BUOYANT inbound traffic is driving hotel rates in Bali skywards, despite limited airlift and a slew of rooms set to flood the market by 2014.

Research by property consultancy Knight Frank shows that Bali will have 10,466 new hotel rooms by 2014. As many as 3,922 of these rooms – or 37 per cent – will be operational by the second half of 2012.

“Hotel rates in Bali have been on the rise even with additional supply underway. There is at least a 10-20 per cent increase (in rates) every year,” said Richard Vuilleumier, managing director of Panorama Tours Malaysia.

Conrad Bali raised its rates by eight per cent in 2012, and is targeting a 10 per cent increase next year, according to director of sales Caroline Chrysdy, who noted that average occupancy was about 78 per cent this year.

Likewise, board member of The Seminyak Beach Resort & Spa, Herdy D Sayogha, said the hotel plans to raise room rates to US$308 in 2013, from this year’s US$270.

Although rates are set to rise further, some hoteliers in Bali feel that a meatier increment could be had, if not for the wave of hotel developments. Sayogha said: “Most hotels in Bali should be able to raise their rates, but the incoming developments mean that rates are not increasing as much as they should.”

Vuilleumier said huge inbound traffic from Australia, Vietnam, China and Japan were keeping demand strong in Bali. “Rates are on the uptrend because there is more demand than supply – construction of additional hotels takes time. Direct connections may be insufficient, but visitors also have the option of flying via Jakarta,” he added.

Moreover, the domestic market has evolved into a force to be reckoned with. Domestic bookings grew 20 per cent a year over the last two to three years, said Gede Parmita, corporate director sales & marketing, Paridiso Bali Hotel, attributing the dramatic growth to the middle-class boom and the strong Indonesian economy in recent times.

“In fact, the domestic segment now generates about 40 per cent of our annual bookings, compared to just around 10 to 20 per cent five years ago,” he said.

Paridiso Bali Hotel intends to raise rates for locals by 10 per cent in 2013, compared to just eight per cent for overseas markets.

Nyoman Santiawan, vice chairman of Rama Hotels & Resorts, which operates seven properties in Bali, said room rates were expected to rise by five to 10 per cent in 2013 despite new room supply, mainly due to the flourishing domestic market.

But Santiawan said not all hotels would be able to hike rates. “Those in the main tourist strip will have more leeway than those off the beaten track,” he said.

Additional reporting by Linda Haden

ENCOURAGED by closer business ties between Asia and South America and the maturing of tastes among leisure travellers in this region, Peru is looking East to tap high-growth markets.

In the last three years, the Peruvian government inked free trade agreements with South Korea, Japan and China – significant because what usually follows is the opening of air routes, PromPeru account manager – Asian markets, Rocio Florian, told the Daily.

She explained that this was the case for Korean Air, which started operating cargo flights last year and is now preparing to mount passenger flights in December via the US.

Last year, tourist arrivals from Asia to Peru climbed 26 per cent, surpassing the growth from traditional markets such as Europe (six per cent) and the US (one per cent). Japan, in particular, jumped by 47 per cent, and has the highest expenditure per day. However, Asia still represents 3.8 per cent of overall arrivals, which stood at 2.6 million.

In the pipeline is a consumer advertising campaign in Japan, fam trips and the appointment of a PR agency in South Korea, as well as door-to-door visits to Chinese tour operators, Florian said, adding that other markets showing potential were Hong Kong and India. PromPeru will also be back at ITB Asia next year with a bigger contingent.

Also noting a rise in Chinese and Indians was Guru Sharma, managing director, Travel Group Peru. “Besides the lack of direct flights, visa issues remain a challenge, especially when cross-country tours are popular. Indians often combine Brazil, Argentina and Peru,” he said.

Florian shared that marketing efforts in Asia had been concentrated in Japan thus far, where there have been initiatives such as promotion subsidies, training and roadshows. As a result, tour operators there now offer options for Peru as a mono destination, compared to only combined packages back in 2004.

“Machu Picchu is a strong icon, but gastronomy is becoming important. Lima has been declared the gastronomic capital of South America. Now, people stop for at least a day in Lima,” said Florian.

Additional reporting by Liang Xinyi

ASIAN travel leaders remain excited over opportunities in the region despite a slowdown of powerhouses China and India, which saw the Asian Development Bank recently lower its growth forecast for the region next year to 6.7 per cent, from 7.3 per cent.

