What are your thoughts on the crisis Sri Lanka is in today?
Sri Lanka has gone through so many challenges in the past – the 30-year separatist war, tsunami and so many other challenges. But the last three years have been much worse, starting with the Easter Sunday terrorist attacks (in mid-2019), Covid-19 pandemic, and now the economic turmoil in the country.
The tourism industry has always taken the brunt of all of these natural and man-made disasters but the people are always resilient.
I am confident that with the return of stability to the country we will see an inflow of tourists, which is the need of the hour to gain foreign currency to meet the balance of payment requirements.
Which sector of Sri Lanka’s tourism industry is hardest hit by these extended crises, and how is PATA aiding them?
The entire industry, from large hotels to individuals selling handicrafts on the street, has been affected over the past three years. As tourism has a trickle-down effect, when the going is good everyone benefits and when the going is bad everyone has to face the consequences.
PATA is part of an initiative called One Voice, which has all the main private sector bodies working together and voicing concerns of the industry to the government. These (communications) have helped in (securing supportive initiatives such as) moratorium extensions and so on.
You spoke of how tourists are the need of the hour for Sri Lanka. But can the country wait till stability returns for tourism to prop up the economy?
We need an inflow of tourists now. Every single dollar coming into the country will assist in stabilising the economy. This is a long journey and there is no easy fix, but if everyone works towards this goal within 18 to 24 months, we can come out of it.
What can be done now to enable and encourage tourists to return and bring that much-needed foreign exchange?
The recently concluded cricket series against Australia and Pakistan, held in Sri Lanka, earned us much needed positive international coverage which showed that the country is capable of hosting such sporting events without issues. We had tourists from Australia who enjoyed the cricket matches, and who went on to travel around Sri Lanka while sending positive messages around the world. Events such as these will boost tourist arrivals in the short term.
How are hotels and resorts maintaining staff morale during these trying times?
When business was absent, we got Jetwing associates engaged in other activities, such as agriculture. That gave most of them a lot of pride and many continued to establish home gardens as well.
We also maintained communications, giving them as much hope as we can. Engaging in religious activities to calm the mind was something else that we did.
Most properties gave staff extended leave so that they could spend more time with their family. During those challenging times it’s important to be with your loved ones.
Has the extended tourism crisis resulted in an outflow of workers?
Many properties have seen individuals leaving the industry, going overseas for better opportunities. They have job opportunities in Doha, Qatar, as many jobs have opened up to prepare for the FIFA World Cup later this year.
We do not mind people going to the Middle East or the Maldives as they gain valuable experience and return to serve the Sri Lanka tourism industry better. However, those who migrate to countries such as Australia, Canada and Europe will probably not come back, which is a loss for the country.
How are Sri Lanka properties dealing with the labour challenge? What is Jetwing doing?
Most properties have downsized over the last few years due to the lack of business. Existing employees are asked to multitask as well. It is essential to keep training the staff and encourage youngsters to join the industry.
Jetwing associates are highly trained, so they’re very much in demand. Sadly, we’ve lost a few of them and we hope they will return after a couple of years in the Middle East or the Maldives.
We believe in training new-bloods through Jetwing’s youth development programmes, and will continue to do so.
Let’s talk about your leadership at PATA Sri Lanka Chapter. What are your plans to take the chapter forward amid these trying times?
My plan is to get more youths involved and work closely with the main private sector bodies – the Tourist Hotels Association and the Sri Lanka Association of Travel Operators – in voicing our opinions and coming up with sustainable solutions for the betterment of the industry.
Are there any policy changes that need to be implemented in tourism given the present crisis?
What I hope for isn’t so much a policy change – I would like to see the tourism sector reducing consumption of imported food and beverage items and proudly serve Sri Lankan produce to travellers. Our objective is to contribute as much as possible to solve the balance of payments crisis here. If we can reduce imported content in our food offerings, that would reduce the quantum of foreign exchange required to sustain the industry.
