INDONESIAN hotel chains are increasingly jumping onto the budget bandwagon to meet the growing travel demand for low-cost yet reliable properties.

Aston International has 22 of its select-service Favehotels under construction, with two already operating. Santika Indonesia Hotels & Resorts will add 14 more of its two-star Amaris this year and nine next year, joining its current seven. Newcomers Intiland’s Whiz Hotel and Dafam Hotels & Resorts’ Hotel Marlin are also opening a number of value-for-money projects.

Aston International Indonesia vice president sales and marketing Norbert Vas said: “A lot of the demand has to do with the rise of LCCs (low-cost carriers).”

With a low investment of between 16 billion rupiah (US$1.78 million) and 18 billion rupiah, and rates between 300,000 and 350,000 rupiah per night, investors can also expect ROI within three-and-a-half to four years.

Hotel wholesale agent MG Holiday sales and marketing manager Eddy Yeo said: “There is really a big demand for budget properties across the country right now, but investors and operators should watch out that in the next couple of years there might be an oversupply.”

However, Yeo warned that three-star hotels were strong competitors. “With an extra 50,000 to 100,000 rupiah, some clients who tried the budget hotels moved to stay in three-stars, which have bigger rooms and more facilities.”

FRASERS Hospitality kicked off its ambitious expansion plan of 25 new properties worldwide over the next two years with the opening of its 72-unit Fraser Residence Orchard in Singapore yesterday.

The new properties will open in destinations such as Suzhou, Chengdu, Jakarta, New Delhi, Doha, Istanbul and Budapest. They will add 4,300 units altogether to Frasers’ inventory, totaling 64 properties across 37 cities.

According to CEO Choe Peng Sum, China will take on the bulk of the new openings.

He also added that the Middle East holds “great potential” for the company. “Although people tend to see the Middle East as one destination, the problems in Bahrain did not affect the Dubai property. I expect the Doha property (opening this May) to do very well,” he said.

Although Fraser Suites Bahrain has been running at 40 per cent occupancy since the start of the political unrest, Fraser Suites Dubai has done well with occupancy in the high 80s, noted Choe.

With Thursday’s launch, Frasers now has four properties in Singapore. A new boutique brand, Modena, will also open here next year.

Fraser & Neave chairman Lee Hsien Yang said: “We believe Singapore is home and even as we grow our significant footprint and network abroad, we will not neglect our home market.”

THE TOURISM industry of ASEAN is ramping up on technology, with the ASEAN eTravel Mart debuting yesterday, along with the announcement of an “electronic standards” for the region and the official signing of an agreement between the ASEAN Tourism Association (ASEANTA) and meta-search engine Wego (see story Wego gets cracking on Southeastasia.org).

The mart – a full-day conference with a small table-top exhibition in its inaugural format – drew about 600 participants and was opened by Thailand’s Prime Minister Abhisit Vejjajiva.

Bangkok-based Travel Technology Association (TTA), which initiated the mart, hopes to grow the event and expand TTA’s role regionally, even casting its eyes globally in the future.

President Apichai Sakulsureeyadej said that while ASEAN destinations offered real value, the challenge was improving the region’s marketing capabilities to reach changing consumers and channels. The TTA saw this gap, he said, and had provided training to 6,000 SMEs in the Thai travel industry since its inception in 2004. It hoped to do the same across ASEAN, which Apichai said was “working to catch up and be ahead” of technology usage.

TTA has also devised electronic standards for the region. Apichai explained these were “technical specs” such as the use of one common term (eg, “hotel” and not “property”) for easier and cheaper connectivity between systems in the travel industry in the region. “It is now up to ASEANTA to carry this forward,” he said.

WEGO, which finalised and signed the contract yesterday with the ASEAN Tourism Association (ASEANTA) to operate Southeastasia.org, the website belonging to the regional private sector tourism body, will start by focusing on driving traffic to and making enhancements on the site.

“Initially, we will do some work to better optimise it for search engine rankings, so if people are looking for South-east Asia travel information, they will come to the site through organic search. We’ll (Wego) spend money – more in paid-search, cost-per-click type, to kick this off,” said Wego CEO Martin Symes. “Like any web business, it all begins with traffic.”

The site is attracting “small but steady” traffic, the biggest being the US market, followed by Europe and Australia, who arrive via Google and other search on “South-east Asia”. Symes said using the “South-east Asia” tourism branding rather than “ASEAN” was more pragmatic. “If we want to be up in the Google search engine rankings, South-east Asia is what people are searching for, not ASEAN,” he said, adding that the website’s tagline, Feel the Warmth, would also be kept.

A new feature Wego is soon adding to the site is a referral to offline travel agents. “At the moment, those looking to fulfil travel on the site are online travel agents, but we are also going to add a referral system to send enquiries to the offline agents,” he said.

SoutheastAsia.org is crucial to the ASEAN tourism leaders’ dream of promoting the region as one destination despite limited resources. The United States Agency for International Development had provided the funding to set up the site and it is now in the hands of ASEANTA to make it self-sustaining.

“These are very early days,” said Symes when asked about targets. “Competing for eyeballs in the Internet space is tough, but we’ll give it a go. We think it is a great product – ASEAN is still the best region in the world to travel to and there is plenty of demand to come here.”

Symes and ASEANTA members were at the inaugural ASEAN eTravel Mart in Bangkok yesterday. ASEAN secretary-general Dr Surin Pitsuwan, in a video address to mart delegates, said a target of 85 million tourists coming in and out of ASEAN had been set for 2015, when the region would be a single community. This represents a 25 per cent increase from 2009.