Ho Kwon Ping, executive chairman of Banyan Tree Holdings, said ‘event’ risks were far more worrying for tourism than economic crises. “Tsunami, SARS, bird flu, 9-11, Fukushima, riots in Bangkok – those things really dry up tourism as the perception of risk has a strong negative impact on tourism, whereas economic recessions generally cause business overall to come down gradually, but all of us in the industry are able to deal with it by (using) various strategies; it’s part of the business cycle.

“We’ve been lucky that China was big when European business declined. Now of course we’re a bit worried as China outbound is beginning to slow down, but we all have to take it in our stride and work hard.”

Group CEO of Panorama, Budi Tirtawisata, said he was cautious, but the industry remained promising.

“Indonesia’s economy has been centred on energy and mining, but now it’s consumer products and services. Demand from the middle-class, affluent consumer has reached the momentum that we’ve all been waiting for – it keeps increasing and we need to keep the supply up. The opportunities in Indonesia alone are vast, thanks to infrastructure development and increased connectivity. We have to tap the momentum.”

He expects the group, whose business is tourism, transportation and hospitality, to grow 20 to 25 per cent this year, as it did last year. It is building 20 to 25 hotels in Indonesia in the next five years, its three brands catering to the affluent middle class – The BnB (budget), The 101 (three star) and The Haven (four star).

Another CEO who expects high growth to continue is Madhavan Menon, managing director of Thomas Cook (India). “In India, the middle class is not affected by the economy. Travel demand is growing faster than the slowdown in the economy. New travellers are emerging all the time, while the priority for holidaying has increased.

“I see India as an outbound country, while domestic travel is picking up and we’re getting into it. Domestic is localised, specialised; as a national and international player, we don’t have the ability but I’m going to do it. I’m not one to let opportunities go just like that.”

TOURISM suppliers in Asia are taking a more serious approach to woo lesbian, gay, bisexual and transgender (LGBT) travellers, attracted by the high spending power of this fledgling segment.

ITB Asia debuted the Pink Corner for gay and leisure tourism suppliers this year. Said ITB Asia executive director, Nino Gruettke: “The LGBT market is a highly attractive niche market, so we are using the Pink Corner as a test to find out more and listen to the needs of this market.”

Thomas Bömkes, managing director of Munich’s tomontour.com, appointed LGBT consultant for ITB Berlin, remarked: “LGBT travel has been around in South-east Asia for ages, but nobody paid much attention to it until recently. While Thailand and Bali are traditionally popular with the community, Cambodia, Vietnam and India are also emerging as hotspots.”

Several regional hoteliers told TTG Asia e-Daily that they are taking discreet steps to target this niche segment.

Bali’s Le Jardin resort, which listed itself on a local LGBT tour operator website early this year, has recorded a 20 per cent increase in LGBT bookings so far.

The Kunja Villa & Spa Bali’s general manager, Mangku Suteja, estimated gay travellers to constitute about five per cent of the resort’s guests and predicted that the segment would grow stronger on the back of Bali’s accommodating culture and supply of high-end private villa resorts.

Since W Singapore Sentosa Cove’s opening, the LGBT demographic has already become a “significant niche market that cannot be ignored”, said director of sales & marketing, Rosmalia Hardman.

She added: “We do not differentiate or track the numbers of gay guests at our hotel nor do we intentionally target our promotion efforts at this segment, but W hotels’ design-oriented approach has always drawn these travellers.”

Hotel Fort Canning (HFC) in Singapore, which has been officially marketing itself as a gay-friendly property since September 2011, is encouraged by the growth of this segment, said assistant director of sales, Pansy Long.

She explained: “We want to tap the gay market as they have high spending power. We have seen a five per cent increase in LGBT bookings since last year till now. Furthermore, we (send out) regular email blasts as well as tie-ups with Worldhotels (which HFC is a member of) to roll out gay-friendly promotions.”

Furama Resort Danang has also differentiated itself as a LGBT-friendly property in Vietnam, said executive assistant manager Nguyen Duc Guynh, who observed a rise of 15 per cent in LGBT bookings compared to three years ago.

“We are going to roll out more serious efforts to target the LGBT market, with the intention to launch special promotions and packages while advertising in local magazines read by the LGBT community,” he added.

