Asia hotels’ battle of price and value
- Price competition intensifies across hotel categories
- Travellers emerge winners as hotel rates plummet to win business
- Hoteliers divided on whether budget or mid/upper-scale hotels will benefit most from heightened price sensitivity
Competition among hotels to fill their rooms has intensified over the past year, with rates being slashed as much as 70 per cent to win over an increasingly price- and value-conscious traveller.
According to a recent GlobalData study, price/value is the top consideration for 48 per cent of Asia-Pacific respondents when it comes to hotel accommodation selection. Health/hygiene takes second spot, with only 14 per cent of respondents voting it as their top consideration.
The results do not differ much worldwide. Forty-seven per cent of respondents across the world opted price and value as their number one consideration, while 15 per cent said quality mattered most. Health and hygiene considerations were important for 11 per cent of respondents.
The consumer study, conducted in 1Q2021, showed that travellers are now more price-sensitive than before the pandemic, with 87 per cent of them expressing concerns about their personal financial position during the pandemic.
With only two per cent of global travellers and three per cent in Asia-Pacific regarding hotel prestige and status as the most influential factor in hotel accommodation selection, GlobalData’s associate travel and tourism analyst, Gus Gardner, said budget hotel options would emerge winners as travel and tourism resumes.
Gardner said: “The pandemic has placed a considerable strain on travellers’ finances. Despite this, travel demand is still high, and many are looking to escape in desperate need for a change of scenery. Travellers are more likely to trade extras offered at mid- to upper-scale hotels for a more basic ‘pay for what you need’ service standard.”
EL Khomri, executive vice president and COO of The Erawan Group, also believes that budget hotels would see the earliest return to pre-pandemic business level, as they are a better fit for post-pandemic price-sensitive leisure and business domestic travellers.
Although many upscale hotels have invested in growing customer loyalty during the pandemic’s travel downturn, Gardner said changes in traveller sentiment could put a damper on the success of such activities.
“The financial squeeze from the pandemic will likely push travellers to budget travel options, forgoing loyalty benefits in the process,” Gardner commented.
Hotels’ battle royal
However, with the ongoing price war cutting across all hotel categories, as mid- and upper-scale hotels dig into lower-spending markets to make up for the lack of international guests, budget hotels could be at the losing end when travellers can now get more for less.
Trip.com’s Weekend Super Deals weekly online sale for the Singapore market, which kicked off in March, features mostly mid-scale to high-end hotels and dangles a variety of lures – from exclusive hotel discounts of up to 40 per cent, one-for-one hotel deals, and added perks such as late checkouts. The company also organises weekend campaigns in other Asian markets such as Hong Kong and South Korea, with different curated offers for each.
In its Mendadak OTW online travel sale in April this year, Indonesia-based OTA Tiket.com dished out special hotel rates that were up to 70 per cent below normal price. The move expanded hotel bookings by 131 per cent.
Sudarsana, general manager business development and marketing communications, Santika Indonesia Hotels and Resorts, said the company was able to shave 50 per cent off the rates of its three-star Santika and four-star Santika Premiere branded properties during online flash sales. By offerings budget-hotel prices for stays that promise mid-scale hotel facilities, price-conscious Indonesians have driven up demand for Santika’s mid-scale properties.
Artotel Group has also lowered its rates, but only as low as they “made sense and were reasonable”, shared COO Eduard Pangkarego. The hotel company runs a five-hour flash sale every Friday, with room rate discounts of up to 50 per cent.
“We will not prostitute our rates,” he asserted, but recognised that the competition among Indonesia hotels is now a fierce battle – and one where budget hotels would find it hard to triumph over generous mid-scale and upscale rivals.
It’s not just about the price tag
While hotel rates have dived, Asian hoteliers agree that price alone will no longer score them the next guest, as perceived stay value is now more important in the hotel accommodation selection process.
A Trip.com spokesperson told TTG Asia: “While price, location, hotel rooms and view from the room used to be the key considerations for most users previously, we noticed that users are now placing more emphasis on the value of their booking and overall experience of their stay. Price is no longer the only or main consideration for users.”
