotel-in-a-garden concept, with gardens constituting twice the hotel’s land area. It also has zero-energy sky gardens powered by solar energy cells.

Facilities include a contemporary open-kitchen concept restaurant, a wellness floor featuring an infinity pool overlooking the city, cabanas to chill out and a 300m garden walk, and ballrooms and meeting spaces of flexible configurations.

The opening promotion rate is S$278 (US$227) ++ for a superior room, inclusive of breakfast for two, valid till March 31.

The new hotel is now the flagship of the brand and sets the stage for its future development. It is owned by the group.

Though Parkroyal has existed since 1962, with roots in Australia, it remains a small brand with 11 in operation and two opening soon. After the new Singapore opening next week, a Parkroyal Serviced Suites Green City Shanghai will open in May.

Imbardelli said the brand’s development was on track. “I don’t see 500 Parkroyals – that’s not our style. We grow when it is the right fit, location, etc. There’s always a place for Parkroyal in Australia, China and South-east Asia, particularly Thailand and Indonesia, which we’re working on.”

Malaysia Airports makes foray into hotels

By TTG Asia

January 11, 2013

MALAYSIA Airports Holdings has launched its new airport hotel brand, Sama-Sama, marking its entry into airport accommodation sector.

The airport operator will own and operate the five-star full-service Sama-Sama KL International Airport hotel adjacent to Kuala Lumpur International Airport (KLIA) as well as the existing transit hotel – which will be rebranded as Sama-Sama Express KLIA. With the completion of KLIA2, Malaysia Airports will also operate its transit hotel, Sama-Sama Express KLIA2.

Said tourism minister, Ng Yen Yen, at the hotel launch yesterday: “It is heartening to note that Malaysia Airports is expanding on its repertoire of airport services to include hospitality with its Sama-Sama brand. It is always a proud moment to see a Malaysian brand grow from strength to strength and achieve success on the world stage.”

Malaysia Airports chairman, Wan Abdul Aziz Wan Abdullah, said: “Not content with just providing world-class, award-winning airport services, Malaysia Airports had the vision to offer every passenger who lands at KLIA a seamless travel experience – from the aircraft to the airport and to the hotel room. We will provide the connectivity, the convenience, the facilities and our unique Malaysian hospitality to welcome them. And so the Sama-Sama brand is born.”

Malaysia Airports aims to launch the Sama-Sama brand in other markets where it plans to operate airport hotels, according to Wan Abdul Aziz. Malaysia Airports manages and operates 39 airports in Malaysia, and also has operations in India and Turkey.

In the Malay language, sama-sama means “togetherness” and “you’re welcome”.

Tasmania fights fire with tourism recovery plans

By TTG Asia

January 11, 2013

THE TASMANIAN government is working on marketing campaigns to boost its tourism industry, which has suffered as a result of the recent bushfires.

Tourism Tasmania will develop short-term campaigns to encourage the return of visitors to affected areas and boost confidence in the tourism industry, said tourism minister, Scott Bacon.

He said that these post-bushfire recovery campaigns are in addition to Tourism Tasmania’s major annual autumn tourism campaign and marketing activities, which this year will be boosted by a further A$1 million (US$1.1 million) from the state government.

“Tourism Tasmania has been working closely with the Tourism Industry Council of Tasmania and the state’s regional tourism organisations to keep visitors, local operators and the global travel trade and media informed about the bushfire situation,” said Bacon. “In particular, we want to emphasise that Tasmania is still open to visitors.”

“This is an important message for both people holidaying in the state and those planning to come to Tasmania, to ensure they realise that in many parts of the state, it is still business as usual.”

In other states like New South Wales (NSW) where the fires have caused damage, some parks and reserves have been affected. All walking tracks in NSW national parks are closed until at least Monday, while picnic and camping areas in the east of the state remain open. In the western region, including Northern Tablelands, parks and reserves are closed, as are a few South Coast parks.

Guests planning to visit parks or reserves are advised to check the websites or contact the park office for up-to-date details.

