London down, not even out

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London down, not even out

London visitor data (from Visit Britain) is not timely. Figures are surprising nevertheless.

 

In Q4, arrivals fell 8%. Remember that this was not supposed to happen. After the Brexit vote in 2016, the fall of the UK currency was supposed to boost visitor arrivals, although probably also prompt a fall in outbound travel.

 

It hasn’t happened like that. Even before the UK is out of the European Union, the London visitor count is down.

 

Of course a fall can have many causes. But the size of that Q4 fall, -8%, is a surprise – that is 400,000 fewer visitors in that period, say 4000 fewer daily.

 

Then comes #2 shock – Q1 figures show a -10% fall! There are fewer visitors in Q1 than in Q4, but that bigger percentage fall produced a bigger actual fall – around 5000 fewer visitors daily.

 

The Brexit surprises continue.

 

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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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 the Travel Business Analyst newsletter, over January-April.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +9%; Cathay +2%; China Eastern +10%; China Southern +11%; Japan +3%; Singapore +6%.

 

Notes (on notable details):

 

-Air China. International growing almost double the rate of domestic.

-Cathay. Why is the investment world not shouting out Cathay’s bad results? A China-related airline running +2% is unheard of.

 

The group’s management is living in the past when it ruled Hong Kong’s aviation scene. However, it may get relief when its local rival, Hong Kong Airlines, stumbles. Not only is HKA expanding too fast (a la Norwegian), but it is part of China’s troubled HNA group.

 

 

-China Eastern. Unlike Air China, domestic and international growth are in sync.

 

 

-China Southern. The biggest of China’s top-3, yet fastest-growing also. Its international business is 20% bigger than for the other two.

 

 

-Japan. Domestic is hardly growing but +6% for international is like boom time in the Japan market.

 

 

-Singapore. Before, we worried for SAG (Singapore Airlines group), because the main airline looked weak (notwithstanding still-fawning press coverage). SA is still only +2% but it is being pulled along by SAG’s other airlines. That said, Scoot should be higher than its +12%.

 

Total results were helped by SAG’s Silk +10%. We think Silk should not be folded into SA but reworked as SAG’s low-cost-airline. (See our definitions for full-service-airlines, low-cost-airlines, no-frills-airlines.)

 

 

-Others of note: Some surprising falls on international routes. Garuda. And Malaysia is slipping again after returning to growth in 2017 after its two accidents in 2014 (MH370 disappeared flight, MH17 shot down over Ukraine).

 

And Thai; given that Thailand’s visitor business is doing well, is administrative dysfunction at government affecting Thai’s operational efficiency?

 

 

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.

July travel stocks’ ups and downs

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July travel stocks’ ups and downs

Travel stocks (US, Asia Pacific, Europe) in July. Airlines: biggest growth, Turkish +24%; biggest fall, Jet India -11%. Hotels: MGM +9%, Shangri-La -13%. Tech: Expedia +11%, Trivago -9%. Others: Royal Caribbean +9%, HNA -17%.

 

Previous month: Airlines: biggest growth, Wizz +6%; biggest fall, China Southern -20%. Hotels: Melia +0.2%, Dusit Thani -18%. Tech: Travelport +6%, eDreams -18%. Others: Walt Disney +5%, Avis -17%.

 

 

Comments:

After a bad June, travel stocks recovered slightly in July, although this is primarily a Dead Cat Bounce. True that fastest Turkish is now back above its end-2017 price (a good +7%), but others are still below. Despite good monthly growth at Air France +12% and Lufthansa +16% (making up the top-3 in fastest-growth), they are nevertheless below their end-2017 prices.

 

At the bottom, Jet (to become Etihad’s 3rd subsidiary to fail?) pushed out Ryanair by a fraction. Investors punish Ryan (and to some extent, other no-frills-airlines) more than full-service-airlines. Look no further than AirFrance-KLM – fastest-grower although still suffering from strikes in France, CEO-less, and losing millions. And probably worse to come, as surely KLM has enough good sense to try to get out?

 

Las Vegas rollers for hotels. MGM was highest, but Sands was 2nd lowest hotel stock at -6%. Life is not so good at Shangri-La either, and it is still below its end-2017 price.

 

The fall at China’s HNA may be blamed on the accidental death last month of its co-founder Wang Jian (although its public face, such as it is for this secretive company, was the other co-founder, Chen Feng; see our PinT, People-in-Travel). But HNA’s stock has been falling most of this year; it is less than half its peak in October 2017.

