In this regular column, Adrian Caruso, founder and CEO of TA Fastrack Australia, dishes out advice to travel experts. A former travel agency and hotel owner/operator, Caruso now coaches travel, tourism and hospitality businesses throughout the region.

Do you remember the good old days when airline commissions generated the bulk of your travel agency revenues?

Well times have changed with the agency community now changing its focus to increasingly complex, high-margin products such as cruises and holiday packages. This type of travel holds far more financial opportunity than air ever did back in the seemingly untroubled days of airline commissions and overrides.

This is an area in which travel consultants have a big advantage over online travel agents (OTAs). Travel experts know their clients. They see them at football games, churches and grocery stores, and have personal relationships with them that many online players don’t have.

But OTAs do have one advantage: A single database that aggregates the purchasing and travel history of all their clients. All their automation is in place. They automatically have every client’s e-mail address. They can easily go back and pull up travellers who have booked a trip but who may not have purchased travel insurance, car hire or day tours.

Now that’s what I call the ‘one database benefit’. Being able to look at a single database, analyse its purchasing power, segment that database to see what kind of products will appeal to the various types of customers in that database and design customised campaigns that will appeal to those clients.

Why do travel consultants fail in marketing? The first reason is that they simply don’t communicate with their previous clients. Our research shows that one in five travel consultants make no contact with their clients during the year and a further 45 per cent contact them only once over a 12-month period.

Even travel consultants that market don’t know enough about their customers to sell them a product that would appeal to them. They just market anything to everyone on the database – mass. Your customer database is your most valuable asset for it has no stock. It is not just a list of clients. Which brings me to the second reason why agencies are failing in marketing.

I feel it is at times the fault of the major GDSs and the back and mid-office systems they have been selling agencies for years as a bolt-on. These systems simply do not do enough with the client data that is captured by travel consultants. If they do, they have not shown travel consultants how to extract the information and what to do with it.

You as a travel agency have total ownership over databases because it’s your programme and you choose the suppliers, you choose which clients get what and you are in control. You are just outsourcing.

This is the future of marketing in the travel industry – targeted and niche marketing based on a client’s interests.

But for this to happen travel consultants have to take a good hard look at their existing mid-office system and see if it is giving them all the information they want about their customers, including purchasing history, preferences and interests.

This usually involves having a customer relationship management (CRM) programme within their mid-office system or as a bolt-on. Travel experts must then learn how to use this valuable CRM programme and decide to embark on more targeted marketing to their database of customers on a more frequent basis.

Otherwise others will, and they will profit – not you.

This article was first published in TTG Asia, May 18 issue, on page 13. To read more, please view our digital edition or click here to subscribe.

Without doubt, Myanmar is the ‘hottest’ word in the GMS right now. But new-found fame always comes with challenges. John Watson, CEO of Diethelm Travel Group, discusses a current hot-button topic with Raini Hamdi

John Watson
CEO, Diethelm Travel Group

Tell me about Diethelm’s history in Myanmar.
We commenced operations in Myanmar in early 1996. We have offices in Yangon, Mandalay, Bagan and Inle, and employ over 50 multilingual staff.

Is business practically ‘booming’?
Yes, it’s fair to say that. We are experiencing serious accommodation congestion in Yangon and Mandalay. As these two cities form a major part of many tour programmes, (the room shortage) limits the ability to confirm full itineraries.

I am concerned that things are moving so fast; there are problems right now and I expect more in the future.

For example, given the high level of demand for Myanmar, from both the corporate and the leisure sectors, we are finding that some hotels are tearing up their contracts and re-negotiating each booking – upwards, of course. Some hotels are taking a very short-term view which will certainly damage Myanmar’s reputation as a tourist destination.

Our customers, mainly from Europe and America, just cannot understand how hotels can change the rules of the game – we have to spend a lot of time explaining to them that certain owners are simply saying ‘take it or leave it’.

Supply and demand is now out of kilter and will remain so for at least the high season.

