Travel Business News February 25 – March 1

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Travel Business News February 25 – March 1

From http://www.travelbusinessanalyst.com

 

Global Hotel Alliance in 2018

1 March 2019

GHA* has announced 2018 results. Most information is about its loyalty program, Discovery. Selected business results:

-Same-store room-revenue from Discovery members at US$1.6bn +10% (quoted in US$). Our database shows US$1.51bn +9% in 2017.

-Cross-brand revenue (revenue produced by members enrolled at one GHA company/brand staying in the property of another GHA member) US$108mn +17%. (2017 US$100mn +21%.) This seems a low share, and appears to indicate that the alliance is not working well. GHA reported cross-brand roomnights for 2017 – 500,000 – but data not given for 2018.

-As in 2017, revenue growth came partly from growth in Discovery membership, 13.6mn +21% members at end-2018 – North America 6mn (assume 6.0mn; we calculate +20%), Asia 2.3mn (we calculate +27.8%), Europe 2.2mn (+15.8%), Australasia 1.3mn (+30.0%, although GHA rounded data in 2017 to 1mn).

2017: 11.3mn +25% – North America 5mn (assume 5.0mn), Europe 1.9mn, Asia 1.8mn, Australia/New Zealand 1mn (assume 1.0mn). Rounding by GHA; growth not given.

-In 2018 top-tier Discovery members were 2.6% of active members but produced US$400mn. We calculate that to be a 25% share – which is substantial if correct. 2017 data shows a rounded 3% traffic share but 28% revenue share – thus US$400mn, and meaning no growth in 2018.

-In terms of channel, there was +24% growth on website bookings ($s not given). In 2017 +62% .

-GPA reports that its newish (2016) Discovery app grew 100% in 2018 bookings to US$1m monthly. In the first full-year , 2017, bookings were US$4mn – which indicates that growth in 2018 was +200%, not +100%.

-Discovery members who booked direct paid a 47% (2017 48%) rate premium over the average Discovery rate, despite a 10% direct-booking discount.

-Highest growth of cross-brand bookings was into Dubai +26%, London +20%, Bangkok +15%. In 2017 four cities named – Melbourne +11%, Sydney +10%, London +8%, Bangkok +6%. Also in 2017, GHA named top destinations – Australia +38%, US +13%, Singapore +11% – but not in 2018.

-Receiving most website bookings were almost the same as in 2017 – Pan Pacific Singapore, Adlon Kempinski Berlin, Outrigger Waikiki Beach Honolulu. In 2017 they were Pan Pacific Singapore, Vier Jahreszeiten Kempinski Munich, Outrigger Waikiki Beach Honolulu. No further data.

*Notes:

-GHA is an alliance of small hotel groups – 35 brands, 500 hotels, 75 countries; room count not given. It is not well known publicly, but works well as a back-desk referrer.

-At press time, GHA had not answered our request for clarifications.

-A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis.

 

WTTC reports on world travel

28 February 2019

WTTC* findings on the world travel business* include:

-The travel business (TTB) in 2018 was worth US$8.8tn.

-TTB growth +3.9%; world GDP growth +3.2%.

-Other sector growth – Manufacturing +4% (rounded by WTTC; we presume from +4.0%), Healthcare +3.1%, Information Technology +1.7%, Financial Services +1.7%.

-TTB 10.4% share of ‘economic activity’ (we are not sure if this ‘EA’ is the same as GDP).

-78.5% +1.0pt share of ‘leisure spend’ (we presume ‘leisure travel spend’), thus 21.5% ‘business spend’ (we presume ‘business travel spend’). No indications of other main categories – we presume MICE is in the ‘business’ total, VFR in ‘leisure’, but other (sport, religion, etc) we cannot categorise, although they probably represent under 10% of the spend total.

-International visitor spend 28.8% +1.5pts share, domestic 71.2%. Note this appears to be only destination spend and not, for instance, air fares – which are included in WTTC’s overall total.

*Notes:

-A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis.

-WTTC (World Travel & Tourism Council), a lobby group for the travel business, has its own methodology for calculating the turnover of the travel business including not just inbound, outbound, and domestic travel, but other industries involved in the business. For instance, if 0.5% of the world’s cars go into the car-rental business, that measure would be calculated into the turnover of the overall travel business.

  Unfortunately, WTTC is not always clear that its data is related to this grand total, and often its commentary appears to be related to just one sector – often, the inbound visitor business. In addition, it sometimes uses the terms ‘travel’ or ‘tourism’ alone; we cannot always determine if these mean something different from ‘travel & tourism’.

  WTTC’s name does not help – the ‘TT’ is ‘travel & tourism’, where we would define ‘travel’ as covering all segments of the travel business, with ‘tourism’ meaning ‘leisure travel’ to most observers, just one segment. This means that most people and bodies the WTTC lobbies may think they are discussing just inbound leisure travel.

  In addition, the group is so careless in its presentations that the professional observer is sometimes left to guess what WTTC’s research shows. We believe its presentations are in contrast with the professionalism of its research.

  At press time, WTTC had not answered our request for clarifications.

 

ITB on Malaysia

27 February 2019

ITBB* on Malaysia, its promotional partner March 2018 through next month’s event:

-Targets 30mn visitors in 2020, which we calculate would be an average +7.8% over the two years. The only time it has counted close to that growth-rate in the past 10 years was +6.7% in 2014. The main reason is that it counts land visitors from Singapore (if Singapore counted visitors from Malaysia in the same way as Malaysia counts visitors from Singapore, then we estimate Singapore’s visitor count would be about 30% bigger than Malaysia’s; with the current system, Singapore shows smaller counts than Malaysia).

-Visitors 2018 25.8mn. Change not given, possibly because this was a fall; we calculate -0.6%.

-Visitor-spend US$24.6bn (at US$1 to MR1.07) in 2020. Change not given.

-Revenue from its homestay program in 2017 was US$6.8mn; change not given, which usually means there was a fall. Homestay visitors (local and foreign) 372,475 – but for 2018, and change not given. We calculate this as around US$18 per visitor, which looks low; ITBB makes no comment, even on whether this is total spend, or just accommodation.

*Notes:

-ITBB=ITB Berlin, the big travel trade exhibition in the city. At press time, ITBB had not answered our request for clarifications.

-A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis.

 

Travel business updates

26 February 2019

[] STR (nee Smith Travel Research) reports on Middle East hotels in January: occupancy -0.9% to 68.2%, average room rate -8.9% to US$154.18.

[] STR reports on US hotels 17-23 February: occupancy -1.7% to 64.7%, average room rate +1.7% to US$129.05.

[] TBA Tracking: Our calculation of seats sold by the big-3 airline groups in Europe in December, from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst, shows for AF+KL+A5+HV +4%, BA+EI+IB+VY +8%, LH+LX+OS+EW+SN +6%. Last month +3%, +7%, +6%.

 

China to Europe

25 February 2019

EF* report on travel from China into Europe (in this case, the 28 country members of the European Union). Selected extracts:

-Chinese* arrivals in 2018 in EU destinations +5.1%.

-Top-3 destinations in volume: UK +2.4%, Germany +2.6%, France +7.7%.

-Bookings for Jan-Apr 2019 up +16.9%; total world +9.3%.

