Thistle Hotels plans disposals, asset writedowns - report

Thistle Hotels PLC is weighing up buyout or disposal options and discussing an up to £90 million writedown of its assets, The Independent on Sunday newspaper reported, citing sources.

It also is understood that chief executive Ian Burke has been tentatively exploring the possibility of a management buyout of the hotel chain and has discussed the idea with Thistle's financial adviser, Merrill Lynch.

Sources said Burke is also in talks with various institutions over a sale and leaseback of some of Thistle's property, in an effort to increase the company's share price and raise money for potential acquisitions.

Thistle declined to comment on the report.

A company spokesman said Thistle Hotels reviews the carrying value of assets at the end of each financial year.

The process has not commenced yet, "so it is much too early to say what the result will be," he said.

Rezidor Gets More Brands

US-based Carlson Hotels has turned over brand development in Europe, Mideast, and Africa, to the current franchiser of one of its brands, Rezidor SAS.

Rezidor, 100% owned by SAS Scandinavian Airlines, has had the Radissson franchise for most of Europe since 1994, and has expanded this selectively to parts of the Middle East and South Africa. The new agreement, however, covers Europe, and all of Africa and the Middle East - making Rezidor the master franchiser for the four Carlson prime brands, but not a sub-set of one of those brands, see below.

In addition to the Radisson brand, Rezidor will now also franchise Carlson’s Country Inns, Park Inn, and Regent. Unlike the Radisson brand - which is named Radisson SAS in Rezidor’s franchise areas - the new brands will not have either Rezidor or SAS appendages.

In addition to new contracts, Rezidor will take over existing management and franchise contracts for these brands in the region - although this is only 14 hotels, see table.

Carlson says each of the four brands reach a distinct market segment - Regent, luxury; Radisson “upscale”; Country “mid-tier”; and Park Inn “economy to mid-scale...limited service”. This is arguable; many would put Park Inn at the same level as Country Inn.

And this brand conflict would appear to be the reason why Carlson’s Park Plaza (even though part of the Park brand) is missing from this new agreement with Rezidor. We would put Park Plaza at the same level as Radisson.

In fact, Carlson’s earlier decision to take over the two Park brands looks inexplicable at best, and bad at worst.

Carlson signed a joint venture with Park Hospitality owner Olympus in 2000 to expand the Park Inn and Park Plaza brand in North America. But Park has lost brand awareness due to a complex ownership, including franchises of the name, and resulting weak promotion. This has not improved with the Carlson JV, and it may have worsened, and it certainly will deteriorate following this new agreement with Rezidor.

Also excluded from the Carlson/Rezidor agreement is Rezidor’s Malmaison, a “lifestyle” brand. Rezidor has not added or announced any new Malmaison hotel since Rezidor bought it in 2000, and with only five hotels in one country (the UK), the operation is beginning to look a failure for Rezidor.

However, the new agreement could solve problems at Regent. Established in Asia but now US-based, Regent has been losing more hotels than it is has been adding - despite a push in Europe.
This year the 54-room Schlosshotel in Berlin was reflagged a Regent. But the hotel is managed by Dorint Hotels, and the deal with Carlson appeared to be little more than a reservations and marketing agreement.

Apart from that, the brand has had two franchised hotels under development in secondary locations (in Malta, and on the French Riviera) - but both have been delayed. Even earlier, two hotels took the Regent name in London (one being the Dorchester), but both were subsequently lost, as was what is now the Four Seasons in Milan.

Since buying the Regent name from Four Seasons in 1997, Carlson has added one hotel worldwide - Berlin - although three contracted before 1997 have also opened. Today, Regent has the same number of hotels as it had in 1995 - 12.

This year we said this slow progress raised the possibility that the Regent name would be sold again. In fact, the agreement with Rezidor is another way of Carlson admitting its failure with Regent - but also with Country and Park in Europe.

Although Rezidor earlier told Travel Business Analyst that it was not interest in the Regent brand, it should do better than Carlson. Part of the top management at Rezidor was running the company when its parent part-owned the Inter-Continental brand. IC was then at a lower level than it is now, but this experience should nevertheless help Rezidor to expand Regent.

