Outbound Asia. Up 4%?

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2007 January 29

Asia. Up 4%?

Overall counts on outbound travel for the whole of Asia Pacific in late 2006 (not precise, but estimated from data collected by the Pacific Asia Travel Association), shows that regional growth was 4% year-to-date, and slowing. 

That compares with about 6% growth for all-2005. 

Both sets of figures are slower than growth in inbound travel counts. And that in turn probably shows that the faster inbound growth is being driven from markets inside Asia Pacific. 

Among certain key markets: 

– The
Japan market – once the most-sought-after in Asia Pacific – has struggled for so long that many have forgotten that it still exists. But there is not much in the latest data that seems likely to change this. Year-to-date growth was at 2%, although the most-recent month produced a better 4%.

Australia – becoming a market difficult to read – was up 3% year-to-date, but fell in the latest month.



Sickening trend. Or Unhealthy growth?

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 May 30

Sickening trend. Or Unhealthy growth? 

I refer to what is called medical tourism, but I will resist any more puns, and continue with the facts. 

Dr Ridzwan Bakar of the Asian Hospital Federation says that there were over 2mn visitors in
India, Malaysia, Singapore, and Thailand in 2005 who combined their trip with some sort of medical procedure at a hospital or clinic. That would be near-6% of the total (depending on who’s counting), and probably a higher share than most thought.

Bakar also said health tourists spent an average US$362 daily compared with US$144 for leisure travellers. But none of his data was sourced, and so for the present should probably be considered just an indication. 

But the business seems likely to grow at a rate faster than general travel. Although as with VFR (visiting friends/relatives), it may be difficult to clearly measure. 

Some may be related to general leisure travel, but more likely not. After all, the head of Bumrungrad hospital in Bangkok – which has been successful at attracting patients from outside Thailand – says ‘Sun, Sand, and Surgery’ is a myth. 

“The first thing a doctor tells you after a procedure is ‘Don’t go in the sun, don’t swim, don’t go in the sand, don’t drink, and don’t over-exert yourself.'” 

But there may be medical business for hotels. Bumrungrad owns two small hotels in the grounds of the hospital, although it manages these itself. But – just as some hotel groups, mainly in the
US, actually run the service sector of hospitals – there will be opportunities to run pure-hotel operations where the main or only clientele is related to the hospital.

Thailand. Selling online?

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Fox – sly. Trots – left-leaning (Trotsky) plus its more insalubrious meaning.
Foxtrots – leading the industry in a dance.

2007 January 26

Thailand. Selling online?

The Tourism Authority of Thailand, the country’s national tourist office, has launched an emarketing campaign – ThailandHotDeal.com.

Its target is to get 20,000 online bookings through this August selling US$5.3mn (at US$1 to B37.7) of travel – which would mean an average US$265 for each booking.

Earlier, the TAT ran a similar program, and sold US$2.1mn online for the destination’s six Andaman-Sea provinces through April 2006.

The new program covers all Thailand. There are 27 target markets – which in practical terms, means most of the markets where the TAT has at least some activity. But the offers can be booked in other markets.

The word “hot” is intended to mean “bargain” to travellers. For that reason, the sales might not be to new customers, but just those seeking a special deal. Over 100 hotels have created special prices and packages for ThailandHotDeal.

Last year’s military coup in Thailand may not have affected tourist traffic – if it remains bloodless. And this online program was also unlikely to be affected. But the end-of-year bombs in Bangkok will certainly reduce potential – although genuine bargains usually overcome fear. And so does the attraction of the sex business in Thailand – travellers looking for sex are less likely to be turned away by bombs.

However, there may be some change in business traffic – which, of course, is included in the overall visitor count. The government’s anti-foreign-business moves might cause change.


Middle East. Airports up in first-half.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 



2007 January 24




Middle East. Airports up in first-half.



The total number of passengers passing through airports in the
Middle East* increased 11% in the first half of this year to 53mn. That growth is double the worldwide rate.


According to the data, from ACI (Airports Council International), the bulk of the traffic (80%) is international, and that is also growing at a faster rate – near-14%. 


Dubai remains by far the airport with the largest international traffic in the region – over 30%. But apart from that some of the results from the first half could indicate changing patterns.


They include (based on international traffic): 


Abu Dhabi. Its overall 10% growth indicates (faster) growth at Etihad is being countered by reduced activity by other airlines.


Bahrain. Is its 29% growth just a surge from Gulf Air or is it related to
Abu Dhabi realities, see above?