National Gallery Singapore presents Familiar Others: Emiria Sunassa, Eduardo Masferré and Yeh Chi Wei, 1940s–1970s, exploring the idea of how “the Other” is represented in art from South-east Asia and examine its own practices of cultural representation through the paintings and photographs by three South-east Asian figures.
The spotlighted artists include Indonesian female painter Emiria Sunassa, who made images of peoples from all over the Indonesian archipelago; Filipino photographer Eduardo Masferré, who aspired to present the culture from the communities of the Cordillera region where he lived in a dignified and respectful manner; and Singaporean Yeh Chi Wei, one of the key painters in mid-20th Singapore.
Explore the idea of how “the Other” is represented in art at the Familiar Others exhibition
Eight text responses commissioned from artists, academics, poets and musicians with ties to the communities represented in the artworks, replace conventional museum descriptive wall labels, diversify the voices behind the exhibition’s narrative, provoking new ways of thinking and broadening the conversation about the images.
The exhibition is accompanied by a free e-catalogue accessible via a QR code inside Dalam Southeast Asia or on National Gallery Singapore’s website.
The exhibition will be held from August 4, 2022 to February 19, 2023 at National Gallery Singapore’s Dalam Southeast Asia located within the UOB Southeast Asia Gallery in the Former Supreme Court Wing. Admission is free for Singapore Citizens and Permanent Residents.
Diversifying into selling flights, DidaTravel, has launched its B2B flight booking multi-GDS portal, which includes access to full-service carriers, low-cost carriers, and new distribution capability content.
The tech-driven integrated travel service provider’s 23,000 B2B buyers around the world can now access flights from 500-plus airlines to fly to more than 20,000 destinations globally.
With dynamic packaging technology that comprises in-path and post-booking cross-selling tools, clients will have the added option of combining flights with accommodation to boost ancillary revenues too.
Packaging of flights with accommodation is currently available through the company’s new flight booking engine or as an XML/API integration, with dynamic packaging to be integrated at the end of 2022.
DidaTravel’s clients also have the option to check on flight prices manually.
DidaTravel’s clients can now access flights from 500-plus airlines to fly to more than 20,000 destinations globally
To lead this latest development, Jason Guan, flight business unit general manager, heads a new team of specialists with expertise in areas of system analysis and design, system architecture and modelling, development and coding, as well as testing and implementation.
Guan who joined the company last year, reports directly to Rikin Wu, DidaTravel founder and CEO.
Guan said: “We have put together a team of top-notch professionals to provide our 23,000-strong B2B travel-buying clients with the best booking technology and customer support available. We have an ambitious expansion plan that adds value to all tourism stakeholders.”
According to Wu, DidaTravel’s partners have requested for flight products for years and the company decided to utilise the pandemic downtime to allocate resources to build this new portal for flight bookings.
He is confident that DidaTravel’s unique dynamic packaging capabilities and Guan’s leadership will enable its flight business to grow and scale.
Founded in 2012, DidaTravel is headquartered in Shenzhen, China and has over 300 staff in eight offices globally.
The company works with travel-buying clients around the world, including travel agencies, tour operators, wholesalers, OTAs, TMCs and airlines.
Additionally, it boasts a portfolio of over 51,500 competitively sourced direct hotel contracts, as well as 700,000 hotel products provided by about 600 global suppliers, covering more than 200 countries and regions.
Pre-pandemic, DidaTravel sold hotel bookings in China and the Asia Pacific region worth over USD700 million in 2019.
To find out how to tap into DidaTravel’s extensive network of travel agencies, tour operators, wholesalers, OTAs, TMCs, airlines and hotels, visit www.didatravel.com.
Ascott will leapfrog its global presence with acquisition of Oakwood
Frasers determines growth at a meaningful scale is more important
Extended stay properties benefit from growing demand for flexible leases and longer stays as digital nomad community expands and companies boost investments in emerging Asian markets
Ascott’s acquisition of Oakwood came as no surprise. Their parents, CapitaLand Investments and Mapletree Investments respectively, are linked to Singapore’s Temasek Holdings. If anything, it is long time coming.
