Phuket tourism outlook darkens amid policy flip-flop
Thailand’s leading resort island Phuket is facing up to the reality that its tourism high season will not see a marked reopening to overseas travellers, following the dismantling of the Phuket Model and refocus by the government on using Bangkok as a single international gateway.
The key tourism indicator for the island is airlift and Phuket International Airport is the gateway for 70-80 per cent of visitors to the destination. According to Airports of Thailand data, 121,530 passengers arrived in the month of September. This equates to just over 4,000 arrivals a day, including local residents and business people. Comparing year-on-year data, 2019’s daily arrivals which included international travellers was five times higher.
C9 Hotelworks managing director Bill Barnett said that “there is a dramatic change in the market mix where the current domestic-led average length of stay for hotels is approximately 1.8 days, while for foreign travellers, it’s more than double this amount. What this means for hotels is severely reduced overall demand across the island’s entire accommodation sector”.
Looking forward to the high season when the numbers spike upwards in the four months of December through March, the high season months last year equated to more than one-third of annual demand. Total domestic and international arrivals at the airport totalled just over 9 million in 2019.
Adding in high season shoulder months into the equation, the stark economic impact of Phuket’s economic seasonality is reflected in the fact that well over half of the island’s tourism arrivals are packed into a six-month period.
Now, nearly two months into that timeframe, what is apparent is it’s virtually impossible to save the high season and hotel owners in 2021 will be forced to contend with historically the lowest trading months of the year by May. Given these grim prospects, C9 Hotelworks is predicting large-scale job losses and business closures, given there is no light at the end of the pandemic-induced tunnel.
“Taking a 360-degree view on the restricted domestic-only demand, you have to take into account that Phuket’s current registered accommodation supply has continued to surge to its present size of 90,267 rooms in 1,773 hotels/tourism establishments,” added Barnett. “Of this supply, upper midscale, upscale, and luxury properties of international standards are approximately 25 per cent of the total rooms.”
Data from STR has Phuket occupancy averaging 10 per cent, with upward spikes on weekends at international standard hotels. Looking into the number though, the reality is domestic travellers are cashing in on cheap deals at upscale and luxury hotels.
Given limited visitor arrivals, the far larger mid and economy tiers where most of the hotel inventory sits, are experiencing even lower occupancy. This domino effect is expected to prevail unabated throughout a sustained downturn and effectively crushes the smaller properties and local tourism businesses.
As Thailand’s government policy has maintained Bangkok as the sole entry point for a limited number of travellers from overseas under the Alternative State Quarantine (ASQ) programme, a number of hotels in all tiers are operating under the scheme. Hotel performance data for Bangkok from STR is reflecting occupancy just above 25 per cent for international standard hotels, though again, in the broader marketplace, demand is at considerably lower levels.
In Phuket, many hotels pinned high-season hope on the now-aborted Phuket Model to allow Special Tourist Visas aimed at long-staying visitors, given the island’s legacy winter ‘snowbird’ market from Northern Europe and Russia.
Putting the ASQ programme at the head of the reopening tourism initiative, 17 Phuket hotels have been approved and 21 applications are under process. Properties who have undertaken both the expense and time in qualifying for the status have been shut out, given the government’s about-face policy of centralising all overseas arrivals into Bangkok.
What is unclear is the logic in policy flip flop on negating the island’s essential tourism lifeline. Using smaller contained resort-focused islands would appear a logical risk mitigation strategy that was echoed in all of the hype over the Phuket Model but after the dust has settled, it ultimately failed to launch.
The time has come that Thailand must gain confidence from international benchmarks, such as the tourism-dependent Maldives. According to data from the nation’s Ministry of Tourism, in October, the destination recorded 21,514 tourist arrivals. This trend is again on the rise in November and looking back, the country has safely managed the reopening of its borders since mid-July. Meanwhile, Singapore is set to start its air travel bubble with Hong Kong from November 22.
Putting Phuket’s economy debacle into perspective, Barnett said “losing this high-season will further intensify the catastrophic impact on the island’s business owners and the livelihoods of the vast majority of residents. Given the sheer size of the hotel inventory, it cannot survive only on domestic visitors, cheaper airfares, or by adding more public holidays. For Phuket, this high season, faced with the prevailing arithmetic, the island can only wait and wonder what comes next.”
Singapore, Hong Kong to start air travel bubble on Nov 22
The inaugural air travel bubble (ATB) flight between Singapore and Hong Kong will kick off on November 22, allowing for leisure travel between the two places without the need for quarantine.
This marks the world’s first air travel bubble arrangement, after the pandemic forced the implementation of border restrictions globally.
