India, ASEAN join hands for tourism

January 16, 2012

INDIA and ASEAN member states made history on January 12 by signing a Memorandum of Understanding (MoU) that will lead to cooperation on several levels to boost each other’s tourism business.

Areas of cooperation include human resource, technology transfers, infrastructure development, bilateral investments in the tourism and hospitality sector, full liberalisation for airlines to increase flights and mutual marketing campaigns. An office for monitoring its future has been set up by ASEAN in Mumbai.

The MoU’s biggest allure is the potential for air liberalisation. Indian private airlines, thus far constrained by the Directorate General of Civil Aviation from flying many of the available international routes, may now break free from the shackles.

The promotion of Buddhist pilgrimage tours will also be significant in the mutual exchange, and a highlight in the bilateral partnership this year is an ASEAN-India car rally that will run from Batam to New Delhi.

Cooperation will also manifest in areas such as cruise development along the Indian coastline and parts of ASEAN, and tourism flow enhancements.

With 4.5 million Indians travelling to ASEAN in 2010, the growth in bilateral tourism is expected to be exponential. The region is expecting 107 million global arrivals by 2015.

MAI spreads its wings

By Shekhar Niyogi

January 16, 2012

MYANMAR Airways International (MAI) is starting a new daily flight in the Bangkok-Singapore-Bangkok sector from February, deploying Airbus A320 with 150 seats and A321 with 210 seats.

As well, to facilitate travel on their busiest routes, Guangzhou, Siem Reap and Phnom Penh, MAI is offering visas on arrival (VOA) for passengers of any nationality.

Ye Jhan, country manager (Thailand & Cambodia) confirmed that the VOA arrangements had helped to increase business travel to Myanmar.

“We are looking at acquiring more aircraft to support the opening of new routes within ASEAN and to other Asian destinations”, he said.

AirAsia X pull-out draws different views

By Brian Higgs

January 16, 2012

AIRASIA X’s impending pullout from Europe (London, Paris) and India (Delhi, Mumbai) (TTG Asia e-Daily, January 13, 2012) has drawn a mixed bag of reactions from the travel trade.

Kuala Lumpur-based MP Travel & Tours, whose inbound business mix consists of forty per cent from Indonesia and 60 per cent from India, stands to lose much from the withdrawal.

“Almost all of our customers from India fly AirAsia X, because our partner agency in India has a joint promotion with the carrier for FITs, so this will have a huge effect on our business,” said the company’s assistant manager – outbound, Ice Tey Lan Lan.

“We’ve not yet had a discussion on the issue, but we expect to lose at least 20 per cent of our business in the beginning. We will have no choice but to look for alternative airlines,” she added.

On the other hand, K. M. Lam, manager – international sales, Greater China inbound, of Kuala Lumpur-based Mayflower Acme Tours, said while AirAsia x’s pullout would be a loss for the destinations concerned, the impact on travel consultants would be insignificant.

“Travel consultants will not really be affected by the route cuts, since not many of us use budget airlines in the first place due to practical reasons,” she said. “Budget travellers, FITs and other independent consumers will be the ones affected, since they are the ones flying AirAsia X.”

“As long as the routes are served by alternative airlines, it will be okay for (travel consultants). For example, India has Malaysia Airlines (MAS) and Air India, while Europe has KLM, Lufthansa, Emirates and MAS,” she added.

Chennai-based Travelexpress chairman C. Nagendra Prasad said: “Tiger Airways will still provide the connections from South India to ASEAN. There are also Indigo, Jet Airways and Air India providing air links.”

View from the Top: Jason Peck

By Raini Hamdi

January 13, 2012

Our first View From the Top in 2012 is a feel-good story of how a director of sales rose to become the CEO of a growing Asian hotel chain based in Singapore. Raini Hamdi finds out how Peck did it

Jason Peck
CEO
Furama Hotels International, Singapore

We always ask women CEOs how they cope, so, for a change – what’s it like to be a CEO of an expanding chain, at just 43 years old and with a wife and two kids?
Quite frankly, in the last two years, I neglected my family a lot. The company expanded from four hotels five years ago to 43 hotels today, even though many of the hotels are in Thailand and China, the latter under FX, which is a no-frills, easy-to-manage brand. Still, that’s a lot of growth in five years.

