Singapore travel experts report buoyant outbound demand

August 10, 2012

TURNOVER at pre-NATAS fairs over the last two weekends grew by 25 to 30 per cent over 2011, taking major travel agencies here by surprise.

The latest jump in bookings is a welcome development, given the somewhat muted performance in the second quarter and at the pre-NATAS sales at the beginning of the year (TTG Asia e-Daily, February 16, 2012).

According to travel consultants whom TTG Asia e-Daily spoke to, Europe has leapt ahead to become the leading destination for Singapore holidaymakers.

ASA Holidays’ head of marketing communications, Eileen Oh, said: “Singaporeans, being bargain hunters, tend to head where currency rates are favourable. We have seen a strong surge in the number of bookings to Europe (at our pre-NATAS fair) due to the all-time low euro against the Singapore dollar.”

Alicia Seah, CTC Travel’s senior vice-president of marketing & public relations, remarked that the rise of “affluent, experienced travellers” was another key factor driving the spike in demand for Europe.

“Having visited regional destinations, these (well-off) travellers are now looking for countries farther afield. Naturally, with the euro at a low, Europe has become the natural choice, particularly Spain and Portugal, which are reporting cheaper prices owing to the eurozone crisis,” she explained.

However, Clifford Neo, managing director for Dynasty Travel, said it was difficult to predict if this upward trend would continue into 2013, given the economic uncertainty.

“We are delighted that bookings in July grew by over 100 per cent compared to the pre-NATAS fair we held in February. Of course, we hope that this will continue, but it is a matter of wait and see,” he said.

ASA Holidays’ Oh was slightly more optimistic. “Barring any unforeseen circumstances, we should see an overall year-on-year sales growth of at least 20 per cent for 2012,” she said.

“In 2013, we feel that free-and-easy travel will continue to grow significantly, especially with additional new and/or direct routes to various destinations served by the low-cost carriers.”

Cebu Pacific gears up for longhaul services with larger and newer planes

By TTG Asia

August 10, 2012

CEBU Pacific (CEB) is planning to sell its entire fleet of 10 Airbus A319 aircraft to US-based Allegiant Travel Company, replacing them with brand new A320 and A330 planes.

CEB will take delivery of 15 new A320s and four A330s between now and 2014, and is also exploring the possibility of bringing forward its orders for A320s scheduled for delivery between 2015 and 2016.

The airline is slated to begin its longhaul services in the third quarter of 2013. With a range of up to 11 hours, the A330s will allow the airline to serve markets such as Australia, the Middle East, Europe and the US.

Meanwhile, the A319s will be transferred to Allegiant over a 15-month period commencing March 2013.

Lance Gokongwei, president & CEO, CEB, said: “The Airbus A319s are our oldest and smallest jet aircraft. While they have served us well for the last six years, as we have grown our business and developed new markets, the time is right to trade up to bigger, brand new Airbus A320 aircraft.”

CEB currently operates a fleet of 10 A319s, 20 A320s and eight ATR-72 500s. Between 2012 and 2021, the carrier will receive 22 more A320s and 30 A321neos.

PHM introduces ‘urban budget’ hotel brand in Jakarta

By Mimi Hudoyo

August 10, 2012

PHM Hospitality, a member of Panorama group, has launched The BnB brand, with its flagship property under construction in Kelapa Gading, north Jakarta.

Targeted to open on Christmas Eve, The BnB Kelapa Gading will have 171 air-conditioned rooms, TV and Wi-Fi access. Its opening rate starts from Rp399,000 (US$42), including breakfast for two.

PHM Hospitality managing director, Kristian Kuntadi, said: “The difference from the rest of two-star properties in the market is that our room sizes are bigger (18m2) and with dedicated place for luggage, allowing guests to move around freely in the room and bathroom.

“We have an all-day cafe, not just a breakfast (outlet), which will be operated by (sister coffee chain) Kaffein. (We will also have) an Internet corner, a self-check-in facility,and shuttle service to the nearby Mall of Indonesia, Mal Kelapa Gading and ITC Cempaka Mas.”

The hotel will also have five meeting rooms with capacity between five and 25 seats.

Kristian explained that Kelapa Gading was a good business and leisure location. “It showcases how an economy hotel with modern design and facilities can be developed in a prime location, which we call ‘urban budget’,” he said.

PHM Hospitality first revealed it was developing new hotel brands at the start of the year (TTG Asia e-Daily, January 17, 2012 and TTG Asia e-Daily, February 21, 2012). Also due to launch by year-end is its three-star premium themed hotel brand, Alaia. It will debut on Canggu Echo Beach in Bali.