Under the ATB, travellers between Singapore and Hong Kong will be subject to Covid-19 tests, in lieu of quarantine or stay-home notice. There will be no restrictions on the purpose of travel and no requirement for a controlled itinerary or sponsorship.
As a start, there will be one flight a day into each city, capped at 200 travellers per flight. This will be increased to two flights a day into each city from December 7. Travellers from both cities must travel on designated flights on Singapore Airlines (SIA) and Cathay Pacific.
If the Covid-19 situation deteriorates in either city, the travel bubble arrangements will be suspended, the Civil Aviation Authority of Singapore said in a statement on Wednesday.
Travellers must also meet the eligibility criteria and adhere to the prevailing border control measures and public health requirements of both cities, it added. More information is available here.
Transport minister Ong Ye Kung said: “The Singapore-Hong Kong Air Travel Bubble enables us to achieve two objectives at the same time – open up our borders in a controlled manner, while maintaining safety in our societies. While we may be starting small, this is an important step forward… It will be a useful reference for other countries and regions that have controlled the epidemic, and are contemplating opening their borders.”
The inaugural ATB flight from Singapore, SQ890, will depart on 22 November; while the inaugural ATB flight from Hong Kong, SQ891, will depart on 23 November, according to an SIA press release.
Customers who have existing bookings but do not meet the ATB requirements, or are travellers transiting through Singapore or Hong Kong and therefore not eligible for ATB flights, will have the option to be reaccommodated on SIA’s low-cost subsidiary Scoot instead.
However, passengers travelling on Scoot’s non-ATB flights must meet the entry requirements for Singapore or Hong Kong, and will have to serve either a stay-home notice or a quarantine.
All travellers are required to take a Covid-19 swab test 72 hours before the scheduled departure time of their designated ATB flight and obtain a negative test result. Upon arrival in Hong Kong, travellers from Singapore are required to take a second Covid-19 test, and must remain in the airport until their results are out. Travellers from Hong Kong arriving in Singapore are not subjected to another round of testing.
Conrad Clifford, IATA’s regional vice president for Asia Pacific, welcomed the impending start of the Hong Kong-Singapore ATB.
He said: “International air travel in Asia-Pacific is practically non-existent. Our latest figures for September show passenger demand at about 95 per cent below the same period last year. The Hong Kong-Singapore air travel bubble, though starting small, is a step in the right direction to reboot international travel in the region. We look forward to seeing Hong Kong and Singapore expand this arrangement with other destinations, and for other governments to adopt a similar approach.
“What is significant is that quarantine measures have been lifted for any travel between Hong Kong and Singapore, and is not limited to just business or essential travel. Replacing quarantine measures with Covid-19 testing will help in reopening borders, restore connectivity that jobs and the economy depend on, and give passengers confidence to travel.
“Standards and technological solutions will also be needed to facilitate the management, communication and verification of test results by the multiple stakeholders involved in the travel process. This is something we are working on with the parties in Hong Kong and Singapore.”
Technology a useful aid for travel reboot
The use of contact tracing tools, GPS and Bluetooth, mobile phone applications, artificial intelligence, digital thermometers and wearable technology by governments have helped to restore confidence in people to resume some form of normal life even in the absence of a Covid-19 vaccine.
However, their application is not without obstacles, from privacy woes to information overload when multiple programmes are utilised.
In the sixth and final article by TTG Asia Media for the PATA Crisis Resource Center, TTG Asia’s Marissa Carruthers looks at the technologies and solutions available to support governments in their contact tracking and health tracking efforts, and finds out from specialised developers as well as travel and tourism industry leaders what an ideal solution would be to grant the public a reliable license to travel once more.
License to Travel is now available on the PATA Crisis Resource Center website.
Subscription model for hotels stokes curiosity
A subscription model for hotels where customers pay a monthly fee to utilise rooms and facilities has been met with much curiosity but also limited interest among Asian hoteliers TTG Asia spoke to.
The business potential of the model was earlier discussed during a HICAP conference panel on October 23, where Pan Pacific Hotels Group’s (PPHG) CEO Choe Peng Sum expressed support for it.
Choe said the model would supplement the group’s existing loyalty programmes, and would be a natural evolution of loyalty building with a growing emphasis on communities.
He opined that customers now seek greater flexibility, value savings and instant rewards – needs that the subscription model could satisfy instantly, compared to the delayed gratification offered by loyalty redemption programmes.
But for the model to work, a “mindset shift” is needed.
