Hilton hides; Singapore Airlines in trouble; Copy Emirates businessplan.

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FOXTROTS

 

 

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

Foxtrots – leading the industry in a dance.

 

 

November 26 2011

 

 

Hilton hides; Singapore Airlines in trouble; Copy Emirates businessplan.

 

 

[] One of my friends once said “No-one got fired for hiring IBM.”

 

There seems to be a related case with Hilton. The Travel Business Analyst newsletter has detailed shortcomings with its China Travel To Europe study, including some apparent faults. Hilton has shown no interest in learning about this, presumably because no-one is going to get fired for hiring the prestigious SOAS (School of Oriental and African Studies at the University of London) to do the study.

 

SOAS may be prestigious, but they appear not to have much general insight into the China outbound market.

 

Does this mean that no-one at Hilton wants to uncover any shortcomings – because it has already paid its money, got a lot of publicity, etc? It would obviously be awkward if all that were undone; maybe heads would roll.

 

The odd thing is that presumably Hilton is going to put down more money, and create new strategies, on apparently flawed data.

 

 

 

[] The Singapore Airlines group is in trouble – not least with the latest figures I calculate, which show 2% growth at SIA compared with the market’s 11%. One of my many proposals is to launch Scoot* sooner than planned – April 2012 at the latest.

 

*The clever name (if you are aged under-9) for its longhaul low-fare subsidiary.

 

 

 

[] Why has no European airline copied the one-stop-shop businessplan of Emirates for travel to North America at least, if not the Americas? Finnair and Scandinavian are probably in the best geographical position to do that to North America.

 

What is ‘that’? One-stop Lyon-Winnipeg, for instance, or Bruges-Portland. It’s all in my extra-ordinarily-successful book (albeit not yet written), ‘How to copy Emirates and Make a Million’.

 

 

 

The Fox

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Visitor-Chief Sound Bites: Mariyam Zulfa, Maldives; Katarzyna Sobierajska, Poland; Taleb Rifai, World Tourism Organization.

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FOXTROTS

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

Foxtrots – leading the industry in a dance.

November 16 2011

Visitor-Chief Sound Bites: Mariyam Zulfa, Maldives; Katarzyna Sobierajska, Poland; Taleb Rifai, World Tourism Organization.

 

SOME soundbites from visitor-chiefs – Mariyam Zulfa, Maldives; Katarzyna Sobierajska, Poland; Taleb Rifai, World Tourism Organization.

[] Katarzyna Sobierajska, minister of tourism, Poland:

 

-In 2012 we will co-host with Ukraine what has been called the most important tourism event in the world, the Euro 2012 soccer competition.

-The new football stadium in Warsaw includes a congress centre and offices; it will be the biggest in the city. There will be a new autoroute Berlin-Warsaw; Germany is our most important visitor market.

-The payment to Messe Berlin to be ITB Berlin’s 2011 ‘partner country’ was included in a US$21mn (at US$1 to €0.72) budget. Other parts included spend on outdoor promotion in Berlin, which we estimate would represent US$7mn.

-We now need to work on promotion for post Euro. Will promote MICE in the new stadiums. And this month we are due to open a visitor promotion office in Beijing. But the problem is that there is no direct flight; LOT may fly there in about two years’ time.

-There will be 1mn visitors for the Euro 2012, including 30,000 by plane for the first match (in June).

[In answer to my question, the minister has no figures for those that would not visit Poland at the time (just before until just after) of Euro 2012, but said those not interested in soccer would not visit at that time. Over that 3-week period around 3.5-4.0mn visitors would normally visit Poland; I estimate up to 200,000 will forego a trip at this time – but may, of course, visit at other times.]

[] Taleb Rifai, head of the WTO (World Tourism Organization):

-We have signed a new cooperation agreement/JV with WTTC. We are serious about building a coherent case for tourism. [He offered no further explanation; I do not know what this means.]

-Governments find [the travel business] a tempting target for taxes.

-We have been approached to put travel advisories from governments on our website. We are against that, because they are issued by others. Because it would indicate that we endorse those. But we are doing this for Egypt and Tunisia – not for others.