AirAsia X to double fleet size in two years

By S Puvaneswary

August 10, 2012

AirAsia X, the longhaul affiliate of AirAsia, is investing US$500 million to lease six Airbus A330-300 aircraft, scheduled for delivery over the next two years.

It signed a letter of intent with International Lease Finance Corporation (ILFC) yesterday on a 10-year lease term for the six aircraft, four of which will be delivered next year and the remaining two in 2014.

These six aircraft, coupled with deliveries of eight A330-300 aircraft from Airbus within the next two years, will see AirAsia X’s fleet size increase from the present 11 to 25 in 2014.

AirAsia X CEO, Azran Osman-Rani, said the new aircraft ordered would be deployed to serve its core markets of Australia, China, Taiwan, South Korea and Japan. The airline will increase frequencies on some existing routes and introduce new routes between Kuala Lumpur and these countries.

“We don’t want to be overtaken by others,” he added.

This is the first time that AirAsia X is leasing from ILFC, a wholly owned subsidiary of American International Group, Inc.

Pricier rooms in Australia’s key cities

By Warren Beaumont

August 10, 2012

AUSTRALIA’S major hotel markets are on a positive growth trajectory, with hotel occupancies and room rates on the rise. Refurbishment has also picked up pace, especially among upscale properties.

With the exception of Melbourne, there has been minimal supply addition in key markets over the past two years, but strong recovery in corporate domestic and leisure inbound travel.

Average room rates in Sydney are forecast to rise to A$210 (US$221) and to just under A$200 in Melbourne by end-2014.

Craig Collins, CEO Australasia, Jones Lang LaSalle Hotels, said the major CBD markets were maintaining strong year-to-date occupancy levels, with Sydney (85.8 per cent), Perth (83.2 per cent), Melbourne (80.5 per cent), Brisbane (78.3 per cent) and Adelaide (73.9 per cent) experiencing strong demand.

He said: “A number of Australia’s major CBD markets are trading at near full capacity and hotel operators are capitalising on these strong occupancy platforms. Continuing supply constraints across the key CBD markets combined with already strong occupancy levels will see room rates continue to grow over the short to medium term.

“In terms of RevPAR growth, Sydney, Melbourne and Brisbane have all posted strong gains of between five and seven per cent, with Perth posting a staggering 13.4 per cent increase.”

Meanwhile, five-star hotels in key markets, including the Four Seasons Sydney, Sydney Harbour Marriott, Park Hyatt Sydney, Melbourne Marriott, Westin Melbourne, Sofitel Brisbane, Brisbane Marriott and Hyatt Regency Perth, have spent over A$500 million upgrading rooms and technology, restaurants, bars and conference facilities over the past year.

Collins said: “We have witnessed a significant increase in refurbishment activity across Sydney, Melbourne, Brisbane and Perth. This is most prevalent in the five-star segment, with about 40 per cent of hotels in these major markets having recently undergone or planning improvement works.”

View from the top: Chang Theng Hwee

By Brian Higgs

August 10, 2012

His customers are multi-millionaires who expect to be blown away by once-in-a-lifetime experiences. Chang Theng Hwee of Singapore-based Country Holidays Travel tells Brian Higgs how his job is about transforming dreams into reality, and why going niche isn’t just about being pricey

Chang Theng Hwee
Founder & managing director
Country Holidays Travel

Tell us more about your products.
Our most expensive is the Antarctic programme. The resort guests stay in has only six rooms, each with a private plunge pool, and the cost ranges from US$9,500 to US$16,000 per pax.

However, Africa is definitely my choice for ‘most luxurious’. There’s just something about the place that makes people want to splurge. Whether it’s observing elephants in their natural habitat, enjoying champagne and quality cuisine under the stars, staying in accommodation equal to a Four Seasons…it is truly the experience of a lifetime.

We also have 12 to 15 Signature Departures per year. These are our top-of-the-line products, with a maximum of 16 persons per group. Perks include entrance into the State Hermitage museum in Saint Petersburg, Russia before it opens or a private visit to the Museum of Egyptian Antiquities in Cairo.

Wow, we’re impressed. Were you always in the travel business?
I graduated with a banking degree from the National University of Singapore in 1988 (he’s 48 now). Even as a student, I was actively involved in Rovers, a club which provided fellow students with travel services. We organised adventure expeditions to places like the Himalayas.

