Nine Techo Trends Impacting Asian Travel
ITB Asia Daily Report - Day 3
Web in Travel (WIT) the leading gathering of Asian travel industry professionals in the marketing, technology, social media, and distribution sector attracted close to 400 delegates at ITB Asia. The focus at WIT 2010 was customer behavior.
The annual WIT, held October 19-20 concluded that technological innovation was colliding with social and economic dynamics in Asia. The result is likely to put the travel industry on the cusp of profound change. Travel suppliers have to change mindsets to adapt to the new landscape.
Web in Travel founder and organizer, Ms. Yeoh Siew Hoon, said there were nine key messages arising from Web in Travel 2010:
Content has become even more important with the fragmentation of channels. And it’s a new form of content: rawer, edgier, user-generated and more audio-visual based than text.
Creativity has to be applied to all sectors of the industry, from marketing to customer service. Expectations have been raised through social media – customers know before they arrive.
Smart phones have changed everything. They allow delivery of contextual, personal, and timely information. They enable augmented reality to change user experience of destinations. They allow customers to book at the last minute (within 24 hours and even after arrival). Some suppliers are banking on mobile commerce (m-commerce). AirAsia expects 20 percent of its bookings to come from mobile in the next 18 months.
Low-cost carriers have created a new kind of traveler – younger, older, independent, web-savvy, looking for new experience. AirAsia will be the biggest airline in the region in terms of seats by 2015.
In the age of the web and Internet, it’s about fast versus slow, not big versus small.
In Japan, 20 percent of domestic flights are booked on mobile devices and 20 percent of search on the biggest travel meta-search site, travel.jp, is through mobile. Conversely, the new challenge is getting young Japanese to travel. Some 30 percent said they have not travelled in last 12 months. They prefer video gaming.
China is the market that will change everything in Asia, not just in scale but in niche segments. For example, 90 percent of Chinese honeymoons take place within China. It is a major opportunity for destinations.
Social media has arrived and is proving it can drive more than brand awareness. It can generate direct revenues if correctly used.
Online has gone mainstream. Don’t think online versus offline, think travel.
ASIA'S AGE OF THE "MASS AFFLUENT"
Travel industry leaders expressed confidence in the return of the luxury market segment at in Asia. Addressing a panel entitled, “Who Says Luxury Is Dead? Long Live The New Luxury,” at the WIT Ideas Lab at ITB Asia on October 21, Mr. Paul Kerr, CEO, Small Luxury Hotels of the World, said that while the market is nothing like the hey day 2007 to 2008, they were pockets of success which signaled a return to form.
“Luxury has come back 12 percent, and we are seeing a lot more bookings coming online. Out of 95,000 club members, about 40 percent book via the web,” he said.
Mr. Brian Yim, editor, Millionaire Asia, a publication circulated among Asia’s mega rich, said that operators of luxury travel options would do well to train their sights on China and India.
“China is a market of the mass affluent, currently there are 450,000 millionaires, defined as individuals with at least US$1 million in liquid assets. This number is predicted to grow to 800,000 within the next few years,” Yim said.
“India has 128,000 official millionaires but there are a lot more who are under the radar for tax and other purposes. The growth rate is 50 percent and the mass affluent in India is defined at those with US$6,000 monthly income.”
“In addition, the Southeast Asia region with the power of 12 countries is the next highest. Singapore alone has 81,000 millionaires, making it the nation with the highest per capita in terms of number of millionaires.
BIGGER ITB ASIA CLOSES WITH STRENGTHENED B2B ROLE
The third ITB Asia closed today in Singapore with 6,605 attendees, a 7.4 percent increase on last year. Organizers, Messe Berlin (Singapore), attributed growth to three forces: the diversity of specialist travel forums within ITB Asia, resurgent Asian outbound demand, and enhanced buyer quality.
“The feedback on Association Day, Web in Travel, the Luxury Meetings Forum and the Responsible Tourism Forum at ITB Asia shows that ITB Asia has created unstoppable momentum through diversity,” said Dr. Martin Buck, director of Messe Berlin (Singapore).