-Excluding the UK (due to leave the EU end-March), the EU would have been +5.8%, and Jan-Apr 2019 bookings +17.7%. Part of the problem is that a separate visa is required to visit the UK, whereas most of the EU is covered with one visa (the so-called Schengen visa).

-Chinese departures from mainland China were +5.2% in 2018, with bookings +16.7% for Jan-Apr 2019. Tier-2 cities in China – Chengdu, Hangzhou, Shenzhen, Xiamen +18.1% and +51.3%. Hong Kong/Macau +7.6% and +35.4%.

*Notes:

-ETC=European Travel Commission, FK=Forward Keys, EF=ETC-FK report on arrival and booking trends.

-FK analyses 17mn flight booking transactions daily from major global reservation systems.

-EF use ‘Chinese’, but this is misleading. Some are China nationals, some residents in China, and some may be China nationals living outside China.

*A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis.

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

 

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Travel Business News February 18-22

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Travel Business News February 18-22

From http://www.travelbusinessanalyst.com

 

US travel business updates

22 February 2019

[] ARC (the Airlines Reporting Corporation, handling financial settlements between US-based travel agencies and airlines), reports:

-for January: air tickets sold US$8.66bn +3.2 %; average US roundtrip ticket US$476 +$17; passenger trips 27.7mn +0.4% (domestic +1%, international +3%); EMD (electronic miscellaneous document) sales US$6.9mn -5%; EMD transactions NA -5%.

-with the Expedia Group their 2019 travel outlook study, the 5th. Selected extracts: Extending a mid-week trip to include a Saturday night stay can save up to 25% on airfares; Booking hotel rooms on Friday provides the best chance for the lowest rate.

 

[] Hotel News Now reports on US hotel transactions in 2018: transactions 707 +25%; transaction revenue US$29.5bn +49%.

 

[] STR (nee Smith Travel Research) reports on US hotels in 10-16 February: occupancy +0.7% to 63.5%, average room rate +2.7% to US$131.99.

 

[] STR reports on US hotels in January: occupancy +0.7% to 54.8%, average room rate +0.8% to US$124.39.

 

 

ITB Berlin update

21 February 2019

Messe Berlin reports that its ITB Berlin exhibition, due next month, is ‘bigger’. Reported data:

-10,000 companies and organisations. 2018 – same, 10,000.

-From ‘over 180’ countries. 2018 – 186.

-Travel technology area +20%, space obtained by moving the ITB Convention to the adjacent City Cube centre.

-New exhibitors: Albatros (sic) Exhibition, Alltours, Atmantan resort, Durak & Reinhardt, Karma Group, Kesari Tours, Kurzurlaub, Mystic Cruises, Saudi General Investment, Scenic Cruises, Setubal, St Helena, Tour East, Trans Indus, Uday Samuadra resort, Urlaubsguru.

-New exhibitors in adventure, responsible tourism, youth – Croatia national parks, Delius Klasing, Federal Association for School Trips, Madagascar, Tourism Watch, Tuscany, WWF Germany, WWF Borneo

-New exhibitors in LGBT+ – European Historic Thermal Towns, Keihan Hotel Japan, Malta’s DMO, New York, Piedmont’s DMO, Thrive Summit.

-New exhibitors in medical tourism – AA Stomatologica Romania, CGH Earth India, Cluster Dalmatia Croatia, Dormio-Med Dorota Kowalczyk Poland, MKT Plus Poland, Viaggiare Sorridere Albania.

-New exhibitors in travel tech – Atomize, Booking Suite, Gastromatic, Loopon, Ratehawk, Travelor.

-Larger exhibition stands for Australia, Balearics, Booking.com, Egypt, Fujairah, Karnataka, Luxembourg, Namibia, Oman, Portugal, Russia, Tamil Nadu, Venezuela. But although the total exhibition space is the same as in 2018, MB does not list those taking smaller areas or not rebooking.

 

 

Travel business updates

20 February 2019

[] Radisson Hospitality has reported its 2018 results.

As the company is moving off the (Sweden) stock exchange, this may be its last published annual report. The company was bought by China-based HNAG (HNA was originally a mis-acronym for Hainan Airlines; now a no-meaning corporate name for a Hainan-based conglomerate; we use ‘HNAG’ when covering the group.) But following HNAG’s continuing financial problems, Radisson has been sold to China’s Jinjiang Hotels.

Selected extracts:

-Revenue US$1.08bn (at US$1 to €0.89) -0.8%.

-Operating profit US$116mn +26.3%.

-7196 -3.7% rooms contracted, 4083 -19.0% rooms opened, 2003 -52.3% rooms left Radisson.

Forecasts +4.5-5.0% revenue for 2019.

 

[] IATA (International Air Transport Association) reports 2018 safety performance. Selected extracts:

-The accident rate (accidents per 1mn flights) was 1.35, one accident every 740,000 flights. This was a fall compared to 1.11 in 2017.

-There were 11 fatal accidents with 523 deaths compared with 6/19 in 2017; one accident in 2017 killed 35 on the ground.

 

 

TBA Tracking: Indices – travel stocks, travel-tech stocks

19 February 2019

Travel stocks

The January ‘TBA-100 Index’ of travel stock prices, from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst, shows: World 227, Asia Pacific 98, Europe 184, US 384.

(Base: December 2006.)

Travel-Tech stocks

Our ‘Net-Value Travel-Tech Index’ for travel stocks of OTAs (+Amadeus) in January, from the current edition of our monthly Net Value report, published by Travel Business Analyst, was at 125; previous month 115.

(Base: December 2014 or when first listed.)

 

 

TBA Tracking: Updates on outbound travel, hotel results

18 February 2019

Asia Pacific outbound nationals/residents travel

Our calculation of Asia Pacific nationals/residents departures for latest-month September, from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst, shows +4.6%; previous month +12.8%. YTD +11.0%.

World hotel results

The November hotel-track from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst, shows occupancy growth in points: World +0.1; Asia Pacific +3.0; Europe -2.8; US +0.2.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

What’s working; what’s not. Airlines in Asia Pacific

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What’s working; what’s not. Airlines in Asia Pacific

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst, over the full-year 2018.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +8%; Cathay +2%; China Eastern +9%; China Southern +11%; Japan +3%; Singapore +7%.

 

Notes (on notable details):

-Air China. International faster, at +14%.

 

-Cathay. Serious problems; we hope management is looking hard at what to do. We think its Cathay Pacific is the troubled one, but although Cathay Dragon has mainly China-mainland routes, some of its others are marginal routes. These figures indicate that traffic at one of the two is falling.

 

-China Eastern. The airline’s figures do not add up. As we cannot get an explanation, we simply add up the published data. This shows international up only +2%, although MU will tell you growth is +10%. Internationally, it has slipped to be 3rd-largest of China’s Big-3.

 

-China Southern. International shoots up at +16%. It now sells 18mn internationally compared with just above 15mn at Air China and just below 15mn at China Eastern.

 

-Japan. International +7% – which is fast growth.

 

-Singapore. The group is now following the restructure we proposed in 2013 – albeit five years later and after ridiculing the proposal at the time. Although growth at its Scoot should be faster, the group’s +7% looks good.

 

Cathay Pacific should adapt its business model to something like Singapore’s – that may not happen though because Cathay thinks Hong Kong is superior to Singapore (the city-state), and Cathay’s management is stuck in the straight-tie British-colonial past.