How do you juggle career and family commitments?
I’m lucky I have a supportive wife. As you know, I rose from a director of sales (DOS) position (within eight years) to become a CEO and it has not been easy, frankly. Given my age, the job, the industry, you need an understanding and independent wife – imagine, your husband is always out. My two kids, one 19 years old and the other 12 years old, are also pretty independent and my wife is a businesswoman herself, working for her dad, so that helps a lot.

We try and schedule our lives – if I’m away, she will try her best to be at home; if I travel, I will always plan to be away Monday to Friday, so I can be with the family during weekends.

It is common for a DOS to rise to become a GM. Few, if any, rise to become a CEO. How did that happen?
Actually, when FHI was set up (as the management company of Furama Singapore, now Furama City Centre; the other property, previously a Novotel, is now Furama RiverFront), the owner did not have any plans to manage anybody’s hotels, only its own.

I joined Furama Singapore as DOS in 2003 during the SARS crisis, when the occupancy was five to 10 per cent. I had left my job at Mandarin Oriental Hotel Group when it decided to cease the regional office – as no one knew how long SARS was going to last – and asked staff to take six months no-pay leave.

I brought in strong results at Furama Singapore. This got me and Kevin (Ng, son of Ng Kim Suan, chairman and substantial shareholder of Furama Limited, the owning company) thinking: why can’t we manage hotels ourselves? Kevin was then business development manager for Furama Limited. At the same time, the management contract with Accor (for the Novotel) was ending. I also had an offer from Hilton International – a VP position in the regional office here – and I told Kevin, if I’m going to oversee just one hotel, it would not be suitable for me. And Kevin himself was young and aggressive (in wanting to grow the company).

But during that time, the other hotel, a Novotel at the time, had 480 rooms (today, it has 605 rooms), which were still a lot of rooms to fill and Singapore was not as vibrant as it is now. While we had stabilised and strengthened Furama Singapore, we had to be sure if we could manage the other hotel. We looked at the GOP and did our sums, and we were confident we could do it.

I’ll never forget what our chairman said. He was very supportive. He said, Jason, you don’t have to do much better than Novotel. If you can do the same, I have 100 per cent control, I save on the management fee and most of all, I can put my Furama brand back on the hotel.

“Why would I settle as regional head of an international chain, or a VP, if I can head the company myself?”

I suppose that’s why we are seeing the rise of more Asian management chains – hungry, young Asian owners and managers, and the fact that one hotel does not cut it to draw talent?
You can’t attract talent if you have only one hotel. People want to grow. There is only one GM for one hotel and one DOS – after you’ve promoted him to corporate director of sales within six months, what then?

Was it tough for you to choose between staying with Furama and joining Hilton?
Not at all. I had been with Banyan Tree and I’ve always had the vision to be with a Singapore homegrown brand. My first hotel was Equatorial Singapore; I was one of the youngest DOS’ then at 26 or 27 years old and I saw for myself how my boss, Lee Soo Han, had the owner’s trust in overseeing 18 hotels. Equatorial was the biggest local chain then. Once you have the trust, the Asian owner will let you run the show, as long as you report to him.

But why a homegrown brand – patriotism?
In my heart, if I work for an international chain, no matter how hard I try, at best I will be a regional head or a VP, not an MD or a CEO. It’s not discrimination. Its HQ is not in Singapore. And why would I settle as regional head of an international chain, or a VP, if I can head the company myself?

So you envisioned being a CEO?
I know I would be because the owner empowered the division to me when I turned around the business. The chairman, too, shared he wanted to focus on the shipping company and needed someone to head the hotel division.

Why not his son, Kevin?
Kevin has always wanted to be the owner, he wants to invest. Kevin worked in a bank for a long time and he never was into operations. He always says we’re a tac (tactical) team: Jay, I will go and enquire about a hotel, you handle the management. We work very well together.