What are you doing about it?
There is little we can do with properties that are determined to maximise profits at this time. We point out to them that the current situation will not last forever and that overseas tour operators will remember when hotel stock increases over the next few years who played fair with them.

The management of the more enlightened hotels understand the point, but some will not listen. This is really sad, because it damages the country’s reputation. Perhaps media, such as yours, can help convince properties to honour commitments already made and in place?

Also, we are advising overseas operators to try to fill shoulder and low-season where availability is easier to obtain.
The Myanmar government is actively involved in trying to ensure there is a fair distribution of rooms for the various hospitality segments. We see some results in the FIT area, but the group and series business is proving harder.

I would also encourage the Myanmar government to ensure that Foreign Direct Investment hotels and local hotels follow the same rules in ensuring sustainable development of tourism to Myanmar.

Are you absorbing these unforeseen rate increases?
No, we are an agent already working on thin margins and cannot afford to work for nothing. Our costs are increasing rapidly due to fuel increases, general inflation and staff being offered increasingly-generous packages to move to the many new companies outside the travel sector establishing themselves in Myanmar.

How are the overseas operators reacting?
The operators who have supported Myanmar through the ‘difficult’ years are not reacting well to the current difficulties. They feel they should not be treated unfairly and their loyalty should be rewarded.

I am not sure how the ‘new’ overseas operators now trying to establish a presence in Myanmar are faring, as we are concentrating on our existing long-standing customers.

One obstacle facing operators is the increasing trend of hotels asking for pre-payment of rooms for high season, which means significant changes to the current arrangement which is basically open credit. In-country tour operators will be hard pressed to fund this investment from free cashflow and will need to make back-to-back arrangements with overseas tour operators who send them business.

All this leads to additional administration and cost burdens.

Your conclusion?
Myanmar tourism and the trade in general should learn from similar situations we have seen in the region in years gone by. Service providers should take a long-term view and bear in mind that supply and demand will, in the end, even out.

This article was first published in TTG Asia, May 18 issue, on page 10. To read more, please view our digital edition or click here to subscribe.

Development of secondary airports across Asia are helping to spread travel demand to emerging destinations

Marianne Carandang

CURRENT The main gateway to the island of Boracay is a one-and-a-half-hour drive away. Despite the Caticlan airport being only a 20-minute ferry ride from Boracay, tourists prefer to arrive via Kalibo due to the scenic ride as well as the runway problems at Caticlan, said Marlene Insigne, tours manager, Southeast Travel Corp.

Cebu Pacific recently launched a Hong Kong-Kalibo route in February, while Philippine Airlines (PAL) started services from Hong Kong and Incheon to Kalibo this month. AirAsia is reportedly looking at a Kuala Lumpur-Kalibo route.

Most Philippine carriers fly to Kalibo via Cebu, Clark or Manila. International airlines operate seasonal charters, such as Mandarin Airlines from Taipei and Jin Air from Incheon. PAL, Zest Air and Cebu Pacific operate Taipei-Kalibo routes, while Airphil Express organises charters from Shanghai, Hangzhou and Beijing. Zest Airways links Busan and Incheon.

In 2011, the Kalibo airport handled 5,420 domestic and 1,924 international flights. It received 609,628 visitors.

FUTURE The Philippine Department of Transport and Communications has earmarked P1.6 billion (US$37.9 billion) for an upgrade that will see a new terminal by mid-2013, a runway extension to at least 2.5km (now 2.2km), a runway widening to accommodate 45m-wide aircraft (it can now receive aircraft the size of Airbus A320s and A321s), and a new ramp to facilitate parking for up to eight aircraft. After expansion, the airport should be able to handle up to a million passengers.

Ernesto Brion, managing director of Cordym Tours and Travel noted that Kalibo was “currently small for its purpose”.

Insigne said the added capacity would help. “Planes are fully booked…but there are still empty rooms in Boracay,” she added. The upcoming Boracay Newcoast will further add 2,500 keys (four hotels) to the island’s 7,100-room inventory.

