Corporate travellers are craving for finer experiences, and the proliferation of design and boutique properties with character is a reflection of the new demand

Sofitel So Bangkok

There was a time when luxurious boutique hotels – usually with a small room inventory and full of character – and design hotels were choice accommodation for leisure travellers who thirst for unique experiences.

But the guest profile at boutique and design hotels is fast changing. Corporate clients are increasingly choosing such properties for stays or for hosting exclusive events and incentive programmes, noted Asian event planners.

Business travellers and clients who favour unique hotels may span all ages, but they share some similar traits: they are all well-travelled and desire a distinctive travel experience.

Faye Handley, director of Red Events Singapore, who had used luxury boutique hotels such as Naumi Hotel, Klapsons the Boutique Hotel and Hotel Fort Canning for small- to medium-sized events, said these clients were usually aged 35 years and under, and were “forward-thinking”.

“The younger generation is well-travelled. They…wish to stay at hotels that offer a different experience, so they can combine work with pleasure,” said Seema Ahmed, general manager, Gainwell Travel & Leisure India.

For Robert Lim, senior vice president of Holiday Tours & Travel Malaysia, corporate clients who gravitated towards small, unique hotels were “top achievers who demand lifestyle experiences”.

Unique properties are expected to gain a stronger corporate following as clients mature in their buying behaviour and recognise the need to keep event experiences fresh for participants.

The rapid adoption of these unique hotels by corporate clients has been made possible by hotels chains that have come up with their own boutique and design-led product range. Starwood Hotels and Resorts Worldwide has the fashionable W Hotels and the more affordable spin-off, Aloft. Accor Hotels has the MGallery Collection, which comprises boutique properties with its own individuality, and designer Pullman, which has a larger room inventory. InterContinental Hotels Group has the Hotel Indigo range of stylish boutique properties that reflect the local neighbourhood and culture. These properties boast stylish function venues fitted out with quality audiovisual equipment.

Aonia Singapore MICE director, Darryl Rodrigues, said corporate clients were more inclined to pick design hotels that belong to an established chain when organising events abroad, as those “provide some novelty, without compromising on the quality of service clients have come to expect from upscale and luxury properties”.

But just as much attention is also being paid to independent boutique and design-driven properties.

“It is the recognition that the accommodation experience is as important as the itinerary of the event,” said Rajani Nair Deb, chief marketing officer, KW Conferences India, explaining the growing corporate gravitation towards boutique and design hotels.

“The objective of the meeting is the driver in most cases. It may be a celebration of a milestone or a leadership meeting that prompts the decision to hold the meeting in a design hotel. Brand alignment is also instrumental in clients choosing to hold business meetings in these niche hotels. Clients have briefed us that they (represent) a high-end (brand) and hence the setting for the meeting has to be exclusive,” said Rajani.

Pacific World Hong Kong MICE account director, Ivy Sung, said a client had once requested for the whole boutique hotel to be booked for a product launch.
Violet Wang, senior account manager of Pacific World Shanghai, which uses boutique hotels extensively in the Chinese city, found that small-sized incentives were bigger supporters of boutique and design hotels.

Wang said: “Our clients have always said that they don’t want big hotels that overwhelm their guests, especially for incentive programmes. They prefer to stay in a smaller hotel, which ensures good service, style and location.

“The bigger the hotel, the less attention each guest will receive – this is a common client prejudice. Design is also a big factor. More corporate clients are looking for low profile luxury, where the hotel’s environment is more subtle and tranquil, instead of one with extravagant trappings and a large inventory.”

Wang noted that her clients’ incentive events require more boutique-style elements and occupy fewer than 100 rooms. Most of the time, such events were not pure incentives, and would be a client appreciation event or corporate sales kick-off meeting, she said.

An increasing demand was coming from the luxury fashion industry, automotive and finance industry, she noted, adding that incentive programmes are now mostly for under 100 pax, which fit the boutique model well.

Shanghai CTS MICE Centre general manager, Tom Liu, said corporate clients tended to choose boutique and design hotels to avoid large crowds at five-star conference hotels.