What lessons do you learn from this, as to why some Asian brands succeed and others don’t?
I have the hotel knowledge but I really need someone like Kevin who has the legal and finance knowledge. And this is a strong good match. Without Kevin, you can indeed hire a finance and legal guy or set up the department, but it is different because it is his, he can make decisions, and he is young, aggressive and takes calculated risks.

Why do some owners choose new chains such as Furama over the internationals?
Various factors. An individual Thai owner, for example, may insist that the international chain employ his financial controller – and this could be his daughter or brother – and that’s something the international chain usually will not accept.

The international chains on the other hand may insist that the owners spend X million dollars to bring the property up to their brand standards, but the management contract starts right now. They also subject projections to 10,000 items that any bank which wants to lend owners money to build or renovate will lack the confidence to when they see there is no real guarantee with all the subject-tos.

I’m just speaking in very general terms to demonstrate that there has to be flexibility and a real win-win. We at Furama, too, have brand standards but, instead of subjecting projections to 10,000 items, we only subject them to maybe eight to 10 items. We promise owners, even if they don’t ask, that within a certain kilometre radius, we will not manage another hotel, regardless of the brand, and we have three (Furama, FuramaXclusive and FX). We don’t ever want to put ourselves in a situation when the owner turns to us and say, would you, as an owner yourself, do that to your hotel?

This article was first published in TTG Asia, January13 issue, on page 7. To read more, please view our digital edition or click here to subscribe.

Undergoing metamorphosis

By Brian Higgs

January 13, 2012

Whether it’s discovering new revenue streams or warding off existing threats, travel companies across Asia are evolving. Take a leaf from success stories told to TTG Asia.

Wee Hee Ling
CEO
CTC Travel

Offline buying online

WHO CTC Travel, a Singapore-based travel company providing leisure and corporate services, well known for its outbound packages.

WHAT Last month, it announced that it had acquired an 80 per cent stake in Singapore-based MISA Travel, whose strength lies in online travel ticketing services. MISA’s various online ticketing channels will now come under CTC, including airfares.com.sg, hotels.com.sg, cruises.com.sg, getaways.com.sg, resorts.com.sg, landtours.com.sg and rails.com.sg.

The two companies will retain their separate brand identities, although there will be some integration in the areas of product development, marketing, human resources and finance. For instance, CTC-designed products will be sold on MISA’s numerous websites, which might be enhanced with live-booking capabilities at a later stage.

WHY With technological know-how provided by MISA, CTC will now be able to tap the burgeoning online booking space, reaching out to new markets.

“MISA Travel’s online portals stand to offer instant access, affordable options for travel products which will provide an opportunity to manage distressed air tickets and hotel inventory for all travellers”, said CEO Wee Hee Ling. The merger marks the beginning of CTC’s three-year plan, which includes expanding its corporate travel services such as MICE and inbound tours.

Michael Lee
Director
Luxury Tours & Travel

B2C + B2B

WHO Luxury Tours & Travel, a Singapore-based tour operator that provides a range of services from hotel reservations to seat-in coach tours.

WHAT It launched the Singapore Tripper Pass last November, a two- or three-day pass that includes entrance to 18 attractions in Singapore, while also acting as a cashcard for public transport.

Luxury is also signing white label agreements with travel companies across Asia, allowing their products to be featured on its website. A revamped site will be unveiled this year.

In addition, the company is in the process of closing its tour desks in Singapore and migrating all its products online.

WHY Director Michael Lee explained that competition was intensifying among offline and online players in Singapore, and profit margins were shrinking. Alternative sources of revenue were needed, he added.

“Travel companies that work with us through our white label agreements will have an additional means of revenue while we earn commission. Conversely, the Singapore Tripper Pass will enable us to reach out directly to consumers without alienating our existing business partners,” Lee said.

Juliana Gan
General manager, outbound travel
Dynasty Travel International

Moving upmarket

WHO Dynasty Travel International, a Singapore-based travel company that sells mainly outbound tours.

WHAT In 2010, it launched the Royale Dynasty brand and opened a Royale Dynasty retail outlet at Marina Bay Sands, targeting high net worth clients. The new brand caters to Singaporeans willing to spend more on top-tier experiences, as well as inbound travellers keen on local or regional sightseeing trips. Services include private jet arrangements, personal tour guides and a travel concierge who can draw up customised itineraries.