 

-Others of note:

Air Asia is less transparent than others, publishing only quarterly data – although when it launched it promised to be above industry norms. Over the year, the AA group sold 79mn +12% seats, almost the same pace as its +13% in 2017. In seats sold it is the region’s 4th-largetst airline after China’s Big-3.

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

Travel stocks – December + January + 2000-18 review

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Travel stocks – December + January + 2000-18 review

December

Following almost-universal falls in travel stock prices in October, they were almost as bad in the last month of 2018. In Asia Pacific, Europe, US in December:

 

Airlines: biggest growth, Korean +4%; biggest fall, Hawaiian -34%. Hotels: Shangri-La +5%, Wyndham -14%. Tech: Lastminute +8%, eDreams -27%. Others: Genting +27%, Hertz -27%.

 

Previous month: Airlines: biggest growth, China Southern +26%; biggest fall, Easyjet -7%. Hotels: Wyndham +16%, NH Hoteles -16%. Tech: Travelport +2%, cTrip -13%. Others: HNA +37%, Thomas Cook -33%.

 

TBA Travel Stocks Index: World 206, Asia Pacific 96, Europe 175, US 345. Index previous month: World 222, Asia Pacific 98, Europe 184, US 384.

 

NVTT (Net Value Travel Tech) Stocks Index: 115; previous month 126.

 

Stockmarkets. Biggest growth Kuala Lumpur +1%; biggest fall Tokyo -10%. Previous month: biggest growth Hong Kong +6%; biggest fall Dublin -4%.

 

Comments:

Of the 81 travel stocks we track monthly, only 17 grew, of which nine were in Asia Pacific.

 

Among airlines (14 in AsPac, 10 Europe, 7 US) only Air New Zealand, Korean Air grew – none in Europe or the US.

 

Among hotels (10 in AsPac, 5 Europe, 9 US), we show Shangri-La as fastest. It was actually Belmond, +38%, but during the month that company agreed to be bought by luxury-group LVMH, boosting its stock price. However, it was actually one of the few companies to have grown in 2018; it was +50% above its end-2017 price before the LVMH offer was made public.

 

Of note is the market’s reaction following Jinjiang’s offer to buy the rest of Radisson Hotels from the (still)-troubled HNA group – JJ’s shares fell -10% in the month.

 

(Separately, HNA’s price – in our ‘Others’ category – fell in nine of the past 12 months, and ended the year -65% below its end-2017 price.)

 

We have long-thought that travel-tech companies (0 in AsPac, 3 Europe, 5 US) would perform better than other travel stocks. But more often more recently, travel-tech has matched the market.

 

In December, only two of our eight grew, and only three (including those two, Lastminute and Travelport) were above their end-2017 prices.

 

Among ‘Others’ (3 in AsPac, 8 Europe, 7 US) one notable fact in 2018 was the fall of the world’s two leading car-rental companies, Avis and Hertz. They almost take it in turns to be worst performer in our ‘Others’ category each month. Over the year Avis was -49% below its end-2017 price, Hertz -38%.

 

Stockmarkets (10 in AsPac, 9 Europe, 5 US) also had a bad month. Our best performer, Kuala Lumpur, was actually the only one to grow. And almost as bad as Tokyo was the -10% of Travel Weekly’s stock index in the US. (They are rounded; Tokyo was -10.5%, TW -10.3%.)

 

China stocks (6 plus 2 US-quoted) all fell – even its three main airlines (Air China, China Eastern, China Southern) which are do so well in business terms. If these falls are a reaction to the trade war started by the US, surely this is over-reaction?

 

 

 

 

 

January

Travel stock prices (US, Asia Pacific, Europe) in January.

Airlines: biggest growth, Southwest +24%; biggest fall, Norwegian -28%. Hotels: Wynn +32%, Shangri-La -12%. Tech: cTrip +25%, Trivago -2%. Others: Boeing +27%, Thomas Cook -5%.

 

TBA Travel Stocks Index: World 227, Asia Pacific 98, Europe 194, US 388.

 

NVTT (Net Value Travel Tech) Stocks Index: 125.

 

Stockmarkets. Biggest growth Istanbul +12%; biggest fall Kuala Lumpur -0.1%.

 

Comments:

-Of the leading growth stocks (and most of the others), their impressive-looking growths are actually a Dead Cat Bounce. Of our four categories, three were still below their end-2017 prices; only Boeing was ahead.

 

 

 

 

 

2000-18 review

Our report on travel stock prices* over the periods since 2015, 2010, 2000 is now available. As expected, there are a few shocks.

 

[] Europe.

-Total. In the eight years since 2010, AAGR (annual average growth rate) for stocks has been +3%.

-Airlines. 2010-8 AAGR +3%. Best performer Ryanair +14%, worst Air France-KLM -4%.

-Hotels. 2010-8 AAGR +4%. Best performer InterContinental +17%, worst Millennium & Copthorne -3%.

-Others. 2010-8 AAGR +3%. Best performer Airbus +22%, worst Thomas Cook -20%.

 

[] Asia Pacific.

-Total. 2010-8 AAGR -1%.

-Airlines. 2010-8 AAGR flat. Best performer All Nippon +38%, worst Thai -16%.

-Hotels. 2010-8 AAGR -3%. Best performer Mandarin Oriental flat, worst Banyan -9%.

-Others (only 3; two to 2015). 2010-8 AAGR -3%. Best performer China Travel +2%, worst Genting -10%. The 3rd company, China’s HNA, is new to our listing; it was -65% 2018 over 2017.

 

[] US.

-Total. AAGR 2015-8 (not 2010-18 as other regions; our full records had not started in 2010) +5%.

-Airlines. 2015-8 AAGR +11%. Best performer United +15%, worst Jet Blue -11%.

-Hotels. 2015-8 AAGR +12%. Best performer Belmond +38%, worst Wyndham -21%.

-Others. 2015-8 AAGR +3%. Best performer Boeing +31%, worst Avis Budget -15%.

 

[] Travel tech. AAGR 2015-8 (not 2010-18 as other regions; our full records had not started in 2010) +4%. Best performer Amadeus +14%, worst cTrip -17%.

 

[] Stockmarkets. 2010-8 AAGR +4%. Best performer Wellington +13%, worst Madrid -2%.

 

 

*A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis – including ‘best’ and ‘worst’ based on differences between company price-  and stockmarket-movements.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

2018 Review of CEO/head moves – died, fired, leaving, promoted

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2018 Review of CEO/head moves – died, fired, leaving, promoted

 

An excerpt from our monthly PinT (People-in-Travel) report. As this is a subscription report, the following item is not from the current edition.

Sections:

-Air heads.

-Hotel heads.

-Industry heads.

-Officialdom heads.

-Life/death.

-Words.

 

 

[] Air heads.

Air France-KLM (AFKL). Action by unions in France is threatening the existence of the group, or certainly the AF part of the troubled group.

Jean-Marc Janaillac, CEO of AFKL, resigned, following a vote by a majority of staff (only in France though, and AF, not KL) to continue their rolling strikes for higher pay, led by the pilots. In broad terms AF pilots (KL have different contracts) currently have existing pay terms that are about 25% better than competing airlines, and with easier work conditions.