After leaving school, I continued to organise travel for friends and family. Having done the math, I realised it was a lucrative business and decided to strike out on my own in end-1992. I spent a year mapping out the strategy and finally launched Country Holidays in early-1994.

When we first started, it was just my wife (Siew Yim) and I. She handled operations, while I was in charge of sales. We concentrated on niche products such as hiking in Nepal, India and the Himalayas, and adventure travel in Africa. Our strategy at that time was creating in-depth cultural trips to exotic destinations.

Why the niche?
When Country Holidays first started, travel consultants in Singapore were mostly focused on run-of-the-mill trips to Europe and the US. They didn’t have any notion of adventure travel or tailor-made itineraries. If you really love travel, however, you won’t go for such products.

As a general rule, we never feature the usual Disneyland or common sights. Unique itineraries in familiar destinations is our strategy now.

We believe that we should only market places where we have been to and would love to visit again. Whichever destination we sell, one of us (in the company) must have been there.

Travelling and selling travel should be about passion. I’m a firm believer that if you’re passionate enough about something, you’ll definitely end up doing it well. These days, we can effectively cover so many destinations because many of our consultants are avid travellers themselves.

“A lot of companies start out in a niche by assessing how lucrative it can be… We don’t want to be just another expensive agency.”

What sets you apart from other luxury operators?
Even though our products are high-end in terms of price, it’s not just about featuring Michelin-star restaurants or five-star hotels. A lot of companies start out in a niche by assessing how lucrative the segment can be. We don’t set out to make our customers pay a lot of money and we definitely don’t want to be just another expensive agency.

We believe in catering to our customers’ exact interests and tastes, allowing them to visit destinations they really want to visit, do the things they really want to, and in the process gain an in-depth, meaningful and insightful experience. You need to have a deeper understanding of what you want to do for your chosen niche.

Who are your clients?
Most of our customers are aged 40-65, and are a mix of legal and financial types, professionals, business owners, doctors and even politicians, including seven ministers from the last two Singapore Cabinets.

Our products need a base of sophisticated, discerning and well-heeled consumers who more often than not aren’t first-time travellers. We need markets where we can graft out a distinct competitive advantage and where there are unserved needs.

Back in 2000, we started to feel the limitations of the Singapore market, but were wary of expanding overseas. However, during the SARS crisis in 2003, which really affected our business, we realised the need to venture abroad to tap larger markets. China was booming at the time, and we opened our first overseas office in Shanghai in 2003. We opened an office in Hong Kong in 2004 and expanded to Beijing in 2005. After that, we finally decided to take a breather and consolidate (laughs).

Now, Country Holidays employs about 50 staff across offices in Hong Kong, Shanghai, Beijing and Singapore. We operate in Indochina, China, India, Bhutan, Sri Lanka, Nepal, Pakistan, Tibet, Middle East, Africa, South America and Eastern Europe.

Right now, 45 per cent of our business is from Singapore; Hong Kong contributes 30 per cent; Shanghai 20 per cent; and Beijing five per cent. As for the client mix, it’s 50-50 expatriates and locals in Singapore, while in Hong Kong, Shanghai and Beijing, the majority are locals.

How much are you focusing on China?
I believe there is a huge untapped luxury travel market in China. In April, we launched a new brand called Jun Chi (‘galloping gentleman’), targeting elite Chinese travellers. Many travel firms say Chinese elite travellers only go for luxury products and don’t know how to appreciate the subtle things in life. I don’t believe this. The Chinese have over 3,000 years of history and culture, and based on our own experience, they seem highly capable of appreciating the culture and essence of a destination.

Hong Kongers and even mainland Chinese are very sophisticated travellers. They view destinations very differently from our Western and English-educated clients. When they visit Russia, for example, they’re a lot more interested in the country’s communist past. And before they head to Africa, they’re already aware of concepts such as a migration safari.

How have your customers across markets evolved?
(A decade ago), our customers weren’t so sophisticated. Now the situation is different, and they are travelling everywhere.

In the past, we were able to recommend places like Singita (Game Reserves in Africa), and they would say ‘thank you’ and take the package. Nowadays, they’re more demanding. We have to give them more variety, more options, and really value-add to the product.

It has a lot to do with our own knowledge as travel consultants. These days, so much information is already available over the Internet, and staying relevant to the consumer is a constant challenge.

This article was first published in TTG Asia, July 13, 2012, on page 8. To read more, please view our digital edition or click here to subscribe.