WHY “An increasing number of affluent travellers, both in Singapore and internationally,” said Juliana Gan, general manager of outbound travel. The two integrated resorts offer a rich source of clients for Royale Dynasty. Singapore’s upcoming International Cruise Terminal will also provide opportunities to service luxury cruise clients.

The company has seen a 20 per cent increase in luxury customers since 2010.

Pham Ha
CEO
Luxury Travel

Reaching Down Under

WHO Headquartered in Vietnam, Luxury Travel is a tour operator focusing on high-end travellers. Top markets are Australia, the US and Singapore.

WHAT It entered into a joint-venture with Australia-based The Cape Club to form Cape Lux Travels in October 2011. The marriage brings together Luxury’s expertise in Indochina with The Cape Club’s client base. The top five destinations sold by The Cape Club are Vietnam, Laos, Cambodia, Thailand and Myanmar.

Cape Lux Travels will introduce new fully-escorted tours to wealthy clients from Australia initially, and later to those from the US, UK and Europe. Vietnam, Cambodia and Laos are its first three destinations.

WHY To widen Luxury’s reach in the Australian market, one of its top markets. “The Cape Club understands Australian luxury travellers and creates beautiful niche experiences for guests,” said CEO Pham Ha. The joint venture is expected to attract 500 to 700 clients in the first year of operations.

Helen Xu
Managing director, sales & distribution
Panorama Tours Indonesia

Beefing up FIT retail

WHO Panorama Tours Indonesia, an outbound travel company which handles the corporate, MICE and leisure markets.

WHAT With already a division dedicated to groups, it developed a strategy to target the FIT market beginning last year, creating free-and-easy packages. It has also opened one retail outlet targeting young travellers, with 10 more on the way. Products can be bought a la carte or as special deals. Examples include backpacker packages and special interest packages for those who travel to watch soccer games. Destinations sold are mostly shorthaul, such as Singapore, Malaysia and Hong Kong.

WHY Managing director, sales & distribution, Helen Xu, said: “The FIT outbound market in Indonesia is huge, but many travel companies are not interested in seriously developing it. Most of them concentrate on developing group tour programmes. We see this as an opportunity.” She added that last year, retail FIT business increased by 70 per cent compared to 2010.

Debjit Dutta
Director & CEO
Impression Tourism Services (India)

Re-invent a destination

WHO Impression Tourism Services (India), a Kolkata-based B2B inbound travel company.

WHAT Developed a range of products and created a new branding for West Bengal, its primary destination. Mountains to Mangroves – A Journey of 1,000 Kilometres has helped to highlight the diversity within the Indian state, from the Himalayas to the Bay of Bengal. The auspicious Bengal owl was also used as a mascot for marketing the products and destination.

WHY Director and CEO Debjit Dutta said the company faced price competition for oft-trodden itineraries, while product development for West Bengal had been stagnant in 10 years. “Instead of taking a beating from OTAs, we decided to re-invent the destination and create several products.” Impression is now readily identified with the destination. Once a small tour operator, it currently serves 900 B2B clients.

Manoj Gursahani
Chairman
Gursahani group

Identify gaps online

WHO Gursahani group, whose diversified interests range from technology to healthcare. Its travel division Travelmartindia is said to be India’s first e-commerce travel portal. Travelmartindia is supported by an offline arm, offering airline tickets, hotels, leisure packages and MICE arrangements.

WHAT Gursahani group entered the group-buy deal space last year with vamoose.in, which is currently being integrated into Travelmartindia’s website.

It also launched myairporttransfers.in last year, offering chauffeur-driven car rental services for airport and railway station transfers in all major cities in India. This operates as both a B2B and B2C model.

WHY The new ventures were in response to “dynamic changes in the marketplace” as well as “to cater to specific niches and address existing gaps”, said chairman Manoj Gursahani.

Jo Jo Chan
Director and general manager
Wing On Travel

Harnessing technology

WHO Hong Kong’s Wing On Travel is known for its premium outbound travel services. Chinese OTA Ctrip bought a majority stake in Wing On Travel’s travel service segment in 2010.