“It’s been so long in not happening, I assumed it wasn’t going to happen,” said Robert Hecker, managing director Pacific Asia, Horwath.
Ascott will acquire Oakwood and introduce new segments in accommodation
The bigger surprise is how the extended stay market has become the darling accommodation model of Covid-19, proving its resilience, flexibility and cost-efficiency in hospitality’s worst crisis ever. New segments such as co-living and serviced condominium units have also mushroomed in Asia, although serviced apartments remain the core product.
Completed in July, the merger is widely seen as a timely realignment or reorganisation of two family members to harness synergies and seize further growth in what is clearly a solid sector.
The acquisition will add 15,000 units in 81 hotels to Ascott’s portfolio, leapfrogging its global presence to 150,000 units in 900 properties across 200 cities in 39 countries.
“That holds up very well against any major global lodging business,” said Robert Williams, head of hotels & hospitality Asia-Pacific, Watson Farley & Williams.
Mapletree is understood to be focusing on students lodging henceforth, a segment in which it has a bigger scale than Ascott.
New target
With Oakwood, Ascott is likely to bust its existing target of 160,000 units by 2023.
“We will share a new target in due course,” said Kevin Goh, CapitaLand Investment CEO for Lodging, in an interview.
This does not necessarily mean the company will do more acquisitions which, since 2017, have included Australia’s Quest Apartment Hotels, Synergy Global Housing US and Indonesia’s Tauzia Hotels, although it is “on a constant look-out for opportunities that are in line with our asset-light growth strategy”, Goh said.
A bigger scale and stronger loyalty and distribution network should accelerate the growth of management or franchised contracts. About 80 per cent of Ascott’s extended stay units are managed or franchised, while the rest is owned by its related investment vehicles such as private funds and hospitality trust. Ascott expects Oakwood’s 8,500 units in operation to bring immediate recurring fee income stream.
In 1Q2022, Ascott’s fees income rose to S$55 million (US$40 million), from S$42 million in 1Q2021. RevPAU (revenue per available unit) jumped S$71 from S$53, while average occupancy was 57 per cent, compared with 48 per cent in 1Q2021.
“We plan to onboard Oakwood properties onto Ascott’s loyalty programme, Ascott Star Rewards, to expand our customer base, drive direct distribution and enhance customer experience,” said Goh. “We also plan to include Oakwood properties in our other digital platforms such as our revenue management and customer management systems, enabling us to analyse data across our expanded portfolio to cross-sell our properties and drive more revenue and cost-synergies for our property owners.”
The Oakwood brand will remain, he said. “We intend to keep the Oakwood brand and build on the strong reputation and heritage of the brand, especially in markets across South-east Asia, North Asia and North America. We will continue to grow the Oakwood brand alongside Ascott’s current portfolio of global brands,” said Goh.
Strong like oak
Asked how the acquisition will strengthen Oakwood, its CEO, Dean Schreiber, said: “We are confident that the synergy with Ascott’s extensive commercial engine, complementary business development network and access to global hospitality talents will add value for our discerning guests, property owners and business partners.”
Goh: we will continue to grow the Oakwood brand alongside Ascott’s current portfolio of global brands
Despite the pandemic, Oakwood kicked off 2022 with a robust pipeline of projects under development, new signings and property openings, Schreiber said. “In the months ahead, we expect to reinforce our presence in key Asian gateway cities and enter new destinations such as Cambodia, Bangladesh and the Philippines.”
Schreiber is excited about future opportunities in the sector. “The extended stay segment is going through rapid evolution because post-pandemic travellers and real estate owners have realised the appeal of this sector,” he said. “Looking into the future, we are certain of greater product differentiation and disruptive services that will change the way we cater to the needs of our guests.”
His immediate priority is to ensure business continuity, hospitality excellence and employee welfare amid the transition period.