Meanwhile, Luxury Travel Vietnam is keen to reap “the first mover advantage” by identifying the firm as an LGBT-friendly tour operator, CEO Pham Ha said.

“This market segment is growing very fast – we have recorded a 20 per cent surge in word-of-mouth recommendations from past clients,” noted Pham, whose main sources of LGBT travellers hail from Australia and the US.

When asked about the outlook of LGBT travel in South-east Asia, tomontour.com’s Bömkes replied: “Thailand and Bali are already attracting a lot of LGBT travellers without NTO support, so there is certainly plentyof room to tap this niche market.”

WITH a successful REIT listing now in the bag, Singaporean hotel group Far East Hospitality’s (FEH) plan is to double its size over the next five years, which will include exporting some of its brands to South-east Asia and Australia.

Operating eight hotels and nine serviced residences in Singapore and one serviced residence in Malaysia, the “internal target” is to achieve 17 hotels and 17 serviced residences by 2017, said FEH CEO, Arthur Kiong.

He told TTG Asia e-Daily that besides two confirmed hotels that will be coming online next year – the 229-room Peranakan-inspired East Village Hotel at Marine Parade and the boutique 37-room The Amoy Hotel, built within shophouses at Far East Square and its lobby being the Fuk Tak Chi Museum – at least four more properties under development by parent company Far East Organization (FEO) were likely to be managed by his team.

“FEO already has a pipeline of hotel projects that it intends to open and guess who is going to manage them…It’s pretty obvious that if FEO has a hotel, is it going to give that to somebody else and not its own?” said Kiong, who is also FEO’s executive director.

Among the stable of FEO’s local projects are Oasia Downtown Hotel (2014), The Outpost Hotel (2016) and Oasia West Residences (2016). The first will be a 318-room business hotel in the Tanjong Pagar area with additional small office/home office units; the second a 292-key business hotel with a strong heritage theme at Far East Square; and the third, 120 one-bedroom apartments that will function as hotel residences catering to individual business travellers from shipping industries, as well as nearby science and technology hubs.

Both The Amoy and The Outpost will join the newly created Far East Collection due to their architectural attributes and unique locations; their sister properties being The Elizabeth Hotel, Orchard Parade Hotel and Sri Tiara residences.

Despite these stand-alone properties, Kiong said FEH would continue its focus on mid-tier and upscale properties, while ensuring brand discipline. It currently has three brands: three-and-a-half to four-star Village, primarily driven by the cultural appeal of a particular enclave; four to four-and-a-half-star Oasia, serving a business clientele; and four-and-a-half to five-star Quincy, with an all-inclusive boutique concept.

Overseas expansion is also on the cards. “We have a lot of prospects knocking at our door because we have raised our profile with our REIT, and we also leverage a lot of FEO’s expertise and business acumen,” said Kiong.

An Oasia Kuala Lumpur is slated to open by 2014, while there are talks for a Quincy in Bali and Phuket, and a Village in Bintan, revealed Kiong. He added that FEH was also looking at bringing its brands to other strategic locations in Indonesia, as well as Myanmar and Vietnam.

Kiong explained that because the above were high-growth markets, FEH was also looking to balance its portfolio with low-risk deals in Perth, Sydney and Melbourne.

“We will have a significant commitment in Australia to establish a large presence because you can’t do it without scale. It would be either an acquisition or partnership,” said Kiong.

He explained that while China and India were hot markets, they were slightly too far away for FEH to leverage its home base in Singapore, while there were already plenty of profitable opportunities in its own backyard.

Kiong said that currently 50 per cent of FEH’s bookings come from travel consultants, a ratio it is intending to keep despite having recently relaunched its own website for direct sales. Overall volumes, however, will increase phenomenally given its planned growth.

AIRASIA X’s suspension of its four-times weekly Kuala Lumpur-Tehran service from October 15 has hotels in the Malaysian capital up in arms over the anticipated impact on their business.

Citing “challenging economic and business conditions including the volatility of the Iranian currency” as its basis for pulling out, AirAsia X’s decision comes just months after the Malaysian Association of Tour & Travel Agents and the Iranian Tour Operators Association inked an MoU to collaborate on tourism-related events and promotion of each other’s products. (TTG Asia e-Daily, October 10, 2012)

Eva Cheong, sales manager-travel trade, Seri Pacific Hotel Kuala Lumpur, said 30 per cent of business generated through travel trade tie-ups originates from Iran.

