Newsletter - January 2, 2002

TOP TRENDS FOR CHINA

With China the name on everyone’s lips, TravelWeekly East asks three experts to share their insights into the new market of opportunity for 2002.

1. Lower operating costs. Operating costs for four- to five-star hotels will be lower due to reduced import tax on all imports now that China is a WTO member.

2. More JV partnerships. Travel agents in China will look for JV overseas partners not only for inbound business, but for outbound as well. By setting up offices abroad, Chinese agencies will start competing on an international level.

3. MICE growth. Huge growth is expected in the inbound MICE sector, particularly into Shanghai due to the success of APEC.

4. Transparency. With WTO entry, transparent business practices are now a must. This requires fast reforms in the travel industry, reforms once considered unthinkable in the ‘planned economy’. The industry will see a surge in professionalism.

5. New challenges & opportunities. While WTO membership creates opportunities for the industry, it also creates challenges for travel industry management. Industry management will now place a high demand on training seminars and cross-country exchanges with overseas travel companies.

6. Career advancements. Local staff will want to join overseas travel companies to gain experience, and local companies investing in JVs will also attract local talents and offer room for future career growth.

7. Higher profits. Better management systems will consolidate the larger companies and less professional, smaller companies will fold. As large companies divert their investments overseas, holding companies with airlines, hotels and travel agencies will seek out profits from high-yield international destinations.

8. A need to keep up-to-date with IT. Local travel companies will turn their focus toward upgrading their IT systems and ensuring their staff are aware of the latest technologies.

9. New professionalism at home. WTO will create a new inward focus on improving professional standards in locally-run hotels.

10. Boost in overseas travel. New international destinations will open to Chinese travellers.

Source: Market intelligence gathered by Jennifer Welker, editor, TravelWeekly China

Robert Hecker, managing director, Horwath Asia Pacific

• The total increase and spread of Chinese outbound tourists as government restrictions to travel are further reduced.
• The explosion in Chinese inbound tourism expected with the opening of direct foreign ownership of tour operations in China.
• Increased hotel chain competition through product distinction, ie guest room design and features instead of existing emphasis on marketing and guest loyalty programmes, (ie the rise of chain boutique hotels, heavenly beds, Art+Tech, etc). First, Westin and now Meridien has got it right. Hotels were created to provide primarily beds and showers. Travellers have matured enough now to distinguish good beds and showers, but few chains are consistent in these areas to capitalise on this consumer awareness to increase customers and customer loyalty via product vs points.
• Increase in last-minute holiday travel in response to chains, airlines and their intermediaries practicing greater yield and inventory management, facilitated by the ease and speed of selling such potentially unused inventory at discount prices via the Internet.
• Increasing emphasis on sales and marketing strategy and know-how for hotel GMs over traditional hospitality strengths.
• Increasing treatment of hotel public areas as retail spaces not just meant for in-house guests, thus encouraging greater emphasis on creating signature restaurants (locally popular) and/or outsourcing of F&B outlets or the conversion of existing retail areas to F&B functions.
• Increasing outsourcing of hotel back-of-house functions such as maintenance, security, information systems and data processing, accounting, and housekeeping.
• Tourist destinations are going to become more and more about lifestyle and activities than about sightseeing, thus creating a need for destinations to invent or re-invent themselves with a greater variety of leisure activities and lifestyle elements if they want their tourism industry to continue to grow.