Yet despite the fact that France and Air France broadly cause recurring problems for AFKL, and KLM’s performance keeps AFKL profitable, it has been French nationals who get the top AFKL job.

Notwithstanding any public statements, KL must be looking for a way out of its link with AF. The problem will be cost. The value of the company has fallen* since the strikes, and so KL would lose on selling its shares in the company.

*Notes:

-Share prices -44% in 2018, -58% since 2004.

-Travel Business Analyst spoke against the merger at the time, in 2004. Primary reason was the reasons that are causing today’s problems – the French penchant for strikes, whether there is a valid reason or not. Striking seems to be in the DNA of French workers.

 

Virgin Atlantic Airways (VAA). Shai Weiss, 50, was due to become CEO of after Craig Kreeger retired, due last month, after just five years in the job.

The appointment of Weiss seems to be related to the reduced importance of the job. He joined VA in 2012, became CFO and EVP July 2014, then CCO January 2017. He is an Israeli national, and was educated partly in the US.

VAA is now owned by Delta 49% and Air France-KLM 31%, with founder Richard Branson 20%. Yet only Virgin president Richard Branson and Delta CEO Ed Bastian made comments about Weiss’s appointment; nothing from 31% shareholder AF-KL.

Both owning airline groups have different strategies, and neither has a need for another airline – particularly one that operates on some of the same route patterns! In addition, VAA is not only probably losing money, but is not doing well with traffic either – its seat sales in 2018 probably ended +2%, in 2017 +0.1%, 2016 -9.9%. See Notes*.

In addition, AF-KLM is in a mess, and if KLM is not trying to get out of its joint-venture, it should be. Also, AF has always run AF-KLM, even if KLM’s managers, based on results at KLM, are clearly better.

We believe this means Weiss will simply work much as before in his EVP role, and Delta will run the airline. If AF-KL can resolve its own problems, then it might become more involved in VAA – which is not necessarily a good thing for strategic coordination.

Corporately, we think Delta will try to sell its share in VAA – although finding a buyer will not be easy. In the recent past, it could have been a Gulf airline, but after Etihad made giant mistakes with its airline-buying strategy, it would no longer be a contender.

Emirates, burned once with Sri Lankan, has shown no interest. Qatar might, which would lead to the ironic situation of Delta selling to its arch-business foe, Qatar.

For the above-mentioned reasons, AF-KLM has made a mistake in buying into VAA. When it announces this (from its new CEO?) it will also try to sell.

The other factor is the UK’s exit from the European Union, due this March. That makes VAA a less-attractive buy. Therefore, Delta and AF-KLM seem likely to have to hold on to their VAA burden.

*Notes: Presumably few will say that according to Kreeger’s brief at the time he was appointed CEO, he failed in the job. When he was appointed, Branson said: “[Kreeger] has the experience and passion to drive Virgin Atlantic forward and capitalise on the opportunities created by our new venture with Delta Airlines.”

 

-Virgin Australia‘s CEO, John Borghetti, is due to leave in 2020; he joined in 2010. He is generally considered a competent operator, although the airline’s future will not be secured when he leaves. The problems include:

-A strong local competitor in Qantas that has an FSA* and NFA* as does VA, although Qantas also has a LCA*. (That said, VA does not meet our definition of minimum 75mn seats sold annually to need three types of airline.)

-Strong competition and/or over capacity on domestic Australia routes and even on some international.

-An unclear business strategy. VA started as an NFA then moved to be partly an FSA after a competitor, Ansett, went out of business, and there appeared to be opportunities. Then much later it bought Tiger Australia, a failing NFA started by Singapore Airlines.

  (The existing Singapore-based Tiger is now unrelated to VA’s Tiger.) If VA wanted to buy TA as an ongoing business, it should have changed the Tiger name as soon as it could, and run old and new names for about 18 months.

On Day 1, then, VA’s new CEO should start writing a new strategy/business plan.

Best place to find the new person is probably to repeat the original Borghetti move, and hire someone from Qantas. However, as international search companies are involved, they will search the world first, then revert to a next-door solution.

 

-Others.

-Stephen Kavanagh is due to leave his CEO job at Aer Lingus this month; he started in March 2015. Due to take over is Sean Doyle, currently British Airways director of ‘network, fleet and alliances’. Because both airlines are part of ICAG, the CEO job is less important that at an independent airline – because many decisions are taken by, and strategy set by, ICAG.

-Remco Althuis named CEO of Air Seychelles. Before he worked with KLM, and with Etihad, which owns 40% of Air Seychelles, one of the few Etihad subsidiaries that are not doing badly or that is still in business.

-Alexis von Hoensbroech, 47, COO Lufthansa Cargo, became CEO and chairman of Austrian Airlines, succeeding Kay Kratky, retired at 60, and in the job only since August 2015.

-El Al, Israel. David Maimon resigned; Gonen Usishkin, former fighter pilot and with El Al since 2004, took over.

-Topi Manner named CEO of Finnair, from this month, replacing Pekka Vauramo. He was with Nordea, a financial group where he was head of personal banking – which does not seem relevant for an airline CEO job.

-Gusti Ngurah Askhara Danadiputra named President/CEO of Garuda Indonesia, taking over from Pahala Mansury.

Hawaiian. Mark Dunkerley retired, replaced by Peter Ingram, EVP/COO.

Icelandair president/CEO Bjorgolfur Johannsson resigned, taking responsibility for company changes that “have not been implemented well enough” and route network changes “that have resulted in an imbalance between Europe and North America flights.”

CFO Bogi Bogason took over on an interim basis.

-Joanna Geraghty named President and COO of Jet Blue, reporting to Robin Hayes, CEO.

-Sumeth Damrongchaitham named President and CEO of state-owned Thai Airways. He has no airline experience, but government experience. He was MD of Dhanarak Asset Development (a state-owned company under the finance ministry, established just to oversee a building project), and COO of GMM Grammy, a media company.

The previous head of Thai retired two years ago. Thailand’s current rulers took over following their military coup in 2014. However, even before this, Thai Airways’ president has often been a military man, but the CEO job has sometimes been outside the military, even if often government related.

-Jane Garvey named chairman of United Continental Holdings (owner of United Airlines), replacing Robert Milton. She was the first female FAA head (1997-2002) and is now United’s first female chairman.

 

[] Hotel heads.

-Jennifer Fox, who joined Millennium & Copthorne Hotels as CEO in June, had left before the year had ended. This is what we said when she was appointed:

‘Being M&C CEO is a tough and thankless job, presumably because Kwek Leng Beng, owner of the owning group, is a hard boss.

‘This has been a short-term position (under two years on average). There has not been a woman in the job, but given company mores, we would think her length-of-stay would be shorter than for a male incumbent.

‘M&C says Fox “will play a critical role in repositioning M&C’s key hotels, uplifting brand awareness of the group, as well as improving the overall performance of their portfolio”. A ‘critical’ role? That word usually means ‘important’, but surely as CEO she should be driving that role?

‘Previous CEOs have also tried repositioning M&C’s hotels, and working on the brand. The group has a solid portfolio, but its brands are not widely known, and it has different standards at hotels that should be the same. And its 3-star Copthorne seems a frozen brand. The impression is left that M&C is a real-estate company owning some hotels, rather than a hotel company.