To ensure that promotions speak to the heart of today’s travellers, Trip.com collaborates with different hotels to curate packages for different types of travellers and which carry value-added perks, such as late check outs, free room upgrades, free club access, and dining credits.
According to Wutthiphon Taworntawat, managing director of UHG, which operates 11 mid-scale hotels in Bangkok, Thailand, the post-pandemic traveller is “picky” and will prioritise hotel location, in-hotel F&B options and other facilities, additional services such as early check-in and late check-out, guest safety, high-speed Internet connection as well as hotel image.
“Travellers may not bargain for the lowest price but they may demand something else that answers their needs. That is another aspect of price sensitivity,” Wutthiphon said.
Improvements in online travel retail have made it easier for travellers to compare room rates and value-adds, noted Wutthiphon, who added that hoteliers must therefore “accept the change and adapt” by offering more than just an attractive price tag to impress customers.
Competing beyond price is also critical for the long-term business viability of hotels.
Vincent Delsol, general manager at Pullman Phuket Panwa Beach Resort, acknowledged that it is a challenge for hotels to continue running with the low room rates witnessed over the past year while dealing with the same – or higher – operating costs today.
Delsol opined that hotels will need to cater to travellers’ desire for travel products and experiences that provide “meaning and authenticity” instead of those that are “generic and undifferentiated”.
Hotels, especially in the luxury and premium sector, would need to “reset their services”, move away from a rate focus, and “invent meaningful experiences”, according to Delsol. – Additional reporting by Kurniawan Ulung and Suchat Sritama
NCL sets sail again in Hong Kong from 2022
Norwegian Cruise Line (NCL) will restart cruises from Hong Kong in 2022, with a collection of itineraries aboard Norwegian Sun.
The 2,000-guest ship features elegant design, alongside bright and open spaces, following a recent bow-to-stern refurbishment.
For Lunar New Year 2022, NCL has curated a five-day Japan Round Trip Cruise from Hong Kong to Japan. Guests can explore the scenic island of Naha, including the limestone caves of Ryukyu village, and indulge in traditional Okinawan flavours that blend Chinese and South-east Asian influences during an extended overnight stay.
The 11-day Asia Cruise will journey to three South-east Asian destinations. The voyage will begin in Bangkok, where guests will weave through golden temples before embarking on a river boat journey down the Chao Phrya, past the Royal Palace and floating markets. The journey continues in Singapore where guests can experience the country’s melting pot of cuisine, innovative architecture as well as colonial history.
Over in Vietnam, highlights include an exploration of the unique cultures of Ho Chi Minh City, Nha Trang, Da Nang and Hanoi – from iconic local street food and rickshaw rides to the natural beauty of untouched beaches and wild jungles, before finally disembarking in Hong Kong.
For an in-depth adventure, NCL’s 16-day Transpacific sailing from Tokyo to Seattle promises an experience like no other, starting with the bright lights and city life of Tokyo, to the unique town of Petropavlovsk in Russia, then across the International Date Line to multiple ports of Alaska before arriving in Seattle, Washington.
In preparation for its long-awaited global return to service in July, NCL has put in place rigorous Sail Safe protocols to safeguard the health and safety of guests, crew and the communities it visits.
NCL said in a press release that it has spent the past year further developing and refining those protocols, using the latest scientific findings and expert advice.
NCL’s Sail Safe Health and Safety programme is founded on three pillars: safety for guests and crew with vaccination requirements for all cruises departing through October 31, 2021, universal Covid-19 testing and enhanced health screening protocols; safety aboard with medical-grade air filtration, increased sanitation measures and enhanced medical resources – including a dedicated public health officer on each ship; and safety ashore through the collaboration with land-based tour operator partners to extend health and safety measures to each destination.
Resorts World debuts on Las Vegas Strip
Resorts World Las Vegas, the first resort built on the Las Vegas Strip in more than a decade, has officially swung open its doors to the public.