I disagree 100% with Rifai. The WTO should be the source of travel information, not promotional travel information. If there was an advisory that the WTO thought unsatisfactory, it could add its comment to the foreign-government advisory.

 

And, of course, its website already runs information from other sources – travel statistics being the simplest example.

 

I believe in reality. But the WTO seems to fear reality, preferring promotional travel information. As a result, Rifai seems unlikely to achieve the credibility he would like for WTO or what the WTO calls ‘tourism’.

[At a news conference, two of Rifai’s three presentations were about new WTO meetings. For the WTO, another meeting qualifies as ‘news’. The outcome of the meeting has less relevance.]

[] Mariyam Zulfa, minister of tourism, Maldives.

Yes, we could mandate resorts to follow the Soneva-Fushi with seawater-powered air conditioning*. But I don’t want to impose another requirement on developers; they are already investing a lot; it costs US$80-100mn to build a resort.

I also disagree 100% with the minister. If there is any place in the world where environmental measures must be incorporated, it is the Maldives.

 

*An idea copied from the Bora Bora InterContinental, but with shallower thus warmer seas, Six Senses has not yet been able to get its airconditioning system working properly.

 

The Fox

 

Visitor forecasts; Europe outbound travel; Eurotunnel’s ups and downs.

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FOXTROTS

 

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

Foxtrots – leading the industry in a dance.

 

 

November 9 2011

 

 

Visitor forecasts; Europe outbound travel; Eurotunnel’s ups and downs.

 

 

[] My fiddling with figures:

I maintain that visitor arrivals counts should always be compared with the population numbers, not just with previous years. After all, the 1bn expected in 2012 would not have been possible in times past, because there was not that number of people in the world.

 

So, I estimate there looks likely to have been a growth this year – from 13.5% of the population in 2010, to 13.9% this year. And according to expectations for 2012, it will grow again, to 14.2%.

 

In terms of growth, the visitor business took 18 years to grow from 500mn arrivals to 1bn (if that is achieved in 2012). And on WTO forecasts, it will take 13 years to add the next 500mn, and then nine more years for the growth to 2bn.

 

 

[] Europe’s outbound travel looks shakey. First-half for some of the more important markets – Austria -8%, France flat, Germany -7%. And Q1 for Denmark +9%, but Sweden -13% and UK -1%. (I extrapolate data from Eurostat; details in current issue of Travel Business Analyst.)

 

 

[] Funny that. For years, Eurostar train traffic has been growing as car traffic through the Eurotunnel has been falling. Now the reverse is happening! Eurostar down 2% in Q3, cars up 4%. However, I calculate car traffic is still 30% below its peak, in 1999; train traffic is still ahead YTD.

 

 

 

The Fox

 

Japan inbound; China outbound; Diversion from North Africa.

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FOXTROTS

 

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

Foxtrots – leading the industry in a dance.

 

 

November 7 2011

 

 

Japan inbound; China outbound; Diversion from North Africa.

 

 

[] The commentariat (yes, them again) tell us than the visitor business in Japan is “on the road to recovery”. However much we might wish that, the figures talk tougher. Monthly totals are still running 30%-plus down. Six months after that triple-hit (terrorism is different), totals should be better than that.

 

 

[] Sit down. I estimate China outbound travel increased 21% through Q3, and Q3 at 29%. You will not see official data until next March at the earliest. If you don’t subscribe to Travel Business Analyst……

 

 

[] I have been looking for indications of where travellers diverted from North Africa are going. (Have a healthy suspicion of positive comments from the big travel associations; they have a message they want to get across.) There are indications that Spain has gained. See current edition of Travel Business Analyst.

 

 

 

The Fox

 

Singapore Airlines. Scoot off.

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FOXTROTS

 

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

Foxtrots – leading the industry in a dance.

 

November 6 2011

 

 

Singapore Airlines. Scoot off.

 

I

 

HOPE that Singapore Airlines’ subsidiary Scoot* is going to be different from what local analysts and commentators think. If not, SIA is going to have another failure on its hands.

 

 

The reason that most observers get it wrong is probably because they travel on company expenses. Life is different when you pay for your own fares, or you are a small or new company.

