KOREA Tourism Organization (KTO) is reopening its Jakarta office after closing it down in 1998 due to the Asian financial crisis.

The office, to be opened between June and September, will focus on stimulating Indonesia outbound traffic to destinations beyond Seoul by dangling various incentives. For example, if an agent sends a group which comprises at least 80 per cent Muslim travellers, KTO will give a subsidy of 10,000 won (US$8.90) per person, which the agent can use for food or performance expenses.

Speaking to agents yesterday, KTO Singapore and Indonesia director Steve Yong said: “Last year we saw a record number of 95,239 arrivals (from Indonesia) or a 17.6 per cent increase over 2009. This year, we are targeting to achieve 110,000 arrivals.”

In terms of arrivals, Indonesia currently ranks fifth in South-east Asia after Thailand, the Philippines, Singapore and Malaysia. Yong, however, projected that arrivals from Indonesia would surpass those from Singapore in two to three years.

The amount Indonesians spend per visit is also higher than Singaporeans and the Japanese, according to Yong.

Yong told TTG Asia e-Daily: “With Indonesia’s economy growing more than six per cent last year and this year, we see bigger potential for growth of the top and middle-class travellers.”

FACING the possibility of a lawsuit (TTG Asia e-Daily, February 10, 2011), organiser New7Wonders (N7W) has charged that the Indonesia’s Ministry of Culture and Tourism has been misleading the public.

In a statement to TTG Asia e-Daily, N7W spokesman Eamonn Fitzgerald took issue with the ministry’s denial of recognising and endorsing the private sector consortium (PC) which signed an agreement with N7W.

He highlighted two letters received by N7W, dated August 25, 2010 and September 6, 2010, which mentioned the office was working with a prominent entity referred to as Lolita Lita Anugerah Foundation – the PC.

Fitzgerald said the US$45 million claimed by the ministry to be the cost of hosting the official winner’s announcement was also inaccurate as the PC had offered N7W US$10 million for the licence fee, which the ministry was expected to support. The PC would then fund the production through a normal commercial agreement.

“The ministry has in fact acted to destroy the image and reputation of Indonesia, by making pledges it would not back up,” he added.

The ministry’s director-general of marketing Sapta Nirwandar declined to comment further. “We have left the matter with our lawyer,” he said.

THE MALAYSIA Homestay Association is pressing the tourism ministry for an annual grant of RM10 million (US$3.28 million) over four years to promote and develop homestay programmes.

It submitted yesterday a paper to the ministry.

President Sahariman Hamdan said this would help fund international outreach to traditional markets such as Japan and Singapore, as well as to new ones such as Indonesia, Thailand, Vietnam, Australia, Germany, the UK and Netherlands.

It would also cover training programmes to upgrade the entrepreneurial skills of homestay operators and provide them with lessons on e-marketing.

Sahariman said: “By next year, we want to double the amount of household incomes of homestay operators, which now average around RM600 monthly.”

Homestays, where owners rent out individual rooms, will also be diversified to allow guests to book the entire house. Dubbed ‘kampung stays’, the product will be launched at Kampung Desa Murni in Pahang on March 20 by Tourism Minister, Dr Ng Yen Yen.

Houses are fully equipped and include cooking facilities. For a start, there would be 50 such accommodations, said Sahariman.

There are now 138 registered homestay villages in Malaysia, with a total of 2,987 operators and 4,042 rooms. The average occupancy of homestays from January to November 2010 was 23.2 per cent.

NINE-month-old Suntec International is set to further export its MICE expertise in 2011, having signed last year a sales and marketing representation contract with the Vancouver Convention Centre and, just last month, the Adelaide Convention Centre.

Suntec International is now in talks with the Malaysian government on the latter’s Economic Transformation Programme, which aims to transform the country into a high-income economy by 2020, with help from the MICE sector.

It is also in the final stages of discussions with two venues for consultancy contracts, but details were not available at press time.

Said director of sales and marketing (international business development) Chu Pui Wia: “Asia’s MICE industry is on the cusp of a regional transformation, and Suntec International is well positioned to capitalise on the task at hand.

“We are also set to tap the opportunities in the emergent China markets as we are poised to implement more strategic initiatives to further expand our footprint.”

This would be facilitated by Chinese-speaking consultants who were helping to build a comprehensive database of contacts.

THE SINGAPORE Tourism Board (STB) foresees a restructuring of the industry – not least the travel agency sector – as the destination continues to evolve and attract higher-spending visitors with greater expectations.

Tourism receipts shot up nearly 50 per cent last year to an estimated S$18.8 billion (US$14.7 billion), while arrivals rose about 20 per cent to 11.6 million.

Giving an example of how a changing product is altering the existing industry landscape, STB’s chief executive Aw Kah Peng pointed to the two gaming cruiseships that stopped operation last year as a result of new gaming options in the city (TTG Asia e-Daily, January 13, 2010).

