Updates. Air Asia, Air Asia X, China outbound, Macau, Singapore Airlines.

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FOXTROTS

 

 

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

Foxtrots – leading the industry in a dance.

 

 

November 29 2012

 

Updates. Air Asia, Air Asia X, China outbound,Macau, Singapore Airlines.

 

S

OME updates that might have been missed. See also reports on all these topics in the Travel Business Analyst newsletter.

 

 

[] Net losses in Q3 for Air Asia’s new associate airlines were US$11mn for Japan and US$8mn for Philippines. The Japan operation started it first international flight, Tokyo-Seoul, in October.

 

 

[] Air Asia X tells us it sold 40.7% more seats in Q3. The real figure is up 3.2%. Because AAX does not count seats sold on routes it flew last year but not this, although it does add counts for its new routes.

 

 

[] China outbound travel: We estimate up 18% through August, taking it to just over 50mn. Monthly growth is now running above 20%. The 12-month total is touching 78mn, up 21%.

 

 

[] Macau has now run up 6 continuous months of visitor-arrivals falls (but YTD still up). That’s what we call a recession. Presciently it was 5 months ago we said Singapore had become ‘Asia’s Leisure Capital’, a title to which Macau aspired.

 

 

[] Singapore Airlines is having a good year, attaining close to its preferred 7% growth rate – after 2/3 bad years. We were the first to point out that not all was well; see how long it takes before other commentators realise the turnaround has come.

 

 

 

The Fox

 

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Updates. AACVB, Novotel Bangkok, Pullman Asia, Taiwan, InterContinental Asia.

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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 2012

 

Updates. AACVB, Novotel Bangkok, Pullman Asia, Taiwan, InterContinental Asia.

 

S

OME updates from last month’s IT&CM Asia MICE trade show in Bangkok. See also reports on all these topics in the October issue of the Travel Business Analyst newsletter.

 

 

[] AACVB (Asian Association of Convention and Visitors Bureaus), once recognised as an important trade body, is fighting for survival.

 

Its only members are Hong Kong, Korea, Macau, Malaysia, Philippines, Singapore, Thailand; its secretariat is in Macau. It had become inactive until about 4/5 years ago when it was decided to revive the association. It made a push to increase membership in 2011, but this was not successful, and another attempt is planned.

 

Membership costs only US$3000 but this is part of the problem – the funds are not enough for any working activity. And certainly not for any sizeable marketing; in any case, the individual destinations have their own promotions.

 

AACVB did start a campaign, ‘Asia for Asia’ (sic; promoting intraAsia MICE travel), first tried in Thailand, due next is Singapore, then Korea and Malaysia.

 

But with a total budget from membership fees of US$21,000, any promotion is likely to be small.

 

 

 

[] Novotel Platinum, Bangkok, business results:

 

-Opened 12 months ago. Built above a fashion shopping mall that opened five years ago. The centre of Bangkok is now moving to around the Central department store. From the hotel, the Paragon, Siam, and MBS shopping and commercial centres are still 20-30” walking distance from the hotel. Even better for Novotel guests, a new elevated covered walkway (called ‘skywalks’ in Bangkok) from the hotel, is due to link with others along one side of the Central store by end-2013. That skywalk will also give covered access to a BTS station (elevated metro system) as well.

 

-75% occupancy after three months, and since then up to 90%. It targeted leisure, so weekends have been full since March. To generate interest in the hotel, it first went for shorthaul markets such as Hong Kong and Singapore. 80% of the hotel’s business is intraAsia.

 

-Now starting to get more corporate and MICE business. But a different type of corporate business; clothing wholesalers who come in and ship their stuff back. Currently, occupancy is 75% leisure, but management expects it will be around 60% in the coming year.

 

-Only two F&B outlets, plus a pool bar. (“Look at hotels with 10 outlets,” says the GM, “and two are busy”.) But the main breakfast/lunch/dinner outlet has 200 covers. Also there are meetings rooms with F&B facilities. There are also many outlets just outside the hotel, with some in the same building.

 

-Revenue breakdown is 70% rooms, 30% F&B.

 

-Singapore is biggest market. Many come on LFAs (low-fare-airlines; there are three based in Singapore which operate into Bangkok) and spend their money on accommodation, shopping, and eating. At weekends the hotel gets small groups of women from Singapore going to Bangkok for a shopping weekend. For clients such as these, the hotel has started a pick-up service with a courier company – it collects their purchases from the shops.

 

-Although there have been some cutbacks in the meetings business regionally, in Bangkok it is still good. Meetings business is around 10% of the total.

 

 

 

[] Pullman updates:

 

-Accor is trying to establish Pullman as a contemporary brand – note its “check-in, chill-out” one-liner.

 

-In Indonesia has Bali, two in Jakarta (one was the Nikko). Others planned, including Bandung.

 

-Asia may soon have more Pullmans than other regions. Opened in Gurgaon, a satellite of Delhi, where one is also planned. One is also planned for Ho Chi Minh City.

 

 

 

[] Taiwan updates:

 

-20-30% of the destination’s annual visitors are business travellers. In 2011, there were 148,045 from China for business.

 

-Kaohsiung convention centre, running late, and now due end-2013.

 

 

 

[] InterContinental Hotels presented some comment about the MICE business, but for most it had no supporting data, so it is difficult to analyse the importance of the following comments:

 

-Resorts are becoming a more popular destination for business travellers.

 

-Change in ratio of meetings:leisure at resort properties.

 

-25% of enquiries for MICE bookings now require at least half day for local excursions.

 

-50% growth in number of MICE delegates who add leisure stay before or after the meeting.

 

-20% increase in 2-centre meetings – city and resort.