“Hotel stays are perishables – pay as you stay. The idea of pay now stay later through a paid membership is a foreign concept. It is a new wave for the hospitality sector, catering to a new generation of travellers, which players must recognise and come on board to,” he said, citing Inspirato as an example of a hospitality company that has launched a subscription-based service in 2019, offering its subscribers access to over 60,000 vacation homes, hotels and resorts around the world.
Choe told TTG Asia that the model could work for PPHG, which has “a plethora of high quality restaurants and bars in our hotels globally”.
“There is a huge potential for us to build up a community through our portfolio of hotels, resorts, services suites and dining outlets. We are exploring different models,” he said, pointing to PPHG’s dining collection in Singapore as a best fit – “a low hanging fruit” – for the subscription model.
“With five hotels here, we have a collection of close to 20 restaurants and bars. A shrewd next step would be to build a strong community of food lovers and diners through a subscription model to our Pan Pacific Dining Collection. Other possibilities could stretch to subscription models for regional business travels for SMEs and hybrid meeting spaces,” he elaborated.
However, TTG Asia‘s conversations with other hoteliers in the region found less enthusiasm. Several hoteliers said the subscription model was still fairly new and unfamiliar.
A Hong Kong-based hotelier who requested anonymity, said it was not a concept the company has considered, or will likely consider in the immediate future.
Another hotel general manager in Hong Kong suggested that the subscription model could work better in Singapore, as the city-state has a strong presence of regional headquarters of multinational companies – a frequent-travelling segment that would find the concept beneficial.
However, he feared limited benefits for the hotel deploying the subscription model. “There is no flexibility. We’ll be in trouble if all our subscribers decide to come and stay on the same week of a month,” he said.
Instead of a subscription model, the general manager is pushing the sale of hotel coupons with face value, which companies can purchase and give away to staff as a form of performance bonus or reward.
Venessa Koo, COO of Taiwan headquartered Silks Hotel Group, also expressed uncertainty around the subscription model, saying that it will require a “very long-term commitment” to get off the ground.
She, too, is utilising a voucher system, which customers can buy in advance with discounts and use before expiry. This system is common in Taiwan, with Silks itself starting the voucher programme in 2011.
“Instead of collecting a monthly fee, it’s just one-off purchase,” Koo said, adding that this mitigates administrative problems that the subscription model could bring, such as resolution of unused rooms by the end of the month.
Koo said Silks is unlikely to adopt the model because “we need to make sure that we look after our guests’ interest and our own interest without making them feel that they are being scammed or taken advantage of”.
New GM takes the reins at Hilton Kota Kinabalu
Hilton Kota Kinabalu has appointed Andrew Nisbet as general manager.
In his new role, Nisbet will oversee the day-to-day operations and spearhead the growth and development of the property.
Boasting more than two decades of hospitality experience for the Hilton Hotels & Resorts brand, he previously served as the cluster general manager at Hilton Hanoi Opera and Hilton Garden Inn Hanoi since 2015.
In 2014, Nisbet was based at Hilton Melbourne on the Park (now Pullman Melbourne On the Park) as general manager. He has also held positions in the areas of F&B, conference & banqueting sales, operations and general management.
Prior to that, Nisbet fast-tracked from the role of director of operations to hotel manager and finally to general manager in 2012 when he led the team at Hilton Queenstown Resort & Spa and Kawarau Hotel.
New DOSM for Holiday Inn Singapore Atrium
Holiday Inn Singapore Atrium has appointed Shadab Amin as director of sales & marketing.
In his new role, Amin will manage all aspects of sales and marketing, including business development, customer relationship management, digital marketing, and brand and communication strategies.
Amin brings with him a decade of hospitality experience. He joined IHG in Manila and subsequently, moved to Crowne Plaza Muscat and Holiday Inn Resort Kandooma Maldives, before settling down in Singapore.
During his stint in Manila, Amin played a pivotal role in laying the foundation of IHG’s India global sales team, while at Muscat and Maldives, he held key sales positions that drove revenue targets.
After moving to Singapore in 2017, Amin joined Holiday Inn Singapore Atrium as a senior business development manager. During his three-year tenure in Singapore, he grew progressively to the position of director of sales.
Thailand crafts new scenic tourist routes
Thailand’s Department of Rural Roads, Ministry of Transport is developing three scenic tourist routes in the south, centre and north-east of the country that will enhance the destination’s tourism competitiveness and appeal.
The routes are the Southern Coastal Road or Thailand Riviera connecting destinations along the western coast of the Gulf of Thailand from Samut Prakan province to Narathiwat province; the Naga Withi route along the Mekong River from Loei Province to Ubon Ratchathani province; and the Burapha Khiri route passing through Nakhon Nayok, Nakhon Ratchasima, Prachin Buri and Sa Kaeo provinces.
