MALAYSIA Airlines (MAS) kicked off on January 6 the first in a series of pre-determined route cuts with the termination of twice-weekly services between Kota Kinabalu and Osaka.

On January 31, the airline’s thrice-weekly Kota Kinabalu-Perth services will cease, followed by the ending of four-weekly services between Kota Kinabalu and Tokyo (Haneda) and Seoul from February 1 and February 21, respectively. All these services were operated with Boeing 737-800 aircraft.

MAS group CEO Ahmad Jauhari Yahya said: “This suspension is until further notice and is part of our regional network consolidation involving single-aisle aircraft operations. We will be reviewing this situation in about three months time from the date of the first route suspension, and will be deciding further by early April 2012.”

Besides maintaining daily B737-800 flights linking Kota Kinabalu to Hong Kong and Taipei, Malaysia Airlines will be codesharing on Korean Air’s flights from Seoul to Kota Kinabalu. There are also 86 weekly flights from Kuala Lumpur that will provide one-stop services to the affected destinations.

These cuts are part of broader efforts by MAS to slash loss-making routes, which include flights from Kuala Lumpur to Capetown, Johannesburg, Rome, Karachi, Dubai, Damman, Surabaya and Buenos Aires.

DESPITE the continuing economic uncertainty, global hotel transaction volume is expected to hold steady in 2012, to again reach upwards of US$30 billion in deals, according to initial results from Jones Lang LaSalle Hotels’ Hotel Investment Outlook 2012 report.

In the first half of 2011, the volume surged impressively, with REITs leading the way and signs of debt market revival encouraging activity. But economic uncertainty in the second half of the year affected the momentum, although deals continued, especially in the US, reaching Jones Lang LaSalle Hotels’ forecast of US$30 billion worldwide in 2011, an increase of 13 per cent over 2010 volume.

“So far, the dislocation in the financial markets has not impacted underlying trading fundamentals. This has reassured investors to a certain degree and has underscored the attractiveness of high quality, income producing hotel real estate as an asset class,” said Arthur de Haast, chairman, Jones Lang LaSalle Hotels.

“Constraint will be driven by illiquid markets and the shrinking balance sheet capacity of international banks to lend significant sources of new money. Still, the market will be flushed with equity capital that will come into play.”

Private equity players are expected to remain ambitious in 2012, selectively acquiring assets in secondary locations, as well as distressed portfolios and non-performing loans.

Joining the buyer mix are sovereign wealth funds and private high net worth individuals who will take a long-term view and make strategic acquisitions globally, according to Jones Lang LaSalle Hotels.

The biggest sellers in 2012 are likely to be bank-induced, as a result of debt maturities and consequent refinancing challenges. In addition to the influx of assets expected to come to market, a significant amount of note sales are anticipated as well. Private equity firms and institutional investors are also expected to liquidate some previous acquisitions, either to divest select non-core assets or to return capital to investors as funds reach maturity.

Emerging markets remain the global growth engine, greatly driven by rising domestic demand. Fundamentals continue to point to further growth in 2012. Although growth in China and India is slowing, both have good momentum, activity is building in Central and Eastern Europe, notably Poland, Russia’s activity jumped up, and South America continues to excite investors, with Brazil as the region’s growth engine.

ARRIVALS in Sri Lanka rose 30 per cent last year to 855,975 and officials are expecting 925,000 visitors this year.

Sri Lanka Tourism Promotion Bureau managing director Rumy Jauffer said earnings rose 47 per cent to US$850 million from 2010. Sri Lanka, recovering from a bloody conflict that ended in 2009, is aiming to reach 2.5 million tourists by 2016 from an average 450,000 during 30 years of war.

India continued to dominate the inbound market with 171,374 arrivals, up 35 per cent from 2010, followed by the UK with 106,082, a marginal growth of 0.6 per cent, and Germany with 55,882 arrivals, up 22 per cent.

Stability is also providing a boost to conferences and meetings. Bandula Ekanayake, director general & CEO of the Bandaranaike Memorial International Conference Hall, Sri Lanka’s biggest convention centre, said the hall had received many inquiries to host international conferences, trade shows and meetings. “We recently got an inquiry from the Indian-based regional office of Domino’s Pizza which wants to have an international meeting here with European (partners),” he said.