Numerically the target for Rezidor/Carlson is to be operating 700 hotels (including existing ones) within 10 years; the total now is about 125. This would require opening an average of about 55 new hotels each year. That is a substantial increase on what Rezidor has achieved so far - an average of 11 annually - although Country at least should be easier to grow than Radisson.

Key development priorities for Radisson SAS are the three Benelux countries, France, Germany, Poland, Scandinavia, UK. For the Regent brand Rezidor says only it will add “a considerable number” in the next 10 years, in particular in the Middle East. Likewise, for the Country Inn brand it plans “substantial” growth. Park Inn will initially be added into Saudi Arabia, South Africa (Cape Town), UAE, UK. Numbers at Park Inn are expected “to rapidly increase” - although there are none at present.

Earlier this year, Carlson said it wanted to increase the Park total - currently with under 100 hotels in North America - to 203 by end-2003. That target seemed difficult, or if achieved it could be taking growth potential from other Carlson brands.

Rezidor’s plans for Country Inn need to be treated with caution - at end-2001 it said its plans to develop a 3-star brand were not with Country Inns. Development plans at Carlson show that it was aiming to open 50-70 hotels a year worldwide, which would be twice the current pace. The aim is to reach 1000 hotels; at that pace that would mean by 2012-15.

This new Carlson/Rezidor agreement seems to endorse continued corporate development for Rezidor. There had been speculation post-911 that SAS would look to sell its hotel operation, given losses in the airline business. At that time, a management buyout looked plausible, but now any new ownership change at Rezidor could also involve Carlson - still privately owned.

Carlson and SAS brands in Europe
Brand Hotels Notes
Country Inns 12 in Austria (2), France, Germany (7), UK (2)
Malmaison 5 Rezidor SAS brand, bought in Nov 2000; not included in new agreement
Radisson SAS 114 includes Mideast and South Africa; 40 under development
Regent 2 in Germany, Kazakhstan
TOTAL* 128 16% of world total
Notes: There are no Park Inns. *Excluding Malmaison. Source: company.

This report originally appeared in the Europe edition of the monthly Travel Business Analyst newsletter, under editor Murray Bailey. Further details can be obtained from info@travelbusinessanalyst.com or www.travelbusinessanalyst.com  

Hilton – what the weekend papers say

e-Tid.com  -  Hilton gets bumper column inches in the broadsheets this weekend in advance of a trading update out this Thursday.

The Times today (Monday) suggests that Hilton is about to enter the inclusive resort sector in deal with Dominican Republic-based Coral Hotels & Resorts. ‘Coral by Hilton’ would develop as a brand in the Caribbean with Egypt and Asia Pacific also in line. A senior Hilton exec will be seconded to the Dominican Republic. Elsewhere, the looks are at Germany. It reports that Hilton is considering a bid for privately-held Steinberger Hotels while also considering a franchise deal with Queens Moat Houses. Steinberger, valued at £200m by the , has 78 hotels, 63 of which are in Germany. It is also attracting interest from Accor and Starwood.

Saturday’s Times also reports on a Queens Moat connection but for the UK. The paper claims that QMH could enter a franchise deal with Hilton which would see all QMH’s 42 UK properties cross over to Hilton.

The Business reports that Thursday’s update ‘will paint another gloomy outlook’ for hotels. A ‘source’ says: ‘The German economy particularly, as well as the downturn in other parts of Europe, has had a major drag on the hotels business. Ladbrokes has proved to be a real saviour for the group.’

Web Marketing – Hotel Friend or Foe?

Written By:  Leora Halpern Lanz & Samipatra Das   HVS International

Just over a year ago, when the hospitality industry was losing strength compared to previous years, hotel sales teams finally began to embrace Internet marketing tools.  With the downturn in international travel that occurred after September 11, 2001, many hotel marketers formed new friendships with travel web sites such as Expedia.com and the newly formed Hotels.com.