Healing the world through music

By Feizal Samath

August 10, 2012

TTG Asia’s very own Feizal Samath, a veteran concert organiser, discovers that it’s possible to combine charity shows with tourism

American musician Bob Livingston (left) and World Bank’s country director of Central Europe and the Baltic Countries, Peter Harrold (right), have performed at previous Country Roads concerts

If Paul McCartney, Jennifer Lopez or the Eagles are performing in Singapore, Thailand or Malaysia, you can be sure that wealthy Sri Lankans will jump on the first flight out to rock the night away.

Post-war Sri Lanka is starving for good entertainment because top celebrities are often too costly for local organisers to hire for a single show. So far, only musicians from a bygone era – think Lobo, Cliff Richard, Engelbert Humperdinck and Olivia Newton-John – have performed on Sri Lanka’s shores as their fees are friendlier to local budgets.

Sri Lanka-based travel experts have since tapped this demand by actively promoting overseas music packages, which include a business-class air ticket, hotel accommodation, concert tickets and a once-in-a-lifetime chance to meet the idols.

Musical concerts are a great way to promote the country. In a small way, I have also contributed to the craze for international acts by staging my own charity concert, Country Roads, in Sri Lanka for the past 24 years. Organised by Country Music Foundation (CMF), a non-profit organisation that I founded in 1988, CMF aims to raise money for needy children, particularly those affected by war.

The organisation has come a long way over the years to raise about eight million Sri Lankan rupees (US$60,000). While this might seem like small change in the world of big-ticket events, this drop-in-an-ocean kind of fundraising has helped to improve the lives of hundreds of disadvantaged children across the country by working with international agencies like UNICEF, Save the Children UK and local community groups.

CMF has brought in musicians from Germany, Italy, the Maldives, the US, the UK and Canada to perform at Country Roads concerts, promoting country and folk music the likes of John Denver, Bob Dylan, Simon & Garfunkel and Johnny Cash, among others. All artistes have donated their services in return for complimentary tickets, accommodation and a chance to visit Sri Lanka and help the children of this country. My own band also plays at these concerts.

In 2013, Country Roads will be going to the Maldives, marking our inaugural effort at staging a concert to raise funds for Maldivian children.

The Maldives, with its over 100 exotic resorts, will be a perfect stage for exclusive concerts. It has already attracted a jet-set crowd and celebrities such as Richard Branson and Ronaldo, who are assured absolute privacy whenever they visit.

Now visualise Beyonce, the Black Eyed Peas or the Rolling Stones singing around a campfire on one of these secluded islands. Can you imagine how much one would pay for this kind of up-close encounter with a celebrity in an intimate setting? Thousands, I would guess!

This article was first published in TTG Asia, August 10, 2012, on page 13. To read more, please view our digital edition or click here to subscribe.

Setting the stage right

By Linda Haden

August 10, 2012

Music festivals are finding their way onto events calendars across Asia, but they don’t always strike the right note with travel consultants.

ZoukOut, one of Singapore’s most popular music draws among foreigners

Asia’s travel companies are keen on bigger business from music fans around the world, but only a handful have managed to capitalise on such opportunities so far.

Singapore’s annual dance music festival ZoukOut drew 28,000 revellers in 2011, of which some 45 per cent were from abroad. Over the last few years, festival organiser Zouk has worked closely with youth travel specialist STA Travel to distribute tickets and packages through the latter’s local and overseas offices.

Sofie Chandra, Zouk’s marketing and business development manager, said the take-up rate for packages had remained steady in the last few years, although free-and-easy options were now more in demand. She added that Zouk was open to working with more travel firms.

For Kuching-based CPH Travel Agencies, sales from the Rainforest World Music Festival has posted a 10 per cent year-on-year growth over the last three years, said director of sales, Hannah Choo, who credited this largely to Sarawak Tourism Board’s aggressive marketing efforts.

The company offers two types of music festival packages to clients, most of whom come from West Malaysia and Singapore, and in small groups of family or friends. The basic package includes tickets and accommodation, while sightseeing tours are added for those who are extending their stays.

Kuala Lumpur-based DMC, AOS Conventions & Events, has even jumped into the events fray itself. In November 2011, it organised the inaugural Langkawi Live Music Festival at the Frangipani Langkawi Resort & Spa, also part of the AOS family.

Group managing director, Anthony Wong deemed the two-day event a success as it attracted about 1,000 music lovers from around the region. Both music festival packages were well received, he said. One included accommodation, meals and transfers, while the other had only tickets and meals.

Still a relatively new segment
In other destinations such as Thailand, Indonesia and the Philippines, however, turning music festivals into tourist magnets is still in its early stages.