Stanley Hui, managing director, Dragonair

1. Continuing restructuring of mainland carriers into three major groups.
2. Increased capacity to reflect anticipated 8 percent GDP growth and effects of WTO accession.
3. An increase in outbound business travel as the mainland government simplifies and relaxes entry permit requirements and extends the validity period of such permits for mainland business visitors to Hong Kong.
4. Increase in outbound leisure travel as per capita income increases and the mainland government:
- abolishes outbound tourism quotas
- adds to the list of authorised destinations for individual leisure travel
- increases the number of authorised operators for Hong Kong tours
5. Further simplifying of cross-border check point procedures as infrastructure is improved and government initiatives take affect.
6. Increased competition on mainland routes as domestic carriers in China add capacity and international carriers turn their attention to this buoyant and thriving market. Yields under pressure as a result.
7. Increased inbound travel from traditionally weak markets resulting from September 11 terrorism attacks in the US and the impact on the North American and European travel markets.
8. Continuing tight security at airports.
9. Increase in co-operation between the hubs of the Pearl River Delta area and Hong Kong.
10. Increase in the use of e-ticketing as technology becomes more widely used in the industry and accepted by the public.
11. Increased willingness by leisure travellers to the mainland to explore new destinations, especially in the country’s fast-developing western regions.
12. Increase in the number of Hong Kong residents travelling to China on short weekend trips.
13. Relatively slow recovery of traffic from the US, Japan and Europe, depending on how the war in Afghanistan proceeds.
14. Increase in the number of Taiwan travellers to China, as economic cooperation between the two continue to strengthen.
15. As a key centre for both business and leisure travellers, volumes to Shanghai will see relatively faster growth.

Peter Wong, chairman, North West Development Ltd

1. The travel sector has already become China’s leading industry.  As the nation eases trade restrictions after entry into WTO, this will bring forward more favourable and transparent policies as well as increased financial resources within the travel industry.
2. China’s domestic economic market will develop at rapid speed, thereby boosting an interest in travel by Chinese throughout the country and increasing consumer spending power.
3. China will experience a new-found awareness and consciousness toward preserving its natural and historical sites. More high-quality facilities aimed at protecting China’s history and culture are already in place to attract overseas visitors.
4. China has a wealth of sites to offer visitors. In the past, insufficient facilities restricted overseas travel. Now, with entry into WTO and promotion of China as a safe destination, significant numbers of US and European visitors will travel to the country.
5. In future, the CNTA will re-organise the structure of the travel industry to allow for privately owned companies; increased competition; lower operational costs and reduced travel rates.
6. In line with WTO requirements, China will open up to foreign markets. As a result,overseas companies will invest more time researching the China market. By working with overseas companies, local Chinese companies will have much to gain from their counterparts and can then start sharing their experiences with others in the industry. 

THE RITZ: JUDGMENT OF PARIS

Source:  Forbes.com

Some people think it's too stuffy. Others say that it's not as good as it used to be. And certainly everyone agrees that it's staggeringly expensive. But for our money there is no better hotel in Paris, or maybe even the world, than the Ritz.

To be sure, there are hotels that may have more movie stars or fashion models staying with them, or maybe even a more inventive kitchen or a bigger health club--but very few people who have ever stayed at the Ritz would voluntarily choose to stay anywhere else.

That's because at one point during your stay there something will happen that will cause you to fall in love with the hotel. Whether it's listening to the strains of the harp float up from the garden to your room, or the way the huge double doors fit together, or the fact that Hemingway and Fitzgerald used to haunt the bar, or that the concierge can do practically anything, or the way that the Place Vendome looks in the morning sunlight--or any of a myriad other reasons--but it happens and you don't want to stay anywhere else. In fact, even leaving the hotel becomes a major decision because, charming as Paris is itself, the Ritz is a distillation of that charm down to its purest, and most luxurious, essence.

But there are practical reasons to love the Ritz as well. For one thing, it's convenient. Whether you are in Paris for business or pleasure, the city's best shops and the headquarters of the most important companies are only a short walk away. For another, the service is superb. Everyone speaks English--usually better than most native English speakers. Clothes are pressed immediately. Reservations are made at the most hard-to-get-into restaurants. Tickets are arranged. Cars are hired.

Then there are the magnificent rooms, all of which have enormous bathrooms with golden fixtures. The hotel's restaurant is one of the best in the city and the fitness center boasts an indoor swimming pool and a squash court, as well as a range of spa services.

But of course none of this comes cheap. Rooms begin at around $500 per night and suites around $700. (Believe it or not, thanks to a good exchange rate, these rates are lower than they had been several years ago.) However, if it's your first time visiting the hotel, don't be put off by its deceptively austere entrance. The real beauty is on the inside.

Fact

The Hotel Ritz opened in 1898 and was named for its founder, Cesar Ritz, a Swiss hotelier whose name has since become synonymous with good living. The hotel's façade was designed in the 18th century by Jules Hardouin-Mansart, the creator of the "mansard" roof.