‘In addition, Fox, an Australian national, has not shone in previous jobs, and seems to be considered good almost just because she is a female CEO. We think there should not be male, female, or Asian CEOs, but good, average, or bad CEOs.

‘In 2011, she was named president of Fairmont Hotels, part of the Toronto-based Fairmont Raffles group. And then as head of the owning company, FRHI (owner Fairmont, Raffles, Swissotel), which is actually owned by Accor. Before that, she was COO of managed operations for Europe (excluding the UK) at InterContinental.

‘The appearance, then, would appear to be that the FRHI job was not so important (as Accor decides strategy), and she moved on when what looked like a good offer came along.’

 

-Others.

-Jeff Wagoner named CEO Outrigger Hotels, taking over from Scott Dalecio, interim CEO who became chairman. Wagoner joins from Trump Hotels, where he was an EVP, and Wyndham Hotels.

The group has still not been able to break away from its Hawaii culture, even though it has hotels in Asia Pacific. Wagoner has no non-US experience.

Tommy Lai named CEO of Singapore-based GHM (née General Hotel Management), under co-founder and president Hans Jenni (other co-founder, and sleeping partner, is Adrian Zecha), who still directs the development of the company. Lai, a Singapore national, can be considered more a COO.

 

[] Industry heads.

-Another quick flip*. Late-June, ICCA announced that Martin Sirk, its CEO since 2002, would be leaving end July. It offered no amplification, prompting speculation of course. We speculate cancer, a ‘me-to’ sex-related matter, or a more ordinary bad-practice.

ICCA said that its search for a new CEO “signals ambitious changes ahead…”. That would indicate Sirk left because of incompetence or disagreement with the new policies – whatever they are.

ICCA did make some comment on policies, but in meaningless jargon – “…working with new leadership to drive the association forward over the coming decade, and to identify and implement new business models that will future-proof ICCA in what is certain to be a dynamic and hyper-competitive environment”.

The fact that ICCA is an industry body makes this more puzzling. We do not know, for instance, with what ICCA is in competition with. If this reference is related to its member companies, however, then the new strategy could be providing more business support to members, rather than just primarily, for instance, information.

ICCA gives member number growth to measure Sirk’s good work, growing from 600 members to 1100 in his 16 years. That calculates to a +3.9% annual average growth rate which, in business-growth terms, looks slow.

Dennis Speet, whose ICCA title is chief value officer, is named acting CEO.

And later, James Rees, executive director at Excel London (the location for the World Travel Market travel trade exhibition) was elected ICCA president. This is the highest position in ICCA, but the power is with the secretary general.

*Notes:

-ICCA was initially an abbreviation for the International Congress and Conventions Association. Then it used ICCA as a name, which it described as The International Meetings Association. It has now reverted to almost the same – ICCA, International Congress and Convention Association.

-In 2017 it was David Scowsill, whose June departure from the WTTC travel lobbying body was announced in May.

 

-Others.

-Guillaume Faury is due to take over from Tom Enders as Airbus CEO this year. Faury is currently president, Airbus Commercial Aircraft. Enders is due to remain CEO until the Airbus AGM in April, when the board should approve Faury’s appointment.

-New chairman of IATA is Akbar Al Baker, the head of Qatar Airways; a one-year appointment. He succeeds Goh Choon Phong, CEO of the Singapore Airlines group.

Sometimes, the post is taken by someone about to leave their ‘day job’. There has been no other indication that Al Baker is leaving QA, even though he has been in the job since 1997, and he did note “the difficult circumstances in which [QA] currently operates”. Why would he take on other responsibilities at this ‘difficult’ time?

-Christian Woronka, director of the Cologne Convention Bureau since 2012, named to head the Vienna Convention Bureau from this year.

 

[] Officialdom heads.

-Lionel Yeo left his job as chief executive of Singapore Tourism Board in June, after a 6-year term. Authorities had no immediate replacement, although they indicated that was normal, which it was not but we do not know the problem.

Then they named Keith Tan Kean Loong, then deputy secretary policy at Singapore’s ministry of defence, to start October.

We were told that Tan had been responsible for defence policy, strategic communications, national education, total defence – which made him seem like Ng Eng Hen, the minister himself. We presume STB meant Tan had responsibilities in those areas.

Whatever, none of them seem directly relevant to the STB job. And before this, all his experience has been in government jobs.

STB, like many DMOs, does not appear to act with the knowledge that a DMO-CEO’s work is almost entirely with the non-public sector. Thus private-sector experience would seem to be more important.

The STB added that Tan’s leadership experience “will equip him well to lead STB to achieve its next lap by pursuing quality tourism and driving tourism development”.

That is not true. There are no indications of any ‘leadership’ in his previous jobs, which were functional government-policy jobs.

And we add his experience would seem to be of no use to develop what STB describes as ‘quality tourism’. That remains undefined, but the STB is probably referring to the inbound visitor business.

It would also be better if STB defined ‘tourism development’. Adding more visitor attractions? hotels? something else?

 

-Others.

-David Lisnard, mayor of Cannes, re-elected head of the DMO (destination marketing organisation) for the south of France – CRT by its French initials. One problem is the region’s name. It is known as the Riviera, Cote d’Azur, South of France, or sometimes by its main centres, Monaco, Nice, Cannes, St Tropez, Marseille.

Lisnard had already served three years but this was marked by a July 2016 terrorist attack.

-The new government in Malaysia named Mohamaddin Ketapi its tourism minister, replacing Mohamed Nazri Abdul Aziz, from the former and now discredited government party. The fact Ketapi is from the state of Sabah has led some participants to hope he will boost Sabah’s image. That is not the responsibility of a federal minister.

PATA, the lobby association for Asia Pacific’s inbound visitor business, named Dr Chris Bottrill, director at Vancouver’s Capilano university, its chairman. He replaced Sarah Mathews, head of destination marketing AsPac for Trip Advisor, and in the PATA post for one year. It is a one-year post, but incumbents usually stay at least two years.

Bottrill did not name any specific focus, but this is a largely honorific post, and so not much is expected.

Non-Asians, working in or out of the region, are usually selected for this post because a Singaporean might have trouble being accepted by a Malaysian, a Taiwanese by a Chinese, and so on. Harmony in the travel business in Asia can be selective.

-Bernadette Romulo-Puyat moved from agriculture to become the Philippines equivalent to ministry of tourism. She succeeded Wanda Tulfo Teo, who resigned following a controversy after a US$1.2mn (P60mn) ad contract was awarded to a TV show hosted by two of her brothers.

 

 

[] Life/death.

Wang Jian, 57, chairman and co-founder of The China-based group HNAG*, died in France in July following an accidental fall.

Wang was not the person most people associate with HNA. That is Chen Feng, the public face of what is a secret company. Indeed, Chen is also described as co-founder and chairman. That would mean two chairmen; sometimes the term ‘co-chairman’ was used.

Before HNA, Wang worked with CAAC, the Civil Aviation Administration of China, when it was everything in aviation in China – including the country’s only operating airline. His connections helped HNA overcome the government-announced (via CAAC) structure of airlines in China to replace CAAC. HNA was not one of them (there were six, of which only three are operating today – Air China, China Eastern, China Southern), but nevertheless that did not stop HNA from being created and then expanding.