Frasers’ next move
Eyes are now peeled on Frasers Hospitality, linked to Thai billionaire Charoen Sirivadhanabhakdi’s TCC Group. At the time of writing in late July, Frasers Property is proposing to privatise its hospitality arm.
Frasers Hospitality boasts 21,000 units in 120 properties across 70 cities in 21 countries.
“Hard to say what is next for the Frasers Hospitality business, other than consolidation in this space will be ongoing, and with a mega-sponsor like Frasers Property, there has to be an upside for the circa S$2 billion portfolio,” said Williams.
Added Bill Barnett, managing director of C9 Hotelworks: “Frasers Hospitality has been hampered by its REIT vehicles and the proposal to privatise it would allow the group to be more aggressive in investing in its portfolio. At the end of the day, TCC is driving Frasers and they are a property developer at heart. But if they are cashed up, they could be more a formidable competition to Ascott, so watch this space.”
Horwath’s Hecker agrees. “The more likely result (instead of Frasers being acquired) is that the Ascott/Oakwood deal will put a fire under Frasers to expand bigger/faster,” he said.
But Hecker said investors must be prepared to pay. “There is less distress in the serviced apartments sector, and any transaction would likely be on full pricing or close to it.”
Asked if it has become critical for Frasers Hospitality to scale up further, its COO, Mark Chan, said: “It is certainly important, but being an owner-operator, we firmly believe that it is more important that we grow meaningful scale, with a considered approach from a product, brands, multi-city operations and partnership perspective.”
He sees the Ascott/Oakwood merger as an opportunity for Frasers Hospitality to “stand out more as a brand of choice in the extended stay market”.
In 2018, the company did a “deep review” of its business that covered growth, product development, brand relevance and differentiation. The pandemic accelerated change, resulting in a more “nimble” structure, a new website and the use of touchless technology such as mobile check-in/out, robotics and digital concierge powered by cloud technologies, Chan said. In-room facilities have also been adjusted, with better space usage, health and wellness features, and Wi-Fi connectivity, to meet more extended living, work-from-home needs.
“We have not stopped growing despite Covid-19, opening eight properties and signing 13 during this period. We expect to open another 12 properties over the next three to four years. Concurrently, we are developing our technology and infrastructure to ensure agility and get closer to the market,” said Chan.
Smaller players
Smaller serviced apartments players also noted the sector’s steadiness.
“Despite Covid-19, most serviced apartments generally have been doing well, especially in Singapore, where their occupancies are in the 90s. Most are trading at S$300 a night,” said Choe Peng Sum, CEO, Pan Pacific Hotels Group (PPHG). The chain has five serviced suites in operation and six in the pipeline, four of which will open in the next six months.
One reason is fewer trips but longer stays. In 2021, the average length of stay (ALS) in Singapore was 22.4 nights, according to an HVS report, citing various quarantine measures and longer stays reasons.
ALS has since moderated to 7.1 days in 1H2022, from 3.4 days in 1H2021, latest Singapore Tourism Board data shows. But this remains a key impetus to fill up serviced apartments, which in Singapore require a minimum stay of six nights.
Williams: with a mega-sponsor like Frasers Property, there has to be an upside for the circa S$2 billion portfolio
But what happens if duration of stay becomes short again? As the HVS report says, last year’s ALS was an “outlier”, not indicative of future ALS growth.
Arthur Kiong, CEO of Far East Hospitality, agrees. “We hope this trend (of longer stays) continues but we never know what will happen when airlines increase capacities and airfares become more moderate with increased competition.”
In July, FEH opened its Australian Adina serviced apartments brand in Singapore, a remake of the Regency House in Orchard Road. It intends to grow the Adina brand “selectively”.
Value spotlighted
But the value of extended stay, which Covid-19 has spotlighted, overrides any uncertainty that longer stays will remain.
For one, in an era of labour shortage, serviced apartments and co-living properties are “low maintenance” compared with traditional hotels. Fewer transient guests check-in and out, and they tend to take better care of their home-away-from-home, Goh said.