 

 

They expect the medium- long-haul LFA (low-fare-airline) Scoop will “seek to provide more frills at a slightly higher price that its rivals. It will be like luxury budget. When you’re flying 12 to 13 hours, you need to throw in some of the facilities people are used to on intercontinental flights.”

 

 

Wrong.

 

 

People want very low fares, a seat, a toilet, and safety, whether two or 12 hours. All the rest they will bring themselves, or buy. Analysts seem to have forgotten that LFAs did away with frills (they were originally called ‘no-frills-airlines) because people did not want to pay for something they might not want.

 

 

I suspect, however, that Scool will go the little-frills way – because management there does not understand the LFA concept as practised by Southwest in the US and Ryanair in Europe.

 

 

 

*Its newly-announced name. Maybe it will grow on me … I still prefer the names I created – Swing (for Singapore Wing), or Scool (Singapore Cool, It’s Cool).

 

 

 

 

The Fox

 

Europe’s travel growth, ‘low-fare’ airports, travel stock prices.

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FOXTROTS

 

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

Foxtrots – leading the industry in a dance.

 

November 6 2011

 

 

Europe’s travel growth, ‘low-fare’ airports, travel stock prices.

 

[] I think all commentators at ITB Asia spoke of growth in AsPac, stagnation or worse in Europe and NAm. Reading ACI’s airport data, I see passenger growth has been greater in Europe than AsPac in every month this year except the first two; substantially – about 50% faster. That may not be a definitive contradiction, but certainly worthy of strategic reflection.

 

[] Traffic is falling at some of what I call ‘low-fare-airports’ in Europe – those which have at least 30% of passengers from low-fare-airlines. Flat YTD at Berlin Schoenefeld, -2% Cologne, -15% Hahn, -2% London Stansted.

 

[] Our travel stock Index shows Asia Pacific tumbling below the 100 mark in the most-recent month. Europe was already below 50; it is now at 42. That means World travel stock prices are at just two-thirds of their pre-9/11 prices in 2000 – our benchmark year.

 

 

 

The Fox

Interview: Regent’s Ralph Ohletz.

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FOXTROTS

 

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

Foxtrots – leading the industry in a dance.

 

November 5 2011

 

Interview: Regent’s Ralph Ohletz.

 

R

ALPH Ohletz was appointed president of the new Regent summer 2010. Some paraphrased comments:

 

 

 

[] This is going to be a very different start from the time when luxury was large hotels and big lobbies. Luxury has changed; it is smaller hotels, and will have a real estate element to it. So there is a new constellation we are working on. Such as villas on the site, for renting out.

 

 

[] Luxury is also the design element, the restaurant, where we can bring in a name restaurant operator. So we are looking at shopping centres, real estate. Because luxury is much wider.

 

 

[] We have eight hotels in the pipeline. We pay Rezidor to manage our hotels in Europe. We will have our Europe base in Berlin, where we have a hotel.

 

 

[] In the next two years all our hotels will be Regent managed. Maybe some of those existing hotels will leave the group. The Four Seasons contract for the Regent Taipei has ended, but the Regent Singapore is FS-managed for another five years. [Contradicting the previous ‘2-year’ statement.’] We will bring Regent back to Hong Kong. We have only six hotels and Regent Cruises. All the good Regents were switched to FS.

 

 

[] Burns is a figurehead for Regent.

 

 

[] Stephen Pan [owner and chairman] has two other hotel brands in Taiwan – Just Sleep and Silk’s Place. The Regent management team will look at developing one of those brands, because some developers want 4-star. [But if Regent is 5-star, then we would consider Silk’s Place would be 3-star). Probably will be Silk. But at present, we want to concentrate on Regent.

 

 

[] The first ‘Regent DNA’ will be open within two years. [Regent management refers frequently to the ‘Regent DNA’. They mean Regent with the old standards, of the pre-Four Seasons/Carlson Hong Kong-base times. But the company is also talking about the new standards for 5-star hotels, as above, and so in reality the ‘Regent DNA’ is just a marketing tag, having no real value. That is not a negative criticism, but a comment of fact.)

 

 

 

The Fox