North-east India welcomes first international tourism mart

By Rohit Kaul

January 11, 2013

INDIA’S Ministry of Tourism will organise an international tourism mart in Assam’s Guwahati from January 18-20, marking inaugural efforts to host such events in the country’s north-east.

Tourism minister, K Chiranjeevi, said: “The mart will provide a platform for delegates to engage in one-to-one meetings with sellers from the north-eastern region. Tourism product suppliers on their part will be able to reach out to international buyers.”

“North-east India has lot of tourism potential and efforts like this will help the region to be promoted on the international front,” said Subhash Goyal, president, Indian Association of Tour Operators.

The Adventure Tour Operators Association Of India is also holding its 10^th annual convention in Guwahati from January 20-22.

At present, north-east India attracts few domestic and international tourists. Assam received around 16,000 foreign visitors in 2011, while the numbers were negligible in other north-eastern states of Meghalaya, Mizoram, Nagaland, Tripura and Arunachal Pradesh.

Around 100 delegates from Australia, Germany, Indonesia, South Korea, Singapore, the UK and the US, among others, are expected to attend the mart. Post-mart fam tours will be held for overseas delegates from January 21-28.

Apart from the north-eastern states, the state of West Bengal will also participate in the event.

Asia-Pacific drives Starwood’s pipeline in 2013

By TTG Asia

January 11, 2013

ASIA remains a high priority market for Starwood Hotels & Resorts Worldwide, accounting for approximately a quarter of the group’s existing hotel rooms and over half of its pipeline.

Nearly two-thirds of Starwood’s new hotels in 2013 will open in fast-growing markets. Starwood plans to open its first property in Tajikistan, while also expanding further in such Asia-Pacific markets as Malaysia, Singapore, Thailand, Vietnam, Bangladesh, China and India.

Starwood’s new luxury hotels in the region for 2013 include The Castle Hotel in Dalian, China; Vana Belle, Koh Samui in Thailand; and W Guangzhou – the first W Hotel in mainland China.

In the upscale segment, Sheraton will roll out nine properties in China this year, adding to its inventory of 57 hotels in the country. The Westin brand will debut in Chennai, Singapore, Qingdao, as well as Haikou and Sanya in Hainan, while Le Méridien properties will be launched in Ho Chi Minh City. Dhaka and Mahabaleshwar in India, in addition to Zhengzhou and Jiaonan in China.

Starwood’s mid-market portfolio, which includes Aloft, Element and Four Points by Sheraton, will account for about one-third of the company’s global development pipeline and nearly 45 per cent of expected hotel openings worldwide in 2013. Aloft’s portfolio will be driven heavily by openings in China, North America and India in 2013, and will debut in Panama, Malaysia and Turkey during the year.

“Rising wealth, increasingly global businesses and a digitally connected world are creating unprecedented demand for travel and new travel patterns, and we continue to be as bullish as ever about our long-term growth,” said Frits van Paasschen, president and CEO.

Starwood signed a total of 131 new hotel management and franchise agreements in 2012, representing an increase of 17 per cent over 2011 signings levels, including 31 conversions, 12 of which opened during 2012, according to Simon Turner, president of global development.

The road ahead

By S Puvaneswary

January 11, 2013

What’s on the horizon for the region’s travel trade? Major associations tell TTG Asia what they’re firing up their engines for

Indonesia

elly-hutabarat Elly Hutabarat, chairman, Association of Air Ticketing Companies in Indonesia (ASTINDO)

What are your biggest challenges now?
We have more competitors – not only from the growing number of travel companies, fuelled by demand from an expanding middle class, but also from our principals who compete with us for Internet bookings.

What must travel agencies change about their business?
Travel consultants must master their products and be able to respond to questions on destinations, facilities, etc. While such information is available online, they need to be able to find it. Therefore, we must invest in technology and human resources (HR), which requires a lot of money. Giving away our commissions by selling cheap will only hurt us eventually.