“There was a drop in the number of ship calls as some of the cruises that focused on gaming found it was not worth their while to do these cruises. Hotels too are looking at what is being offered and reshaping and investing to change the nature of their product offering,” she said, during a media conference Q&A this morning on 2010 tourism sector performance.

Asked what sort of restructure she sees happening in the travel agency sector, Aw said: “Demand for travel agents remains. As we can see, last year saw a nett increase in the number of agencies. The question remains how are they going to service the customer whose demands have changed. It’s no longer about a package tour, so many agents are rethinking itineraries, training issues, and so on.”

Last year saw 120 new licensed agencies and 85 agency closures, resulting in a nett increase to 975 agencies in total. STB’s assistant chief executive, Industry Development 1 Group and Sector Planning & Development Group, Tony Lai, said he noticed a change in new agencies in that they were led by “young entrepreneurs” and many were web-driven, with more than half having a retail front at the same time.

– Read more in TTG Asia, February 25 issue

JAPAN’s All Nippon Airways (ANA) has designs on the Chinese budget travel market, with plans to launch a new low-cost carrier (LCC) by mid-February.

A joint venture with Hong Kong-based First Eastern Investment Group, A&F-Aviation will initially be based in Osaka’s Kansai International Airport, servicing limited destinations in China and Japan from October, while also offering Japanese domestic flights. It will increase the number of routes to 20 within five years.

First Eastern chairman Victor Chu said the LCC would challenge Air China and Japan Airlines on Chinese routes, while its major hubs would include Beijing, Shanghai, Hangzhou, Shenzhen and Guangzhou, as well as Hong Kong and Macau.

AMADEUS has agreed to sell its pan-European online travel agency Opodo to private equity firms AXA and Permira for approximately 500 million euros (US$684 million), subject to approval by competition authorities.

Following the sale, AXA and Permira plan to merge Opodo with their two online travel firms, Go Voyages and eDream.

London-based Opodo was founded in 2001 by a consortium of European airlines including British Airways, Air France, Alitalia, Iberia, KLM, Lufthansa, Aer Lingus, Austrian Airlines and Finnair.

KOH Samui’s four-year hotel building boom is threatening to undermine the destination’s long-term success, as supply outstrips a demand hamstrung by severely limited airlift, according to a report released today by hospitality consulting firm C9 Hotelworks.

Samui Hotel Market Update 2010 reveals that oversupply and limited access heavily impacted last year’s operating performance for hotels on the island, with marked declines in occupancy (seven per cent), average room rates (15 per cent) and RevPAR (26 per cent) compared to 2009.

C9 Hotelworks managing director Bill Barnett explained: “Private sector development in the hospitality sector has surged well ahead of transportation infrastructure improvements, which has caused the market to go into a tailspin.”

Located in an international flight corridor requiring low landing levels, coupled with environmental restrictions allowing only 36 flights a day and a runway length unable to handle larger aircraft, the long-term potential of the destination is effectively capped, especially with no airport expansion or relocation plans in the pipeline.

Comparing the destination to the more developed markets of Phuket and Bali, Barnett added that what was clearly missing in Koh Samui were high-demand generators such as regional low-cost carriers and charter flights.

THE INDONESIA Ministry of Culture and Tourism will sue the organiser of the New7Wonders (N7W) of Nature campaign for dropping the office as its official supporting committee over the Komodo National Park furore (TTG Asia e-Daily, February 8).

The ministry’s lawyer Todung Mulya Lubis told the media yesterday: “Their decision to drop the ministry as the official supporting committee is an attempt to discredit Indonesia’s government and has no legal basis.”

In the meantime, Indonesia tourism stakeholders are calling on the government and private sector to forge ahead with plans for developing and promoting Komodo National Park.

“We must use the momentum to continue improving infrastructure in Komodo,” said Indonesia Care Tourism member Wuryastuti Sunario. “Indonesia should also start selling Komodo together with Flores as an ecotourism destination.”

Incito Tours managing director Sebastian Ng said the N7W campaign was a good means of garnering media coverage for the destination. “We must continue promoting Komodo by highlighting it as a UNESCO World Heritage Site,” he said.

MYANMAR operators report a busier January compared to the same period last year, although the prospects for March onwards are less certain, with differing forecasts from industry players.

Hla Aye, managing director of Shan Yoma Travel and Tours, said January had been a hectic month. “We’ve already received bookings for February and March,” he said.

All Asia Exclusive Travel managing director Phyoe Wai Yar Zar said the company had registered a slight growth in business in January and February, but bookings started to wane in March.

Hotel Yangon sales and marketing director Thet Ko Ko Htaik said the property ran at about 85 per cent occupancy in January, a 20 per cent year-on-year increase, while forward bookings for February and March indicated a full-house situation on most days.

Chatrium Hotel sales and marketing director May Myat Mon said although the hotel’s occupancy in February was better than in January, forward bookings were pointing to a quieter March.