Some 580 buyers attended the three-day event, many of them joining the inaugural Association Day interactive forum which aimed to expand the quality and quantity of large association events in Asia.
“ITB Asia and Association Day provided excellent networking to make new contacts and to clarify issues - all in a very friendly atmosphere,” said Mr. Manojit Das Gupta, secretary general, the Indian Tea Association.
Ms. Sharyati, Datuk Shuaib, director, destination management, World Gas Conference 2012, said, “Association Day was an eye opener on how associations manage their membership and run events – a fascinating exhibition with many networking opportunities.”
Association Day, a first of its kind in Asia, attracted over 100 attendees. “We created a new platform based on the exchange of high quality information that never existed before,” said Buck.
Innovative formatting characterised Web in Travel (WIT), which attracted nearly 400 attendees. Two WIT Clinics were created to let travel industry "doctors" consult with IT Asia attendees on how to make money from their website and how they should better use social media.
Successful formats geared to the exchange of rich content characterized specialist sectors such as luxury meetings. The ITB Asia Luxury Meetings Forum attracted leaders from brands such as Ritz-Carlton, Hilton, the Event Company, and Small Luxury Hotels of the World.
Egypt was the official partner country of ITB Asia 2010. It held a travel agent workshop just prior to ITB Asia and organized an exotic Egypt Night extravaganza on the opening day of the show.
“Our activities in and around ITB Asia were excellent,” said Mr. Hisham Zaazou, first assistant minister in the Ministry of Tourism in Egypt. “We want to build on the success of this year with increased space next year. I will report to the industry in Egypt to ensure even greater participation in 2011.”
Other exhibitors had similar sentiments: Peter Blumengstel, director of the German National Tourist Office Japan, said, “Our schedule has been very busy from day one, and there’s hardly time in between meetings with buyers from all over Asia.”
Momentum and specialist forums have induced a high number of early bookings for ITB Asia 2011. “We have received a higher than usual number of super-early bird bookings for ITB Asia next year,” said Mr. Nino Gruettke, executive director, ITB Asia.
“With exciting new branding for ITB Asia 2011 about to be announced, we are looking forward to building on the momentum, quality and specialist success of this year in 2011,” he said.
THE 7 "Rs" OF THE NEW RESPONSIBLE TOURISM
The travel industry knows about the 3Rs – reduce, recycle, reuse – but there are 7Rs that good operators should follow, according to the Heritance Kandalama Hotel in Sri Lanka.
The hotel’s general manager, Mr. Jeevaka Weerakone told participants of the Responsible Tourism Forum on October 21 at ITB Asia 2010 it was time to follow the 7Rs.
“We convert waste into a resource without letting it become garbage by utilising the 7Rs. It is quite widespread in Sri Lanka," he said.
Over an above the existing 3Rs, the Heritance Kandalama advocated the following 4Rs:
Reject - rejection of products, services, techniques, methods that cause significant environmental damage, for example plastic and polythene.
Reclaim - if you cannot reuse 100 percent, use whatever part can be reclaimed.
Replace - replace products, services and methods with more environmentally friendly alternatives. For example, replacing polythene bags with biodegradable bags and the use of cardboard files instead of plastic files.
Repair - where possible repair broken items without purchasing new items.
Other speakers at the forum included Mr. Anthony Wong of the Frangipani Langkawi Resort & Spa in Malaysia, an island accommodation renowned for its extensive environmental management program.
“Everyone in the Frangipani Langkawi Resort community from the owners to management, staff and guests is encouraged to participate in our programs and we find that we have the full support of all. Being an island, Langkawi has many sensitive environmental variables that need to be carefully managed if tourism on the island is to be sustainable,” said Wong.
Wong remarked that various methods had been introduced at the resort including reducing consumption especially wastage, effectively managing energy usage to reduce wastage, using environmentally-friendly detergents, filtering the resort’s "grey water" through a wetland, and working with the local authorities to reduce the amount of rubbish that goes to the island’s limited landfill.