Promising a safe, comfortable and picturesque travel experience, the routes will see the improvement of existing road sections as well as creation of new ones. It will also create job opportunities for the local people, said Pathom Chaloeywaret, director-general of the Department of Rural Roads.
As the longest of the three scenic routes, the Southern Coastal Road is divided into four phases, with construction ongoing now on the Samut Songkhram to Chumphon (Phase 1) and Chumphon to Songkhla (Phase 2) sections. They are set for completion in 2023 and 2026 respectively. Construction of the Samut Prakan to Samut Songkhram (Phase 3) section is expected to begin in 2023, the same year in which design work is scheduled for the Songkhla to Narathiwat (Phase 4) section.
Work on the Naga Withi route is set to begin in 2022 while Burapha Khiri route is currently in the design stage.
Asians far more cautious about travel post-lockdown: Inmarsat study
Inmarsat’s Passenger Confidence Tracker survey has determined that nine in 10 Asia-Pacific airline passengers will alter their travel habits for the long-term as a result of the pandemic, with half planning to travel less frequently by any means.
The survey, commissioned by Inmarsat and carried out by market research company Yonder. studied 10,000 airline passengers globally, including 2,500 from the Asia-Pacific region.
Ninety-three per cent of survey respondents in Asia-Pacific do not expecting to return to their previous travel routines once the pandemic is over, with 57 per cent describing their behaviour towards the pandemic as ‘highly cautious’, compared to 48 per cent globally.
The pandemic also seems to have sparked a shift in attitudes to travel in Asia, where 49 per cent of respondents expect to travel less by any means and 37 per cent plan to fly less in the future. This sentiment is stronger in India and South Korea, with 58 per cent and 55 per cent surveyed planning to travel less in the future respectively.
Despite this, there are early signs that Asia-Pacific travellers are starting to feel confident about flying again. Passengers in the region are more likely than the global average to have flown since the pandemic began: 41 per cent of Asia-Pacific respondents – and as much as 56 per cent of Indian respondents – have taken at least one flight since the pandemic reached their countries, compared to just 34 per cent globally.
The majority – 60 per cent – of Asia-Pacific passengers surveyed expect to feel fully ready to fly within the next year.
David Coiley, vice president Asia Pacific, Inmarsat Aviation, said: “The Passenger Confidence Tracker reveals that Asian travellers are more confident with the safety of the passenger journey than their counterparts.
This also reflects prevailing conditions in the region, where the spread of Covid-19 has largely abated across most markets, relative to other regions experiencing a resurgent wave of infections and further lockdowns. Given the level of consumer confidence, the outlook of the aviation industry in Asia-Pacific is looking optimistic.”
Coiley pointed to domestic travel recovery in China and India as most telling of the region’s travel confidence.
“In China, we saw domestic passenger volumes for the month of September increase from the same period last year, while domestic travel volumes in India are forecast to recover to pre-Covid levels by the end of the year,” he said.
When asked to rate their confidence around the safety and health precautions currently undertaken across all touchpoints throughout the journey, Asia-Pacific respondents recorded an aggregated score of 6.27 (with 10 being the highest level of confidence), higher than the global average score of 5.55.
The majority also perceive public spaces such as restaurants, cinemas, public transport, and public toilets to be either as risky, or even riskier than, taking a flight.
Asian respondents stated a need for clearer information about border restrictions, standardised practices across all airlines and a consistent worldwide set of safety standards as particular areas for improvement. Furthermore, respondents determined that wearing a face mask both inflight and in airports, and only being allowed to fly after a 48-hour test are the most effective personal safety measures. Only 10 per cent identified a 14-day quarantine as a top factor.
While the majority of Asia-Pacific passengers (65 per cent) surveyed feel satisfied with the aviation industry’s response to the challenges of Covid-19, the study reveals areas of opportunity for airlines to encourage passengers back to the skies.
Almost half (48 per cent ) of Asian respondents believe that reputation is a more significant factor when choosing an airline today than it was pre-pandemic. It has therefore never been more vital for airlines to differentiate and gain a competitive edge. The research highlights that improving inflight experience is one way to achieve this.
From extra legroom (44 per cent) to free baggage (36 per cent), value added services are becoming increasingly important to passengers returning to the skies. Digital solutions are fast-becoming essential to an enjoyable inflight experience, with four in ten respondents agreeing that on-board Wi-Fi matters more today than ever before.
Philip Balaam, president of Inmarsat Aviation, said: “With safety and reputation becoming even more important to today’s flyers, there is a clear need for airlines to differentiate themselves in order to encourage passengers back onto their flights.