To boost travel amid economic and safety concerns after September 11^th, lodging facilities were quick to form reciprocal relationships with these web sites, which had traditionally offered discounted airline fares.  While hotels were able to sell chunks of their inventory to travel sites at discounted rates, travel sites were attracting more traffic, and consequently, more business.  Hotels could now cut their losses while travel sites could profit from the premiums they charged.

As the hospitality and tourism industries sought to fight the effects of the recession on their business, travelers sought deeply discounted rates to cut their own personal losses.  And so, as average rates were posted on the web, the “rate game” began, and marketing strategies were drastically altered.  To meet consumer demand, hotels were now forced to reconsider the meaning of the “best deal”; once deemed the best overall value, the “best deal” had now come to mean simply the lowest rate. As such, consumers typically did not remain loyal to one particular brand. To hotel and travel site marketing teams, it was a time to win over new customers who were now “playing the field.”

However, over the past year, this new marketing tool has compromised the integrity of the hotel industry – especially for those who haven’t been playing this Internet game properly.  To preserve our hotel’s brand integrity, our sales teams must check these sites daily, asking questions such as, “Is our hotel’s going rate consistent with our brand image?” and “How does our hotel’s going rate compare to other hotels in our market?”  We must make sure that these sites work according to our hotel’s marketing plan, attracting the “right” customers, and at appropriate rates.  It is a tedious process, but it is absolutely necessary to preserve the integrity of our brand image.

Here’s an idea of how some of these online intermediaries operate.  For more information on this Internet marketing strategy, contact the HVS Marketing Communications division.

Hotels.com

A majority-owned subsidiary of USA Interactive, Dallas-based Hotels.com was launched by Hotel Reservations Network (HRN) in March of 2002 to address the growing need for clarity among the company’s various hotel reservation web sites.  Specifically, Hotels.com has partnered with more than 25,000 travel-related web sites and three call centers to offer discount accommodations in more than 6,000 premier properties in over 210 major destinations worldwide.

In launching Hotels.com, HRN has made its first concerted effort to build its own brand. Prior to launching the site, which involved a $20-million marketing initiative, HRN employed a low-public-profile marketing strategy.  Reluctant to build a strong brand identity due to the high cost of advertising during the dot-com boom, HRN instead offered its services to other travel-related Web sites free of charge, in turn offering these affiliates a small cut of the company’s revenue.  While HRN benefited from the affiliates’ marketing efforts, these affiliates enjoyed the ability to offer their customers discounted hotel room rates without the trouble of developing a hotel reservation system. 

Hotels.com utilizes the “net rate” or the “direct rate” reservation channel, whereby the company contracts with lodging properties in advance for volume purchases and guaranteed availability of hotel rooms and vacation rentals at discount prices. Once Hotels.com purchases a block of rooms from a client hotel, the company resells these rooms at premium prices, thereby commanding a profit.  Meanwhile, customers receive the guaranteed lowest prices, saving as much as 70% off standard rates, and hotel partners benefit from the widespread Internet exposure provided by Hotels.com.  Additionally, hotel partners can sell their inventories during slow periods.

While most of the company’s competitors package hotel rooms and airline tickets, Hotels.com focuses on land-based demand, i.e. those consumers who drive or take the train to their destinations. Furthermore, the site focuses on leisure demand, while its competitors typically target corporate travelers.

Hotels.com is now one of the fastest-growing hotel reservation web sites; according to the Nielson/Netratings, this site was the sixth-most-visited travel web site for the week ending September 1, 2002.  Additionally, Hotels.com has recently accounted for as much as 25% of HRN’s total daily bookings.

Expedia.com

A leading online travel service provider, Expedia.com has been a majority-owned subsidiary of USA Interactive since February of 2002. Since its launch in 1996, Expedia.com has grown to meet the needs of travelers worldwide, currently headquartered in Bellevue, Washington, with localized versions throughout Europe and Canada.  The site offers travel services provided by more than 450 airlines and over 43,000 lodging properties; major car rental companies; cruise lines; and destination service merchants including restaurants, attractions, and local transportation and tour providers.