 

How low can Trivago go? It is now 65% below its 2016 launch price! At that price, it is almost certain to be bought out soon – unless the market is simply waiting for it to run out of funds.

 

 

TBA Travel Stocks Index: World 245, Asia Pacific 106, Europe 218, US 409. Index previous month: World 234, Asia Pacific 105, Europe 214, US 381.

 

 

NVTT (Net Value Travel Tech) Stocks Index: 138; previous month 132.

 

 

Stockmarkets. Biggest growth Bangkok +7%; biggest fall Dublin -2%. Previous month: biggest growth Wellington +3%; biggest fall Bangkok -8%.

 

 

Info from the Travel Business Analyst newsletters. Details in next month’s newsletters.

 

 

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 Europe

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What’s working; what’s not. 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 the Travel Business Analyst newsletter, over January-April.

 

Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+KLM (starting this year, no longer separated) -1%; British +1%; Easyjet +5%; Lufthansa +7%; Ryanair +7%.

 

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

-Air France group (AFG). We presume AF’s striking employees are causing the fall. We are still surprised KLM wants to be associated with this (until this year, its figures were separated, showing its superior performance compared with AF. Transavia had a bad month (+1%); also bad because it should be pulling AFG out of AF’s business mess.

 

AFG says its Joon subsidiary has sold 1mn seats; that looks good, but because AFG publishes no meaningful figures, we cannot say if the airline is doing well or not. (This presumably is the reason AFG hides the figures.)

 

We note that at this time when AFG reduces published data, the Lufthansa group has started to add more – notably traffic out of its Frankfurt and Munich hubs.

 

-British (=ICAG). BA is still the weak partner in the group, traffic flat as Iberia grows +11%. The other problem ICAG will need to resolve is weakness at AerLingus (+1%; our estimate). AL should be at least as fast as Vueling (+7%; our estimate).

 

-Easyjet. That +5% needs to be improved, although Easy did manage to squeeze seat factor +0.5pts.

 

-Lufthansa. Seems to be operating in a different faster world than the struggling groups AF-KL and ICAG – Austrian +6%, Brussels +10%, Eurowings +22% (yes), Lufthansa +5%, Swiss +12%, and the whole group +9%.

 

-Ryanair. Showing a good +9% (although around +15% was more common up until one-year ago). And no growth in seat factor. At 96% that might be the peak. (Note, however, that Ryan rounds that figure, and does not provide the data for us to calculate something more precise. So its seat factor could be falling – from 96.4%, say, in 2017, to 95.6% this year.)

 

-Others of note: As AF-KL now provides less information, which opens space. We have added Russia’s Aeroflot, which is having a good year. April +9%, YTD +7%.

 

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.

 

June travel stocks’ ups and (mainly) downs.

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June travel stocks’ ups and (mainly) downs.

Travel stocks (US, Asia Pacific, Europe) in June. Airlines: biggest growth, Wizz +6%; biggest fall, China Southern -20%. Hotels: Melia +0.2% sic, Dusit Thani -18%. Tech: Travelport +6%, eDreams -18%. Others: Walt Disney +5%, Avis -17%.

 

Comments:

Concern over a trade war hits travel stocks as well. 63 of the 75 travel stocks we track, fell (one was flat).

 

Unbelievably, only one hotel stock (of the 23 around the world we track) grew – and that by +0.2%, essentially flat. This appears to indicate that investors believe that hotels will be hit harder than, say, airlines.

 

Yet airlines also had a bad month. Even Lufthansa (which we think has the best businessplan among big airline groups, 75mn-plus annual seat sales) fell -11%.

 

China’s airlines as a group did worst (in airline size -20% -15% -17%).

 

Among hotels, Wyndham’s corporate break-up in May was partly responsible for its -11%. Another surprise was at Mandarin Oriental, usually a solid stock, down -10%. Does this mean investors think business travellers – MO’s strongest segment – will be affected most by world-hating US trade (and other) policies?

 

 

Previous month: Airlines: biggest growth, United +21%; biggest fall, Jet AW -36%. Hotels: Belmond +12%, Millennium & Copthorne -6%. Tech: Amadeus +12%, Last Minute -16%. Others: China Travel Service +18%, Hertz -31%.