Lawyer and writer Roselle C. Tenefrancia, who is a resident of Boracay Island, in the Philippines, a member of the Boracay Foundation Inc., and editor and writer of the Boracay Sun, a community-based newspaper on the island, sounded on the potential for environmental decline of Boracay island, which is one of the most popular tourist destinations in the Philippines.
“With rapid urban tourism development, Boracay has evolved but there is a chance to reverse itself through a united island community and the power of nature’s healing hands,” she said.
The Responsible Tourism Forum is co-organized by ITB Asia, Wild Asia, and The Green Circuit. ITB Asia is actively aware of tourism’s responsibilities and is doing its part to fulfil Corporate Social Responsibility (CSR) with the implementation of several measures such as:
• The provision of an (almost) paperless media center.
• Usage of recyclable flyers and printing materials.
• Recycling of exhibition badges.
• Distribution of walking maps to guests in hotels around Suntec.
• Reusable signage at venue.
• Special recycling bins on and around the show floor.
• Various independent initiatives of Suntec Singapore Convention Centre.
NO STIGMA WITH LUXURY MEETINGS IN ASIA
At the Luxury Meetings & Incentives Forum on October 21, a four-member industry panel led by Mr. Bill LaViolette, managing director of I&MI Media, discussed the status and performance of the high end of the travel and meetings segment in the aftermath of the problems faced by corporate America and the UK.
Mr. Andreas Kohn, director of sales and marketing at The Ritz-Carlton, Millenia Singapore, emphasized the importance of human capital; associates who “understand the client’s desires and objectives of the meeting.”
For destination management companies, the negotiation stage is where it all starts. Mr. Sanjay Seeth, VP, business development and consulting, The Event Company, said clients such as financial institutions appreciate the standards and quality of a brand, and the intrinsic brand value for attendees.
CEI Asia editor Mr. Shannon Sweeney, however, highlighted the proliferation of brands – among MNC chains and independents – in China and that it was not always possible to compare them against equivalent properties in Hong Kong and Singapore.
One of the results of the heightened concern for privacy and security was that companies sometimes buy up the entire inventory of a luxury boutique hotel. Another observation was that while AIG and other big MNCs suffered a PR backlash in the USA, luxury events in Asia were not seen as indulgent excesses. There was no problem in Hong Kong and China, for instance.
Jackie Seah, regional director of sales, Southeast Asia for Hilton Worldwide, also pointed out that it was important to distinguish between meetings and incentives for internal staff and clients. Customer events were “perfectly all right” and companies in Asia were less sensitive to being seen as enjoying luxury events.
Kohn mentioned the rising expectations of clients and the need to provide unique experiences with the “wow” factor, especially in a buyers’ market where customers want more flexibility, such as with room allocations and cut-off dates for confirmations.
To the question of commoditisation at the luxury tier and the possibility of RFPs being asked for luxury events to satisfy procurement stipulations, Seah said: “When e-bids hit this segment, we are dead!”
Sweeney said he still had faith in face-to-face meetings, where senior people deal with high-level decision-makers, as seen on the ITB Asia exhibition floor.
THE NEED TO CUT THROUGH THE CLUTTER OF TECHNOLOGY
Members of the panel discussion on Social Media, Search, Mobile and Stuff at the WIT Ideas Lab at ITB Asia 2010 on October 22 emphasized the need to cut through the clutter of social media without getting bogged down with technology.
Brett Henry, vice president, marketing, and vice president, India, Abacus International, urged travel industry players to keep up with emerging trends in social media especially the proliferation of mobile applications.
“Mobile apps are in the emerging stage and right now, it favors the intermediaries so make sure you capitalize on them. However, mobile initiatives have to be company-wide and should touch all aspects of the business from sales and marketing to the help desk,” he said. “Start with the service aspect and ask yourself how you are reaching customers. It is important to get this right first before you move to the financial aspects,” he said.