“AirAsia X’s exit from this route will hurt us a lot, especially during Ramadan and the Hari Raya holiday season.

“If Iranians are really keen on visiting Malaysia they will find seats on other airlines, but the problem is that flights from Iran to Malaysia are insufficient at the moment, so maybe we’ll have to rely on strong promotions and attractive rates, and target alternative markets such as China, Japan and Taiwan,” she said.

Azlan Azwan Tahir, assistant director of sales, Furama Bukit Bintang, Kuala Lumpur, said: “The pullout by AirAsia X will definitely impact our business negatively since Iran is one of our top 20 markets. We’ve had 2,000 room nights from Iran since we started targeting the market in June, and we work with major inbound operators such as Aspen Holidays and Persian Travel. We’ll have to wait till the peak Iranian travel season in March to assess the overall impact.”

However, Eugene Yeo, director of sales & marketing, Hotel Istana Kuala Lumpur City Centre, was more upbeat. “Even though we get about 4,000 room nights from Iran per year, I believe we won’t be affected to such a large extent since most major inbound operators already have seat allotments with airlines such as Emirates, Qatar Airways and Iran Air,” said Yeo.

Speaking to TTG Asia e-Daily, Azran Osman Rani, CEO, AirAsia X, said: “It’s a very difficult geopolitical environment, and the circumstances don’t allow us to continue. Even though the route only contributes a single-digit percentage of our business, we’re incredibly reluctant to give it up because it showed a lot of promise.”

He added: “We’re definitely open to resuming flights to Tehran in the future. Meanwhile, we’ll concentrate on maintaining existing and opening new routes in markets where we have scale such as Australia, China, South Korea, Japan and Taiwan.”

THE former CEO of TMS’ head office for Asia, Andrew Chan, is striking out on his own, after having left TMS amicably since the executive search firm withdrew all of its Asian operations last month.

The new firm, dubbed ACI HR Solutions, was incorporated at the start of this month and now operates out of two offices, one in Singapore and the other in Hong Kong.

“Asia is a market that’s growing consistently for the recruitment industry, particularly within the travel and hospitality sector. Asia is still projected to have a much more positive (economic) outlook than the rest of the world. So the time feels very right to be establishing a new venture,” said Chan.

He emphasised that the firm was being positioned as a boutique HR consultancy offering a host of turnkey recruitment, retention and training solutions. Plans are also on the drawing board to expand services to lifestyle sectors such as spas, wellness and theme parks.

He added that a conscious decision was made to keep ACI lean, owing to the lessons he had drawn from heading TMS.

“It is crucial for us to get our foundation right and build a business model that works in Asia. The broader market environment changes so rapidly that it is harder for HR firms with a large presence to react. We’ve deliberately been mindful of that, and hence, we’ve kept operations small to remain sufficiently flexible and nimble,” Chan said.

Despite the fact that ACI HR Solutions would be a new brand in the market, Chan was unfazed by the challenges this posed. “ACI might be new, but the people behind it are not,” he said.

According to Chan, most of the staff affected by the closure of TMS’ offices in Asia, including the former general manager of the Singapore office, Thomas Lim, as well as Adeline Lee, the manager of its Shanghai outpost, have been brought on board.

When questioned if the move to set up ACI HR Solutions could result in a conflict of interest with his previous employers, Chan replied that he saw no reason for a clash. “For a start, ACI will draw its client base from companies TMS’ Asian offices had already established close ties with during my tenure. We’ve reached an agreement with TMS’ senior executives that ACI will continue servicing TMS’ Asia-based clients. They understand that these clients need a sense of continuity. We were the face of TMS in Asia for these clients, and will continue to meet their needs, but just under a different banner,” he explained.

ACI’s team will be meeting with clients to inform them of TMS’ closure and ACI’s establishment over the next few weeks.

Chan admitted that the closure of TMS operations in Asia was a strategic decision made by the firm’s two key shareholders, Mark Rizzuto and Gary Marshall. “I am sure that they have their own agenda in mind about where to take TMS. On a brighter note, we’ve received a lot of positive feedback from industry members about ACI, and are looking forward to capitalising on the growth in Asia,” he said.