FLORIDA’S HOTEL RATE DOWN 15 PERCENT IN NOVEMBER

ORLANDO, Fla. -- (AP) -- Florida's hotel and motel occupancy rate dropped more than 15 percent in November compared to the same period last year, indicating the state's lodging industry is still in a post-Sept. 11 slump.

For the year through November, the state's lodging occupancy rate was down more than 6 percent, figures released Friday by Smith Travel Research showed.

Some parts of the state fared better than others.

The Tampa-St. Petersburg area had an 11.7 percent decline in November, while Miami had a 17.9 percent decline. Orlando had a 23.5 percent decline.

Orlando's poor November showing was backed up by Orange County resort tax collection figures also released Friday. The hotel tax netted $6.6 million in November, down more than 25 percent from last year. For the year through November, hotel tax receipts were down 26.7 percent.

While November's statewide occupancy rate was disappointing, it's still an improvement from the weeks after Sept. 11 when the rate was down by 20 to 25 percent, said Tom Waits, president and CEO of the Florida Hotel & Motel Association.

``We think we've bottomed out and we're closing the gap,'' Waits said. ``But we're closing the gap slower than we want to. We've still got a ways to go.''

ELECTRONIC BOOKINGS FELL DURING THIRD QUARTER OF 2001

The number of hotel room nights worldwide booked electronically through the Global Distribution Systems (GDS) fell by 7% during July, August and September.

London showed the biggest fall over the period, with the number or room nights booked through the GDS falling by more than 11%, but many European cities recorded a rise.

Electronic marketing firm Travelclick, which compiled the figures, said the worldwide decline was mainly the result of the 11 September terror attacks.

"Worldwide electronic hotel bookings made by travel agents grew 3.6% through the first eight months of 2001 and then experienced year over year declines following the events of 11 September," said Jan Tissera, division vice president for Travelclick.

"The major European markets such as London, Paris, Rome, Brussels and Amsterdam experienced declines in electronic bookings during the third quarter, while some European markets maintained or grew their volume of electronically booked room nights.

"Cities in Germany experienced strong growth, ranging from 2% in Frankfurt to 19% in Dusseldorf. Stockholm enjoyed the highest increase at 38%, due to strong domestic demand and increasing business travel spurred by the recent EU meetings."

The results were compiled from Travelclick's database, which monitor's hotel industry electronic distribution data from the Amadeus, Galileo, Sabre, and Worldspan GDSs.

Top ten destinations

RECHARGE OR GO TO CHINA

What happens behind the closed boardroom doors when times are bad? Companies are taking this opportunity to re-energise and revitalise, ready to do battle when the global climate takes a turn for the better. “Programmes which help to ‘recharge’ have been seeing an increased demand,” says Andrew Chua, facilitator of Singapore-based Outdoor Adventures. He is a veteran trainer who also runs the Focus Adventure Training Centre on Bintan island, Indonesia.

“The knowledge economy is not performance based, it is ideas based. And it’s these ideas which give the company its competitive edge.” So it’s no wonder to him that the people who continue to do well, and remain relevant, are those who are committed to “out-flank, out-pace and out-run the competitors”, whether internally or externally. As companies are always on the lookout for people who generate ideas and piece them together to create workable solutions, Chua says that the pertinent question to ask should not be “what now?” but “what’s next?” – like the telco industry, where the launch of a new product immediately sets it on the path to obsolescence. So it’s revolution which is the buzzword, not evolution.

Training programmes are not immune to changes in the global climate. “We’ve had several cancellations to Indonesia and Malaysia due to the war in Afghanistan, and we’ve also seen programmes shift to Singapore,” informs Chua. Demand for training programmes like leadership and communication skills has seen a drop as companies cut back their training budgets. But at the strategic level, management, visioning, redirection, and remaking programmes have been in high demand as companies seek to refocus their business direction. “We play the role of facilitator using known management tools and experiential exercise to help overcome the mental barriers of the individual and the team,” he says. Next year’s numbers for corporate training programmes can go both ways. If the war in Afghanistan is over and the dust settles, “we would certainly see an increase in companies gearing up for the economic battle as they prepare their teams mentally to stay focused. If not, we will definitely see a worsened world economy and further cutbacks on development of the employee.”