The sector also responses to demand for flexible leases that is driven by trends such as longer stays and digital nomads. Besides, who knows when the next crisis will appear.
Plus, Asia has lots of emerging markets, hence the need for extended stay accommodations.
“Companies are pouring foreign direct investments in emerging markets such as Vietnam and Cambodia, and are sending project groups and expats to set up factories and offices. These executives need more than a hotel room. This is also true in Bangkok, where there are lots of Koreans and Japanese investing in, say, car manufacturing, or in Jakarta, where companies invest in oil and gas, mining and shipping,” said PPHG’s Choe, who was formerly Frasers Hospitality’s CEO.
“Everyone is looking at opportunities, including us. But for us, only in certain places, i.e., corporate long stay in emerging markets,” he said.
There are downsides to serviced apartments, however. During peak periods, say, the Grand Prix F1 season in Singapore or a major convention in Hong Kong, hotel rates in those cities could soar by 100 to 200 per cent while serviced apartment rates are locked in, said Choe.
Moreover, yields for serviced apartments are lower than hotels on a per square foot basis, he said. “A service apartment has living room and bedroom. In hotels, this is considered two units. So, if I sell a hotel room at $200, I’d gain $400 for two rooms instead of $300 for a serviced apartment unit. But the serviced apartments business is more stable,” said Choe.
In the wake of Covid-19 and the Russia/Ukraine war, stability is king.
A recent study by Hilton reveals that Asia-Pacific consumers are quickly embracing travel once more with renewed motivations: to rebuild family bonds, and to revive the body and soul.
New data from the survey conducted with nearly 6,000 respondents across Singapore, Australia, Indonesia, Malaysia, Thailand and India show that families cannot wait to travel together after two years of closed borders, mandated restrictions, and streamlined social circles.
Asia-Pacific consumers are prioritising trips to focus on family bonding
Travellers from this region are prioritising trips with their nearest and dearest, choosing spouses and significant others as their top travel companion (43%), followed by their children of all ages (38%), parents (25%) and extended family members (23%).
Renewed priorities
While health, safety and cleanliness remain a top priority, family travellers across all six markets are ever more motivated to be together. Besides traveling as a group, family travellers are also looking for ways to spend more time together while on holiday. This new emphasis on togetherness is not only reflected in choosing pastimes, but also in preferred room arrangements – highlighting the importance for travellers to consider where they stay.
Singaporeans (60%), Malaysians (57%) and Australians (51%) now place a lot more thought in planning family-friendly activities during trips, as respondents from these markets list finding activities that everyone in the family will enjoy among their top travel concerns.
When it comes to deciding which hotel or resort to book, family-friendly facilities and activity offerings within the property are also a top priority, especially for family travellers from Indonesia (60%) and Malaysia (59%), followed by Singapore (49%), India (47%) Thailand (45%) and Australia (40%).
For markets such as Singapore (66%), Australia (61%) and India (57%), confirmed room upgrades before departure are an important hotel and resort offering, minimising any uncertainty and giving families greater peace of mind.
Travellers from Singapore (30%), India (27%) and Indonesia (25%) prefer connecting rooms for easier access to family bonding activities and to make up for lost time.
Maximising each stay
While the pent-up travel demand is real, additional market insights by Hilton show that the increasing price of travel is also a growing concern and potential barrier in this recovery climate, further putting a spotlight on where customers choose to stay.
Cost of travel was ranked as the top travel obstacle for travellers from Malaysia (57%), Indonesia (49%) and Australia (41%), which ranks higher than their concern over health risks (Malaysia 51%, Indonesia 40%, Australia 34%).
Travellers from Thailand, Singapore and India reported that concern over travel costs (44%, 43%, 40%) are at similar levels as health risks (47%, 44%, 41%), respectively.
Compounded stress during the pandemic has taken a toll on couples as they turn to travel to reignite the romance. This puts increasing importance for travellers to consider where they stay to create the most meaningful connections while on vacation. Having a romantic meal with their spouse or significant other consistently ranks high (#2) among other preferred activities when they have alone time while traveling with family.