Beirut (up 4%),
Cairo (up 9%). Both affected by external non-travel events which can distort analysis on current figures.


Dubai. Onwards and upwards. Up 32%.


– Jeddah (up 8%),
Kuwait (up 7%). Missing out on regional growth?


Muscat, Sharjah. Still small. But
Muscat is now larger than, say,
Amman. And although Sharjah’s 41% growth (fastest in the region) is mainly self-generated, some would, in effect, be related to
Dubai demand. And thus making
Dubai’s growth even more remarkable.


The region’s domestic traffic numbers are generally small, for obvious reasons. Only
Cairo and the three airports in
Saudi Arabia counted more than 1mn each in the first six months. (Note that domestic traffic would normally also include helicopter flights.)


Damascus and
Doha are the only major non-members of ACI in the region. As a result, their data is not included here.)



India. Travel spending confusion.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 



2007 January 22




India. Travel spending confusion.



New date from the World Tourism Organisation on
India’s travel spending supports the evidence that statistics lie.


Earlier figures indicated that
India‘s travel deficit (amount spent on outbound travel by residents minus amount spent in
India by inbound visitors) increased substantially in 2005.


New figures – in theory final – indicate a near-completely-different outlook. 


To reach these totals WTO adds up amounts spent in other destinations by travellers from
India (or, depending on the destination, Indian-citizen travellers, who may live in
India or other countries) but takes
India’s own figures for spending by foreign visitors in


This usually means that figures for outbound-spend will change – not only because different periods of time as measured, which is understood, but sometimes new figures are received for periods past. 


Usually, inbound-spend does not change much – because of the single source – with only currency fluctuations causing differences. 


But in 2005? The WTO reports a growth of 17% in spend by visitors to US$7.4bn – but based on data the WTO released earlier, growth calculates to 54%. 


There has also been changes in the data given for outbound spend – but not so great as for inbound. 


The main result of these changes is that travel is no longer in deficit. There is actually a surplus – visitors to
India spent US$1.5bn more than Indians travelling overseas.


The other significant change is that this indicates that outbound travel from
India is not growing as fast as has been reported – or as believed. Although current reported growth on spending – 12% – is fast, it is below general conception of the market, which is more like 20% and above.


Current data indicates that in 2005 visitors in
India spent 26% more than
India residents spent overseas.




TUI. Michael Frenzel.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 



2007 January 20



TUI. Michael Frenzel. 


Is Michael Frenzel losing his grip as head of
Germany’s giant tour operator, TUI?


We look to
France, where Eric Debry, the head of TUI’s Nouvelles Frontieres, has jumped, or was pushed, after years of losses – before and after TUI took over.


This seems to confirm failure. TUI took over NF when it was a successful marketing operation, but doing badly – it was then run by founder Jacques Maillot, who is/was a brilliant concept man, but found that managing the success he created much more difficult. 


Frenzel presumably thought German efficiency would simply replace the inefficiency. But the concept and moral got lost along the way, so there was not much of a business to run – efficiently or not. 


And now NF – once a leader (like Club Med, another French company that has lost its pre-eminence), is now reduced to catching up with competitors rather than leading them. 


If Frenzel cannot see his mistakes in this operation, he may not be capable of adapting TUI to the new world realities in travel retailing. Or, rather, travel selling – because retailing and wholesaling and others are now intermixed. 



Hotels. Rich Mandarins in Tokyo.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 


2007 January 17




Hotels. Rich Mandarins in



The Hong Kong-based Mandarin Oriental hotel group has made a stunning start with its year-old hotel in


We believe the hotel’s average room rate is running at over US$500 – which would make it the city’s rate leader. 


We are not clear about occupancy levels. At the start of 2006 they were not so high, probably close to 60%. But they likely grew over the year, along with
Japan‘s economy – because the other remarkable factor about the hotel is that a high share of business is domestic, perhaps 80%.


The product (the hotel itself and service) seems to warrant this auspicious result. This includes a high (particularly for high-cost
Japan) staff:room ratio of 2.5:1. And all but about 10 of the 450 staff are Japanese.


Mandarin Oriental already sets a high standard with its hotels. This
Tokyo hotel, along with its new one in
Hong Kong and, probably, the original MO in
Hong Kong, now reopened, may put the company a notch higher.


We also hear that the group’s hotel in
New York is also reporting stunning results. Part of this is undoubtedly because of overall results in
New York; these days, it is hard to be doing badly in
New York.



Kofi Annan. Out of touch.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 


Kofi Annan. Out of touch. 

The outgoing secretary-general of the United Nations usually has more important things to worry about than the travel business. 