 

-50% of its business for meetings in Southeast Asia comes from outside the region. The company says (a surprisingly-high) 20% of business for its non-leisure hotels-and-resorts in Southeast Asia is MICE.

 

 

The Fox

 

Trottings: Novotel in Bangkok.

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TROTTINGS = Trip Jottings

 

The Fox Trots: Travel Stories from The Fox.

 

 

 

November 15 2012

 

Trottings: Novotel in Bangkok.

 

T

HE Novotel Platinum opened in Bangkok 12 months ago, a 5” walk from the Central department store. The opposite side, though, to the Paragon, Siam, and MBS shopping and commercial centres – although these are still 20-30” walking distance from the hotel.

 

 

The tourism centre of Bangkok is now moving to around these commercial centres. Even better for Novotel guests, a new elevated covered walkway (called ‘skywalks’ in Bangkok) from the hotel, is due to link with others along one side of the Central store by end-2013. That walkway will also give covered access to the Chitlom and Siam BTS stations (elevated metro system) as well.

 

The hotel is built above and adjacent to a fashion shopping mall that opened five years ago. This is in the style of many shopping centres in Bangkok – many floors packed with small shops packed with goods. One floor might be all shoes, another handbags – the hotel’s general manager, Sagar Naker, calls it “Handbag Heaven”.

 

Singapore is the biggest source of guests, many of whom come on low-fare-airlines (three are based in Singapore, and all fly into Bangkok).

 

At weekends the hotel gets small groups of women from Singapore in Bangkok for a shopping weekend. For clients such as these, the hotel has started a pick-up service with a courier company – collecting their purchases from the shops.

 

The hotel has only two F&B outlets, plus a pool bar – but the main breakfast/lunch/dinner outlet has 200 seats. There are also many F&B outlets just outside the hotel, some in the same building.

 

The hotel also has meetings rooms which can provide F&B services. These can cater for 250 theatre style, 180 banquet style.

 

Indeed, corporate meetings have become another source of business. Bangkok is seen as a good place for corporate meetings, because of lower cost than, say, Hong Kong and Singapore, and attractions – particularly for travellers from Hong Kong, Malaysia, Singapore.

 

Still unusual, the LCD projector is included in the price of the meetings rooms. And in the guest rooms, wifi access is free.

 

 

The Fox

 

Australia, et al. Etihad, SIA, Tiger, Virgin, et al.

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FOXTROTS

 

 

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

Foxtrots – leading the industry in a dance.

 

 

November 2 2012

 

Australia, et al. Etihad, SIA, Tiger, Virgin, et al.

 

R

ECENTLY, we remarked that reading some travel industry announcements is like China-watching. It is important at least to read between the lines. That topic concerned Scoot (sic), a Singapore Airlines’ subsidiary.

 

 

This one involves Singapore Airlines as well.

 

Firstly, the basic facts:

-Singapore Airlines (SIA) is buying 10% of Virgin Australia (VA).

-VA is buying 60% of Tiger Airways Australia (TAA), owned by Tiger Airways Holdings. (TAH also owns Singapore-based Tiger Airways Asia. Strip away the corporate fixes, and the Tiger airlines are part of the SIA group.)

 

 

Secondly, the ancillary facts:

 

-SIA owns 49% of Virgin Atlantic, which in turn owns about 25% of VA.

 

-SIA wants to sell that 49% (but who wants to buy a no-control 49%?), and the Virgin Group (which owns the other 51%) has been looking for a buyer for two years.

 

-Abu Dhabi-based Etihad bought 5% of VA earlier this year.

 

-TAA is in trouble. It was grounded for a few weeks in 2011 by Australia government authorities for safety reasons.

 

-SIA has been there before, with disastrous results. It bought heavily into Air New Zealand, which subsequently owned 100% of Ansett Airlines in Australia – which had a strong domestic network and a few international lines, as VA has today. Ironically, when Ansett collapsed in 2001 (causing unspecified but big losses to SIA), the airline that had just been formed, VA, had a much easier launch. Now, 10 years later, SIA may be hoping it can get back some of the money it lost.

 

 

 

 

Thirdly, some observations:

 

-VA has finally shed its pretence that it is a low-fare-airline – which it claimed from its 2001 beginning. We have long said it was not a LFA, but it has clung to that image – as well as, confusingly, moving away from it. With the TAA acquisition, it noted that it could now be present in the LFA market in Australia. Now, relief all round, VA is a regular airline, competing with Qantas.

 

-SIA and VA had already been making marketing deals, which we questioned when SIA already had its own airline in Australia – Tiger. These deals now make sense.

 

 

 

 

Finally, the future:

 

-This is not the end.

 

-A couple of months ago, Qantas announced a deal with Dubai-based Emirates that involved moving its Singapore transit hub to Dubai. We believe that deal is all-good for Emirates, but bad and potentially disastrous for Qantas – although some observers think the opposite.

 

-Enter the new SIA/VA deal, in which Etihad is also a factor, thanks to its share of VA.

 

-Will SIA and Etihad make a deal to match the Qantas/Emirates deal, with a transit hub in Abu Dhabi? (Abu Dhabi and Dubai are like Malaysia and Singapore; they like to outdo the other.)

 

-Better, will rich Abu-Dhabi-ergo-Etihad solve the Virgin Atlantic problem, noted above? That is, buy Virgin Atlantic from its two owners?

 

-That would give SIA something it has long wished for – international presence. That Australia link (which, in fact, is not big in international terms), plus the booming Mideast link (and Abu Dhabi is a more sensible, and richer, partner than brash Dubai), and the European Virgin link.

 

 

 

 

But as I ended my previous China-watching comment – it is frighteningly easy to get it completely wrong…

 

 

 

 

 

The Fox