Duncan Forgan

CURRENT The new terminal at Danang International Airport opened last December and is set to rival Hanoi’s and Ho Chi Minh City’s (HCMC) airports with its facilities.

Built at a cost of VND1.3 trillion (US$62.7 million), the three-storey building is located adjacent to the existing terminal and has a handling capacity of up to six million passengers a year. The two 3km runways can accommodate larger aircraft such as Boeing 747s, 767s, Airbus 330s and 340s and Antonov 124s. Retail and F&B options are also plenty.

AirAsia Malaysia started flying between Kuala Lumpur and Danang last December, while both Asiana Airlines and Korean Air launched direct flights from Seoul to Danang recently. Other new regional destinations include Savannakhet by Lao Airlines and Beijing by Vietnam Airlines, while new LCC VietJet Air has launched a Danang-HCMC service in end-April.

Danang also has links to international destinations such as Guangzhou, Shanghai, Singapore and Siem Reap. Local carriers Vietnam Airlines and Jetstar Pacific connect the coastal city to other domestic hubs.

George Ehrlich Adam, general manager-Vietnam, Exotissimo, deemed the new airport terminal a necessary step for Danang, as passenger levels had been rising by an average of 20 per cent since 2005 with no sign of levelling.

FUTURE The introduction of more international routes to Danang is fuelling travel to the area, which is already seeing rising visitor numbers attracted to its myriad attractions and growing array of luxury resorts and golf courses.

“Our business has increased by 30 per cent – much of that has to do with the new route from Malaysia,” said Pham Ha, managing director, Luxury Travel Vietnam. “Danang is going to boom – we will open an office to meet the increased demand.”

New routes from Japan, Thailand and Hong Kong are also on the cards.

Rahul Khanna

CURRENT The country’s second international airport is mainly served by domestic flights. Opened in 2000, it has a 4.3km runway and airport capacity of three million passengers per annum. There is sufficient space for 10 aircraft to anchor and Boeing 747-400 aircraft can be accommodated.

According to a spokesperson from the Department of Civil Aviation (DCA), the airport is capable of handling international flights and does not need any major refurbishment. However, there is only one scheduled international service to China. Last year, the airport received 50,000 international arrivals out of a total of 500,000 arrivals.

FUTURE According to a spokesperson from DCA, Bangkok Airways, Thai AirAsia and Thai Smile Air are considering direct services from Bangkok, and at least one is likely to launch flights by year end. Direct flights between Mandalay and Chiang Mai were also a possibility, he said. Air Mandalay previously operated that route.

Meanwhile, China Eastern has doubled its capacity on its daily Mandalay-Kunning route by using Boeing 737-300 aircraft since March.

There are plans to partially privatise Mandalay International Airport, although details are not available at press time.

“Tour operators have expressed their wish to put the Mandalay airport into use, so that they will be able to create new products starting from Mandalay to other parts of Myanmar,” said Phyoe Wai Yar Zar, managing director of All Asia Exclusive Travel and secretary of Myanmar Marketing Committee. It will also ease Yangon’s congested hotel situation, he added.

Flights connecting Laos and Cambodia would also appeal to tourists visiting the Mekong region who often look to combine multiple cities, said industry sources.

Liam Aran Barnes

CURRENT Sihanouville International Airport finally received regular air access when national carrier Cambodia Angkor Air launched thrice-weekly services from Siem Reap last December.

Since the late 1990s, Sihanoukville has been steadily rising as a tourist destination, but access has been limited to long bus journeys or taxi rides along poorly maintained roads. The airport, built during the 1960s with funds from the Soviet Union, has largely remained dormant until recent times.

Cambodia Airports, which now manages the airport, has so far invested US$30 million to extend the runway from 1.4km to 2.5km, enlarge its shoulders to 45m and increase the passenger terminal floor area to 1,000m2. The airport can handle planes as large as the Boeing 737.

While actual figures are not yet available for 1Q2012, Sihanoukville saw 131,440 visitor arrivals in January – a rise of 64 per cent – of which a quarter were foreign tourists.

