THE US and Eurozone financial crisis is keeping inbound tour operators in China at the edge of their seats, with some saying that business from these segments has yet to recover.

Guo Lingmei, spokesperson of Beijing-based BTG International Travel and Tours, which handles inbound leisure tours, said that sales had been steadily declining by 30 per cent every year since the 2008 financial crisis.

Guo said the agency was only able to hit 40 per cent of its target for these markets. She added that the agency has been feeling the pinch even in Germany, traditionally its best source market.

As a result, more attention has been given to developing outbound tours, especially at a time when a strengthening Renminbi is fuelling Chinese consumers’ travel purchases.

Like Guo, CYTS North American department senior manager, Michael Tan, who oversees inbound from the US and Canadian markets, said his core business had been “very obviously affected” since 2008.

“There was a very significant decline in 2009. It was stable last year, but it has gone down again this year,” he said.

“We handled an average of 8,000 to 10,000 North American visitors per year before the crisis. So far, the number has dropped to around 6,000.”

To make up for the loss of income, Tan’s department had resorted to targeting other English-speaking source markets such as the UK, Chile and Malaysia, as well as widening its business scope.

Tan said: “We’ve never handled meetings or outbound to the US before 2009. Now, we handle both inbound and outbound, corporate travel into China, as well as MICE, which we used to refer to specialist operators.

“Even though we end up cannibalising business from our sister outbound office, we have no choice. We can’t only rely on North American inbound, as the people there have no confidence in travelling due to the economic crisis,” he said, adding that the unfavourable currency exchange rate was a strong deterrent.

– Read more in TTG Asia, November 4 issue

Additional reporting by Amee Enriquez

A MASSIVE S$410 million (US$326 million) has been set aside for the remaking of Suntec International Convention and Exhibition Centre and Suntec City Mall, funded by ARA Trust Management, the managers of Suntec Real Estate Investment Trust.

The funds will go towards the redesign of the MICE venue and mall, the addition of event, retail and F&B spaces, as well as new technology to support new media requirements of future event organisers and delegates – all to be completed in four phases between mid-2012 and 2015.

Unveiling preliminary plans for the improvement works, Pieter Idenburg, CEO of Suntec International Convention and Exhibition Centre, said the revamped MICE venue would have a bold new entrance with escalators leading straight to a grand lobby on level three, a two-storey interactive digital wall, and “a slight increase in meetings spaces”.

Work on Suntec International Convention and Exhibition Centre, which alone will cost S$180 million, is scheduled to begin in June 2012, and be completed in phases to minimise inconvenience to clients and event attendees. Arrangements have also been made to relocate events that would be affected by the construction, said Idenburg.

Idenburg denied that the hardware overhaul was in response to increasing competition from Marina Bay Sands, Resorts World Sentosa and Singapore Expo, insisting that renovation plans had been “cooking for a while”.

“It has nothing to do with competition. The venue is now 16 years old and it is time to (refresh),” he said.

Rental rates are not expected to increase after the venue’s upgrading.

Specific details on Suntec International Convention and Exhibition Centre’s revamp and expansion will be unveiled soon.

AUSTRALIAN flag carrier Qantas kick-started the resumption of services earlier today, after industrial regulator Fair Work Australia ordered a hiatus to its long-running dispute with unions that culminated in the grounding of its entire fleet over the weekend.

The carrier announced on its website that “all domestic and international services have resumed from mid-afternoon on Monday 31 October”, adding that “all domestic (Australia) services on Tuesday 1 November are scheduled as normal” and “all international services are expected to be back to normal by late Tuesday 1 November”.

Qantas’ unexpected full-scale grounding over the preceding 46 hours, which CEO Alan Joyce said was in response to months of strikes by baggage handlers, engineers and pilots, had affected 108 planes across 22 airports, disrupting the travel plans of nearly 70,000 passengers in Australia as well as regional hubs such as Singapore, Hong Kong and Bangkok.

The union-organised strikes, against pay and restructuring plans that would see 1,000 jobs axed and the establishment of two Asia-focused airlines (TTG Asia e-Daily, August 16), have been costing the carrier an estimated A$15 million (US$16 million) per week.

Fearing the grounding would have far-reaching consequences for the Australian economy, the country’s Prime Minister Julia Gillard directed Fair Work Australia to step in to terminate the industrial action.