WHAT Last August, it rolled out iWingon.com, an online hotel booking portal offering 17,000 hotels in 500 Chinese cities. Customers pay only upon check-in and no bank charges are incurred.

In November, the My Group concept was launched, allowing private groups (minimum 10 pax) to book Wing On’s signature group tour itineraries, based on standard fares. Bigger groups have more discounts.

WHY “With Ctrip’s strong back-up, we wanted to expand our business and be the market leader. Ultimately, the group wants to become a leader in Asia through product innovation and value-added services,” said director and general manager Jo Jo Chan.

Tan Sin Chong
Managing director
Reliance Travel

Go the franchise way

WHO Reliance Travel, a Malaysia-based outbound travel company.

WHAT Boosting business through franchising. While initial franchised outlets were concentrated in the city of Kuala Lumpur, they have spread out to the suburbs. Last August, Reliance opened its 15th franchise, some 30km away from the city.

WHY Said executive director Raymond Lee: “(The franchised outlets) increase our reach and brand presence, and collectively portray a strong brand visibility for Reliance in most key urban areas with high population bases.”

Additional income is also generated. Franchised outlets currently contribute 40 per cent of Reliance’s total sales compared to 20 per cent three to five years ago, Lee added. The company has plans to expand its franchise network to other big cities over the next two years.

Vincent Liu
CEO
Star Travel Corp

Cutting out the middle

WHO Star Travel Corp, a Taiwanese outbound travel company that counts Japan as its bestselling destination.

WHAT Tackling cost increases by eliminating the middle man. Taiwanese travel companies usually rely on local contacts in Japan to book hotels and on-the-ground services, “so nobody here knows what the real price is”, said CEO Vincent Liu.

Last year, Star Travel decided to deal directly with Japanese suppliers. With pre-paid bookings, the company was also able to negotiate lower prices.

WHY The March 11 earthquake and tsunami resulted in Japanese companies repatriating funds from overseas, forcing the Japanese yen to strengthen. What was once Star Travel’s most profitable business sector (outbound to Japan) was under threat, as the Japanese yen rose 20 per cent against the NT dollar. Going direct provided an effective hedge.

Additional reporting from Sirima Eamtako, Linda Haden, Mimi Hudoyo, Anand and Madhura Katti, Prudence Lui, Glenn Smith, N. Nithiyananthan and Shekhar Niyogi

This article was first published in TTG Asia, January 13 issue, on page 2. To read more, please view our digital edition or click here to subscribe.

Myanmar’s tourism ministry signals change

By Shekhar Niyogi

January 13, 2012

A FAR-SIGHTED new government in Myanmar has revealed that it is studying the implementation of several tourist-friendly changes in the areas of hotel development, air access and visas.

Policies are in place to develop infrastructure in six regions including Yangon, Bagan, Inle and Mandalay.

U Htay Aung, deputy minister, Ministry of Hotels and Tourism, told the Daily that the country’s land allocation and leasing policies are being relooked, including extending the duration of leases from two to at least five years.

He said: “There are 25 foreign investment-backed hotels here, and we may see a deluge if some of the policy changes take effect. We now charge US$200,000 or a percentage of gross revenue as a fee, whichever is higher. We are working on a formula that will be attractive to new overseas investors.”

According to U Aung Zaw Win, director general, Ministry of Hotels and Tourism, a target to build 24,000 guestrooms in the budget, two- and three-star categories over the next few years has been set.

Illustrating the destination’s dire need for rooms, he said the country’s 739 hotels were all booked out till March.

Aside from infrastructure, the Daily has also learned that a proposal to scrap tax on all incoming flights has been submitted to the government.

• Read more in the ATF Daily

NATAS to lead missions

By Linda Haden

January 13, 2012

THE NATIONAL Association of Travel Agents Singapore (NATAS) has taken over the lead in giving Singapore a face at some major travel tradeshows this year, following the Singapore Tourism Board’s (STB) move to cut back on its tradeshow presence.

Inbound players are worried that this may be symptomatic of STB’s gradual withdrawal of local trade support. STB’s decision to skip major tourism events such as GIBTM, WTM and ATM in 2011 struck a raw nerve with the trade and many have interpreted the move as a snub.