Expedia.com operates under a diversified business model, utilizing both the agency and the merchant models. Under the agency model, Expedia.com acts as the agent in a transaction, passing the customer’s reservation to the travel supplier (hotel) in return for a commission from the travel supplier. Under the merchant model, Expedia.com receives inventory (hotel rooms) from suppliers and acts as the merchant in the transaction, thereby commanding higher per-sale profit levels than the agency model.  Furthermore, the merchant model provides customers with lower prices than the agency model.

To power its marketplace, Expedia.com has built the Expert Searching and Pricing (ESP) technology platform, which consists of two components: a fare-searching engine and a common database platform that enables the site to package all types of travel services dynamically, thus enhancing the site’s ability to cross-sell.  According to the Expedia web site, integrating merchant inventory with the ESP technology platform has enabled Expedia.com to offer products that benefit both customers and suppliers. In addition, Expedia.com recently introduced new display and promotional features to its Expedia® Special Rate program, thereby making it easier for hoteliers to showcase and differentiate their properties and providing customers with improved navigation tools.

Expedia.com’s target customers are well educated, have high discretionary income, and are veteran Internet users and savvy online shoppers. In addition to a substantial advertising presence in both online and offline media, the company’s brand-building campaign includes expansion of its distribution channels, including telesales operations, strategic partnerships with leading customer aggregators, expanded travel agent distribution through the recently acquired Classic’s travel agency network, and an affiliate program that enables partners to drive potential customers to co-branded Expedia.com/partner web sites.

As per their web site, Expedia.com was ranked the eighth-largest travel agency in the most recent United States agency rankings. The site was one of the top 75 most popular Internet sites, with 13,163,000 unique visitors in August, 2002.  The company recently announced its intention to acquire Newtrade Technologies, Inc., a provider of software development and integration services to the hospitality industry.  Newtrade’s XML interfaces provide seamless connectivity among multiple points of distribution, including hotel central reservation systems (CRSs), property management systems (PMSs), global distribution systems (GDSs), online travel agencies, and hotel web sites.  Newtrade’s technology will enhance Expedia.com’s competitive advantage over other travel web sites.

Orbitz.com

Launched in June, 2001, Chicago-based Orbitz LLC is a full-service online travel agency offering competitive fares on lodging, car rentals, cruises, vacation packages, and other travel services. Founded by leading airlines including American, Continental, Delta, Northwest, and United, Orbitz.com’s 160-employee team seeks to provide customers with a one-stop shop, with a niche in web-only airfares.

Orbitz.com follows a hybrid of both agency and merchant models. However, they are more concentrated on the agency model in comparison to the merchant model. The company has formed strategic affiliations and associate partnerships with several car rental companies; more than 50 airlines; and leading hotel and resort chains, including Hilton Hotels Corporation, Hyatt Hotels & Resorts, Marriott International, Starwood Hotels, and Wyndham International.  In 2001, Orbitz.com entered into a co-marketing agreement with Hotwire.com to save consumers time and money by allowing them to move seamlessly between the two sites. Orbitz.com also has an agreement with Pegasus Solutions, Inc., a leading provider of end-to-end reservation distribution solutions to the hotel industry worldwide. Under this agreement, travelers using Orbitz.com can reserve rooms at more than 38,000 hotels in more than 200 countries.

Orbitz.com’s target customers are primarily leisure travelers interested in cultural and sporting events, popular urban attractions, and spa and ski resorts. According to comScore’s Media Metrix Top 50 Internet Properties for May, 2002, Orbitz.com was ranked third with 9,000,000 unique visitors, indicative of the site’s continued success.

Priceline.com:

Priceline.com is the “Name Your Own Price” Internet service that offers travel services including leisure airline tickets, hotel rooms, and rental cars; personal finance services including home mortgages and refinancing; automotive services; and a long-distance telecommunications service. Based in Stamford, Connecticut, Priceline.com LLC is a privately held company. Founded in March, 1996, the company’s web site was launched in April, 1998.