Addie Hirunkate, managing director, Destination Asia Thailand, said events in her country were mainly aimed at the domestic market, making it difficult to attract overseas visitors. “We really need promoters to look at bringing more world-renowned music festivals like WOMAD or to create Thailand’s own world-class music festival,” she added.

Diethelm Travel Thailand managing director, Hans van den Born, said the company had no specific itineraries incorporating music festivals, although it had “regular promotions and write-ups in various media to create awareness of the music festivals Thailand has to offer”.

While the Tourism Authority of Thailand (TAT) does not have exact figures of foreign tourists who come specifically for these events, spokesperson Chattan Kunjara Na Ayudhya, said the Pattaya International Music Festival – the most popular one – sees international and Thai tourists swelling to 400,000 during the event, made up of mostly younger travellers. Another prominent event is the Hua Hin Jazz Festival, which attracts an older demographic. Around 50,0000-70,000 tourists visit the town during the period, and numbers are rising, said TAT.

Indonesia has a growing number of music festivals, such as the Java Jazz Festival in Jakarta, Kereta Kencana World Music Festival in Solo and other more traditional ones, but many major travel consultants have not been able to sell these effectively.

Association of the Indonesian Tours and Travel Agencies South Sulawesi chapter board member, Nico Pasaka, said: “Most festivals in Indonesia are announced at the last minute. Although it is an annual event, the exact dates are usually decided too close to the event, making it difficult for us to package and promote.”

Brazil’s Raiz De Cafezal at Sarawak’s Rainforest World Music Festival (left); Thai band Paradox at Pattaya International Music Festival

Hellen Xu, Panorama Tours Indonesia managing director of travel management, added: “There is always a possibility that a festival or music concert is cancelled at the last minute for any reason. While the admission fee is refundable, there is no (refund) guarantee for room bookings and deposits made with hotels.” As a result, Panorama only focuses on selling tickets to local customers.

Ironically, the musically-destination of the Philippines currently does not have any major festivals it can promote overseas. Some organisers of international concerts are also not interested in the overseas market. Renen de Guia, head of Ovation Productions, which has staged Lady Gaga and Sergio Mendes & Brasil 2012 in Manila, said “the domestic market was big enough”.

This may change, however, with the emergence of bigger venues in Manila, including the SMX Convention Center and the Mall of Asia Arena. Current events targeted at mainly domestic tourists may also stand a chance of going international.

The Backdoor Ventures Arts & Music Festival, which is now in its sixth year, has already secured a move from the Megatrade Hall to the bigger SMX Convention Center. Founder Jay Viriña said he plans to involve the foreign embassies in the Philippines in marketing.

Blue Horizons Travel and Tours inbound sales and marketing manager, Jayne Lim-Ong, recalled that negotiations for an international jazz festival fell through some two years ago, due to insufficient facilities to accommodate up to 4,000 people.

Hand-in-hand marketing
Destination Asia’s Addie suggested that organisers worked with the trade from the event’s inception. “We need more advance notice to effectively promote music festivals,” she explained.

Panorama’s Xu added: “They could involve us in their promotional activities and make us their appointed agents as we have many outlets, both in Jakarta and outside the city.”

Singapore-based Tradewinds ceased selling tickets and packages for ZoukOut and Mosaic Music Festival due to insufficient sales, according to a company spokesperson. She said: “Generally, these events are not well-advertised abroad to music fans, and they are too Singapore-centric. Organisers should do more to market these festivals abroad.”

However, one organiser said a more fundamental issue was the profile of festival attendees. Steven Woodward, general manager of Midas Promotions, which does Singapore’s SINGFest, explained that selling tickets and packages to foreign travellers was “not financially viable for travel companies and event organisers in general as most overseas music festival-goers prefer to travel independently and make their own arrangements”.

This article was first published in TTG Asia, August 10, 2012, on page 12. To read more, please view our digital edition or click here to subscribe.

Additional reporting from Chami Jotisalikorn, S Puvaneswary, Mimi Hudoyo and Rosa Ocampo

Not your usual .coms

By Linda Haden

August 10, 2012

These innovative start-ups are revolutionising the travel research and booking process, moving away from conventional OTA models. Linda Haden and Divya Kaul speak to their creators for a dose of inspiration

Flocations

Date founded and by whom 2012. Tudor Coman (previously from RIM), Florian Cornu (background in banking), Shaw Chian Kuck (former software developer) and Venkatraman Dhamodaran (telecommunications field)

Description of the business A travel discovery service that lets users search for their next holiday destination within a specified budget utilising a fresh, easy-to-use visual format. Also enables users to share their newfound trip with contacts through Facebook.