China is about to experience an unprecedented economic growth. Largely insulated due to its strong domestic demand, the Chinese are embracing western management and ideas at a rate which is unmatched. Once the culture of work and rewards are changed, likely in one generation, China will be a world economic powerhouse. Just don’t miss the boat.

Source: TravelAsia

BANYAN TREE AIMS TO GROW LOCALLY

Bangkok Post; - Banyan Tree Holding, a Singapore-based hotel and resorts development group, is spreading its wings with plans to aggressively expand its portfolio in the region, including Thailand.

The company was looking to invest in Chiang Mai, Pattaya and Hua Hin, said Bernold Schroeder, vice-president for business development of Banyan Tree Hotels and Resorts.

The property in Chiang Mai is expected to become the third Banyan Tree hotel in Thailand, while the other two proposed hotels are likely to be sited in beach cities and operated under the group's second brand, Angsana Resorts and Spas.

The Banyan Tree Chiang Mai would be a newly constructed hotel since the brand required a unique architectural design, he said yesterday. The properties in Hua Hin and Pattaya would likely be acquisitions of existing resort hotels.

The projects, part of a long-term plan over three to four years, were still at the discussion stage and the total investment had not been finalised, Mr Schroeder said.

Besides the planned projects in Thailand, the group will also open the Banyan Tree Seychelles next year in the Indian Ocean island republic.

''The Seychelles has become very popular with high-end tourists such as Hollywood celebrities visiting the islands. Brad Pitt and Jennifer Aniston spent their honeymoon there,'' said Renee Ho Phang, the group's director of marketing communications.

Excluding the Seychelles resort, the group's portfolio includes four Banyan Tree properties in Bintang, Phuket, the Maldives and Bangkok.

The group also runs 10 Angsana spas, four of which are at its hotels while the other six are stand-alone services or facilities located under other hotel brands, said Ms Ho Phang.

The company recently completed a US$4-million refurbishing of the former Westin Banyan Tree on Sathon Road and will rebrand it as the Banyan Tree Bangkok on Jan 1.

The group's first city property was poised to join the top five hotels in Bangkok by mid-2003, Mr Schroeder said.

The rebranding follows the expiry of the five-year contract with Westin Hotels and Resorts this week.

Under the group's own brand, Mr Schroeder said the Banyan Tree Bangkok aimed to redefine the business traveller's experience by presenting a city garden spa atmosphere.

Under the new brand, the average room rate of the Banyan Tree Bangkok will be increased from $250 to $300 a day.

The hotel will also focus more on leisure tourists instead of the current corporate clients. Its spa services now occupied six levels of the hotel, said Ms Ho Phang.

To accommodate the rapid expansion of its spa services, the group has recently opened the country's first Banyan Tree Spa Academy in Phuket.

The academy now has 190 students, from local workers to college graduates, who will later be sent to work in the group's spa services all over the region.

The number of students was expected to increase to 350 by mid-2002, she said.

''Our academy is not like a training centre as with other spa operators. But we offer a full course, beginning with learning what kind of herbs are used in the spa from our own herb garden.''

She said that 98% of the group's massage therapists, in all of its properties, were Thais.

The group's spa facilities also include a Banyan Tree Gallery, a gift shop with spa accessories mainly produced by local communities, in line with the government's One Tambon, One Product policy.

Ms Ho Phang said that the value of the export products, such as essential oils, incense sticks and handicrafts from Thailand, was substantial since they were supplied to the group's 28 spa galleries in the region.

WORLDLY THEME PARKS: FENG SHUI, SEAFOOD

CNN - When it opens in 2005, Hong Kong Disneyland may be the Most Harmonious Place on Earth.

That's because the 310-acre park will be constructed according to the ancient principles of feng shui, the Chinese system of arranging buildings and furnishings in harmony with natural elements.

Doorways will be aligned so that no sharp objects point at them. Rocks and pools of water will be added to the park, which is being built to resemble Disneyland in Anaheim, California, dubbed by Disney "the Happiest Place on Earth."

United States theme park companies building facilities in international locations are finding they must strike a balance between authentic Americana and indigenous sensibilities.

More American theme park companies are looking abroad for growth. Just this year, Universal Studios opened a theme park in Osaka, Japan, and Disney opened Tokyo DisneySea. Next year, Disney is opening a second park outside Paris, Walt Disney Studios. And Six Flags is opening a Warner Bros. Movie World park in Madrid.