Priceline.com employs a “demand collection system,” which enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Using the “Name Your Own Price” consumer proposition, Priceline.com collects consumer demand (in the form of individual customer offers guaranteed by a credit card) for a particular product or service at a price set by the customer and communicates that demand directly to participating sellers or their private databases. Consumers agree to hold their offers open for a specified period of time to enable Priceline.com to fulfill their requests from inventory provided by participating sellers. Once fulfilled, offers cannot be cancelled. By requiring customers to be flexible with respect to brands, sellers, and/or product features, Priceline.com enables sellers to generate incremental revenue without disrupting their existing distribution channels or retail pricing structures. In August, 2002, Priceline.com announced the launch of its enhanced “Name Your Own Price” global hotel service product, which features over 8,000 quality hotels in more than 1,300 cities and towns. Priceline.com’s enhanced hotel service includes new features such as amenity listings for every category of hotel and resort; examples of actual Priceline.com transactions; and the best-price guarantee, wherein Priceline.com can deliver savings of up to 50% off prevailing retail prices. 

Priceline.com targets savvy Internet users and shoppers in order to leverage the unique attributes of the Internet for the benefit of consumers and businesses. Prior to submitting their travel requests, Priceline.com customers have researched brands, rates, and availability. Therefore their offer is well researched, and probably their way of finding out the best deal for their travel plans.

According to Opinion Research, Priceline.com is one of the top five Internet properties. Additionally, the site attracted 12.7-million customers in the fourth quarter of 2001, with customer savings ranging from 20% to 80% off published prices.  The company also benefits from its extensive supplier network, efficient cost structure, and continuous growth initiatives.

Travelocity.com

Headquartered in Fort Worth, Texas, Travelocity.com was launched in March, 1996. Travelocity.com is wholly owned by Sabre Holdings Corporation, a provider of technology and marketing services for the travel industry. Travelocity members can access reservations and information for more than 700 airlines, 55,000 hotels, 50 car rental companies, and 6,500 cruise and vacation packages, all backed by more than 1,000 customer service representatives. 

Similar to Expedia and Orbitz, Travelocity utilizes both the merchant and agency business models. The company also engages in advertising and promotional campaigns and participates in an affiliate program. For hotels to be listed on Travelocity, they must participate in either Sabre Hotels or the Hotel Reservations Network.

Travelocity.com’s target clientele includes consumers and small-business professionals with disposable income for travel, and web-savvy individuals with experience in shopping and buying online. Due to the strength of their online travel services, distribution arrangements, and substantial investment in advertising, Travelocity.com has a significant audience with a high propensity for buying a wide range of travel-related products and services online. According to Media Metrix Q2 2002, Travelocity.com registered 35.5-million members and 11.4-million unique visitors. With more than 35 million members and more than $3 billion in gross sales in 2001, Travelocity is the sixth-largest travel agency in the United States; it has been named the World’s Leading Travel Internet Site for five consecutive years at the World Travel Awards; and it operates or powers web sites in seven languages across four continents.

Travel is the largest and fastest-growing e-commerce category on the Internet today. Consumers are confident about booking and purchasing travel, online and more of them are doing it every year. According to Media Metrix, the online travel sector is expected to grow from $18 billion in 2000 to $63 billion in 2006. With these significant growth levels anticipated in the future, it essential that hotels employ excellent yield management systems and marketing strategies to further their goals, maintain their brand integrity, and reap the benefits of this expected boom in online travel shopping.

Contact:
Leora Halpern Lanz
Samipatra Das
HVS International

Cardiff tops UK for hotel profit growth: London fares poorly compared with other European cities

Cardiff's hotel industry has proved more robust than that of any other UK city, according to a Deloitte & Touche report. The HotelBenchmark profitability survey, which covers over 2,000 hotels across Europe, the Middle East and Asia, reveals that in 2001 Cardiff was the only UK city to show a rise in hotel profitability*, with profits up 15 percent on 2000. London fared the worst, with profits declining by 15 percent, followed by Birmingham and Glasgow, which both dropped four percent in profitability. 