Qantas and the unions now have three weeks to settle their differences or face a mandatory arbitration decision.

Meanwhile, Qantas is providing full refunds and flexible re-booking options to customers whose travel was affected by the grounding. The carrier is also offering to reimburse affected passengers for reasonable out-of-pocket expenses, including accommodation, transfers, meals and incidentals up to a total value of A$350 per person per day.

SINGAPORE Airlines (SIA) will commence a fourth daily flight between Singapore and Beijing from December 16.

The new service, SQ806, operated using an Airbus A330 aircraft, effectively grows its frequency on the route to 28-weekly.

SIA also flies daily to Guangzhou, 35-weekly to Shanghai and 49-weekly to Hong Kong.

The flag carrier’s Guangzhou services will increase to twice-daily from next month onwards.

PATA has completed phase one of its new Mandarin web platform, www.PATAChina.org.

Developed by Dragon Trail, a China-based travel technology and digital marketing firm, the website boasts links to local social media channels such as Weibo.com and Youku, PATA member and industry news updates, a calendar of PATA and regional events, insights, tourism trends and a more user-friendly media centre.

THE TOURISM landscape of Chengdu, Sichuan province will transform radically with several tourism development projects initiated by the Chengdu Culture & Tourism Development Group (CCTDG), which is responsible for the city’s tourism, sports and cultural industries.

These projects in districts such as Anren Ancient Town, Pingle Ancient Town, Longchi Town and Xiling Snow Mountains involve the construction of commercial and retail hubs, hotels and resorts, among other facilities, expected to be completed within five to eight years.

Invitations for investment and management tenders have been issued, and foreign companies have been given permission to bid for these projects, according to CCTDG European Project Team officer, Jane Liu.

Liu added that applicants must adhere to the development blueprint set by CCTDG, which means that a theme park, for instance, must not be built in a district earmarked for public gardens and resorts.

“These strict specifications ensure preservation of the district’s natural characteristics and quality of tourism products,” she explained.

HONG KONG-based Gloria Hotels & Resorts will expand its China footprint by at least five properties between now and the first quarter of next year, one of which will be its first boutique property in Shanghai.

The 90-room hotel, to debut under Gloria’s Merlin boutique brand, is scheduled to open by first quarter next year. It will be located near Shanghai Hongqiao International Airport.

Clarence Wong, vice president-business development, Gloria Hotels & Resorts, said the Merlin brand targets “upscale customers, celebrities, those who are fashion-forward and some corporate clients”.

Two 400-room resorts on Hainan Island – one in Sanya Bay and one in Haitang Bay – will join the company’s property network by the end of this year.

In Changsha, Hunan province, Gloria is planning to open a 300-key five-star hotel and an adjacent 200-key midscale hotel in 2012. Wong said these hotels, like most of Gloria’s other properties, will court the MICE segment, as well as family groups and European travellers, particularly from Russia.

Meanwhile, Gloria’s affiliate programme, which offers marketing support to member hotels, is growing too. It will welcome in November the Red Wall Garden Hotel, a 38-room boutique property in Beijing’s hutong areas. Red Wall Garden Hotel will join two other Gloria affiliates, one in Tokyo and one in Beijing.

By Amee Enriquez

A STRATEGIC partnership between China’s HNA Hotel Group and Spain’s NH Hoteles has resulted in the entry of an international business hotel brand into China, and the formation of a brand new hotel management company.

The partnership comes on the back of HNA Hotel Group’s acquisition of 20 per cent of NH Hoteles’ shares through a capital injection of 430 million euros (US$609 million).

The first milestone for the duo is the opening of a 210-key NH-branded hotel in Chongqing early next year, the first Asian property for the Spanish group, which has 400 hotels in 25 countries under its belt. The property, owned by HNA Hotel Group, will be managed by their joint hotel management company, which both will have an equal share in.

Steven Song, executive chairman and president of HNA Hotel Group, told TTG Asia e-Daily that the yet-to-be-named hotel management company would be responsible for hotel development and management projects in China.

NH Hoteles will add properties in Beijing and Nanjing soon after, and the group’s chief strategy & development officer, Francisco Zinser Cieslik, said the expansion would focus on primary and secondary cities in China.

“Our hotels in China will adapt to the Chinese market, which means the decor will have a mix of European and oriental flavours, and more F&B outlets will be offered,” he said.