Achini Dandunnage, senior manager of Sri Lanka Convention Bureau, expects at least 15 per cent growth, on top of the 12 per cent last year, in MICE tourism with many international events confirmed including the Commonwealth Parliamentary Conference with some 1,000 participants. “This year and next year will see a lot of growth in MICE,” she said.

ACCOR opened last week the Sofitel Mumbai BKC (Bandra Kurla Complex), the group’s flagship Sofitel property in India.

Developed in partnership with local realtor Shree Naman Group, the hotel offers 302 rooms, including 22 prestige suites and one imperial suite, a So SPA, an outdoor swimming pool, a fitness centre and a Turkish hammam.

There are a total of six F&B outlets, including an all-day dining restaurant, a chocolate patisserie, outlets serving Indian and vegetarian dishes, a poolside bar and a lobby bar.

MICE facilities include eight meeting rooms, and a 270-m2 grand ballroom capable of hosting 224 pax banquet-style.

Accor is planning to open 12 new hotels under three different brands in India by the end of the year.

At the moment, the group’s India portfolio includes 10 properties under its Ibis, Novotel and Mercure brands, offering more than 2,000 keys.

INTERCONTINENTAL Hotels Group (IHG) will launch a new upscale hotel brand in China by the middle of the year and is planning to eventually expand the brand across Asia-Pacific, according to a report in MarketWatch.

In an interview with Dow Jones Newswires, Jan Smits, IHG’s chief executive of Asia, Middle East & Africa operations, explained that the move was to enable the group to become top-of-mind among increasingly wealthy Chinese travellers.

Subsequent plans include exporting the brand to other Asia-Pacific markets to cater to outbound Chinese travellers, with Hong Kong and Singapore seen as logical choices for expansion.

Event though details about the new brand have yet to be revealed, IHG has decided to bring forward its launch date—which was originally scheduled for later this year.

“There’s obviously a lot of interest in a domestically-grown brand that has got the benefit of a large international system behind it. Owners have shown significant interest,” Smits was quoted as saying.

According to MarketWatch, 12 contracts for the new brand have already been inked across China, including in Beijing and Shanghai.

THE PHILIPPINE Department of Tourism (DOT) has revealed a new international tourism brand for the country, incorporating a revamped slogan, It’s more fun in the Philippines.

The new brand, developed by BBDO Guerrero/Proximity Philippines under the supervision of Tourism Secretary Ramon Jimenez, effectively replaces the previous one, Pilipinas, Kay Ganda!,  which was discontinued just a week after being launched in November 2010 (TTG Asia e-Daily, November 16, 2010).

Using an ethnic weave design that incorporates the Philippine islands, the new brand is expected to make its debut at international travel tradeshows such as next week’s ATF in Manado and ITB Berlin in March, where the “first iterations of a new (international marketing) campaign will emerge in the first half of 2012”, said Jimenez.

Covering mainstream and digital communications that would harness the power of media platforms like Facebook and Twitter, a formal campaign launch is expected to follow.

“Going viral is at the very core of our media strategy…we have tremendous influence on the web, and we are determined to leverage that strength,” said Jimenez.

A partner campaign for the domestic market uses the snappy slogan, “#1forFun”, which prior to today was being circulated on Twitter with the help of DOT’s own twitter account, @DOTPhilippines.

Cebu Pacific VP for marketing and distribution, Candice Iyog, said: “The unique combination of fun destinations and the remarkable hospitality of Filipinos make the difference for tourists. DOT’s new campaign is an honest representation of the many things that the Philippines can offer the world.”

Celine Clemente, newly elected president of the Philippine Tourism Congress and president of Cordym Tours and Travel, added: “It’s a simple slogan that’s easy to pronounce and with a simple message: we want others to come to the Philippines, where we can offer you a package of fun.”

INDONESIAN airline operators are feeling the heat from a new set of government measures implemented since January 1 to raise industry service standards.

Local airline companies must now fork out compensation of up to 300,000 rupiah (US$33) per passenger when a flight is delayed for more than four hours, up to 200,000 rupiah per kg for lost luggage, and a supplementary compensation fee of 200,000 rupiah per day for a maximum three days while customers are waiting for the missing bags.