Sushil Wadhwa, chairman and managing director of Platinum World Group India, said the ability to offer novel experiences in a good location was the “trump card” of boutique and design hotels, which cannot compete with dedicated MICE hotels on meeting facilities.

“Many times the historical significance of the property becomes a factor in making a decision,” Sushil said, adding that these out-of-the-ordinary hotels are sometimes used when delegates have had their last event at a large chain hotel.

He said: “We did a meeting in Rome in early February for about 40 people, and instead of using a MICE hotel, we chose Grand Hotel Via Veneto (a boutique hotel that occupies 19th century buildings) in the heart of the city. The client was delighted with the hotel’s central location, large guestrooms and personalised service.”

In Shanghai and Singapore, where there is zealous competition among hotels, event planners said boutique and design hotels were attractive because they were priced more competitively than their five-star branded conterparts.

“As hotel rates for larger or chain hotels in Singapore continue to rocket skywards, some clients, including MNCs, have, upon our recommendation, opted for smaller, boutique properties such as New Majestic Hotel and Naumi Hotel,” said Andy Michaels Lim, general manager of Singapore-headquartered Bonvo Travels.

Lim noted that the number of corporate clients choosing to stay in such hotels rose from 100 to 300 between 2010 and 2011.

Hotel Indigo Shanghai on the Bund

Unique hotels make their way into vendor lists

Travel buyers are taking notice of unique hotels offered by major hotel chains and some are slowly gaining acceptance as company preferred vendors.

Shauna Whitehead, project manager, CWT Meetings & Events Asia Pacific, said: “Not many sole properties are included in preferred vendor lists. However, with Andaz Shanghai being part of Hyatt Hotels, and Indigo Hotel Shanghai on the Bund being part of InterContinental Hotels Group, both are a definite consideration for companies’ preferred vendor lists.”

Whitehead believes that there is now a trend for high-end, boutique-inspired properties, merged with local influence and all the essentials that frequent business travellers would expect. Demand for such properties will increase as meetings and events customers expect high-end servicing and amenities, while also appreciating the local influences that hotels such as these have integrated into their design and hospitality.

American Express Business Travel director of advisory services-Japan, Asia-Pacific, Australia, Carl Jones, believes companies generally avoid luxury brands in the current economic environment, and “more locations and awareness of these boutique global chain properties” will allow travellers the chance “to stretch their travel budget from a moderate tier property to upscale”.

“(But) I don’t see travellers downgrading from a full luxury brand to an upscale boutique unless mandated or forced,” he said.

HRG China general manager, Harald Weber-Liel, said: “We have noted a growing number of enquiries from our clients in China about hosting special events in boutique hotels. These enquiries range from business luncheons with clients and incentive meetings for staff.

“We could eventually see a rising popularity among clients from certain industries for hosting events in boutique hotels and resorts. However, demand for corporate stay in boutique hotels in China will probably not change too much (soon) as the economic downturn has seen many companies sticking tightly to their corporate travel budgets.”

While boutique hotels connote a sense of exclusivity for corporate events, and would be a major differentiating factor for clients wishing to deviate from the norm of hosting events in luxury hotels, Weber-Liel said that his company always considers the objective and size of the event because these hotels are generally smaller.

Weber-Liel foresees a significant number of design-driven hotels emerging in China due to the growing number of high-end consumers. These developments would benefit China’s MICE industry as it would grant corporations a larger variety of venues to choose from. – Patricia Wee

Additional reporting from Linda Haden, Patricia Wee, Shekhar Niyogi, Prudence Lui and N. Nithiyananthan

Corporate travel in Asia stays buoyant but interest in policy compliance and cheaper options heightens as prices rise

Courtesy of Park Hotel Group

Despite an anticipated economic slowdown in Asia this year, airfares and hotel rates are continuing to rise across the region, representing another year of consecutive increase.