Inspiration Users rely on search engines to find places then go to an OTA to fill out forms and go through price lists. We’ve created a visual answer to the age-old questions of ‘where can I go for my money’ and ‘where can I go to do activity X’.

Revenue model We run a meta-search model, collecting commission on referrals. There’s been significant B2B interest, however, as many other travel sites are looking to provide their users with additional functionality and new ways to search.

Success metrics At this early stage, virality ratios and user retention numbers are more important to us. Once we hit the goals for these metrics, then we can move towards new performance indicators such as volume and revenues.

Where most of the traffic comes from We have been predominantly marketing in Singapore, as that’s where our main traction lies. Currently, we are gathering data to move out of Singapore as quickly as possible.

Trade partnerships Agoda, AirAsia, Tiger Airways, Jetstar, Batavia Air, Kal Star and Merpati Airlines are our current partners, although we look to expand this further.

Under development We’re really excited about some of the new functionalites that we’re bringing in, but of course, I can’t go into detail. On the operations side, we are hiring a community manager and graphic designer.

I am/am not an OTA… Our interface is very different from the default set-up used by OTAs for the last 15 years, which seem to be trying to turn users into travel professionals. Flocations is a fresh way to travel.

mygola

Date founded and by whom 2009. Anshuman Bapna (previously from Google) and Prateek Sharma (an early employee at telecommunications company Tejas Networks)

Description of the business A global community of hundreds of travel freelancers who use our technology platform to answer questions from travellers, and a platform that pulls data (e.g. deals, hotels, blogs) from the best sites in the world to aid our guides.

Inspiration We think 90 per cent technology but 10 per cent human judgment is the right way to go. We radically simplify travel planning and give everyone a personal travel concierge. Our researchers give completely personalised answers.

Revenue model Users get to ask the first question for free. We then ask them to pay what they think is right after seeing the answer. In addition, they can pay per trip or take an annual plan. We also make money from ads and lead generation.

Success metrics We’ve planned over 25,000 trips to 100 different countries. We have almost 4,000 guides around the world.

Where most of the traffic comes from Thirty per cent comes from India, while 40 per cent comes from the US. Our traffic is growing 25 per cent month-on-month without spending a single dime on customer acquisition so far (mainly through SEO and word of mouth).

Trade partnerships We’ve partnered with Expedia, Agoda, Viator, MakeMyTrip and hundreds of other travel companies as an affiliate. This allows us to fulfill our travellers’ booking needs. We’re actively looking to work with tourism boards.

Under development We’re building something very innovative that is still under wraps at next.mygola.com – expect it to launch in August.

I am/am not an OTA… We don’t see ourselves as an OTA; instead, as a layer of trust on all the innovative services that have come up in travel in the past decade. We combine the high touch of a travel consultant with the enormous power of the Web.

ImpulseFlyer

Date founded and by whom 2011. Steven Gong (formerly of Wego and Circos Brand Karma)

Description of the business A members-only flash sales site, offering luxury boutique properties within APAC. Applications are screened based on specific criteria. Unlike typical voucher sites, there is a real-time booking engine for instant confirmation.

Inspiration It stemmed from a personal problem. I love luxury and boutique hotels and discovering hidden gems around the world, but there weren’t many sites that could help. There was certainly a gap in Asia for a luxury online travel brand.

Revenue model We operate a bit like a conventional OTA, earning commissions from each reservation that we take. Membership is completely free. Members can invite their friends, although there’s no guarantee that they will be able to join.

Success metrics We look first and foremost at our revenue stream, the size of our membership base and the number of bookings generated.

Where most of the traffic comes from Most of our customer base is concentrated in the APAC region.

Trade partnerships Presently, we deal exclusively with the hotels featured on our site.

Under development Hopefully, in the next couple of months, we will be able to unveil our retail product: we will be selling selected hotels all year round, instead of just two weeks at a time as we do now.

I am/am not an OTA… We are a private sales site that features only selected hotels to an exclusive set of customers in a closed environment. We are distinct from an OTA in terms of how we generate sales.

travelmob

Date founded and by whom 2011, but site was only rolled out in July 2012. Turochas Fuad (previously from Skype) and Prashant Kirtane (formerly of Yahoo)

Description of the business A platform for private property owners in APAC to market their properties to an international audience in a secure environment. We offer travellers the opportunity to book accommodation where they can ‘live like a local’.