The new regulations also stipulate compensation on injury and death at the airport pre-, post-flight and during transit.

Indonesia Minister of Transportation, Evert Erenst Mangindaan, explained in a statement: “(The new regulations) have been introduced to make airline operators care more about (customers), be it cargo or passengers.”

Indonesia Director General of Air Transportation, Herry Bakti Gumay, said airline operators would be given a chance to cut the compensation liability in half provided they offer alternative travel arrangements.

Should passengers need to be transferred to other carriers, the airline would still have to bear any additional cost that might arise due to a higher cabin class, and would also have to return the balance if passengers’ tickets were to be downgraded.

THE TOURISM Authority of Thailand (TAT) has decided to focus on promoting its niche tourism offerings as it adjusts its marketing strategy in anticipation of a slowdown in longhaul demand.

Juthaporn Rerngronasa, TAT deputy governor international marketing – Europe, Africa, Middle East and Americas, said the NTO would look to work closely with travel professionals specialising in the medical, honeymoon, golf and green tourism sectors during its various roadshow and tradeshow activities.

“We will kick start our mart-within-a-mart project at ITB Berlin, where niche tourist market specialists will be hosted to participate in a special table top session,” she said. “Sellers wanting to join will be charged an extra fee on top of the normal participation cost under the TAT pavilion.”

TAT intends to deploy a similar strategy at Arabian Travel Market in Dubai, World Travel Market in London and Leisure Travel Fair in Russia.

According to Juthaporn, niche tourism is expected to suffer less of an impact from a number of upcoming developments affecting travel cost, such as an eight per cent hike in the UK’s Air Passenger Duty in April, and the implementation of the European Union Emissions Trading System carbon tax.

The upcoming elections in Russia, France, the US and China might also dampen travel demand from these markets, Juthaporn added.

Reporting by Sirima Eamtako

THE MALDIVES government has placed a moratorium on its controversial ban on spa and massage facilities in the country’s resort hotels, pending a Supreme Court ruling on whether their operation falls foul of the country’s constitution—which is guided by Islamic law.

Last week’s abrupt ban sent shockwaves throughout the local travel industry, which denies charges by religious groups that the high-end spas and massage parlours, an integral component of the various holiday resorts in the Maldives, were fronts for prostitution.

Maldives president Mohamed Nasheed acted quickly to lift the ban following complaints from the travel industry, the main source of income in the country.

A spokesperson for the presidents’ office told TTG Asia e-Daily: “If the court rules that spas are contrary to the constitution, then the government must abide by the court’s ruling and re-impose the ban. But we are pretty confident the court will not rule this way.”

Ajit Gunawardene, deputy chairman of Colombo-based John Keells Group, which operates three up-market resorts in the Maldives, said: “We are relieved and happy that the status quo remains.”

SINGAPORE Airlines will be making several frequency adjustments to its Northern Summer operating schedule (March 25 to October 27, 2012) to match capacity to prevailing travel demand.

A daily service will be added to Seoul, boosting the frequency to four-daily from thrice-daily, including one flight that continues to San Francisco.

In West Asia, frequency to the Maldives’ capital Male will increase to twice-daily from the current 10 flights per week.

Mumbai services will be hiked to 19 per week from 17.

Frequency will also increase to points in Australia. Adelaide services will increase to 10-weekly from the current seven, while Brisbane and Perth will each be served 21 times per week, rather than 19 and 18, respectively.

Meanwhile, some markets will see frequency reductions during the Northern Summer schedule.

Singapore–Moscow–Houston services will be reduced to five-weekly from daily. Singapore–Munich–Manchester services will be reduced to six-weekly from daily.

Singapore–Taipei services will be reduced to 14 per week from 18.

Some Middle Eastern services will also be restructured.

Flights to Riyadh, which are currently served via Abu Dhabi, will instead operate via Dubai. This will result in Abu Dhabi being served three times per week, down from seven weekly, with flights carrying on to Jeddah.

Dubai will continue to be served with 10 weekly flights, four of which will carry on to Riyadh and three to Cairo.