The survey reveals the full extent of the damaged caused to the hotel market by the events of last year, with profits falling eight percent across the UK as a whole, compared with growth of six percent in 2000.

Julia Felton, Travel, Tourism & Leisure director at Deloitte & Touche, said, "The hotel industry was always going to find it hard to match the growth recorded for 2000 but economic and political events, compounded by foot & mouth, made the challenge impossible. Cardiff's strong performance can be attributed largely to the pull of the Millennium Stadium as a sporting and concert venue, with hotel occupancy levels up 12 percent on last year."

In Europe, hotel profitability fell by six percent. Athens was hardest hit with a decline of 24 percent, indicating that the cost cutting measures that had helped achieved 47 percent growth in 2000 could not be sustained. Dusseldorf, Hamburg, and Rome also suffered double-digit declines in hotel profits. However, there was considerable disparity across Europe. Paris, Milan, Prague and Vienna all showed positive growth, contrasting starkly with London's 15 percent decline. Paris proved the strongest hotel market in Europe, with profitability increasing by 18 percent mainly due to controlled cost management and exceptional demand during the Paris airshow.

Across the Middle East profitability levels fell 12 percent but the survey shows that hotels in this region are the most efficient at converting revenue to profit. Hotels in the Middle East retain on average 42 percent of every dollar as profit. This compares with 38 percent in Europe and 32 percent in Asia Pacific. Beijing was the only city in Asia where hotel profits rose, with growth of 13 percent (measured in US dollars). Sydney suffered the greatest fall (-32 percent).

Julia Felton added, "Despite the decline in demand that started in April 2001 and continued steadily thereafter, hoteliers did not appear to start significant cost cutting measures until post-September 11th. It seems hoteliers thought they could weather the summer difficulties and that trading conditions would improve in the final quarter. Of course it was the September 11th events that forced the industry into taking drastic action, with many companies reducing their workforce and deferring capital expenditure plans. With revenues likely to remain under pressure even greater focus will need to be paid to cost structures if profitability levels are to be rebuilt."

Note:

*profitability measured as Income Before Fixed Charges per available room

The HotelBenchmark Survey by Deloitte & Touche tracks the performance of over 6,000 hotels across 300 markets globally on a monthly basis. Participants of the survey can access the results online at www.HotelBenchmark.com. For more information please contact Lorna Clarke at llclarke@deloitte.co.uk.

Deloitte & Touche is the UK's fastest growing major professional services firm in 23 locations, with over 10,000 staff nationwide and fee income of 713.6 million pounds in 2001/2002. It is the UK practice of Deloitte Touche Tohmatsu, a global leader in professional services with over 100,000 people in 140 countries and fee income of 12.4 billion dollars for the year ended 31 May 2001.

Authorised by the Financial Services Authority in respect of regulated activities. The information contained in this article is correct at the time of going to press. For further information on Deloitte & Touche, you can access our website on www.deloitte.co.uk.

Contacts:
Julia Felton: 44 20 7304 1785, jfelton@deloitte.co.uk
Marvin Rust: 44 20 7438 2593, mrust@deloitte.co.uk 

Web tops hotel room wish list

Hotel items like trouser presses and shower caps are outdated and useless, according to a survey that says they should be substituted for Internet access and laptop chargers.

Web site travel company Expedia interviewed more than 500 business travellers in the United Kingdom for its survey of the things people wanted and did not want in their hotel room.

The Bible topped the list of the least-useful items with 37 percent of the participants saying they find it something they would not want to use.

Shower caps were also given the brush-off with 22 percent saying they had no use for the head wear.

Sweets on the pillow after the staff turn downed the bed left a bad taste in 18 percent of those surveyed. And the trouser press created a wrinkle with 10 percent of the participants.

Internet connections topped the list of things business travellers would most like to see in their rooms with a whopping 42 percent wanting them.

Sixteen percent thought mobile phone and laptop chargers would be useful, making the items the second most popular.

Work stations and ergonomic chairs were favoured by 14 percent while 12 percent thought their room could be improved by the presence of printers, photocopiers and fax machines.