“For that to happen, we have to make sure products and services can be accessed by markets easier, quicker and more accurately. Now, most of the access is through traditional means – phone calls, faxes, emails,” he said. “There’s a need for one integrated website…”

OPPORTUNITIES abound for traditional travel agents in ASEAN to be the online leader in their respective markets, but they need to change their approach, several panelists at yesterday’s ASEAN eTravel Mart in Bangkok said.

With travel e-commerce poised to increase in ASEAN as infrastructure that supports online transactions – from broadband to payment regulations – improves, the space will remain fragmented and not at all saturated, with lots of opportunities for everyone.

“No traditional agency has become a big online travel agency in ASEAN – not in Indonesia, not in the Philippines. In Singapore, there’s ZUJI or Asiatravel (both did not emerge from traditional agencies), or in the hotel space, there’s Agoda, Asiarooms, etc, but in the OTA space, there’s nobody (from the traditional agencies). A lot of agents are dipping their toes into the water, but to me, the effort is half-hearted,” observed Wego CEO, Martin Symes.

“Yet, traditional agencies could leverage their product and supplier relationship, which is critical in this part of the world where it’s not a free market and you can’t get it all from the GDS. For God’s sake, set up a separate team (to do the online business) because the metrics measured are completely different, the way you look at the business is completely different, the way you want to interact with your customers is completely different, so you just need to have dedicated people who are passionate about the Internet and live and breathe it,” he said.

But Alexander Rayner, e-Business advisor to PATA, said that the traditional agent should not be underestimated. “A whole range of tools is now available to them to make them more effective. Technology is enabling agents and they are becoming more clever, effective and efficient,” Rayner said.

Christian Lukey, COO and director of sales of Web Sawasdee, said the barrier to entry for online was low and in the end, it was still about people and delivering reliable travel. “Anyone can set up a website easily, but at the the end of the day, it can be lost in space. What makes a difference is ensuring the customers are comfortable and confident about your ability to deliver reliable travel.”

THE BALI Hotels Association (BHA) is reporting an influx of new bookings that has somewhat offset cancellations at hotels that usually cater to Japanese travellers.

Chairman Jean-Charles Le Coz said in BHA’s newsletter published yesterday: “Some of our member hotels have reported that they are seeing a ‘balancing out’ effect with the Japanese market.”

Le Coz also noted that independent of the recent crisis in Japan, arrivals to Bali from there had already begun to decrease in 2009 due to its economic difficulties.

“Given the encouraging results to date from the Australian, Singaporean, Malaysian and Middle Eastern markets, we’re confident that Bali arrivals will continue to surge,” he added.

AUSTRALIA-based Strategic Airlines has reported strong demand for its recently launched direct flights from Melbourne and Brisbane to Phuket (TTG Asia e-Daily, January 14).

The carrier introduced its twice-weekly Melbourne-Phuket service on February 22 and its twice-weekly Brisbane-Phuket service on February 24. Both flights are serviced by an Airbus A330 aircraft with 274 business- and economy-class seats.

Strategic Airlines founder Michael James said the carrier has been growing its operations within Queensland and Western Australia over the past 12 months and that Melbourne was its third Australian hub after Brisbane and Perth.

He added that the airline was planning to expand its Melbourne and Brisbane services in the near future.

AIR Bagan will launch on April 11 a twice-weekly direct regional service between Yangon and Phuket, the airline’s second route between Myanmar and Thailand.

The carrier will use a Fokker aircraft that can accommodate about 100 passengers on the route scheduled every Monday and Friday.

Air Bagan currently operates a twice-weekly regional flight between Yangon and Chiang Mai, as well as 18 domestic routes.

The airline is also planning to launch flights to Cambodia, Thailand (Bangkok), China (Kunming), Malaysia (Kuala Lumpur) and Singapore soon.

THE TRADE in the region is bracing itself for a dramatic slash in Japanese clients this year, following the tragic earthquake and tsunami that hit the country on March 11.

As expected, bookings from Japan, mainly for the March-April period, have been wiped out since the event, which occurred during the low season for Japanese travel to most South-east Asian countries. Further losses are expected from refunds and waiving of cancellation fees for Japanese bookings.

For H.I.S. International Travel Singapore though, March is the high season for top market Japan. Noting that most cancellations were emotional in nature due to the somber mood, inbound general manager Christina Chiang said: “We’ll be in trouble if the Japanese don’t travel for the rest of the year, but I don’t think this will happen. Once the (nuclear plant) problem is solved, business will return.”

Others are less than hopeful of a full recovery of the Japanese market within the year and are already cutting their losses.

– Full story in TTG Asia, March 25

WALK Japan, an agency that specialises in walking tours led by guides familiar with Japan’s history, nature and current affairs, has halted all operations following the natural disasters and nuclear crisis in the country.

Its star product, the Nakasendo Way tour that takes participants from Kyoto to Tokyo, has been discontinued together with all other tours until May 4.

Paul Christie, Walk Japan ‘s managing director and CEO, said the decision to stop the tours was made to ensure the safety of clients and staff, although the walking routes are far from affected locations.

Clients impacted by the cancellations have been contacted and fully reimbursed.

Christie said the company would take this non-operational period to “review all current tours, with the aim to improve them and create new, shorter tours, especially for clients from Singapore and Hong Kong”.

Prior to the crisis, Walk Japan was looking to launch new walking tours around Okinawa, themed around legendary Haiku poet Matsuo Basho’s own walking experiences.