“Digitalisation lies at the heart of both; minimising critical touchpoints in the passenger journey to improve confidence, all the while keeping passengers connected and entertained.”
Singapore-Malaysia causeway light rail link project to begin end-November
The much-delayed JB-Singapore Rapid Transit (RTS) Link that connects Bukit Chagar in Johor Baru with Woodlands in Singapore may finally break ground at the end of this month, following a virtual launch planned on November 22 in conjunction with the birthday of the sultan of Johor Ibrahim Sultan Iskandar.
The Johor Royal Press Office said the ruler has been presented with project details, including launch arrangements and final designs for the station.
The RTS Link is expected to ease causeway congestions, improve connectivity between the two countries and generate shared economic and social benefits. When complete, it will be a standalone Light Rail Transit (LRT) System with the capacity to serve up to 10,000 commuters during peak periods, for every hour and in each direction.
A sharp shift towards domestic tourism, shorter booking lead times, and rising demand for contactless booking tools are some of the emerging trends in the post-pandemic travel landscape in China and South Korea.
These insights are based on a study by B2B accommodation provider WebBeds, following extensive research including focus groups, expert insights, interviews with travel experts, and its own in-house data.
In China, WebBeds has found that the country relied on the rebound of its large domestic tourism sector, although uncertainty is still having a major effect. Ted Zhang, co-founder and CEO of DerbySoft, revealed that the booking window has shortened to just two to three days in advance, as customers lack information on when hotels and facilities will be fully operational.
This assertion was echoed by Zhiwei Bai, vice president of brand marketing of Tongcheng Elong, who also stated that online hotel bookings have significantly increased, and that walk-ins have become almost impossible as travellers don’t know if a hotel is still operational.
According to Bai, domestic airfares were “surprisingly low” this year, which enabled many migrant workers to book flights. Many trains were suspended and demand for bus tickets grew fast.
Wenzhi Zhao, executive vice president of Guangzhilv Travel Agency, noted that his business – like many others – has shifted to focus on domestic travel. “We are intensifying efforts to develop small group customised products with niche characteristics, especially products focused on ecotourism and wellness,” he said.
Gloria Wang, executive vice president of Jin Jiang Hotels – China Region, predicted that the domestic travel switch could continue for “three to five years… if international travel restrictions continue”. She also noted that “short-haul destinations around urban areas will become more popular, particularly in destinations with nature and fewer people”.
China’s Ministry of Culture & Tourism has forecast that domestic tourism will decline 43 per cent to 3.43 billion trips this year, while domestic tourism revenue is expected to slump by 52 per cent to US$394 billion) in 2020.
Over in South Korea, spending power and independent travel are diving revival. Following the closure of international borders, South Korea saw an 80.2 per cent plunge in international visitor arrivals in the first eight months of 2020, according to government data. But while the country has a much smaller population than China, it still ranks as the world’s ninth biggest outbound tourism market – a reflection of South Korea’s affluence. This local spending power has the potential to fuel a domestic rebound.
WebBeds research found that, as in China, booking lead times in South Korea have been severely shortened, which has also reduced the popularity of early bird rates. Flexible booking conditions are now the top priority for customers when making a travel or hotel reservation. Interestingly, Youngmi Jung, general manager overseas at Interpark, noted that travellers are now booking either ultra-short breaks or very long holidays, with a preference for self-contained stays.
The preference for secluded vacations since the onset of Covid-19 has also led to a rise in South Korean motorhome holidays. Despite mixed opinions on the sector’s long-term sustainability, Kyung Ok Kim, managing director of Hotelpass, suggested that demand may continue in the post-pandemic era, as more people become accustomed to this style of independent travel. South Korean consumers were also found to prefer contactless booking.
Finally, the usual travel seasons have been usurped by Covid-19 swings; according to Wook Sung, managing director of Shinhwa World, demand now grows when customers feel confident that an outbreak is under control and declines when a new outbreak occurs.
Sun Kok Sheng, WebBeds’ CCO for Asia Pacific, said: “The results of our focus groups in China and South Korea correlate with WebBeds’ own in-house findings. For example, our bookings have seen a considerable shortening of lead times, with a 60 per cent increase in proportion of bookings made two to three days in advance.”
“We’ve noticed a sharp increase in requests for room rates that include value-added services, such as dining, airport transfers, spa treatments and hotel credit. We’re also offering our clients in certain markets a B2B affiliate programme to book motorhome vacations,” he added.
Based on the findings of its research, WebBeds recommends that hotels and other tourism providers continue to offer flexible travel policies, rather than simply relying on discounting. It also advises travel agencies and other stakeholders to continue making investments in technology, including contactless services.