Henry called on the industry to start thinking about how they could leverage digital tablet platforms, which he predicted would be huge in the next 24 months.
”Mobile applications are part of the service and can be used to capture information about the client rather than for conducting financial transactions,” said Timothy Hughes, vice president, commercial, Orbitz Worldwide and HotelClub.
“We have our people collecting data, processing it, and evaluating how we can serve the next customer better,” he added.
Hughes pointed out that mobile users were not necessarily mobile, as they could be couch surfing. “We did a survey in Australia and we found that 40 to 50 percent of people are online even as they watch television. It’s hard to tell if they are watching America’s Next Top Model and at the same time, surfing to find out how to become models.”
Morris Sim, CEO and co-founder, Circos Brand Karma, said the four P’s paradigm of product, price, promotion, and placement was being replaced by the four E’s of experience, exchange, every place, and evangelism.
“Travel is not a product but an experience, which involves exchange in the form of human interaction that takes us to every place. That’s certainly worth evangelizing. The more wonderful you make the experience, the more positive the content that will be generated about your product,” Sim said.
GARUDA SEES PICK-UP IN BUSINESS TRAFFIC
The revamp at Garuda Indonesia in the last two years is yielding results in terms of more favorable passenger perception and traffic carried.
Average monthly passenger load factor is around 75 percent, with main online points such as Singapore – served by seven flights daily, and daily Tokyo, Dubai and Amsterdam flights doing well.
Garuda’s daily Jakarta/Dubai/Amsterdam service, reinstated since June, is popular with business travelers because there is no change of aircraft en route. The new A330-200 aircraft are deployed on this route, which also has a unique value-added service: immigration procedures are handled on board.
Mr. Clarence Heng, Garuda sales and marketing manager, Singapore, said: “For the corporate market, timing is also important and our schedules suit customers well. Garuda has also received favourable reviews on Skytrax.”
Convention and corporate meeting numbers into Jakarta are up, especially from Singapore and major Asian cities. For MICE overall, Garuda carries a 50/50 mix of Asians and Europeans, the latter mainly from the Netherlands.
Although Garuda does not fly to India, there is growing demand from the Indian market, especially to Bali, with sizeable leisure and incentive groups, as well as conferences, such as a group of 50 doctors in September. Singapore is the main gateway to Bali.
Garuda is receiving deliveries of the new B737-800 aircraft at the rate of one per fortnight.
ITB ASIA IN BRIEF: EXHIBITOR NEWS
WORLD'S FIRST INDIAN ART HOTEL
Le Sutra, the world’s first Indian art hotel, has opened in Mumbai. It exhibited at ITB Asia. The hotel is located in one of the most vibrant streets in Mumbai.
The boutique property has been inspired by philosophy, myth, art form, and historic pride and "Indian-ness."
Room types have name such as Dyuutya, Kathak, Sringar, and Karna and are theme decorated to represent heroes, the gamble of life, adornment, and beauty.
Dining options include Out of the Blue, a food and fun getaway, the Olive Bar & Kitchen, a chic Mediterranean lounge bar, and delilcae, a dessert café. Further information: www.lestura.in .
TRAVELCARMA SEALS THREE DEALS AT ITB ASIA
TravelCarma, part of AvaniCimcon Technologies, confirmed three new deals at ITB Asia. Mr. Saurabh Mehta, CEO and founder of AvaniCimcon, said that Zoraq.com of the UAE, Special Holidays Travels of Delhi and Indochina Charm Travel of Hanoi had signed up with TravelCarma.
The company provides a Facebook booking engine for hoteliers and travel portals for companies anywhere in the globe. “Facebook is a core part of our strategy,” said Saurabh, “Utilizing social media allows customers to become your sales people.”
Mr. Saurabh said that around 15 other companies were likely to sign up after negotiations at ITB Asia.
