FOXTROTS

 

 

 

 

 

 

 

 

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning. 

Foxtrots – leading the industry in a dance.

 

 

 

 

 

2008 May 19

 

 

 

The Economist is impressed. Not me.

 

 

 

 

 

 

 

I mean that. The Economist (TE), a magazine that usually questions the subjects it covers, appears to have fallen for the charms of the travel business. I am, like many others, in awe of much of what the publication does, and so I am somewhat timid about attacking, nay, ridiculing something that it has produced.

 

 

 

 

 

 

 

But I must do the work TE usually does – on its report on the travel business in the current issue:

 

 

 

 

 

 

 

[] The report subject was ‘Travel and tourism’. TE appears somewhat ignorant about the travel business, and over-influenced by those big names in the travel business. For instance, what is “travel and tourism”? According to the World Tourism Organization, ‘tourism’ includes ‘travel’. Geoffrey Lipman – now of WTO, then of WTTC – invented T&T because he could not call his WTTC ‘WTC’ because it was too close to WTO.

 

 

 

 

 

 

 

[] TE has fallen for WTO’s marketing ploy and named the body ‘United Nations World Tourism Organization’. This is wrong. The body is the World Tourism Organization, which it would like to be abbreviated to UNWTO. Another sign that TE is a newcomer to the travel business.

 

 

 

 

 

 

 

[] One statistical table is sourced as ‘United Nations’. The data is actually from the WTO. Also, TE’s definitions are wrong – it should be ‘International visitor arrivals’ not “tourist”.

 

 

 

 

 

 

 

[] Dubai “is expected to  become the world’s busiest airport”. TE’s editors should go back to read their book of maths, preferably while sitting in one of New York’s three airports, one of London’s five, or, of course, Beijing, Guangzhou, Shanghai.

 

 

 

 

 

 

 

[] “…the world’s only seven-star hotel…” Who says so? The hotel, and now TE. What happened to the sixth star? Most counts go up to 5-stars. Does TE know that the better hotels do not like to describe their lowest room category as ‘standard’, so they use ‘superior’. To me, you can’t have something ‘superior’ if you don’t have something ‘standard’.

 

 

 

 

 

 

 

And does TE know that hotels, particularly in Asia and now the Middle East, use ‘5-star’ with abandon, so those hotels that aim for something genuinely 5-star have to say more, so they say 5-star-deluxe or even 6-star. Now a hotel has come along (yes, in Dubai) that has taken this hype up another rung, and denominated itself 7-star. Now endorsed by TE.

 

 

 

 

 

 

 

[] “Dubai also boasts the Middle East’s first indoor ski-slope.” Hopefully the last as well. Today it might be a boast, tomorrow it will be a shame – until powered by solar power. We are surprised TE glides over this matter – despite its comments on the environment later in the report.

 

 

 

 

 

 

 

[] “…the top brass of the World Travel & Tourism Council…might have found lots of reasons to be gloomy: a weak dollar, sky-high oil and food prices, looming recession in America and a credit crunch on both sides of the Atlantic…[yet they] were fairly chipper.” Welcome to the travel business. Has it ever predicted a downturn? Only post-event does it issue such negative commentary, usually accompanied by ‘resilient’ comments, and genuine examples of resistance to downturn.

 

 

 

 

 

 

 

If TE (and the WTTC) really need to know, there is already a downturn this year – in some sectors of some markets. Yet there is also continued and remarkable growth. For instance, I forecast China’s outbound will top 50mn this year, although the first quarter seems to have started slowly with growth around 16% – but see below.

 

 

 

 

 

 

 

[] WTO “has resorted to monitoring international tourist arrivals only. It therefore knows where tourists are going to, but has a much less accurate idea of where they have come from.”

 

 

 

 

 

 

 

Eh? “Resorted” sounds like a change; the WTO has been doing this not quite as long as TE has been around, but a long time. “Tourists”? Hopefully all travellers, not just tourists.