But he did make some comments during a visit to the World Tourism Organization headquarters in Madrid. Since the WTO became a UN agency in 2005, his comments take on more importance; after all, he is like the big big boss. 

We are somewhat disappointed with his comments, then, which appear to show that he does not regard the travel business as important. Or, if he does, that he is ignorant or naive about how it works. 


Some of his comments follow – with our comments in italics: 

– Tourism really has the potential of opening up economic space for people around the world. We are not quite sure what Annan means by this, but we think it is meaningless. He seems to be saying that the travel business can become a business for people around the world. Well, yes. 


– We should encourage tourist developers to go and set up tourist developments…and doing so help provide basic amenities such as electricity and clean water for the communities living in those areas. This would help ‘uplift’ the local people, encouraging them to produce for the tourists. 

Like many others, Annan seems to have been fooled by the WTO’s use of the word ‘tourist’ and thus assume that all travellers are travelling for leisure purposes. If he stopped to think, he might realise that (what, 98%?) of travellers go to places where they already have electricity and clean water. 

– Tourists should not be offered ‘ Europe abroad’ when they travel to Africa and other continents. We really need to get them to interact with the people and also to offer them authentic culture. 

Yes, but most travellers from Europe would not book a hotel in Africa if it had no airconditioning, for example. Plus, and we are surprised Annan does not seem to take into account that many people in Africa live and work in airconditioned homes and offices, drive 4×4 gas guzzlers on metalled highways, and eat Big Macs. So what, please, is ‘authentic culture’? 

We suspect Annan is thinking of those village mud huts – which, probably, did not have electricity or clean water. 

We are disappointed that such an important person seems so out of touch with the modern and efficient travel business, and commonsense traveller requirements. 

And, of course, that the WTO seems to think big-boss Annan’s words were commendable; we think them condemnable. 




Indonesia. Trying hard.

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2007 January 12



Indonesia. Trying hard.


In recent years, Indonesia (ID) has had a hard time as a leisure destination. Terrorist bomb attacks in
Bali targetting tourists in 2002 and 2005, the December 2004 tsunami, an earthquake in
Yogyakarta last June, and general uncertainty about an islamic destination – for moslem as well as non-moslem tourists.


The following is a round-up of developments.  


·         ID marketing/product. 


– The annual budget of ID’s ministry of tourism (plus culture) is US$10.8mn. In addition there is a governmental US$7.2mn
Bali recovery fund plus a general one for recovery worth US$6.5mn.


– ID will continue to attend selected international travel shows, including the Arab Travel Mart, Asean Travel Forum, ITB, JATA, PATA Travel Mart, and World Travel Market.  


– Heading for failure is the overall tourism policy. ID wants to emphasise new destinations from this year, rather than highlighting current main destinations like
Jakarta, or
Yogyakarta – pushing
West Sumatra,
North Sulawesi,
South Sulawesi, and the Western and
Eastern Lesser Sunda islands.


Yet Lesson 1 in marketing is that when times are tough, you concentrate on core products and/or those that are easiest to sell. Unfortunately, politics in
Indonesia is driving tourism marketing, which means it will fail almost by definition.


Holding the Time exhibition in
Makassar is one example; it should be in
Bali or
Jakarta for at least the next 3/4 years.


– Priority markets are
India, and the
Middle East.


– Although requiring visas reduces potential, at least ID has increased the number of countries that can get visas-on-arrival from 36 to 52 – including Netherlands and Sweden, which had been excluded for political reasons. 


– Hoping to promote eco-tourism. A comprehensive and good eco-product brochure has been produced, but prices are high. 



·         Garuda (GA). 


– Donated 10k tickets (5k international) for in a lucky draw to help
Bali recover after the 2005 bombing. But dropped it because got no support from rest of industry.


– Restructuring (again) its network. Plans to drop
Bali as a hub, leaving only
Jakarta, probably for this summer. Too costly, it says; it is like having two airlines.


Bali traffic has fallen into losses since the 2005 bombing. The
Japan market recovered better than


– Plans to restart
Europe, with JKT-Dubai-Amsterdam, including traffic rights DXB-AMS, from this June with 3or4 flights/week. Currently plans are to use B747-400s, but after we pointed out that this is not the right aircraft type, an airline spokesman said it may lease another type. He added that GA does not want to return to
Europe in the same way it left.


– No new routes in
Asia are planned, partly because it has no available aircraft. Discussing now whether to buy A350s or B787s.


– GA wants to join an alliance – does not know which – hopefully by this summer. Skyteam would make most sense. 