Carlson Wagonlit Travel (CWT) predicts a three to four per cent rise for Asia-Pacific airfares this year, while hotel rates in the region are expected to jump by up to 15 per cent.

But contrary to popular belief that a hike in hotel rates and airfares would curtail corporate travel, business travel demand in Asia is expected to remain fairly robust.

Large Asian economies, with the exception of Japan, have so far appeared to be spared the full impact of the economic turmoil erupting across the US and Europe.

Preliminary data from Pegasus revealed that, as of February 28, advanced corporate net reservations for June 2012 in Asia-Pacific rose by 27.9 per cent over 2011, compared to 7.6 per cent in North America, 8.5 per cent in Europe and a decline of 15 per cent in the Middle East and North Africa.

Looking further ahead, the Global Business Travel Association (GBTA) anticipates corporate travel expenditure in Asia-Pacific to grow by up to 11 per cent by 2015, almost three times the predicted rate for the US.

Against a backdrop of more expensive airfares and hotel rates, corporate travel managers are tightening travel polices to keep costs at a manageable level.

Travel management companies (TMCs) that TTG Asia spoke to all agreed that while companies and the travel managers they deal with in Asia have not trimmed their travel budgets this year, they are now intent on sniffing out ground and air savings.

“As airfares and hotel rates go up, corporates tend to examine their travel policies more closely, making tweaks to optimise spending and returns, for instance, by telling their staff to downgrade from business class to economy, or by switching to four-star from five-star hotels.

“This is happening to a degree at the moment (in Asia) as airfares and hotel rates escalate, but it is not evident across all sectors and organisations,” said Greg Treasure, Hogg Robinson Group’s managing director for the Asia-Pacific region.

Mike Orchard, senior director, CWT Solutions Group, Asia-Pacific, said more clients were considering integrating low-cost airlines into their travel programmes to reap the substantial cost savings that could be derived by switching to such carriers, especially on shorthaul routes.

“Companies can expect to save up to 20 per cent on their airline expenditures simply by using low-cost airlines,” he said.

Alternatively, some firms are reducing the frequency in which employees undertake business trips, replacing face-to-face meetings with technology such as video conferencing or by combining multiple destinations into a single trip, according to a spokesperson for FCm Travel Solutions.

Adherence takes centre stage
The renewed interest on cost control has given precedence to travel compliance. A CWT survey found that improving traveller compliance ranked the top priority for Asia-based travel managers in 2012, as they often face an uphill battle in ensuring that travel policies are being adhered to.

GBTA’s regional director for Asia-Pacific Welf Ebeling said: “Asia is still woefully behind the US and Europe when it comes to getting employees to toe the line, and in utilising online tools to keep travel expenses in check, even though they might have a travel programme and policies in place.”

This point was reiterated by Advito (see related article below, left), which said in its 2012 industry forecast that Asia was 15 to 20 years behind the West in its travel management evolution.

Orchard argued that the laissez-faire approach to travel policies among Asian employees was rooted in the perception that booking directly with suppliers was the cheapest option. “However, our research found that average hotel rates offered by TMCs are around 18 per cent lower than those directly quoted by hotels,” he said.

Policy restrictions are also a cause for employees skirting the rules. “Multinational firms that have not adapted their global travel policies to accommodate local cultural differences and idiosyncrasies usually see more incidents of travel policy defiance,” Orchard said.

Best road to compliance
While adherence to travel policies is crucial, travel managers should not be overzealous when clamping down on employees, said Carl Jones, director of advisory services, Japan, Asia-Pacific, Australia, American Express Business Travel.

Instead of wielding the stick, employees should be encouraged to follow policies through constant communication and engagement. “After all, (business) travel is a prime motivator, and if policies become too restrictive, this will demoralise workers, which could in turn affect retention rates,” he said.

Orchard, on the other hand, prefers “gamification” techniques. “Persuade employees to accumulate points in exchange for rewards for good travel behaviour, instead of harking on about rules and regulations.”

“Alternatively, give employees a traveller score card that lists exactly where their behaviours are driving savings – it’s a good solution to keep employees on the straight and narrow.”