As with many operations in China, in the last 5-10 years, HNA expanded too fast and into too many different areas (geographical and type) – even if most were in the travel business. We seemed to be alone in writing that HNA’s expansion made no synergetic sense, and time would tell if it was to become a financial success. Most other reports – not just in China but outside – were fawning; HNA could do no wrong.

About profitability, time did tell, and for the past two years HNA has been unravelling much of its earlier expansion – notably, investments into Hilton Hotels, Radisson Hotels, Brazil’s Azul Airline.

It is not clear whether Chen, Wang, or both were responsible for these massive mis-investments. In the absence of evidence, we would think Chen – as Wang was important particularly for his political connections in Beijing, still a central part in business life in China.

A replacement for Wang was not needed. What is probably needed in a strong corporate position is a financial expert. But also, to handle the fallout from its mis-investments, someone like Wang to handle relations with CAAC and the political leaders in Beijing.

There are many unexplained matters concerning HNAG, which need to be noted in any report on the company. Firstly the changes (following our policy, mainly leaders) announced after Wang’s death:

-Xiangdong (usually known as Adam) Tan to chairman of HNA International (HNAI) replacing Wang Jian. But Tan also kept his jobs as vice-chairman and CEO of HNAG. In other companies we would therefore presume that those other jobs would be filled by other people later. But this is China, where ‘China-watching’ is still a skill needed to try to guess what is ‘really’ happening. As HNAG has expanded internationally, the obfuscation is easier to observe – if that is not an oxymoron.

-Chao (Dennis) Chen chief-investment-officer of HNAG replacing Shuang (James) Wang, and also named executive-chairman of HNAI.

Guang Yang stepped down as president of HNAG North America and as a trustee of the Hainan Cihang Charity Foundation, listed as an (important) owner of HNAG, see below.

-At HNAG’s Swissport, Ling Zhang to chairman, Xiaofeng (DanielChen vice-chairman.

The only comment from Chen Feng – now alone as chairman of HNAG – that might be significant was that he said the new team would help “… build a stronger, more focused [HNAG].”

Chen’s comment would appear to indicate that the acquisition push was driven by Wang, but HNAG has always presented Chen as the group’s driver. Is this comment a way to avoid loss of face for Chen rather than admitting much of its expansion was ill-advised?

Following are some facts concerning HNAG and HNAI:

-According to currently-known data, New York-based Hainan Cihang Charity Foundation owns 29.5% of HNAG, with China-based Hainan Province Cihang Foundation owning 22.75%.

-According to the Washington Post, Guo Wengui, an apparently-wealthy Chinese businessman who lives in self-imposed exile in the US, alleged that HNA has secret financial ties to top China Communist Party officials. HNA denied Guo’s claims and sued him in New York for defamation.

Before mid-2018, Guan Jun, until then a little-known investor, had been HNA’s biggest shareholder, with 29%, according to filings in China in late 2016. He was holding that on behalf of the company and its leadership, Bloomberg News reported.

HNA reorganised its ownership structure in early-2017 and Guan distributed most of his holdings to five individuals, who then donated the shares to HNA’s Cihang foundation. Guan donated his remaining stake, about 4.4%, to the charity as well.

Among the biggest remaining mysteries: Why did HNA executives place their shares with Guan in the first place? And what to make of the unproven allegations from Guo, shared on social media from his exile in New York, that seek to tie HNA’s acquisitions to corruption among Chinese leaders and their family members?

-Hainan Cihang Charity Foundation was formed in New York in December 2016, and owns 29.5% of HNA. In 2016, the Foundation reported the identity of its three directors – Adam Tan, now HNAG chairman; Chen Guoqing, brother of HNA co-founder Chen; and Guang Yang, who was then CEO of HNA Capital International, and who has now left HNAG – although HNAG says only that he has left as trustee, but says nothing about ownership.

-Little is known about how the charities are managed and how votes are cast, though the company says its donations have reached billions of dollars.

-HNAG has said it plans to update its ownership status annually and that the executives plan to donate all their shares to the charities should they resign or die. Eventually, HNAG expects the foundations to own 100% of the group.

-Some figures differ from available data as recently as late 2017, when corporate filings showed that Guan Jun owned that 29% via two holding companies. Guan is no longer listed in HNA’s statements. Little is known about him. Adam Tan has said he is just a Chinese businessman and Chen told a newspaper in Hong Kong that Guan was not a significant shareholder as he owns only a “tiny” share of the company. Yet at the time, corporate filings showed Guan owned a bigger share of HNAG than Chen and Tan combined. After this, HNAG said Guan had donated his shares to Cihang.

*Notes: HNA was originally a mis-acronym for Hainan Airlines; now a no-meaning corporate name for a Hainan-based conglomerate. We use ‘HNAG’ when covering the group.

 

-Others.

Aegean founder Theodoros Vassilakis died. Aegean began flying in 1999 and in 2013 bought Olympic Air, which had been Greece’s main airline.

 

 

[] Words (paraphrased).

-Luis Maroto CEO Amadeus.

All our acquisitions are significant in some way and they’ve allowed us to advance our business objectives.

Navitaire was the biggest, and important to allow us to get involved in the no-frills-airline segment. Newmarket was important as it opened new parts of the hospitality business – enabling us to broaden our portfolio.

It is important to understand that hospitality is completely different from airlines, and so we have to adapt and deliver on hoteliers’ specific needs. We do this with our Hospitality Platform.

-Sonia Cheng, CEO Rosewood Hotels.

We were one of the first to open a 5-star hotel in China. Her family’s New World group was not one of the first non-China groups to develop hotels in China. First, all in Beijing, were Peninsula (with the Jianguo hotel), Sheraton (Great Wall), Holiday Inn (Lido).

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

ATF Asean Destination Updates

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FOXTROTS*

 

ATF Asean Destination Updates

Earlier this month, we ran daily update-presentations* on travelbusinessanalyst.com by the 10-Asean DMOs (destination marketing organisation) at the Asean Tourism Forum event in Halong Bay, Vietnam.

 

This is a reworked presentation of that information. As the amount of information presented by the DMOs varies, our reports also vary in length.

 

Presentations by non-DMOs are included at the beginning, started by our calculation of Asean visitor counts.

 

*Notes:

-A report on this topic in our WYSK-What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis.

-Asean = Association of South East Asian Nations (Asean writes ‘Southeast’, even though that should make the abbreviation ASAN). Asean members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.

 

 

Asean visitor counts

Based on official statements made at ATF presentations, but including some estimates and extrapolations* by Travel Business Analyst, we total Asean’s DMOs forecasts to note that there is forecast to be 158mn +13% visitors this year in their 10 destinations.

 

However, this is unlikely to be achieved; we count 2018 growth as only +7% to 140mn, and 2017 +8% to 131mn.

 

*Notes:

-One major adjustment is growing Singapore’s count to match methodology in other destinations.

-A report on this topic in our WYSK-What-You-Should-Know monthly-report contains some additional totals (by reducing some counts to match Singapore’s methodology), and 5- and 10-year growth comparisons.

 

 

MTCO, Mekong Tourism Coordinating Office

-Has 5- and 10-year strategic plans.

-Among its many activities on social media, has started Mekong Moments – storytelling for everyone – and held the first Mekong Mini Film Festival.