 

 

 

 

 

 

 

“It therefore knows where tourists are going to, but has a much less accurate idea of where they have come from.” I don’t really know where to start on this one, but…

 

 

 

 

 

 

 

The WTO gets its data from national bodies and adjusts some (but does not tell its audience that, or how – so, for instance, its China total is different from the (3) sets of data that China itself produces). So the WTO’s figures are as good or  bad as theirs. And, in general, the biggest mistake WTO and others make is collection of data by passport instead of residence. The US-national financier based in London is categorised as ‘US’ when he arrives in China – by China and thus by the WTO.

 

 

 

 

 

 

 

[] “Arrivals in [Asia Pacific] were 185m”. Hopefully TE (and the WTO) knows about 100mn of these are border crossings from Hong Kong and Macau into China. (But not, ironically, a US-national financier based in Hong Kong; he is listed under ‘US’!) Under WTO’s own rules, most of these should not be counted. The WTO ignores its own guidelines – probably because it does not want to mark down its visitor counts. If the financial business has problems with grading agencies, the travel business has problems with the WTO.

 

 

 

 

 

 

 

[] A nice table on increased spending 2009-18 is meaningless – but nice. It needs to be attached to other numbers, such as actual visitor numbers. But I presume the main reason for the table is to impress politicians – and TE – and for that it will probably work.

 

 

 

 

 

 

 

[] TE quotes Bill Marriott, head of the eponymous hotel company or, hopefully, misquotes him. “The Middle East, India and China are the next big thing”. Except for the Mideast (which I don’t think is big), that comment is about 10 years behind the reality in China, but probably only 1-2 years for India – although “the next” appears wrong. “He thinks that the industry will be bigger in the Middle East”. Can’t really argue with that; in fact I reckon the industry will be bigger in most of the world. “China will dwarf even the Middle East.” What planet are we on? “Will”? How about ‘However, China dwarfs the Middle East’.

 

 

 

 

 

 

 

[] China outbound in 2007 “reached 47m”. That’s a new figure to me (I estimated 41mn), but if correct and from the same base as earlier figures, then the remarkable fact is more than the number. Because it would mean growth was 36%. However, until there is more confirmation (honestly, I don’t think we could be that wrong), treat that figure with caution.

 

 

 

 

 

 

 

[] China says it will “add 97 airports by 2020”. We hope TE knows that China repeats last year’s targets (that c97 has been the annual statement for about 30 years) and that it usually includes expansion of existing airports.

 

 

 

 

 

 

 

[] For all TE’s misunderstandings on China, it appears to understand India better. Although it did not note an important reason – visas, the cost and difficulty of getting them – for poor results in terms of visitor arrivals. It was going to cost me US$75 for a visa for a 3-day visit – but I could not find out how long it would take to actually issue the visa, so I did not go.

 

 

 

 

 

 

 

[] “Carlson is developing around 50 hotels in India compared with only ten in China.” I am not bothered about the figures, but I know the sentiment of this comment is wrong. It could be Carlson has signed a franchise agreement for its economy brands (Country Inn, Park Inn), which TE did not mention. And that it has not yet signed a similar agreement in China.

 

 

 

 

 

 

 

[] “Thomas Cook bought Thomas Cook India”. Whoops. TC also sold TCI about two years ago to the company it has now bought it back from. That was dysfunction at TC, although remarkable that it did not have the elementary foresight about India’s potential when it sold.

 

 

 

 

 

 

 

 

[] The industry “recovered quickly after [9/11], SARS, [start of war in Iraq], and the [Indian Ocean] tsunami [end-2004]”. Well, yes and no. The US is still below its pre-9/11 visitor count in 2000 – seven years on. Recovery from SARS was indeed rapid for some destinations although for some, such as Hong Kong, it was boosted by a change in visa regulations for travellers from Hong Kong – creating a new category which now produces 50% of the visitors in Hong Kong from China. The war in Iraq was a non-event – sorry, as far as the travel business is concerned – so ‘recovery’ is the wrong word. The tsunami recovery was also quick – about one year. Bali was not mentioned (two serious bombing incidents), but recovery there has not been so obvious.

 

 

 

 

 

 

 

 

[] TE touched on the environment. But I was not impressed with most of the commentary. No mention, for instance, of my favourite – Six Senses plans for a zero-emission resort in the Maldives. That, in turn, inspired the start of the new report at our organisation, entitled ZERO.

 

 

 

 

 

The Fox