What is your association focusing on in 2013?
We are focusing on HR development. ASTINDO has formed the Ticketing Expert Council, compiled ticketing job competencies and trained our members’ staff. We are also overseeing the Ticketing Professionalism Competence Certification programme. This is a recent programme that will run through 2013. Another priority is to get more members from across Indonesia as only 10 out of 33 provinces are currently represented.

• Almost 400 members

• 10% of registered travel consultants

• >70% of all domestic and international airline ticket sales

Malaysia

adam-kamal Adam Kamal, honorary secretary-general, Malaysia Inbound Tourism Association (MITA)

What are your biggest challenges now?
Firstly, increasing competition among inbound tour operators has led to undercutting. MITA has suggested that the tourism ministry limit the number of inbound licences to 3,000 at any one time. New players who are serious about starting an inbound business can buy over an existing dormant agency. Secondly, threats from online booking portals and hotels that deal directly with overseas travel consultants. Thirdly, competition from overseas travel companies that have an inbound business here. They offer familiarity as they speak the same language as their target market as well as ease of transaction as customers can pay in their own currency.

What must tour operators change about their business?
Tour operators should embrace technology and go direct to the consumer instead of relying solely on B2B traffic. They need to understand that the effective use of technology can bring more business and help them reach a wider audience.

What is your association focusing on in 2013?
MITA is focusing on fair practices and using technology to drive business growth through seminars.

• 300 members

• 40% of inbound players

Philippines

cesar-cruz_thumbnail Cesar Cruz, president, Philippines Tour Operators Association (PHILTOA)

What are your biggest challenges now?
An insufficient supply of accommodation, poor accessibility to destinations, underdeveloped travel infrastructure, visa entry restrictions and a getting a sustainable pool of tourism professionals.

What must tour operators change about their business?
Adapt to online marketing without losing the personal touch or customised service.

What is your association focusing on in 2013?
We aim to complete PHILTOA’s official inventory of tour packages under the Island Philippines Fun Getaways and Caravans brand. This includes tour packages with guaranteed departure to 17 regions around the Philippines, as well as various Metro Manila city and day tours operated by a consortium of 19 PHILTOA members. We are also organising the first Philippines Tourism Convention in May and will expand the 24th Philippine Travel Mart in September. As part of our commitment to sustainable tourism, we will finance the construction of the first PHILTOA Ifugao Heritage Hut in Batad for village tourism.

• 289 paid members, 15 affiliates, 1 corporate member

• 53% of inbound tour operators

Singapore

robert-khoo_thumbnail Robert Khoo, CEO, National Association of Travel Agents Singapore (NATAS)

What are your biggest challenges now?
For the outbound leisure sector, competition remains rife among brick-and-mortar firms, OTAs and supplier websites. But there is still enough of the pie to go around.
Conversely, corporate ticket sales remained stagnant in 2012 with companies downgrading purchases and some eliminating travel. A rise in operational expenses has also squeezed profits. Things look a little brighter for DMCs, as arrivals to Singapore are expected to remain buoyant. Generally, those who target emerging Asian segments will do better.

What must travel agencies/tour operators change about their business?
Become more lean and mean by augmenting staff productivity i.e. training them to become multitaskers. NATAS is encouraging members to initiate more rigorous training programmes, and recently distributed cash vouchers as an incentive to enrol employees for courses.

What is your association focusing on in 2013?
Raising service standards in the industry. In February, we intend to unveil our accreditation programme for individuals, which will recognise those who have shown outstanding performance in various capacities.

• 350 travel agencies, 100 associate members

• 33% of travel trade

• 85% of total revenue generated by travel trade

Thailand

suthipong-pheunphiphop_thumbnail Suthipong Pheunphiphop, president, Thai Travel Agents Association (TTAA)

What are your biggest challenges now?
Travel agencies and tour operators in Thailand face two major challenges. Firstly, November’s events (such as the Pitak Siam protest in Bangkok) show that tensions remain, and this is a risk to us all. Secondly, the economic crisis in Europe has affected Thai outbound. Longhaul markets did not perform well in 2012 and travellers were diverted to shorthaul markets instead, maintaining steady business to Asian countries.