However, parents hoping to steal a moment to themselves while on vacation may find it a challenge to keep the kids entertained. Screens are the go-to distraction to keep children entertained, but as the survey reveals, there are differences in parenting styles and attitudes towards screen time for kids. While some families enjoy sharing screen time with their children, others may experience the pressure to limit screen time.
Across all markets, about 96% of parents inevitably allow their children some amount of screen time to keep them occupied while on vacation.
Respondents with kids, particularly 51% of parents in Thailand and India, share that they feel some amount of guilt for allowing their children to use their devices.
Bonding over food
Survey findings also show that family travellers are looking forward to sitting down together with good food that everyone will enjoy, reflecting how the simple act of sharing a family meal together after years of restrictions carries deeper significance.
Across all six markets, having a variety of F&B offerings on-property is a top-of-mind consideration (#1) when booking hotels and resorts. This translates to an array of selections to satisfy everyone.
The full Hilton’s 2022 Global Trends Report can be viewed here.
Celebratory events were held onboard Royal Caribbean International’s Spectrum of the Seas as she called at Port Klang in Kuala Lumpur on August 5 and Penang’s Swettenham Pier Cruise Terminal on August 6 – all to mark the revival of cruise tourism for Malaysia after a two-year break due to Covid-related travel restrictions.
The event in Penang included a ship tour for industry leaders, such as the Penang State Exco for Tourism and Creative Economy, chairman of Penang Port Commission, general manager of Penang Port Commission, chairman of Penang Port, and CEO of Penang Port.
Celebratory events were held at Penang’s Swettenham Pier Cruise Terminal to mark the revival of cruise tourism for Malaysia
Over in Kuala Lumpur’s Port Klang Cruise Terminal (PKCT), the Cruise Day Fiesta was launched as a new attraction for passengers. The festival, conducted in conjunction with Tourism Selangor, features local cuisine and handicraft
Commenting on the momentous occasion of Spectrum’s return to ports-of-call cruising within the region, Angie Stephen, vice president and managing director, Asia-Pacific, Royal Caribbean International, said: “It is truly a privilege to share the majesty of the ocean and the vibrancy of our destination communities with our guests. To that end we are committed to pilot and develop new technologies and practices to protect region’s local waters, preserve the health and heritage of the local communities we visit, and continue to deliver the best vacations at sea, responsibly and sustainably.”
Vietnamese carrier, Bamboo Airways launched its first overseas operation on August 7 with the debut of Hanoi–Siem Reap services, marking a crucial step in the airline’s roadmap of expanding international network and towards traffic recovery.
The new service, operated on the Embraer-190 aircraft, will be conducive to reconnecting travels between the two cities, strengthening travel options for passengers and boosting tourism growth.
Bamboo Airways had its first Hanoi–Siem Reap service on August 7
Thach Pierre Hoang, deputy chief commercial officer, Bamboo Airways, said: “We expect our new Vietnam–Cambodia route will fulfil its crucial role as (an) aviation bridge and make a substantial contribution to the development of both countries in all aspects such as tourism, economy, culture.”
Stephen King, chief commercial officer, Cambodia Airports, added: “We look forward to welcoming new routes between our two countries partnering with Bamboo Airways in the coming months.”
FWD Group Holdings has commenced a distribution partnership with Klook for a fully-integrated accident cover insurance that will be available via the latter’s app and website.
Through the partnership, FWD Group will help customers in Singapore obtain protection by offering short term accident cover. Subject to regulatory approvals, the protection plan will subsequently be available in other countries across South-east Asia.
Klook and FWD will help customers in Singapore obtain protection by offering short term accident cover
The protection plan will be an add-on when purchasing through Klook’s platform and is designed to cover the insured for the duration of the activity.
Terence Lim, FWD Group chief officer, group new business models, said: “FWD is responding to meet and support the needs of customers with accident cover insurance that is more accessible, simple and affordable, encouraging them to protect themselves while doing what they love.”