Through a partnership with Hilton, the integrated luxury resort offers 3,500 luxury guestrooms and suites from three Hilton brands, namely, Conrad Hotels & Resorts, LXR Hotels & Resorts, and Hilton Hotels & Resorts.
Las Vegas Hilton at Resorts World features 1,774 full-service guestrooms and suites with smart, elevated amenities; while Conrad Las Vegas at Resorts World offers 1,496 contemporary and luxury guestrooms and suites, boasting luxe amenities and a curated art programme.
Meanwhile, Crockfords Las Vegas, LXR Hotels & Resorts showcases a collection of 236 guestrooms, suites and villas featuring lavish accommodations, upscale amenities, and highly personalised service.
With over 10,800m² of gaming space including 1,400 slots, 117 table games, a dedicated poker room and 30 poker tables, high-limit areas, and a sportsbook, the on-site casino will redefine the traditional gaming experience by introducing cashless wagering, RFID bet tracking, and ticket-in-ticket-out (TITO) at the table.
Through the Resorts World Las Vegas mobile app, guests can pay for gaming, entertainment or hotel offerings, as well as check their Genting Rewards account balances, and receive offers and rewards.
More than 40 F&B options are on offer, ranging from fine-dining and quick-service venues to original and exclusive concepts like Kusa Nori, Genting Palace, Sun’s Out Buns Out, Famous Foods Street Eats, Wally’s Wine & Spirits, and Craig’s Vegan.
The resort’s 5,000-capacity concert and entertainment venue has been outfitted to host a myriad of affairs, from star-studded concerts to convention, corporate and sporting events. The joint development between Resorts World Las Vegas and AEG Presents will be exclusively programmed and operated by Concerts West with exclusive engagements by Celine Dion, Carrie Underwood, Katy Perry, and Luke Bryan beginning this November.
In partnership with Zouk Group, Singapore’s leading lifestyle and entertainment company, the resort features a multiplicity of experiences in one entertainment complex, including Zouk Nightclub and Ayu Dayclub featuring performances by resident DJs Tiësto and Zedd.
With approximately 6,500m² of dedicated retail space named The District, the resort is home to two levels of luxury and lifestyle brands, including Fred Segal, Judith Leiber, Hervé Léger, and Pepper.
Additional amenities include more than 23,000m² of flexible meeting and banquet space complete with 50 multifunctional meeting rooms, as well as a 2.2ha pool complex featuring five pool experiences, including an infinity-edge pool. The resort will also debut a 2,500m² spa experience later this summer.
Adara data points to strong travel intentions to APAC destinations
While intent to travel to destinations in Asia-Pacific remains strong, that pent-up demand has not translated into bookings as new Covid-19 variants and a resurgence of local community cases hamper reopening plans, according to recent data by Adara.
The report, which tracked search volumes over a 30-day period from May 24 to June 22, found that there is still a strong intent to travel to Asia-Pacific destinations such as Bali, Hong Kong and Australia.
As previously forecasted, the domestic travel market is slowly but surely gaining traction ahead of international routes among countries such as Indonesia and Australia, with growing interest in searches.
Indonesia has the highest pick-up in searches for domestic travel in the region, and Canadian-based travellers, in particular, have shown the most interest in travelling to Indonesia.
Domestic travel in Indonesia has increased, and international routes in Bali have shown strong signs of growth in demand, with volume of searches and bookings having risen by 18.8 per cent and 27.4 per cent respectively.
However, the number of international and domestic trips taken by Indonesian travellers in 2021 has decreased by 86 per cent and 60 per cent respectively compared to 2019 figures.
Canadian-based travellers, in particular, have shown a strong increase with market share of international travel to Indonesia by 178 per cent.
Hong Kong is still attracting stable interest, but is still seeing a marginal decrease in terms of searches and bookings, with volume of searches marginally down by 1.9 per cent and bookings by 2.6 per cent compared to the previous period. Overall booking demand is still 89 per cent lower than 2019.
However, there is still an interest in search demand to Hong Kong from Canada (+52.7 per cent), France (+21 per cent), the UK (+15.3 per cent), the US (+14.5 per cent), Taiwan (+7.2 per cent) and India (+6.4 per cent).