-Prepares comprehensive market reports. Completed in 2018 was Aviation in its region; due this March is Responsible Tourism.

-Its 2018 tourism conference was plastic free. This year’s event will be in Dali, Yunnan, China, which has a new high-speed train service.

-Overtourism. Thailand is doing the most. But many places are trying to spread tourism to other regions – like Cambodia to its southern part of the country. In some, the aim is for quality tourism, by which they usually mean bigger spenders.

-To measure the success of MTCO activities, it has various KPIs (key performance indicators), some which are on the website.

 

Asean

-Asean has many apparently-overlapping activities. Launched Asean Tourism Marketing Strategy for 2017-20, although there is also an Asean Tourism Strategic Plan 2016-25.

-It targets to attract visitors from certain geographic sectors; there are six, but basically they cover the world excluding Africa and Latin America.

-Much promotional activity is built on promoting Asean as a single destination. The authorities are still not aware that few, if any, travellers visit ‘Asean’. They just visit countries that are Asean members. The same applies to the European Union; few visit the ‘EU’, just some of the 28 destinations countries that are EU members.

-As a further confusion of its message, Asean is now doing a promotion under an old slogan – ‘Southeast Asia; Feel the Warmth’. Not only is the Asean ‘brandname’ not used in this promotion, neither is its logo; ‘SE-Warmth’ has its own.

 

 

Brunei

-We estimate 2018 visitor arrivals at 0.27mn +4.5.

-The DMO forecasts 2019 visitor arrivals at 0.28mn; that would be +2.5% but the DMO says +14.5%.

-Introduced new logo/slogan in 2018. ‘Kingdom of Unexpected Treasures’ has become ‘Abode of Peace’.

-RBA started a few routes in 2018, including to London, which the DMO was hoping would produce a last-month boost to the arrivals total. In 2019, it plans to and Changsha and Narita.

 

Cambodia

-Estimated 2018 visitor arrivals at 6.2mn +12%.

-Forecast 2019 visitor arrivals +12%, which would mean 6.94mn.

-Recent developments: self-drive vehicle-caravans with cross-border travel; autoroute Phnom Penh-Sihanoukville due 2023.

-No plans to add visa-free, certainly for its main market China, because with about-2mn visitors, it brings a lot of money for Cambodia.

 

Indonesia

-Estimated 2018 visitor arrivals at just over 15mn. That looks too high as it would have meant an annual +16% growth but it had managed only +13% Jan-Nov.

-Forecast 2019 visitor arrivals at 20mn, which would mean +33% and thus also looks unlikely. However, that 20mn was forecast by Indonesia’s current president Joko Widodo (known as Jokowi) when he was elected in 2014 (new elections are due this year). And officials may be reluctant to change it, despite new realities.

-In fact, 17mn was the target for 2018, but the country’s natural disasters* slowed arrivals.

-The ‘tourism sector’ (believed to be the inbound visitor business) is currently No2 economic activity this year, after agriculture. The DMO believes it will be No 1 in 2020.

-The DMO continues with its policy – started 25 years ago – of promoting areas other than Bali. It has now identified other destinations in the country – collectively called ‘10 New Balis’ – for this promotion.

-The DMO also hopes to attract visitors into Singapore to extend their trip with a visit to the secondary centres in Indonesia. But as most leisure travellers move on fixed-date air tickets, these plans seem unlikely to be successful.

-Jakarta’s metro is due to open this May.

-*Natural disasters. There were many (over 2000), but the largest were Lombok earthquakes, July/August (over 400 deaths); Sulawesi earthquakes, September/October (2000); Sunda Strait tsunami, December (400).

 

Laos

-Poor data provision. Based on statements and indicative figures, we estimate 2018 visitor arrivals at 3.5mn -10%. This for a year designated Visit Laos Year; the original 2018 target was 5mn.

-DMO forecasts 2019 visitor arrivals again at 5mn, which would mean +43%. Normally that would seem a hard target, but some factors may help this to be realised:

-1. A damn collapse in July 2018 negatively affected visitor counts that year.

-2. The DMO targets arrivals from China to grow from 500k in 2018 to 1mn this year. That would be one-third of the additional needed.

-A high-speed train from China’s Yunnan province, through Laos and on to Thailand is due to start in 2021.

 

Malaysia

-We estimate 2018 visitor arrivals at 25.6mn -1.3%.

-Forecast 2019 visitor arrivals at 26.3mn +2.7%.

-DMO is working of 50/50 funding promotions with airlines, but not yet agreed.

 

Myanmar

-Estimated 2018 visitor arrivals at 3.55mn +3.2%.

-Forecast 2019 visitor arrivals at 5.5mn, which would mean +55%.

 

The complication is Myanmar’s Rohingya refugee crisis, where an estimated 600,000 have fled Myanmar to refugee camps in neighbouring Bangladesh. Most observers blame Myanmar’s army for forcing this, and the government for doing nothing about it, and mainly denying there is a problem.

 

The Rohingya matter is probably the main reason for slow growth in visitors in 2018, although we are surprised that there was not a fall. In recent years, when Myanmar was considered a friendly country, annual growth rates had been +50% and higher. But it seems unless there is a substantial positive turnaround in statements, policies and actions concerning the Rohingya, this target seems unlikely to be achieved.

 

-China is forecast to be the biggest market this year, overtaking Thailand.

-Has added visa-on-arrivals for nationals of China and India.

-In 2018 launched new promotional video, Be Enchanted.

-Aviation is still a problem; three domestic airlines went out of business in 2018, perhaps because of weak sales – foreign passengers pay double the price locals pay.

-There is an agreement with Cambodia over religious tourism between Bagan and Siem Reap, but has not been started.

Myanmar

-New visitor brand ‘Myanmar: Be Enchanted’

-Visa-free extended to nationals of Japan, Korea, Macau, Hong Kong, with visa-on-arrival for China and India nationals.

 

Philippines

-Estimated 2018 visitor arrivals at 7.1-7.4mn, about +12%.

-Forecast 2019 visitor arrivals at 7.98mn +10%.

-Claims that share of ‘tourism’ (not defined) grew from 8.6% of GDP in 2016 to 12.2% in 2017. However, the share is extremely unlikely grow that much in one year (near 50%) without a special reason – such as collapse of another big segment of the economy, or a change in measurement systems. The DMO was not able to clarify, which to us indicates that the figures are wrong, or require additional qualification.

-14 hotels with 4700 rooms were opened in 2018, most (eight, 3412 in Metro Manila), due this year are 10 with 2600 rooms (six, 1670), and in 2020 three with 835. See table.

-Convention centres due to open this year – SMXs in Cebu and Clark.

-Philippine Airlines is planning a second route into Europe – Rome or Paris.

-New airports at Bohol-Panglao, Cagayan North, T2 at Mactan Cebu. Planned: Bicol, Manila, Zamboanga.

-The rehabilitation of Boracay was followed by its reopening last October. The 2nd phase is due to be completed this April, and the final phase December. Only 293 properties with 10,067 rooms are allowed to operate at present. The government allows only 6000 visitors daily.

 

Singapore

-Estimated 2018 visitor arrivals at 17.6-18.1mn, which would be about +2%.