NH Hoteles will also bring its signature staff development programme to China. Its virtual university, which offers online training to improve employees’ skills and career advancement opportunities, has helped the group achieve an enviable staff turnover of less than five per cent. Cieslik said the industry average in Europe was 15 per cent.

Training programmes will be adapted to the Chinese market.

Meanwhile, HNA Hotel Group is pushing ahead with its expansion plans for Tangla Hotels & Resorts, which debuted its first property in Beijing in 2009 under the flagship Tangla label.

Tangla Hotels & Resorts has three other brands – ultra-luxe Tangla Grand Place, boutique-style Tang Hotel and business-class Gardenlane Select.

By the end of the year, Tangla Hotels & Resorts will open a Tang Hotel in Sanya and a Gardenlane Select in Haikou, as well as a Tangla in Shenzhen. A Gardenlane Select in a hot springs area in Beijing is also being planned.

The flagship Tangla brand will also head overseas with a hotel in Brussels, Belgium, and another in the east coast of the US, said Song. Construction of the Brussels hotel will begin early 2012.

“China has opened its doors to international trade for many years now, but there is still no homegrown hotel company that has gone worldwide. We acknowledge that we are a young company, but we can go far by positioning ourselves as a five-star oriental brand (in overseas destinations),” he said, adding that the brand’s homegrown status will help to attract Chinese travellers.

GROWING interest in Malaysia among travellers from the Chinese provinces of Yunnan and Sichuan has prompted travel agents in those markets to commence chartered flights starting December.

M. Wahid, director, Tourism Malaysia South China, told TTG Asia e-Daily that these flights will take off from Chengdu and Kunming to Sabah, Langkawi and Kuala Lumpur.

He pointed out that Sabah, on the northern side of Malaysia’s Borneo island, has also been gaining much popularity among Chinese travellers from Guangzhou. However, he did not elaborate on the number of chartered flights planned.

“Malaysia is now concentrating on attracting the high-end segment from China,” he said.

In the past six months, Malaysia received 560,000 arrivals from mainland China, a six per cent increase compared to the same period in 2010.

By Amee Enriquez

TAIWANESE sellers who were anticipating a jump in the number of younger mainland Chinese visitors after the China government approved Taiwan-bound FIT traffic starting June 28, say the market needs more time to take off.

The FIT visas, valid for stays of up to 15 days, are available to residents of Beijing, Shanghai and Xiamen, with a quota of 500 arrivals per day (about 15,000 per month).

Taiwanese travel agents TTG Asia e-Daily spoke to said although the number of mainland FIT travellers to Taiwan was steadily increasing, most are middle-aged or retired visitors on business or VFR trips.

Even though Taipei-based Phoenix Tours handles about eight per cent of total FIT business from the mainland (more than 300 customers per month), the company’s general manager, Spicer Lee, said only 10 per cent were travelling for leisure.

“I think it’s because the FIT visa regulations were only recently introduced, and the segment needs more time to mature. Most of our business from mainland China still consists of the older crowd,” he said.

Ivan Lin, vice president, inbound tour department, China Travel Service (Taiwan), agreed with Lee, saying that most of his income from serving mainland FIT customers was earned through visa processing fees, with the rest from booking accommodation, mini tours, car rental and airport transfers for those on leisure trips.

Only 10 per cent of the 400-500 mainland FIT customers Lin handles per month are on leisure trips, staying an average of four to five days, in three-star hotels or homestays. The rest participate in exhibitions, conventions and meetings, or visit relatives and friends, he said.

According to Lee, the main obstacle in growing this segment lies in the rules requiring mainland FIT visitors to apply for a travel permit in their hometowns.

“It would be great if they were allowed to apply at their place of residence, the number of which also needs to be increased from the current three,” he said.

“Once the rules are relaxed, we can even expect FIT traffic to surpass group traffic, like in Hong Kong, where more than 60 per cent of mainland Chinese visitors are FITs, and about 30 per cent are on group tours.”

Meanwhile, Taiwanese sellers are pressing on with efforts to grow the mainland FIT segment. China Travel Service (Taiwan) is planning to increase promotional efforts targeting mainland FITs through mainland travel agents and introduce one-day and customised tours, while the Taiwan Visitors Association has been running roadshows in various Chinese provinces.