What must travel agencies change about their business?
Many consultants here have been slow to adopt IT in their management process. This is a concern as we move towards the ASEAN Economic Community (AEC) in 2015. About 30 per cent have an online presence currently, but penetration is growing.

What is your association focusing on in 2013?
We are concerned about the AEC and are making sure that Thai travel consultants are ready to compete in the open market. We are working with the government to provide training courses for members. While we offered just four or five courses a year over recent years, we plan to hold at least one per month in 2013 to improve the capabilities of Thai staff. TTAA is raising awareness and encouraging business owners to keep training their staff in computing because it is very important that they adapt to the digital era.

• About 580 travel agencies, while over 130 are airlines, foreign NTOs and extraordinary members

• 10% of registered travel consultants

India

Iqbal Mulla, president, Travel Agents Association India (TAAI)

What are your biggest challenges now?
The zero commission issue. Saddled with financial problems, some airlines are now trying to cut corners by withdrawing the commission they traditionally pay to travel consultants. The last national budget also revised service tax upwards from 10 to 12 per cent.

What must travel agencies change about their business?
Since margins are declining, we need to be innovative and come up with out-of-the-box ideas. Travel consultants should strive to offer clients tour packages according to their needs and demands, and value-for-money deals.

What is your association focusing on in 2013?
TAAI is focused on reinstating our right to commission, doing away with the weekly payment system, reducing service tax and bringing in web parity. We plan to significantly enhance connections with state, national and international tourism boards. TAAI will also work aggressively on our Vision 2020 roadmap that aims to raise the bar for all travel- and tourism-related services and activities to meet globally accepted standards. We are in the midst of identifying critical factors that impact the investment climate, in order to boost tourism.

• 2,500 members, including those overseas

Malaysia

Mohd Khalid Harun, president, Malaysian Association of Tour & Travel Agents (MATTA)

What are your biggest challenges now?
The lack of IT knowledge and understanding of the importance of technology in growing the business. Consumers are purchasing direct from suppliers and OTAs through the Internet. The traditional travel agency must change with the times and remodel its business to incorporate technology.

What must travel agencies change about their business?
Learn to innovate and incorporate IT into their businesses. Pump in more capital to invest in IT solutions and follow the latest trends on where consumers are buying online.

What is your association focusing on in 2013?
Improving our members’ knowledge of e-commerce and using it to grow their businesses. To this end, we are organising a global travel and tourism conference in April. We are also holding the annual World Islamic Tourism Mart in June, through which we hope to create opportunities for members interested in promoting Islamic tourism.

• 2,800 members

• 80% of the industry represented

Hong Kong

paul-leung_thumbnail Paul Leung, chairman, Hong Kong Association of Travel Agents (HATA)

What are your biggest challenges now?
Technology, especially the birth of OTAs, has transformed the way we do business. Consumers also go directly to suppliers. In the past, we were the key sources for ticketing and hotel bookings as we offered better prices and various services like ticket delivery. This is no longer true.

What must travel agencies change about their business?
Don’t compete head-on with OTAs with simple functions like hotel bookings, as they are doing so well. Instead, we have to create more value-added options such as hotel and transfer packages, and provide more information for clients to make decisions.

What is your association focusing on in 2013?
Helping our members equip themselves fully and meeting their needs, such as having an online presence and Internet tools. We may boost their online capacity by consolidating our resources for mutual use.

• About 300 members covering ticketing, inbound and outbound

• 20% of the industry represented

• 50% of the industry’s revenue

India

rajeev-kohli_thumbnail Rajeev Kohli, vice president, Indian Association of Tour Operators

What are your biggest challenges now?
The global economic uncertainty is changing consumer behaviour patterns. They now look for deals and discounts, and the selling community is forced to offer the same level of service at lower prices even when supply costs are increasing. Consumers are also booking trips with shorter lead times as short as four to six weeks before departure. The travel industry is finding it hard to forecast future revenue streams and therefore cannot effectively budget future expenses. Futhermore, government policies such as double taxation are antiquated.