Interest in international travel to Australia has picked up, but has not fully translated from searches into bookings. Increase in market share searches were largely from Canada (+43.8 per cent), South Africa (+19.12 per cent) and New Zealand (+2.8 per cent).
As for countries in Asia, Adara saw notable increase in search demand to Australia from Taiwan (+154.88 per cent), Japan (+86.1 per cent) and Malaysia (66.6 per cent).
Overall searches and bookings for travel to Australia went down 3.6 per cent and 5.2 per cent respectively compared to 2019 volumes.
Sri Lanka’s hoteliers plead for financial aid to save sector from collapse
Sri Lanka’s hotel operators, whose businesses have been left crippled by the Covid-19 pandemic, will seek financial relief during a crucial meeting with representatives from the country’s main Central Bank on Tuesday (June 29).
“We are hoping for some relief from the Central Bank and the government to stay afloat as our financial obligations have gone beyond crisis levels,” said Sanath Ukwatte, president of The Hotels Association of Sri Lanka.
Among the proposed financial assistance to be discussed at Tuesday’s meeting is a three-year waiver of interest on loans; extension of the loan moratorium which ends in September; and a wage support scheme for hotel staff.
“We don’t have cash flows but we have to pay salaries and maintain the infrastructure,” Ukwatte said.
Despite inbound travel demand for Sri Lanka, the industry is not confident of the forthcoming winter season because the country is on the “red list” of destinations. Under the new traffic lights system for destinations, green countries allow for quarantine-free travel, amber countries require quarantine on return, while red-list destinations are no-go areas.
Ukwatte, who is also chairman of the Mount Lavinia Hotel, a 210-year-old colonial heritage hotel, said the government needs to protect the struggling tourism industry which has three million dependents out of Sri Lanka’s 21 million population. “The tourism footprint in the economy is greater than any other sector, and for this reason, the government needs to protect it before it collapses,” he said.
Since Sri Lanka reopened her borders to foreign holidaymakers on January 21, 2021 – with a temporary 10-day shutdown in May – tourist arrivals to the country have been low, with just 18,000 arrivals from January to mid-June 2021, according to official figures.
Currently, there are 116 ‘safe and certified’ hotels for tourists, while another 20 hotels have been transformed into intermediate care centres for local, suspected Covid-19 patients and a further 48 hotels into quarantine centres for Sri Lankans returning from abroad.
To supplement their income, most hotels in the capital Colombo are offering food deliveries using ride-hailing apps like Uber Food.
One such hotel is Jetwing Symphony Hotels. Chairman Hiran Cooray, however, said that while offering meal deliveries “keep staff occupied and kitchens clean”, the revenue derived from it is insufficient to cover wages.
He added that Sri Lanka’s tourism will only return to its former pre-pandemic glory if the country vaccinates 60 per cent of its population.
M. Shanthikumar, director at the Ramada Colombo, agreed that the food takeaway business is only to keep hotel staff occupied, but not enough to pay salaries and operational bills. He said restaurants and bars in hotel premises remain closed, as per existing health guidelines, and thus, a major component of their revenue is gone.
As of Saturday (June 27), Sri Lanka reported 251,751 Covid-19 cases and 2,905 deaths.
Malaysia extends MCO 3.0 for second time
Malaysia has extended its nationwide lockdown, dubbed movement control order (MCO) 3.0, for the second time to stem the spread of Covid-19.
MCO 3.0 was supposed to end on Monday (June 28).
Prime minister Muhyiddin Yassin said that the government will maintain phase one of the nationwide lockdown until the following three main threshold indicators have been met: The number of new daily Covid-19 cases dip below 4,000, the public health system returns to moderate levels, and 10 per cent of the population has been fully vaccinated.
On Saturday, Malaysia recorded 5,586 new cases and 60 deaths.
Meanwhile, the country’s vaccination programme is in full swing, with more than 7.2 million doses of vaccines having been administered nationwide. Of this, over 5.2 million have received their first dose, while the remaining have received both doses.