According to a statement from STB to the Daily, attendance at AIME, ITB Berlin, IMEX Frankfurt and IMEX America in 2012 have been confirmed to date, fewer than last year, when the NTO chose to exhibit in at least eight major tradeshows.

NATAS’ initiative, which is being evaluated, is spearheaded by Samson Tan, CEO of travel group GTMC Holdings and a member of the association’s inbound sub-committee. It will see eight to 10 travel companies, three to four attractions and up to 10 hotels heading to key trade events such as ATM, WTM and CITM under the NATAS banner this year.

Participation rates are expected to be slightly higher than what STB charges – between S$3,500 (US$2,708) and S$9,000 depending on location – as NATAS does not have pockets deep enough to subsidise trips.

• Read more in the ATF Daily

More airline pull-outs could hurt the Philippines

By Marianne Carandang

January 13, 2012

THE LOCAL travel trade is hoping that the Philippine lawmakers will approve the abolishment of an airline tax, which has been roundly criticised for its detrimental effect on the destination.

KLM – the last carrier to operate direct flights from Europe to the Philippines – recently announced it would add an intermediate stop in either Hong Kong or Taipei to its Amsterdam-Manila route from April.

Cees Ursem, Air France-KLM general manager South China Sea, attributed the decision to the financial burden dealt by two taxes – the common carrier tax (CCT), a three per cent business tax on gross receipts, and a 2.5 per cent gross Philippine billings tax.

Stephen Crowdey, first vice chairman of the Board of Airline Representatives, said that “less non-stop capacity significantly reduces the appeal of the Philippines for the trade and tourists alike,” a concern shared by inbound travel companies.

Philippine Travel Agencies Association president, Aileen Clemente, explained: “The Philippines will be reliant on flights connecting through other Asian cities, which may be the deciding factor for tourists from Europe, (who may) just conclude their trip in an Asian hub of their chosen airline.”

• Read more in the ATF Daily

A burst of new inventory

By TTG Asia

January 12, 2012

Kuala Lumpur is main beneficiary, while the rest are in Malacca and Sabah.

The Malaysian capital will witness the opening of five new properties (2,119 rooms) this year, widening the choice of hotels for travellers, especially for those seeking more economical options.

Leading the pack is Accor, with an ambitious plan to open 10 more hotels by 2014, adding a total of 1,224 rooms. It currently has four properties in Malaysia. More significantly, the hotel group will enter the economy segment in Malaysia this year, with the introduction of the Ibis brand.

Vice president of Accor-Malaysia, Indonesia & Singapore, Gerard Guillouet, said the company aimed to be the leading international hotel operator in Malaysia by 2015.

“These 10 new properties bear testimony to Accor’s belief that Malaysia is set to be among the leaders within the tourism and hospitality industries in the region,” he added.

The first of these properties will be the 513-room Pullman Kuala Lumpur Bangsar, due to open by mid-2012.

Two Ibis Styles properties will also come onstream this year, located in the Frasers Business Park (500 rooms) and Cheras (156 rooms).

Other hotels making their way to Kuala Lumpur are the D’Tiara Amanah Raya Hotel Suites in the transport hub of Sentral (507 rooms) and the Park Regis in the city centre (443 rooms). In the satellite town of Petaling Jaya, the Royal Bintang Surian is slated to open with 300 rooms.

Luxury Tours Malaysia senior manager Arokia Das Anthony said the developments would expand available options for travel professionals, pointing out that the arrival of Ibis Styles was especially noteworthy.

“There are not many international three-star hotel brands in the city. It will definitely have an impact,” he added.

Mayflower Acme Tours headinbound division, international sales, Andy Soo, said: “Looking at their locations in the golden triangle (CBD), they will be targeting corporate and business travellers. Having more international brand names is always a winner. More is better.”

Anthony said Luxury Tours had benefitted from the three hotels which opened in 2011 – Furama, Pudu Central and My Hotel.

“They were excellent additions to the city and offered excellent rates,” he said.

However, rates were not expected to soften with the arrival of new properties despite an oversupply in the city, said the two travel experts.