-DMO, as usual, will not provide a forecast for 2019 visitor arrivals until the organisation has formally decided its position, due to be next month. We forecast 18.6mn +4%.

 

As noted below, Singapore’s new promotional theme is based around ‘passion’. This cannot succeed – as illustrated by the DMO’s approach to statistics. Many officials in Singapore find it hard to break out of the formal mode (and provide, in this case, an ‘unofficial estimate’). To break out requires a form of passion. Singapore’s DMO sticks rigidly to formal formats; no passion here.

 

-Cruise passenger throughput 1.38mn +17% – but for 2017; no information for 2018.

-In 2017 the DMO launched ‘Passion Made Possible’ as its theme.

-The meeting between North Korea and US presidents, held in Singapore, is calculated to have brought US$500mn’s worth of promotion.

-There are a few developments this year:

-1. 200th anniversary of the arrival in Singapore of Sir Stamford Raffles, considered the founder of modern Singapore – although the history is more complex than that.

-2. Due to open at Singapore’s Changi airport is Jewel – a commercial and entertainment complex, not just for air travellers.

-3. Design Orchard. A complex housing 60 local designers, a sort-of modern crafts village.

 

Thailand

-Estimated 2018 visitor arrivals at 38mn +7%.

-Forecast 2019 visitor arrivals at 42mn +10%.

-Has nominated 55 secondary provinces in Thailand to spread leisure visitors around the country. However, that is almost whole country; there are only 22 other provinces. The 55 are those than get fewer than 4mn visitors (domestic and international). Has divided these 55 into three tiers, depending on their preparedness for visitors.

-Pairs specific destinations with specific markets, such as Japanese to a certain destinations.

-Also wants to encourage more mid-week travel rather than weekend.

-Styrofoam and plastic banned from public parks. It wants to reduce tourism waste by 50% by 2020.

-A high-speed rail is planned between the two Bangkok airports and uTapao (for Pattaya). However, this is only at the survey stage; construction may start this year – but we are sceptical.

-eVisa starting with China from next month, and then other countries.

-The DMO wants to attract bigger spenders, in the name of ‘quality’ visitors.

 

Vietnam

-Estimated 2018 visitor arrivals at 15.5mn +20%.

-Forecast 2019 visitor arrivals at 17.5-18mn, about +14.5%, although this is Visit Vietnam Year.

-Adding an app for leisure visitors in English and Vietnamese; hopes to add Chinese, Korean, Russian this year.

-Added to eVisa availability; now 43 nationalities.

-This September’s ITE travel trade exhibition in Ho Chi Minh City will be the 15th.

 

New hotels in the Philippines
Name
2018 Rooms
Metro Manila
Seda Circuit, Makati 255
Seda BCG Tower 342
Westin Bayshore 600
Mercure, Ermita 500
Movenpick 324
Sheraton 350
Hilton 357
Savoy 684
Other regions
Courtyard, Iloilo 314
Seda Lio, Palawan 153
Holiday Inn, Baguio 185
One Central, Cebu 157
Seda Ayala Centre, Cebu 301
Seda Capital, Bacolod 154
Total 4676
2019
Metro Manila
Seda Arca 200
Novotel Suites 310
Seda Bay Area 289
Westin Sonata Place 250
Seda Ayala North Exchange 312
Dusit D2 Fort 310
Cebu
Sheraton Mactan 214
Seda Central Bloc 271
Dusit Mactan 125
Dusit Princess 295
Total 2576
2020
Okura, Manila 380
Mandarin Oriental, Manila 275
Holiday Inn, Cebu 180
Total 835
Source: Tourism Promotion Board, Philippines.

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

All-2018 indicators – what’s working, what’s not – airlines in Europe – world’s top-3 no-frills-airlines

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All-2018 indicators – what’s working, what’s not – airlines in Europe – world’s top-3 no-frills-airlines

 

January-November data – which will be a near-match for all-2018 results.

 

 

Airlines in Europe

Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe. Excerpts from the current editions of WYSK: What-You-Should-Know, published by Travel Business Analyst,

 

Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France (from February 2018 available only combined with KLM, but we now have obtained separated data) +0.4%; British +3%; Easyjet +7%; Lufthansa +5%; Ryanair +8%.

 

Notes (on notable details; on whole-group for Air France (=AFKL), British (=ICAG), Lufthansa (=LHG)):

 

AFKL a disappointing +3%, with AF hardly moving (see above) and KLM slowing; at +4%, compared with +10% in Q1, for example. Transavia at +7%, which is not as fast as a no-frills-airline should be. And still no data from Joon which, based on our calculations on data released by AFKL, did not sell any seats in 2018! (Where is AFKL hiding the figures – and why?)

 

ICAG looks good at +8%, but the problem is the slow growth at its biggest airline, British; is this pre-Brexit nerves? Our estimate has Iberia at +11%. And at its two lower-cost airlines, AerLingus was at +12% (our estimate), Vueling +10% (our estimate).

 

-Easyjet. Varying results; also pre-Brexit nerves?

 

LHG an impressive +10%.

 

But a negative move – the group is hiding data for Brussels and Eurowings. For some time these have been reported as a combined total, but we could calculate EW data by extracting data from Brussels. That has now stopped.

 

We find this LHG move strange because 1 LHG is usually more open than most groups; 2 The two airlines are/were doing well; 3 LHG separates out its other main subsidiaries, Austrian, Lufthansa, Swiss.

 

However, we have made some calculations to estimate Brussels at +13%, Eurowings at +21%. As time passes, however, our estimates will become less strong, but we hope by then – six months? – LHG will have corrected this current backwards-step.

 

For LHG’s other three big airlines – Austrian +9%. Lufthansa +6%. Swiss +9%.

 

Ryanair. +8%, including its Lauda acquisition, although Lauda’s counts were not added to Ryan’s 2017 counts. This means the comparison is not correct, but we estimate the difference is less than 1pt.

 

Others of note:

Virgin Atlantic had another bad year, about +3%; previous five years – flat, -10%, -3%, +1%, +8%. And the outlook does not look good. Perhaps its business-model – bright, friendly, full service – is no longer there? Has it been superseded by bright-friendly-cheap, such as at Norwegian? And why has VA not opened more routes? Surely owners Delta and Air France (a stunningly bad recent move) are looking to get out – but how?

 

Talking of Norwegian, it is still looking ok at +13%, but will Brexit reduce its routes? It operates more than a few routes out of the UK, technically 5th-freedoms. The UK might not change this (it is desperate to keep as much unchanged post-Brexit as it can), but will the other countries? Will, for instance, the US allow a Norwegian airline to fly UK-US?

 

-Much data shows Asia Pacific as the region with great potential. If so, Europe’s airlines are not doing well at capitalising on that. At the AFKL group, growth on its Asia Pacific routes was +3%, matching group growth. But results were not so good compared with their totals at ICAG (+1% AsPac, +8% total) at LHG (+3% +10%).

 

 

 

World’s top-3 no-frills-airlines

Our calculation of seats sold by the leading NFAs (no-frills-airlines) January-November in the world’s three main regions, from WYSK:What-You-Should-Know, published by Travel Business Analyst, shows: Ryanair +8%; Southwest +4%. Air Asia is less transparent, reporting Qs only; Q3 +9%; other Q3s Ryanair +5%, Southwest +4%.

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

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