FUTURE Local tour operators say the airport’s relaunch will mark a turning point in Sihanoukville’s development.

ANA Travel owner, Mick Spencer, said: “We’ve not seen huge numbers yet, as there’s a maximum capacity of 67 passengers per flight, but the biggest impact will be felt in the high season.”

Expanding routes to international destinations is the next step, which will boost Sihanouville’s appeal as a new destination, particularly for high-end tourism, said Mohan Gunti, Cambodian Association of Travel Agents advisor. A number of regional carriers, including Air Asia, have already expressed interest in mounting flights.

However, Spencer added that airlines interested to fly to Sihanoukville should commit to a one-year schedule to enable travel companies to market and sell the destination better.

Divya Kaul

CURRENT India’s first privately owned airport in Puducherry’s Karaikal will draw more attention to the region’s spiritual offerings when it becomes operational.

To be developed by Coimbatore-based Super Airport Infrastructure, construction of the Rs2.8 billion (US$52.9 million) airport will commence in September. The first-phase construction, which is expected to finish by August 2013, includes a 1.8 km runway and a 250 peak hour passenger (PHP) capacity terminal spread across 160 hectares.

Karaikal is known for its rich pilgrimage sites including Velankanni and Nagore, temple towns like Kumbakonam and Thirunallar, and historic sites such as Tarangambadi and Poompuhar.

According to K Dakshinamurthy, assistant public information officer, Puducherry Tourism Development, Karaikal receives about 100,000 tourists weekly, half of which come from Delhi alone. However, this figure also consists of families visiting their children or relatives studying and working there.

FUTURE “A lot of airlines have shown interest to operate from the airport. We are negotiating with a few, but it will be premature to divulge names,” said K Ramalingam, managing director, Super Airport Infrastructure.

The company also plans to further expand the airport with a 2.6km runway and a terminal building boasting 500 PHP capacity in about five years.

Gopal Krishnan, owner of Pondicherrytours.com, said: “The new airport will be a boon to tourists and pilgrims visiting Karaikal and the neighbouring district of Nagapattinam. We expect tourist arrivals to increase after the airport becomes fully operational.”

“The new airport will help us to market our packages to attract high-end tourists who want to visit Karaikal for religious purposes but are sceptical due to the lack of air connectivity,” said Vikram Dolia, director, Chetak Travels.

Timothy France

CURRENT The new Attapeu International Airport is being built in Laos’ southernmost province, about 26km from the provincial capital Attapo. According to local sources, the first phase is five per cent complete and the airport is on target for a June 2013 opening.

The US$45 million facility is being developed by Vietnam’s Hoang Anh Gia Lai Group. This first phase will see the construction of a 1.9m runway with a width of 30m to accommodate aircraft of between 70 and 100 seats, such as ATR 72s and Fokker 70s. Further expansion will take place in the second phase from 2015 to 2020 which will see the runway extended to 3m with a width of 45m. It will then be able to accommodate aircraft with 150-250 seats. Based on state media reports, the completed airport will be handed over to the Lao government for management.

Laos Airlines is currently operating international flights to Pakse International Airport in the neighbouring province. According to the airline’s deputy marketing director, Soulasak Souvannasy, there are no plans to service Attapeu.

Marian Erenfeld, executive assistant manager, Bangkok-based Ultima Travel, said his company seldom runs tours to Attapeu, which borders Vietnam and Cambodia, due to lack of airline facilities and logistical problems as well as a low destination profile.

FUTURE Attapeu governor, Khamphanh Phommathat, said the new airport is expected to improve the province’s tourism prospects and provide a shot in the arm for the local economy.

Erenfeld agreed: “It will boost tourism in the area and open up Laos, together with North-eastern Thailand, which is still quite a remote area due to logistical constraints.”

However, other challenges such as high airfares to Laos in general in comparison with its neighbours still hinder tourism development, he added.

This article was first published in TTG Asia, May 18 issue, on page 16. To read more, please view our digital edition or click here to subscribe.