– Government is paying GA a US$107mn subsidy. 



·         Other airlines. 


– A number of Indonesian airlines in addition to GA have added international routes: Adam Air, Jakarta-Singapore; Indonesia Air Asia (ex-Awair) Medan-Penang, JKT-Kuala Lumpur; Jatayu Air JKT-KUL/PEN; Lion Air, JKT-KUL; Merpati Bali to Timor Leste.  


– GA’s plan is (still) to spin off its Citilink subsidiary as a low-fare-airline, with five aircraft (type not decided). It may operate international flights regionally. 



·         ID visitor-arrivals market wrap up. 


– In 2005, ID counted just over 5mn visitors, surpassing the 1998 peak. In 2005, despite the tsunami, a further increase was expected – but the second bombing in
Bali and fears of bird flu helped cause a 6% decline.


In 2006 there was an earthquake in
Yogyakarta and a (relatively) minor tsunami. These may not reduce visitation too much, but the government was expecting 5-5.5mn visitors, and then 6mn this year. The target is 10mn in 2010 – which would require an average annual growth rate of near-15%, and therefore seems unlikely to be reached.


A key will be air seats. Capacity increased 6.5% over the past year to 88,200 seats weekly. 


Indonesia misreads its own statistics.
Singapore figures highest – taking a 27% share in 2005. But as much as half of this was to the near-Singapore islands of Batam and Bintan – which are like an excursion trip for
Singapore residents.


In 2005 there were complex disputes between
Singapore and the islands – which still linger

– and this caused most of the decline shown for
Singapore. Exclude
Singapore from the counts, and ID actually had 3% growth in 2005.


– Visitors produced revenues of US$4.5bn in 2005, down, but up per-visitor and per-day. The 2010 target is US$10bn – also looking a tough target to attain.  



Bali. Despite the image, the island has not been doing well, even apart from the bombings. Arrivals passed 1mn back in 1992, but then grew only an average annual 4.3% through 2000 – when the series of external problems started. In 2005 arrivals looked likely to surpass the 2004 peak of 1.5mn. But three terrorist bombs in October caused arrivals to drop 40% in the last quarter.


But current target is for a recovery this year to 1.6mn visitors. 



·         Hotels. Despite reasons for caution, hotel expansion continues. Accor, for instance, says it plans to increase the number of hotels from 32 to 50 by end-2007. Other developments of note include: 


– In
Jakarta. The country’s first international hotel, Hotel Indonesia, which opened as an InterContinental in the 1960s, is due to reopen end of this year following refurbishing as Hotel Indonesia Kempinski. The planned Conrad would bring the Hilton flag back to
Indonesia. Aston plans two of its Aston Express budget hotels.


– In
Bali. Pansea (now part of Orient-Express) has opened the

Gardens. Hawaii-based Outrigger Hotels is due to open at

Beach. Bulgari opened its 59-villa 5-star resort late last year. 


– Others.
Medan is due to get its first international group with the Marriott. Swiss Belhotel’s hotel in Banda Aceh, due this month, will be the largest travel investment in the province since the 2004 tsunami. In
Sulawesi, Clarion has opened in
Makassar, and Singapore-based Sedona near



·         Time (Travel
Indonesia Mart & Expo). Held last September in
South Sulawesi. This is the wrong place for such an event – see above.


The event is weakening. And for the second year running, the country’s minister of tourism, Jero Wacik, did not attend (the ex-minister did, when he was a minister, and now). That should be a scandal – and the fact that is not indicates part of the problem. It shows government’s lack of support for the inbound travel business. 


Also, and perhaps more bizarre than scandalous, Pontjo Sutowo,  the chairman of the event and the Indonesia Tourist Promotion Board – sort-of official NTO – did not attend either. Or, rather, he was there to cut the ribbon at the official opening ceremony, then he quickly jetted back to


Beere. PATA or Australia?

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Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2007 January 10



Beere. PATA or


In theory, Richard Beere is about equal-2 with five others at Tourism
Australia, the country’s NTO. In practice, and certainly in the public face, he is number two.


So his move to become PATA chairman looks questionable. That honorific post is usually for people looking for publicity to help their career development, or for those on their way out of a senior position in a big company. 


Beere says he is not on the way out, and that indeed the chairman’s role and his own at the TA (director, global operations) overlap. In addition, PATA’s travel mart reaches some markets that are in TA’s smallest target markets – what it calls Tier 4. 


He says the PATA job will help to “save ourselves a lot of money; I can get a lot of what we need” from PATA. 



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