Inspiration There’s been a growing need for an online solution that facilitates the so-called social economy. None have been specifically designed for APAC. We aim to become the largest provider of social stays in the region.

Revenue model Commissions earned from property owners or hosts, and service fees charged to guests when they make bookings. Hosts list their properties for free, with travelmob providing the marketing know-how and tools.

Success metrics The size of our audience, and the number of listings and bookings are our main metrics.

Where most of the traffic comes from Our bookings come from virtually anywhere, with a rough mix of 70 per cent from outside APAC. We tend to attract a younger demographic, and they book a wide spectrum of properties, from budget to luxurious.

Trade partnerships None specifically at the moment, but we are in talks with a range of travel-related suppliers such as spas, transport companies and tour providers to provide more enriching experiences for travellers.

Under development South-east Asia is our starting point, but we are hoping to make inroads elsewhere in Asia. We plan to fill the gap (in the social-stay market) by developing Asian-language sites and by using Asian currencies.

I am/am not an OTA… We do not see ourselves as an OTA. travelmob is an online marketplace for social stays, connecting property owners and potential guests in a transparent, seamless and secure manner.

Qiito

Date founded and by whom 2011. Chuang Pei-Han (previously from HSBC), Leong Jiayong and Clement Tan (both worked at Singapore’s Defence Science and Technology Agency)

Description of the business Qitto, which stands for Quick, Interesting, Interactive Travel Organizer, allows users to document and share potential attractions and venues through pictures. We are the first Asia-based interactive online travel planner.

Inspiration Qiito was designed to make trip planning a hassle-free process. There is a growing trend among travellers to seek bespoke itineraries. However, the amount of information available on the Web can be daunting to consolidate.

Revenue model We believe revenue will be generated from streamlining the information flow of the travel industry. In the near future, we might accept bookings on the behalf of airlines and accommodation providers. We are also exploring ad opportunities.

Success metrics Our success is measured based on the usage duration and frequency of visits to our website. We also benchmark our performance against our competitors in terms of usability, features and resources.

Where most of the traffic comes from The bulk is derived from Singapore, although we are receiving significant demand from Indonesia, the Philippines, Malaysia, the US and India as well.

Trade partnerships Qiito has been working with the Taiwan Tourism Bureau for almost half a year, showcasing Taiwan’s attractions and sights on our website. This tie-up has been successful so far.

Under development We intend to strengthen our presence in South-east Asia first. With a timeframe of three months each, we will target various countries and user groups. We want to launch a Mandarin website and set up an office/partnership in China in the future.

I am/am not an OTA… We do not see ourselves as an OTA because we do not plan trips or sell any packages. Users pick up information that interests them and build a travelogue. They are able to modify an existing one or build from scratch.

This article was first published in TTG Asia, August 10, 2012, on page 10. To read more, please view our digital edition or click here to subscribe.

Additional reporting from Divya Kaul

View from the top: Tim Hansing

By TTG Asia

August 10, 2012

Now in bed with Tune Hotels, Bangkok-based Red Planet Hotels is charging ahead with one deal a week, one opening a month. CEO, Tim Hansing, tells Timothy France he believes the marriage will be a harmonious one

Tim Hansing
CEO
Red Planet Hotels

From an initial franchise agreement, Red Planet recently became Tune Hotels’ third-largest investor with a 16.05 per cent stake. What attracted you to the brand in the first place?
When we set up Red Planet (in 2010), we came across Tune and thought it was a great niche in the market. There is a very obvious gap here in Asia, where there is no quality branded budget product across the region, and we saw an opportunity (to be a major franchisee).

In this day and age, people are looking for a value connection. There needs to be a relationship between what you are buying as a consumer and the amount of money you are being charged for it. Two or three years ago, that value connection did not really exist in the marketplace in terms of the hotel space.

Why the need for such a major investment?
We acquired shares from a seller in return for cash and shares in Red Planet. It was part of the long-term strategy in terms of “it would be a great opportunity if this happened”, but we did not include it in our business plan because it was too good an opportunity to count on. So we are very happy about it.

We’ve invested in Tune because it’s a global scalable business, which means the pie that our shareholders now own is going to get fairly substantial and fairly large. Tune Hotels plans to do an IPO at some point, and the bigger and more diversified a platform you have, the more valuable your business is going to be.

Where will the company be in the near term?
Our business plan states that we should have 80-100 hotels within the next three years. We are planning to raise an additional US$100-US$120 million of capital (primarily from Japan) by the end of this year. With that money, we will effectively be doing one hotel deal a week, so we are ramping up. What we’ve got now is a good dress rehearsal, opening one hotel a month; we’ve got the structure in place, so really it’s just a case of a few extensions.