“Online bookings have changed the name of the game. Rates are going to be standard from about RM150 (US$50) for a three-star hotel to RM300 upwards for a five-star hotel,” Anthony explained.

Outside of Kuala Lumpur,  the rest of the new openings for 2012 will be in the highly popular tourist destinations of Sabah and Malacca.

In Malacca, the Best Western Plus Riverside Hotel (170 rooms) and Hatten Hotel (700 rooms) are due to open.

And in Sabah, the following openings are anticipated: Best Western Sandakan Hotel and Residence (170 rooms); Grand Uno Hotel & Residence, South China Sea Place, Kota Kinabalu (167 rooms); and Gaya Island Resort, Borneo (121 rooms).

By N. Nithiyananthan

This article was first published in TTG Asia, January 13 issue, on page 15. To read more, please view our digital edition or click here to subscribe.

Ready to set sail

By Gracia Chiang

January 12, 2012

Asia’s waters will see even more cruise activity in 2012. TTG Asia examines several expansion plans*

Michael Bayley
Executive vice president
Royal Caribbean Cruises (RCC)

Homeporting, deployment plans in Asia The regional capacity of Royal Caribbean International will more than double with the Voyager of the Seas joining the Legend of the Seas in Asia. It will be the largest ship to homeport at Singapore’s new cruise terminal, commencing a series of South-east Asian cruises in May. The ship will then move to China and offer North Asian cruises from June to October. Premium brand Celebrity Cruises will also introduce Celebrity Millennium in Asia with cruises between Singapore and Hong Kong.

Asia as a source market Around half of RCC’s customers are from North America, with the rest coming from Europe (30 per cent), Asia (10 per cent) and Latin America (10 per cent). We have about 200,000 to 250,000 Asian customers a year. The Asian market is growing in double, triple digits every year, from a very small base. This year, the Chinese market will grow around 160 per cent because of the Voyager of the Seas. I predict the number of people cruising in Asia-Pacific will go up to 11 million by 2030, up from over one million now.

Investment on marketing, training We’ve invested disproportionately in the Asian market, opening five sales and marketing offices in China, Singapore and Australia over the last three to four years. We are investing in sales teams, training, collateral, communication, advertising and brochures. We also have an online training portal. We have to work hard to explain to travel professionals what cruising is and how to sell it. Travel consultants have always been the core of our success. In North America, they account for the lion’s share of our distribution.

Challenges The lack of knowledge in developing markets. People either have no perception or the wrong perception of what cruising is all about. They believe it’s for old people, that there’s nothing to do, that it’s very expensive. This year is looking relatively positive despite the uncertainty in Europe. All our research confirms that during difficult times, people will give away other things but want to protect their vacation. We’ve always been quite happy because cruise stacks up as the top option against land-based vacations when you add up the costs.

gianni-onorato

Gianni Onorato
President Costa
Crociere

Homeporting, deployment plans in Asia We are deploying a bigger ship to Asia for our 2012 South-east Asian and China-South Korea-Japan itineraries in view of the robust demand. Costa Victoria has 40 per cent more capacity than Costa Classica, the existing ship plying Asian waters. Costa Victoria arrives in late May. This year, Costa will introduce a wider choice of cruises lasting seven nights or less, which Asian passengers often prefer owing to their lack of generous leave compared to their European counterparts.

Asia as a source market Currently, less than 10 per cent of Costa Crociere’s business is derived from Asia. However, we would like to grow this to 15 to 20 per cent in the long run. The Asian market definitely has a lot of room for growth, and we expect this growth to be driven by Greater China. However, we are also looking at Singapore, Malaysia and Indonesia as source markets.

Investment on marketing, training We will work closely with local tourism organisations to combat the challenges of marketing cruises to Asians. We want to develop both the Aida and Costa brands in Asia, and ensure their marketing strategies complement one another. Costa has developed online training websites for both Japanese and South Korean travel professionals. Our website is also accessible in a variety of Asian languages including Mandarin, Japanese and South Korean.