An overwhelming 70 percent surveyed felt they were penalised by unreasonably high rates in hotels with modern facilities.

Just two percent were interested in the provision of adult TV channels in their hotel rooms.

Hotels: Dig In

Skip the pool and head to the garden and get your hands dirty on your next out of town trip

All hotels have spas now, but farms? Along the California coast, hoteliers are taking advantage of the year-round good weather, planting their own fruit, vegetable and herb gardens—all organic, of course. Some of the best:

MARK HOPKINS HOTEL: Overlooking the entire San Francisco Bay, the rooftop garden includes wild blackberries, Meyer lemons, chamomile (for the hotel’s tea creme brulee) and purple sage, to be used in Thanksgiving stuffing. markhopkins.net ; rooms cost $355 to $4,000 a night.

MEADOWOOD: The Napa Valley resort’s one-acre garden has a flower bed (blooms adorn the guest rooms), old-growth walnut, apple and fig trees, and a newly planted olive grove. meadowood.com ; $425 to $3,585 a night.

BACARA: The Santa Barbara hotel boasts a 1,000-acre ranch. You’ll find 300 acres of Hass avocados and 100 acres of Lisbon and Meyer lemons—used in its signature spa treatment: an avocado-citrus body wrap. bacararesort.com ; $395 to $5,000 a night.  

Thailand drowns in its own success

WTM REPORT - It never rains but it pours and it's especially true for Thailand, writes Yeoh Siew Hoon - TravelWeeklyEast.com 

The Thais are feeling a little battered these days in the UK market.

Once the darling of holiday playgrounds for the British, Thailand could do no wrong. Tour operators were reporting double digit growth to the kingdom, year on year.

Even after the events of September 11, Thailand's position as the favourite playground for the British seemed unassailable. Until now.

Following travel warnings placed on Patong beach in Phuket, which have already caused cancellations from some European markets, the last thing Thais attending WTM wanted to read about was yet another negative article on their destination.

The most recent travel section of The Times included the screaming headline, "A heavy price to pay for paradise". Only this time the article was not about fears over security but the environmental degradation of Phi Phi island off Phuket.

The introduction read, "The Foreign Office's warning over Thailand is not the only problem facing the country. An environmental disaster also looms.

"All is not well on the Phi Phi Don and Phi Phi Ley, two of the most picturesque islands in the whole of South-east Asia" - and it went on to relate the lack of controls over development, the crowds, the garbage and bad environmental practices of local travel operators.

The writer describes his experience. "When my day-trip boat turns into the bay, we're in for a shock. Fifteen boats have dropped anchor ahead of us and 100 or so holidaymakers are taking pictures on its sands.

"In the water, dozens of snorkel tubes poke upwards and flippers splash away as others follow the brightly coloured fish feeding on the bay's coral reef."

Next to this article is a question and answer section on the legal position of local holidaymakers who wish to change their plans for Thailand, in light of the UK travel warning on Phuket "to exercise extreme caution in public places".

It clarified the Foreign Office had not issued a blanket ban on travel to the island and that this was creating confusion for travellers.

It explained consumer rights over the claiming of refunds from tour operators should they wish to cancel their holiday in Phuket.

"If you cancel your trip, you have no right to a refund. This is written into the small print of tour operators' contracts with their customers. The operator may offer alternative holidays but there will usually be a charge for this."

And the section explained the position of the Association of British Travel Agents (ABTA), which says that when the FCO advises against all travel to a country, its members will offer a refund to those cancelling trips. "But Thailand, unlike Iraq or Indonesia, is not on the ‘don't go’ list and does not trigger a cancellation refund. Tour operators say they would welcome guidance."

It is clear there is very little the Thai travel trade can do about the travel warning other than to lobby its government to put pressure on the British government.

But there is a lot it can, and must, do to address its environmental issues.

Phi Phi has been an environmental disaster waiting to happen. Koh Chang, too, could go the same way if lessons are not heeded.

Thailand must clean up its act. Its new tourism minister will be at WTM. Let's hope he listens seriously to the industry and puts his environmental background to good use.