Now that you have a share in Tune, how do you plan to further the relationship?
We’re great friends with Tune, and we’ve had a number of discussions about how we can move forward together. Obviously the acquisition of shares was the best way to do that.

Would we merge with Tune? We would never rule that out. We could also develop regional platforms together.

The franchise agreement was the engagement, the share acquisition the marriage, and then the kids after this. So it’s a blue-sky future and we’re not ruling out anything.

How many times have you stayed in a Tune hotel and what were your experiences like?
I can’t remember how many times. It’s a hotel that I helped design, so I think it is fabulous. If you go onto TripAdvisor, some people call it a “nest”, and I just shout with joy when I see that because (the hotels) are comfortable, they are small, but everything is around you. For example, there is a little fold-down table and next to that there is an international plug at table height. It’s the little things that count for so much. That’s why I like staying there because it’s just so easy.

The one thing our customers are asking for is a refrigerator in the room, so we might do that in some markets, but that’s amenity creep and I’m not sure we like that.

How do you keep a lid on costs yet still maintain standards?
Our fixed overheads are very low. We outsource housekeeping and security, so housekeeping is effectively cost per occupancy. We have no F&B outlets, no expensive chefs. We have receptionists, security, a couple of maintenance guys, and that’s it. We can survive quite a severe winter on what we have without any impact on the quality of service and customer experience whatsoever.

To maintain standards we’ve put in place a number of physical (promises) that the brand delivers on, namely a five-star bed, feather pillows, high-quality linen, a power shower, TV channels that you actually want to watch and quality Wi-Fi. That’s on the product side. Then of course, the hotels are spotlessly clean, we have high levels of security, and the girls at the reception desk know what they’re doing and we have a rigorous training programme.

“Scale can often hit without you planning for it, and as a result you can get growing pains as a company. We’ve not had that because we’ve known that we were going to expand this quickly and this rapidly.”

Broadly speaking, many low-cost models have left travel consultants out in the cold. How will you be working with the trade?
The reality is that we’re in markets where local travel (consultants) dominate, so how stupid would you be to ignore them? We’re here to service demand,
and places like Hat Yai, Pattaya and Patong are heavily reliant on travel (consultants), and it would be foolish not to realise that. So travel (consultants) are our friends.

We have very good working relationships with them in Hat Yai, and we are starting relationships with them in Pattaya. We need them and they are a force in the business.
The issue is that if you come from a four- or five-star background travel (consultants) are not your friends because they are low-cost, high-volume, but that’s what we want.

But will low cost mean low returns?
I spent eight years working for Kingdom Hotel Investments, where I did US$3 billion worth of deals in emerging markets, all at the five-star level. What is clear is that if you want to make money, it is the low-cost budget hotel sector that will deliver faster returns. We are expecting anywhere between 15-20 per cent return on capital deployed a year on these hotels. Most upmarket hotels will struggle in the first year to make even a three per cent return.

The drawback with the budget space is that you have to develop scale quickly. We have US$180 million of projects under construction at the moment, which is effectively one Four Seasons (property), so we have to get it done quickly otherwise corporate overheads will eat us alive. Building scale in the budget business will give us the returns.

How dangerous is it to expand so aggressively?
We’ve managed to do it effectively because we’ve got a team of people who have done it before, so none of us are new to it. We knew we were going to do this on such a scale, so we’ve built a structure that can cope with it.

Scale can often hit without you planning for it, and as a result you can get growing pains as a company. We’ve not had that because we’ve known that we were going to expand this quickly and this rapidly.

Are there any challenges that you have not been able to foresee?
There is always someone somewhere in the world doing something stupid that you can never foresee. There are licensing issues in Indonesia; you’ve got people making up planning regulations as they go along. It’s a lot of small things, but there has been nothing major so far. You can usually see things coming on the horizon and form a contingency plan.

What other interests does Red Planet have?
None at the moment; we are keeping focused. That’s the key: keep focused, keep it simple, do it properly, do what you know. We have no plans to diverge.

We could as we’ve got a lot of hotel expertise and about 150 years’ experience within the company in terms of buying buildings and operating hotels. But at the moment, with this acquisition particularly, it wouldn’t be something we would look at. However, the door is always open.

This article was first published in TTG Asia, August 10, 2012, on page 8. To read more, please view our digital edition or click here to subscribe.

By Timothy France