Asia’s cruising scene heats up as more international ships arrive, helping to also cultivate outbound markets

Travel consultants in Hong Kong are gearing up to sell more cruises as they anticipate an even bigger market with the opening of the country’s new Kai Tak terminal next year. Last month, Worldwide Cruise Terminals Consortium was finally announced as the terminal’s operator and manager.

Crystal Cruises, regional sales manager, Asia-Pacific, Marnie Whipple, said: “(The new terminal) shows the commitment of Hong Kong to provide superior berthing (facilities) for cruise ships. Increased cruise visits – and simply greater visibility of ships in the harbour – help to build awareness and lead to more queries.”

The refurbished Crystal Serenity recently called at Hong Kong, while Crystal Symphony will visit the city for three days in 2013. “In 2014, both ships will call on Hong Kong on expanded 10-, 12-, 14- and 16-day itineraries, plus longer combination cruise options,” said Whipple.

The number of ships calling at Hong Kong in 2013 is not yet available, but confirmed cruise liners include Queen Mary 2, Seabourn Pride, Celebrity Millennium and Azamara Journey, according to a Tourism Commission spokesman.

To tap the Asian market, UK-based Cunard Lines appointed Cruise Vacations – led by cruise expert Nancy Chung – as its GSA in Hong Kong and Macau in 2010. Earlier this year, Chung set up an office in Seoul “to manage and build rapport for Cunard” due to the significant size of the South Korean market. Last year, she appointed a GSA in Jakarta to oversee the growing Indonesian market.

Memory Holidays, a subsidiary of Lotus Travel Group, also recently launched the GeoTraveller Cruise Center, a brand that aims to lead the cruise vacation industry through product innovation.

Meanwhile, travel trade members said they preferred to keep the existing cruise terminal in operation, even when Kai Tak opens in mid-2013. Kai Tak’s second berth is set to be completed in 2014.

Wharf Holdings, which has been managing the popular Ocean Terminal since 1966, is still negotiating with the government to renew the lease expiring on June 15. – Prudence Lui

Whipple: longer trips in pipeline

The Philippines Department of Tourism (DoT) is eyeing a greater slice of the lucrative cruise travel industry as more international liners call at the destination.

The 694-guest Azamara Quest, part of the Royal Caribbean International (RCI) fleet, made its maiden call at Manila on March 28. (Although at press time, the ship had to cut short its 17-day itinerary due to a fire.)

RCI’s 2,074-guest Legend of the Seas will also visit Manila before making its inaugural call in Boracay this October, a rare win for the Philippines which hardly receives ships of this size. And ships like Classic International Cruises’ Princess Danae are visiting new ports like Davao, where it called at this week. The majority of its 371 passengers opted to take a city tour, said DoT regional director Art Boncato.

Despite underdeveloped port facilities compared to Hong Kong and Singapore, the country is keen to pursue the cruise segment as it is “a resilient market”, said Maria Corazon Jorda-Apo, who heads DoT’s North America and Asia-Pacific teams. The NTO is participating in major cruise shows, as well as collaborating with ASEAN counterparts in Singapore, Malaysia and Thailand to invite more ships into South-east Asia.

Cruise tourism has been identified as one of the priorities within the National Tourism Development Plan, with plans underway to move cargo business away from Manila’s South Harbor to pave the way for better cruise liner-ready facilities. The deepwater port of Subic is also being positioned as a cruise destination.

Business is getting noticeably better, said Carla Mariano, groups manager, Blue Horizons Travel & Tours. “Last year, we handled three ships; this year, we’ve already handled seven ships in the first quarter.”

Most ships coming to the Philippines bring about 300-400 pax, and some call at as many as four ports in the country, such as the Spirit of Adventure which visited Palawan, Cebu, Manila and Subic.

Orion II, which sails in July, will also make stops in Puerto Galera in Mindoro and Coron in Palawan, and Fuji Maru is expected to visit in May and November. – Marianne Carandang

Mariano: jump in cruise sales