"The U.S. and North America are very mature markets, some say saturated," says Tim O'Brien, an editor at the trade publication Amusement Business.

One of the most difficult things about opening a Hollywood-style theme park in Japan was adapting American humor to a Japanese audience, says Norm Elder, senior vice president of international marketing at Universal Studios Recreation Group in Los Angeles.

Some jokes or story lines in the "Wild, Wild, Wild West Show" that ordinarily would have been conveyed verbally, for instance, were performed physically or subtitled.

Such concerns also carry over to the menus at the park's 20 restaurants, which include Mel's Diner, Louie's N.Y. Pizza Parlor and Schwab's. While the food is predominantly American, much of it has Japanese touches. The company tested 4,000 menu items over three years to get the right combinations.

"You'll get a spaghetti dish, but instead of spaghetti and meatballs, you'll have some kind of seafood with it," Elder said.

Bows to local culture take other forms.

Before Orlando-based theme park designer Bill Coan began building the Taman Ria amusement park in Jakarta, Indonesia, local officials buried a water buffalo's head below the foundation for good luck. The attraction opened in the late 1990s.

Not everyone is keen on installing the native country's traditions. Disneyland Tokyo originally had no Japanese restaurant.

"The Japanese told us from the beginning, 'Don't Japanese us,"' says Marty Sklar, vice chairman and principle creative executive of Walt Disney Imagineering. "What they meant was, 'We came here for Disney. We came for America. Don't give us Japan because we know Japan."'

Disneyland Paris, on the other hand, was quick to incorporate French elements, such as restaurant Auberge de Cendrillon (Cinderella's Inn) in Fantasyland.

"The French say, 'We are very important. Therefore, don't forget you have to pay attention to our culture,"' Sklar says.

For Hong Kong Disneyland, company officials consulted a feng shui master on the design. Feng shui followers believe the environment is crowded with invisible energy lines that carry with them either harmony or discord, health or sickness, success or misfortune.

While 95 percent of the design was already feng shui-compliant, the master recommended an extra courtyard be built with access to rocks and a small pond, said Wing Chao, executive vice president of Walt Disney Imagineering.

Even the park's location has good feng shui: It's situated between a hill shaped like a white tiger and another hill resembling a dragon.

"It's a very prosperous and fortunate site," Chao said.  

SINGAPORE UNVEILS FREEBIES FOR DOMESTIC MARKET

SINGAPORE: To stimulate the local tourism industry, the Singapore Tourism Board (STB) has launched the first comprehensive, industry-wide programme targeted at the domestic market. Part of a S$13 million (US$7.2 million) assistance package aimed at helping the industry tide over the current economic downturn, the initiative is two-pronged.

Local residents will enjoy a series of incentives like $6 tour packages and $90 room stays, together with additional discount vouchers for accommodation, tours, attractions, shopping and dining. Says STB’s chief executive Yeo Khee Leng: “[We] want to encourage locals to rediscover the wealth of experiences that we have here. Singapore has developed a whole range of new hotels, tours, attractions and dining experiences in recent years that has spawned a vibrant urban environment and bolstered our international appeal, but many locals have not experienced this side of their own country.” A total of 40 hotels are offering 15,000 packages to the resident market. Also on offer are specially-priced tour packages, some of which are more than 60 percent off normal retail prices. These translate into tours for some 70,000 adults and children.

The second thrust of the initiative is a special holiday package designed for local residents to invite their overseas friends and relatives to visit the Lion City. “The year-end season is a time when friends and relatives gather from far and near to commemorate the many festivities that we celebrate,” says Yeo. “There are events lined up back to back, including an array of cultural and arts events such as Chingay, River Hong Bao, Porgy & Bess and Judah Ben Hur.” The Singapore Reunion Package starts from $170 per person for a 3D/2N vacation, hotel accommodation and ground arrangements inclusive.

“We are making it easier for Singapore residents to host their reunions in Singapore,” he adds. “Plus, we want to give their visitors a chance to experience things that they may otherwise miss, such as a bumboat ride [or] foot reflexology.”

Source: TravelAsia