  What must tour operators change about their business?
They can no longer be complacent and rely on current or traditional operating systems. The cycles of change are becoming smaller and unless businesses understand the need to be proactive rather than reactive, they will face a wall.

What is your association focusing on in 2013?
Our focus has always been on our smaller and medium-sized members, as smaller players often need help. We have also been consistently engaging tourism officials on government policies. We need to help change policies to keep our members relevant and viable as well as ensure a level playing field and equal market access.

• Approximately 4,000 members

• 80-85% of all foreign exchange earnings in tourism

Philippine

aileen-clemente_thumbnail Aileen Clemente, president, Philippine Travel Agencies Association (PTAA)

What are your biggest challenges now?
On an industry level, PTAA wants to see the National Tourism Development Plan come into fruition (achieving the goal of 10 million international and 35.5 million domestic tourists by 2016). Factors influencing its success include the removal of onerous taxation on airlines operating within the Philippines, the implementation of investment incentives for tourism-related enterprises, and travel consultants making intuitive and effective process improvements.

Other issues that need to be looked at are the proper implementation of value-added tax and withholding tax for travel agencies and tour operators, as well as seat and airport capacity.

What must travel agencies change about their business?
Travel agencies must accept that the business model for travel firms has evolved. They must maximise the use of enabling technologies, while still maintaining good client relationships.

What is your association focusing on in 2013?
PTAA’s top priorities continue to be facilitating the evolution of the business model for travel companies and being actively involved in advocacy efforts. This includes lobbying the authorities to pass laws in order to keep up with the times, providing seminars on current issues for members, participating in tradeshows in collaboration with the Department of Tourism, etc.

We will also continue to promote destinations that have been recently launched in the Philippines and provide suitable venues for networking among our members.

• About 350 members are travel firms, while over 200 are hotels, resorts, transport operators, schools and GDSs

• 85-90% of total travel volume

This article was first published in TTG Asia, January 11 issue, on page 1-3. To read more, please view our digital edition or click here to subscribe.

Additional reporting from Mimi Hudoyo, Rosa Ocampo, Marianne Carandang, Shekhar Niyogi, Rohit Kaul, Prudence Lui and Timothy France

Ready to bloom

By Prudence Lui

January 11, 2013

Built up by HP Kong 55 years ago, family-owned Lotus Tours’ challenge is to remain competitive in today’s digital environment. Leading the travel service provider and ticketing wholesaler’s charge is second-generation Kong, who is sowing the seeds for growth with technology and staff

Patrick Kong, Deputy chairman/CEO Lotus Tours, Hong Kong

You didn’t start off your career in travel. What made you join Lotus?
After graduating with an MBA in 1979 from the US, I returned to Hong Kong in 1981 to work in a merchant bank. Influenced by the American hippy lifestyle, I was a reluctant businessman and despised conglomerates. I returned because I am the only son and I wanted to be with my dad. While I enjoyed travelling, I stayed away from the travel business because the company was already well established.

In 1991 my employer, UPS, moved to Singapore. This was an opportunity for my sister and I to start thinking about doing something good for the company. As an engineer, I find joy in inventing something different, so our No. 1 goal was to set up a mission statement (not yet a common practice for corporates at that time) and change the company culture. (Until then) we were a family-run business without staff cohesiveness.

We trained university graduates like Ken Ng (now general manager and COO) and Keller Mak, who made her comeback to Lotus early last year (as general manager and chief distribution officer), and they became our new blood. But opportunity knocked in 1994, and I decided to take up an appointment as one of the initial five regional importer-principals for BMW AG in China.

In 2007, however, I was diagnosed with lung cancer and had to retire from work. After a complete recovery, I decided to return to Lotus under semi-retirement in 2008. I am now primarily responsible for positioning the company in the 21st century and expanding its businesses in China. My father is a detail manager, while I am a dreamer. I see myself as a facilitator of our staff’s dreams.

Your staff seem to be at the heart of your business.
People are our most important asset and they are part of my family. Our team is very loyal, as over 30 per cent of our entire workforce has been with us for more than 10 years. In fact, the managers like change and I never reject their proposals. We adopt an approach of collective responsibility (meaning we share our troubles), so we are proud that we do not lay off any staff in a bad economy.