THEY SAID IT: ITB ASIA IN QUOTES
"The turnout was good during the three days. We promoted our new fleet, product enhancements, increased international route frequencies and new destinations in Indonesia." - Garuda Indonesia, Clarence Heng, sales and marketing manager, Singapore
"There was strong MICE interest, especially for meetings and incentives in China, such as for our Shenzhen and Beijing hotels. For the wholesale business, inquiries were mainly from Europe for the various Southeast Asian properties." - Hyatt Hotels and Resorts, Lin Ing Lee, Hyatt Regional Office
"It has been busy and a good show. We had a lot of inquiries from India, China, and Singapore. Leisure interest from Singapore and India was strong. Besides the traditional perception of Munich – beer and sausages – we are also promoting modern cuisine with international flavors. We also cater to Indian dietary requirements. For accommodation, visitors can sleep in a castle or try ‘sightsleeping’ where those interested in arts and culture can stay in small, unique hotels. Rates are from €60 a night." – Bavaria Tourism, Stefan Appel, head of international sales promotion
"The interest is mostly from the region: Singapore, Malaysia, Thailand, and Vietnam. We also met Korean buyers. Generally, most of the buyer appointments and visitors wanted rates for holiday and business visitors to Phnom Penh. We also see growing interest in regional corporate meetings, such as from the Philippines, Thailand and Singapore." - Hotel Cambodiana, Cambodia, An Sophon, senior sales manager
"The airline is newly represented in Singapore. Not many travel agents and consumers are familiar with the various places in South America. Our main objective at this show was to create awareness and explore markets, where we could get good leads and we have managed to make headway. We also want to work with preferred partners. Currently, our A340 daily flights fly from Santiago to Auckland and Sydney. Passengers from Singapore can fly on Qantas or SIA to either Sydney or Auckland. They can stop over if desired. We met travel agents from Malaysia, Indonesia, and Singapore and as far as Bahrain. Most are looking at FIT and small group tours of four to 10 persons." - LAN Airlines, Chile, Daryl Wee, account manager, Singapore
"Singapore is looking good and there is renewed interest. This could be due to the two new integrated resorts and also the destination as a whole. Marina Bay Sands is demand-driven. There is considerable interest, with buyers coming to us requesting that the integrated resort be included. This applies to FITs, incentives, and meetings. From the alliance perspective, being together here at a joint booth is good. It provides a lot of opportunities for cross-marketing and cross-referrals." - Asian Connections Alliance/World Express Singapore, Darren Tan, managing director, World Express Singapore
"We are here for the first time as we are looking for business from Asia. The Estrel Berlin is Europe’s largest convention, entertainment, and hotel complex, and we have 1,125 rooms and suites, five restaurants, two bars, and a beer garden, so we have plenty to offer to guests. Over the last three days, we have seen 50 to 60 prospective corporate and mice buyers from Indonesia, Malaysia, and Thailand. We also have strong leads from India and we are confident that the follow through will be strong." - Matthias Mandow, key account manager, Touristik, Estrial mHotel Betriebs, Berlin, Germany
"We’ve had a wonderful response at ITB Asia 2010 with good quality buyers showing interest in South Africa. We had a big take up from buyers from India and substantial buyer interest from China, Taiwan, and of course, Singapore. I am happy to say that through the contacts we made in ITB Asia, we will for the first time, have strong representation from Asia for our own Meetings Africa Show in 2011. Meetings Africa is Africa’s top business tourism marketing platform and a gateway to the tourism market in South Africa." - Karin White, general manager, sales and marketing, Sandton Convention Centre, Johannesburg, South Africa
"Our schedule has been very busy from day one and there’s hardly time in between meetings with buyers from all over Asia. We are seeing strong interest from India for sightseeing and cultural events. We also have interest from Asian markets for the 2011 FIFA Women's World Cup finals, which will be held in Germany from June 26 until July 17, 2011. Games will be played in Berlin, Augsburg, Bochum, Dresden, Leverkusen, Monchengladbach, Sinsheim, Wolfsburg, and the Frankfurt Arena, where the final will be held." - Peter Blumengstel, director, German National Tourist Office, Japan