Earlier this month, the prime minister had announced the country’s national recovery plan, which is a four-phased exit strategy from the Covid-19 pandemic.
To transition to phase three, the number of new daily infections would have to drop below 2,000, the healthcare system would have to be at a comfortable level with enough beds available in ICUs, and about 40 per cent of the population should have received two doses of the vaccine.
In the final phase four, expected to take place in 4Q2021, the number of new daily infections should stand at less than 500 and 60 per cent of the population would have to be fully vaccinated. In this phase, all economic sectors will be allowed to operate including domestic travel, but under strict SOPs.
Uzaidi Udanis, president, Malaysian Inbound Tourism Association (MITA), stressed on the need to speed up the nationwide vaccination programme to achieve herd immunity quickly and for life to return to normalcy.
“Meanwhile, agents will have to find ways to ‘survive’ until domestic tourism is allowed to recommence,” he said.
On its part, MITA is encouraging members to sell non-travel products to their existing clients. To support struggling agents, the association recently organised a virtual tourism bazaar, which saw the participation of nineteen vendors and generated about RM3,000 (US$723) in sales.
MITA hopes to organise more of such events in future, according to Uzaidi. He said: “We realised that many vendors were selling products that were easily available on other e-commerce sites and in retail outlets. Therefore, their profit margin was small.
“We are looking at approaching the Malaysia International Digital Entrepreneurship Centre to see how we can connect (our agent members) with Malaysian suppliers and help them to market their products to a wider audience.”
Uzaidi added that the association members are also exploring how they can market local products to neighbouring countries such as Indonesia, Singapore, Thailand and even China.
Longer trips look set to boom post-Covid
The pandemic has triggered greater demand for lengthier holidays of more than ten nights, according to a poll by GlobalData.
The data and analytics company noted that, with accidental savers on the rise and working from home making longer trips a possibility, extended vacations look set to boom post-pandemic.
A live GlobalData poll of 602 respondents revealed that over one in four (26 per cent) of respondents now prefer to take a leisure trip of ten-plus nights – the second-most popular length of trip behind stays of between four and six nights (28 per cent).
Gus Gardner, associate travel and tourism analyst at GlobalData, commented: “Many travellers are desperate to escape their lockdown locations and need a change of scenery. A lengthier trip gives the optimal amount of time to switch off and reset, which is likely to be driving the increase in demand.
“Furthermore, GlobalData analysis showed that in 2019, the average trip length was 4.45 days for domestic and 9.22 days for international trips, revealing demand for longer stays has risen considerably since the pandemic began.”
GlobalData noted that while some consumers have experienced a strain on their finances, others have become accidental savers due to less opportunity for recreational spending and reduced expenditure on commuting. These inflated funds may have contributed to the increased desire for longer stays, it added.
Gardner continued: “Travellers who have seen a considerable increase in savings are more likely to splash out on longer stays. Adding an additional night onto a trip generally results in the average cost per night decreasing, meaning the increased cost of a longer stay is minimal. Therefore, those with higher travel budgets will easily be swayed by the prospect of a longer holiday. The pandemic has fuelled the desire to travel and make up for lost time – longer stays are a great way to do this.”
The rise of remote working, which could potentially change the way people travel, has also added to the appeal of an extended holiday.
Gardner added: “The pandemic has accelerated the work from home model, and the tourism industry could benefit. Those that are working from home, especially independent remote workers on a higher salary, no longer require a fixed location and only need somewhere quiet with internet. This new working model, which seems set to stay for some time, could further increase the desire to blend a traditional holiday with a ‘workcation’.
“For those seeking a different location, they may look to book a longer holiday, utilising some annual leave, whilst working remotely for the remaining days to maximise trip length. This new type of traveller could benefit accommodation sharing providers who can offer a home away from home.”
TAT launches Hug Thais project to revitalise battered tourism industry
The Tourism Authority of Thailand (TAT) has partnered with the Thai Chamber of Commerce (TCC) to launch the Hug Thais project aimed at stimulating Thai and foreign tourists’ spending to revive the economy.