Challenges The biggest issue to date is definitely distribution – it is simply not mature enough. The trade’s knowledge and experience in selling cruises is lacking, and this has a strong impact on how fast the cruise market in

Asia develops. Marketing directly to customers is a possibility but this is very expensive and difficult due to the geographic spread of the region. Moreover, as the cruise industry

in Asia is still in its infancy, a lot of time has to be spent educating consumers and convincing them to take a cruise.

SIL1697 SS2944

steve-odell

Steve Odell
Senior vice president,
UK, Europe & Asia-Pacific Silversea Cruises

Homeporting, deployment plans in Asia We deploy the Silver Shadow (382 guests) here for seven months of the year, and that pattern will stay. One way we could increase capacity is move one of our bigger ships here. As a company, we are looking at a new build that would likely be of the same size as the Silver Spirit, 540 guests. A year-round ship in Asia is also something we should consider. Our development in the region is two-fold: create itineraries of different durations and find small ports. We tested shorter, seven-day cruises to Bali last year.

Asia as a source market Asia-Pacific accounts for almost 20 per cent of Silversea’s business (the luxury cruise operator carries some 65,000 passengers a year). Within Asia-Pacific, Asian markets represent 25 per cent. Japan and China deliver the biggest volumes, but we’re also building business in the smaller, sophisticated markets of Singapore, Hong Kong and Taiwan. Singapore grew by 50 per cent this year compared to the previous year and Hong Kong recorded about 25 to 30 per cent year-on-year growth.

Investment on marketing, training We really have to address education and training. As an industry, we do this collectively through the Asia Cruise Association. Silversea will also launch our online academy in Asia by mid-year. Certificates will be awarded at each stage and incentives will be offered. We are also working on rolling out a Mandarin version of our website this year. In addition, we conduct training seminars in the region almost every month; use our ship for travel specialist showcases and pay for them to host their clients; and organise fam trips.

Challenges We don’t have any increases in capacity in 2012, so passenger numbers will remain quite static. The airlines are also charging a premium for business-class services from North America and Europe. When the ship comes in February, we’ll likely see a higher percentage of Australians and Asians because of the air situation and the slowdown in Europe. However, cruising is still in its infancy here. There are a lot of distribution issues, and not many travel professionals specialise in luxury travel. The mentality in Asia is volume and price.

Richard Meadows, President

Richard Meadows
President of Seabourn and executive vice president, marketing, sales & guest programmes of Holland America Line (HAL)

Homeporting, deployment plans in Asia HAL’s three ships deployed in Asia – Volendam, Amsterdam and Rotterdam – will have six itineraries and 10 departures this year, up from three departures in 2011. In 2013, HAL will offer seven itineraries and 11 departures. Seabourn – which deploys Seabourn Pride, Seabourn Legend and Seabourn Odyssey here – will include more Asian destinations for 2012/2013. Cambodia has been added, while those to Indonesia go beyond Bali to places like Sumba. There are eight itineraries, two world cruises and 24 departures.

Asia as a source market I am unable to provide details of existing business figures and projections in Asia, but we understand the value and importance of the Asian market. We are extremely optimistic that this sector will continue to evolve and grow. Both HAL and Seabourn attract guests from Asian markets that have sizeable affluent populations who speak English such as Japan, Hong Kong, South Korea, Singapore and Thailand, as well as China.

Investment on marketing, training HAL’s online academy for travel consultants has seen about 13,000 graduates to date. Seabourn will be rolling out an online academy over the next few months. We have to do a better job of helping the trade to understand the USPs of our brands. It is very difficult for a travel consultant to discover what sets apart the different products without proper training. We will also continue with our marketing efforts through our GSAs, as well as through direct mailers to clients. There will also be fam trips.

Challenges While there may be a global recession, people still view travelling as a right. They are not going to give up on their dream vacation. Instead, they are going to go on high-value vacations – value does not equate to price – something that matches what the consumer wants. Hence, there is a need to provide the proper education and training for travel consultants, so that they are able to sell better, articulate the difference between our various cruise products, and interpret and communicate value to a customer in a way that is compelling.

Millennium at Hubbard Glacier Seabourn Pride, Spirit, Legend Ship Images- Seabourn Pride at Sea- Clouds

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

Additional reporting from Brian Higgs and Linda Haden

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