In 2010, we motivated our staff by launching a year-long paid maternity leave and three months’ paid paternity leave. From last year, staff trips have also been combined with employee development and test marketing practices to offer our staff the chance to experience newly designed travel routes, so that they can share their personal experiences with customers to enhance the quality of service.

Tell us about the unprecedented Management Share Ownership Programme you’re intending to implement.
The idea came from my stint with UPS, where one of the mission statements was that it would always be managed by its owners and owned by its managers. My father and I want to take care of our loyal staff and this is the best and most sustainable way to do so. Such a change in ownership scheme is a big experiment in Chinese society as it’s against the tradition of family-controlled businesses.

We will issue shares to managerial staff every year and these are tradable. As Lotus is not listed, we can decide our share price. It’s a low-risk investment with guaranteed outperformance, so it will have even better returns than Hong Kong’s Mandatory Provident Fund. Eventually, our family’s ownership share will be diluted and the staff can influence the price by working hard for high profitability. If they retire within 10 years, they are required to sell their shares back to the company.

We have appointed all general managers as directors of the company in preparation of the programme. We have also put all our travel-related companies under a holding company, Lotus Travel Group, to facilitate the distribution of shares.

“If we aren’t different, there is no innovation. We can’t sit still, be bored and continue doing the same thing…Our next priority is to reinvent how travel content is distributed within the region.”

How would you like to see Lotus evolve in the next 50 years?
We have to be different. If we aren’t different, there is no innovation. We can’t sit still, be bored and continue doing the same thing. This is why we went back to the retail world in 2010. In 2010, retail comprised 30 per cent of the business, and ultimately we hope to grow it to 60 per cent.

For Hong Kong, diversification through organic growth is the direction we will take. Last year, we relaunched our high-end retail unit, GeoTraveller, and inaugurated its cruise centre in anticipation of the soon-to-be-completed cruise terminal. In the coming months, one of our new strategic thrusts will be to promote in-depth cultural and heritage travel to China. This reflects our passion for travel, our pride of heritage and our love of Chinese culture.

We also recently established a wholly-owned travel agency in Taiwan as well as in Guangzhou and Shanghai. We need to be aware of our critical paths to enhancing our distribution network, both online and offline.

We have succeeded in accumulating a basket full of the best value travel content in the Hong Kong market. We will continue to build on that to become one of the most comprehensive content providers for Greater China. Our next priority is to reinvent how travel content is distributed within the region. We are experimenting with new distribution channels, and will see how to make traditional distribution channels more efficient.

How are you embracing technology to achieve this?
Our goal is to be the city’s most efficient travel consultant. Back in 1991, we were the first one to install mini mainframe computers followed by the automation of our back office and the launch of a B2B platform during the dot-com era. Stiff competition from direct suppliers as well as online channels continues to prompt us to adapt to challenges.

Our newly signed 10-year partnership with Amadeus provides us with an innovative suite of tailor-made solutions that improves operating efficiency, offers greater customer convenience and reduces overall IT spending in line with the company’s long-term strategic goals. These solutions include a guided booking platform, a smart checking system, a corporate self-booking website and Amadeus Travel Office Manager. It’s vital to cater for our future staff with a user-friendly system.

And after that?
The next step is to get Amadeus to create a B2C website. Internet travel portals are taking off slowly but surely due to the convenience. At the moment, they are only being used for search wwwpurposes or last-minute bookings. We plan to have a website targeting different market segments, i.e. GeoTraveller for cruise.

The ultimate goal is an upscale site equipped with dynamic packaging, which means clients may create custom-made FIT packages with their preferred hotel and flights. Currently, most bookings are static, based on fixed airlines and few choices of hotels. It will require immense effort to shift from static to dynamic. Package airfares are available, but the hotel part is challenging as they charge different room rates in different periods.

This article was first published in TTG Asia, January 11 issue, on page 7. To read more, please view our digital edition or click here to subscribe.