Phiphat Ratchakitprakarn, minister of tourism and sports, said, “The Hug Thais project is the latest public-private sector initiative of TAT, the Thai government, and partners like the TCC to reinvigorate Thailand’s tourism industry and the wider national economy. Such cooperation is vital as Thailand progresses towards once again enjoying its status as a preferred tourist destination.”
The word “hug” in local northern Thai dialect means “love”, and was chosen to drive the campaign’s key elements – Eat More, Travel More and Shop More – across “in a warm and friendly manner”, according to a TAT press release.
Yuthasak Supasorn, TAT governor, said the tourism board will provide the marketing and publicity support to stimulate travel and tourism expenditure by encouraging both Thai and foreign tourists to ‘Eat More’ local food, ‘Travel More’ within Thailand, and ‘Shop More’ for products of Thailand at shops and outlets with the Hug Thais logo.
The Hug Thais project will be launched with the pilot Hug Thais Hug Phuket programme next month, to coincide with the much-awaited July 1 reopening of Phuket to tourism under the Sandbox model. This will see the island welcoming vaccinated foreign tourists without quarantine requirements, and is expected to be followed by the reopening of other destinations in the coming months.
Eventually, the Hug Thais project will also be rolled out in other destinations across Thailand.
Yuthasak said: “The Hug Thais Hug Phuket project is aimed at revitalising Phuket’s tourism and service industry and in doing so, leading the way for the similar revitalisation of other destinations around Thailand.”
Among the Hug Thais Hug Phuket initiatives on offer to Thai and foreign tourists will be discounts of up to 10 per cent when they spend 1,000 baht (US$31) or more in the retail sector, and 100 baht cash coupons for use on their next visits at participating shops and outlets.
Sanan Angubolkul, TCC chairman, said the agency will encourage hotels, airlines, transportation operators, restaurants, shopping centres and all tourism players to take part in the Hug Thais project, while providing support on marketing and trade activities, particularly for SMEs.
The Hug Thais project is expected to generate over 100 billion baht to the Thai economy within the next six months.
Dubai Airport unveils in-house Covid-19 testing lab
One of the world’s largest in-house airport labs for the processing of Covid-19 PCR tests has opened at Dubai International Airport (DXB).
The development is part of the country’s efforts to further enhance safe international travel, while accelerating the recovery of the travel sector, Dubai Airports said in a press release.
The result of a collaboration between Dubai Airports, the Dubai Health Authority and Pure Health, the laboratory was inaugurated by His Highness Sheikh Mansour Bin Mohammed Bin Rashid Al Maktoum and His Highness Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Dubai Airports.
Located close to Terminal 2, the over 1,800m² laboratory is a dedicated facility for round-the-clock processing of RT-PCR test samples collected from passengers at DXB. Using latest WHO-standard Covid-19 RT-PCR testing equipment, the lab can process up to 100,000 samples per day and provide reliable results within a few hours.
The lab is equipped with negative and positive pressure rooms and is linked to government reporting platforms, ensuring secure and easy sharing of information between health and regulatory authorities and airlines.
The opening of the lab comes as DXB’s Terminal 1 and Concourse D resumed operations on June 24, following 15 months of suspension due to the Covid-19 pandemic.
IHG Hotels & Resorts has signed a management agreement with UAE-based developer ASRE Limited to introduce its premium brand voco into Dubai’s Palm Jumeirah.
Scheduled to open its doors in December 2021, voco Dubai Palm Jumeirah will feature 141 rooms, four dining options, a gym, pool, spa, and a 55m² meeting room.
voco Dubai Palm Jumeirah will be part of a newly launched area dubbed Palm West Beach, which also comprise of dining concepts and a promenade along the beach.
The new hotel joins the voco family in Dubai, with voco Dubai on Sheikh Zayed Road and the soon-to-open voco Bonnington Jumeirah Lakes Towers Dubai. In the Middle East and Africa region, voco has a portfolio of four operating hotels and five in the pipeline.