 

TBA Travel Stocks Index: World 234, Asia Pacific 105, Europe 214, US 381. Index previous month: World 248, Asia Pacific 114, Europe 217, US 412.

 

NVTT (Net Value Travel Tech) Stocks Index: 132; previous month 136.

 

Stockmarkets. Biggest growth Wellington +3%; biggest fall Bangkok -8%. Previous month: biggest growth Dublin +5%; biggest fall Kuala Lumpur -6%.

 

Comments:

Bangkok’s market fall was part responsible for Thai’s -20% fall and Dusit worsting all the world’s hotel groups. For interest, our US index (made up of three markets) was flat (+0.2%).

 

 

Info from the Travel Business Analyst newsletters.

 

 

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

 

Double WYSKs. UK’s inbound & outbound travel.

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Double WYSKs. UK’s inbound & outbound travel.

WYSK = What You Should Know.

 

Funny, that. Experts (I’m a Trainee-Expert) presumed UK outbound travel would fall after the value of the UK currency fell – following the mid-2016 referendum in favour of quitting the European Union. And inbound travel would grow, spurred by that cheaper currency.

 

Some of the following figures are two months old, but I have just looked at them again – this time with my brain switched on.

 

Outbound, the segment that should be at risk. Up +2.1% for all-2017, and slightly faster, +2.7%, to the main (80%) destination region, the rest of Europe. The total fell in six months, including the last three. To the rest of Europe in fewer, just five, months.

 

Inbound, the segment that should be doing well. The total did indeed grow, but that +3.4% is hardly special; in fact, it is worse than its closest competitors in Europe. In order of total size, France (allegedly; data release varies between secretive and puzzling) grew +9%, Spain +9%, Italy +10%, Germany +5%.

 

There were falls in five months, but including the last four.

 

UK from the rest of Europe (a 72% share) was worse than the total, just +0.8%. And prospects do not look so good – there were falls in six months, also including the last four. In December the fall was big, -11%.

 

 

From all this I calculate the UK’s overall travel business grew +3% in 2017, and that related to the rest of Europe, +2%. Although that looks weak, it is better than the UK’s GDP growth in 2017. Time to break-out the last of the tariff-free champagne?

 

 

Notes:

-Something else is happening. The government usually reveals this type of data on a monthly basis. It has said nothing over the past three months.

 

-All this excerpted from our WYSK – What You Should Know. WYSK is available as a subscription service. We provide about 10 brief (usually 2/3 sentences), broadly world-based with emphasis on the region of the subscriber. A subscriber can contract for up to three special subjects.

 

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

 

WYSK: ITB Asia’s misleading data

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WYSK: ITB Asia’s misleading data

WYSK = What You Should Know.

Messe Berlin (MB) continues its practice of using misleading and/or incorrect data for its events, the latest one for the 11th ITB Asia (ITBA), due in Singapore this October.

 

However, most of these appear to be due more to ineptitude than duplicity.

 

MB reports:

-Exhibitor numbers expected to be +21.8%, which would make 1136. ‘Presence’ from Europe (which we presume means exhibitor numbers) +13.8%; previous data not given.

 

-85% of exhibition space booked. But if there is 22% growth in exhibitors, how can booked space be down – surely exhibitors are not reducing their booth sizes?

 

-MB describes the 2017 ITBA as an ‘enormous success’ with ‘record-breaking numbers with 113 countries’ at the event. ‘Record-breaking’ has occurred on most measures in most of the nine years. Not many figures were released for the 2017 event but attendance grew only +0.2% and countries +2.7% – although exhibitor growth was good, +11.1%. We interpreted some of these small growths as a relative loss due to the start of ITB China – when China is the biggest single part of growth in Asia’s traffic growth.

 

-MB reported worldwide outbound trips as growing +3.9% in 2017. In fact*, that was 2016 data, and for only Jan-Aug.

 

-Likewise the +11% growth given as Asia outbound growth* in 2017 – data was for Jan-Aug 2016 only.

 

-In addition, those figures MB uses include data for China, yet China should now be excluded from the ITBA prospectus, because China now has its own stand-alone event.

 

-Blatant misuse continued, with MB forecasting +4-5% growth in worldwide outbound travel ‘over the next year’. In fact*, this was a forecast for 2017!

 

*Notes:

-MB (mis)-uses its own ITB Berlin World Travel Trends for its data.

-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

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

 

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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