C S Soong, vice president, corporate development, Klook, added: “In this new travel environment, customers are demanding increased assurances and insurance has been a natural progression to that.”
The Lux Collective and Jumbo Group in China have signed a hotel management agreement to build the first Lux* urban resort in Guangzhou, Lux* Guangzhou, slated to open in June 2024.
This marks The Lux Collective’s first foray into one of the top three first-tier cities in China and will boost its brand presence in a highly important strategic source market.
The first Lux* urban resort in Guangzhou, Lux* Guangzhou, is slated to open in June 2024
Located in Huangpu District, Guangzhou City, Lux* Guangzhou will be in a complex comprising a 109-room hotel which includes 36 residences, an art gallery and a modern office building. The hotel will feature a banquet hall, restaurants, spa, fitness centre, an interconnecting indoor and outdoor pool, children’s playground and more.
Lux* Guangzhou will be the first Lux* hotel in Guangzhou City, and the third Lux* hotel in Guangdong Province to be managed by The Lux Collective, following two Lux* properties in Zhuhai – Lux* Hengqin and Lux* Doumen.
“Our strategic entry in Guangzhou reinforces our presence in the Pearl River Delta Economic Zone and Guangdong-Hong Kong-Macao Greater Bay Area. We are confident that this partnership will elevate our flagship luxury brand Lux* as we continue to expand and shine in China,” said Paul Jones, CEO, The Lux Collective.
The new Consumer Travel Spend Priorities study, published by Amadeus, indicates a strong desire among respondents to travel despite the economic uncertainty, with ‘international travel’ ranked as the highest priority from a selection of six discretionary spend categories.
The study, which involved 4,500 consumers from France, Germany, Singapore, the UK and the US, aims to understand consumer’s expected spending habits for the year ahead.
The study by Amadeus shows that international travel is a high priority spend for respondents in the coming year (Photo: Amadeus)
Forty-two per cent of respondents said international travel is a high priority spend area for the coming year, far higher than fashion, eating out and big-ticket items like home improvements.
On average, consumers estimate they will spend US$2,670 on international travel over the next 12 months, broadly in line with how much they spent in 2019 (US$2,780 average).
Many travellers plan to spread the cost across instalments, reducing exposure to costly Foreign Exchange (FX) transactions and by dipping into loyalty points previously collected.
David Doctor, executive vice president, payments, Amadeus, said: “This research clearly shows consumers are prepared to forego spending in other areas of their lives to accommodate travel this year. But that’s not the end of the story. The industry will need to look for ways that fintech can make travel costs more transparent as well as help travellers manage their spend.”
Faced with economic uncertainty, travellers are adopting fintech to reduce the expense of paying internationally and to flexibly fund their trips.
Three quarters of respondents (75%) said they are more likely to choose a pay-by-instalment option like Buy Now Pay Later to fund travel over the coming year. This compared to 44% who are more likely to use a credit card, and 26% who are more likely to turn to ‘payday loans’, where short-term borrowing typically incurs high interest rates. 47% of travellers said they are planning to spend previously-earned loyalty points to pay for trips.
Travellers are also embracing new fintech options with 48% more likely to try pre-paid debit cards that hold multiple currencies to avoid FX fees when paying abroad, and 49% saying they are now interested in co-branded cards that yield loyalty points.
In the current environment, 73% of travellers say they are more likely to pay attention to FX fees and costs associated with international travel and 56% are more likely to choose a travel provider that lets them pay in their own currency, with transparent FX fees.
Doctor added: “The demand for flexible payment options like Buy Now Pay Later in travel is extraordinarily high. The industry is eager to meet this demand, but it should do so responsibly, with thorough risk management in place. Savvy travellers are adapting to limit costs involved in travel. We see in our own data that more travellers are choosing to pay in their local currency across the airlines using our FX Box technology.”
What are your thoughts on the crisis Sri Lanka is in today?