Only then can Thailand resume its top position in the British holiday charts.

NOTES FROM LONDON: Day 1, World Travel Market
TravelWeeklyEast.com

Koh Samui set to become even more luxurious

ASIATravelTips.com - The third largest island in Thailand and a tourism gold mine, Koh Samui can be described with just one word - paradise.

The first tourists to Samui were backpackers who came to enjoy its unspoilt beaches and stunning waters, now Koh Samui has transformed itself into one of Asia's leading beach destinations, and large and small luxury hotel companies are starting to claim their piece of this beautiful Island and profit from its ever increasing visitor arrivals.

Development however can often come at a price, but the local government, TAT, and local tourism operators have gone out of their way to ensure that Koh Samui remains what it has always been, an idyllic island.

Construction close to the beach is heavily restricted with no buildings being allowed within the first 10 metres of the beach, the height of buildings within the first 10 - 50 metres is restricted to 6 metres and from there no building must be higher than a palm tree. This means that when you are lying on the soft sandy beaches enjoying the turquoise waters of the Gulf of Siam, you can hardly see the bungalows and hotels at all, but instead lush greenery which leads you to believe that you are still on an untouched desert island.

An untouched desert island though Koh Samui is not, the island has expanded its airport, increased its tourist facilities and amenities rapidly over the past years. In 1997 there was approximately 6,500 rooms on the island, and today this number is a staggering 9,870 which is continuing to increase at a rapid rate.

Investment has come into Koh Samui, with McDonalds, Starbucks, Boots, Burger King and even a Lotus Tesco Super Mall setting up shop. GSM telephones can be used all around the island even when lying on the beach, so communication of all varieties is available to locals and tourists alike.

In early 2002 Koh Samui experienced a serious water shortage that meant water had to be expensively imported, the local authorities have responded to this by extending and enlarging the water reservoir, and are now looking at possibly using a water desalination plant on the island, or bringing in water from the mainland. 

The road problem has also been addressed with roads throughout the island having been widened and now a new ring road, which is expected to open first quarter 2003, is being constructed in Chaweng (the most popular beach area and entertainment heart of the Island) that will create a much needed one way system around some of the most popular entertainment and shopping areas of Samui.

Perhaps because of uncertainties or a large backpacker community, top end luxury resorts have been slow to enter this lucrative market ,and were very much outnumbered by small bungalows with attractive rates and local management. Luxury hotels in Samui presently comprise of properties such as The Tongsai Bay Cottages & Hotel, Le Royal Meridien Ban Taling Ngam, Poppies, Dusit Santiburi, The Imperial Samui Resort, The Imperial Boathouse, The White House and the Central Samui among others. 

Rumours (hence unconfirmed) tell us that this is about to change, with Ramada being rumoured to be about to sign a contract with the impressive Samui Bay View Villa & Resort at Chaweng Noi. Marriott, Royal Garden, and Four Seasons are rumoured to be looking at a development site on Laem Yai Beach and also Bophut. Aman resorts it is also believed has secured land along Bang Kao beach, Evason part of Six Senses, is believed to be looking at Haad Samron, and finally Banyan Tree are rumoured to be looking at land on Choengmon Beach.

Whether any of these rumours actually materialise into fact, only the hotel companies themselves know, but it is blatantly obvious that Samui is attracting an increased number of luxury and international hotel operators which can ultimately only benefit Samui as a whole. Whatever and whoever enters the Samui market, one thing is for sure, the future of tourism on Koh Samui is looking very bright.  

Source:  ASIATravelTips.com 

HPL launches Island Explorer floating hotel

Singapore based HPL Properties Limited (HPL) has invested nearly US$6 million in a state-of-the-art luxury yacht based in the Maldives.

HPL, together with Como Hotels and Resorts, already owns Four Seasons Kuda Hura Resort, Bandos Island Resort, Coco Island Resort, and Rihiveli Resort in the Maldives.

The Island Explorer was custom-built in Perth and has just completed a major outfitting in Singapore.