Travel Trends

THE early Easter break didn't help regional Australian tourism operators with 47% of Hotel Motel & Accommodation Association (HMAA) members reporting lower occupancy than 2009. Almost 60% of respondents were regional owner/operators. HMAA Chief Executive, Lorraine Duffy said governments should do more to promote short regional breaks.

Meanwhile, Accor Australia CEO Simon McGrath said "Easter was ok, a little better than last year". McGrath said RevPAR was up across the 150 hotel group by 8% in February, 6% in March while April is on track for a 5% to 6% result. Demand remains the primary driver but rates are on the way back, he said.

GO figure. Wotif, the online travel powerhouse, today announced that its net profit for the 09/10 financial year will increase by more than 20% yet its share price fell by 8% to just under A$6.98 in early trade on the Australian Stock Exchange. Wotif estimates its profit for the year will be between A$52m to A$56m, compared with A$43.5m last financial year. Despite the fall, Wotif is still trading on a price earning ratio of 30,  far more than any other other listed online travel stock, which shows it's the clear sector favourite among investors.

Flights To Nowhere

STRANDED travellers gave certain European airport hotels a much needed boost to business last week to figures released last night by STR Global, though the impact has been short-lived as people either moved on or found somewhere better to stay. Revenue at Gatwick was up by 40 percent, Amsterdam Schiphol (+69 percent), Heathrow (+70 percent), Stockholm Arlanda (+75 percent), Brussels Airport and its surroundings (+137 percent) and Frankfurt Rhein-Main Airport (+369 percent) for the week April 11-17. Meanwhile, European travel remains in chaos as the ash cloud caused by an Icelandic volcano forced airport closures across the continent. Some major airports are due to open later today (AEST) but there are reports of further eruptions – and aircraft-debilitating ash – on the way.

FACEBOOK helped AirAsia sell almost 900,000 tickets in just two days, according to Kathleen Tan, the airline’s regional head of commercial, who has been stunned at the impact social media – when correctly deployed – can have on sales. “We started with one staff and it’s been like a tsunami,” she said. “Our aim last year was to build a fan base of 50,000 and now we have 215,000. I think we could hit 500,000 easily this year.” Tan said it’s important to adopt a different tone when marketing through Facebook. “The key is to have relevant content and it shouldn’t be too hard sell,” said Tan. See full article at Web In Travel.

Bit confused about the new Tourism Australia site, www.nothinglikeaustralia.com, which launched today. Initially promoted as a social media portal in which ordinary Aussies extoll the virtues of their country, turns out it's a competition site. Best entry wins a $25,000 trip while the photos and accompanying words ("There's Nothing Like…") will be used on a "new map of the best Australian holiday experiences". The whole thing looks management rather than people driven. Inevitable I suppose but a little disappointing given the high expectations of what can be achieved for destinations through social media – witness Tourism QLD's "Best Job In The World". Anyway, check it out, see what you think.

Pilgrims used to travel for weeks or months by foot to reach their goal. Now they log on to the net and fly vast distances in a matter of hours to attend great religious sites or events such as the Canonisation of Mary MacKillop in Rome on October 17. Thousands of Australians are expected to attend and a website www.canonisationtravel.com has just been set up by Harvest Pilgrimages. Entry level deals feature 'pilgrim accommodation in a central religious house or convent style lodging in rooms with private facilities'.

RISING home loan interest rates are having no impact on Australian leisure travel according to Qantas CEO Alan Joyce, who said Australians are not cutting back on their holiday spend. "We are seeing very strong leisure demand despite interest rates having gone up," Joyce told the Sunday Business program. He also said the business market, which was hit by the Global Financial Crisis, is strengthening.  "Confidence is returning to the business sector, people are travelling again."

Here's a prediction for you. The day is fast approaching when every prime spot on Google will be paid advertising. Nothing free, all organic listings pushed down the page. It's been a long-term trend, first the ads down the side, then those across the top, three deep now, supplemented by the rise and rise of Google Maps, which occupies all the prime real estate for key accommodation based search terms. Then there's fact that Google pushes Maps harder than any other travel tool and its motivation is always to make more money.

Speculation, sure, but the recent announcement that Google is testing a form of paid travel meta-search via Google Maps seems to confirm this line of thinking and for many the writing has been on the wall for some time now. That is, Google wants all “above the fold” listings on its precious splash pages – the majority of which used to be free – to be paid for by advertisers. More …

HARD to argue with claims that the Rugby World Cup in New Zealand next September/October is looming as an exercise in price gouging. The focus so far has been on hotel rates during the tournament, headlined by the Hilton Auckland charging NZ$1700 a night with a 10 night minimum during the finals period. Warren Livingstone, Managing Director of We Love Rugby told scoop.co.nz that such pricing is not isolated: "We have a list of hotels that have all increased rates by 400% and in some cases by up to 100% from their normal rates." But what about official wholesale packages?

In the same week Jetstar announced one way fares of just $129 between Sydney and Auckland (travel between 20 April and 22 June), I saw a "deal" from Adventure World costing an enormous A$2068 for return Sydney-Auckland travel and a ticket to the England v Scotland pool match. No accommodation. It is just me or is that outrageous? More …

Do the math and it's hard to argue against the run of record low Australian domestic airfares continuing throughout 2010. The equation is simple: supply is set to increase while demand is at best flat. Latest government stats show that January domestic passenger numbers fell 1.5% year on year while airline loads slipped from 81% to 79%. More aircraft (and routes) are due for Jetstar, Virgin Blue and Tiger Airways over the coming months, ensuring further aggressive discounting for these carriers to just maintain market share. That's certainly what's happening right now.

According to research from CommSec, airfares are the lowest since official tracking began 17 years ago and 13.2% less than they were a year ago. Full economy and business airfares have been rising of late but are still well down on 2008, says CommSec. For me the big thing out of all this is domestic passenger growth, or lack of it. Just check out the chart above.

After years of incredible growth, is has levelled off. Some may argues that the GFC is to blame but I'm not going there. I reckon growth had to level out at some point and that's simply what's occurred. As a result I don't see further significant  increases, which puts suppliers under a lot of pressure to maintain the high loads they require to ensure profitability when fares are so heavily discounted. Someone must lose, but who?

AFTER years of speculation Google has finally made its move into travel meta-search by offering hotel price comparison on Google Maps. "Today we started experimenting with a new feature, visible to a small  portion of users, by showing specific prices for selected hotel listings," the company said. More …

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Budget carrier Jetstar will spend up to 40% of its marketing budget on the internet next financial year – an increase of more than 500% over present levels, according to a report in B&T Today. Social media will be a big part of the mix. Jetstar's head of marketing and PR, David May, was quoted as saying that traditional media cost too much relative to its audience reach. "It's clear our customers are comfortable in the online space and as Jetstar is essentially an online retailer it makes sense for us to embrace social media outlets. Online media channels gives us immediate access to our consumers. Social media offers more value for money (than traditional channels) and is a smarter way to reach our customers." He said Jetstar's already had "phenomenal" success with Twitter and YouTube.

Flashes from No Vacancy conference yesterday. 2010 looking like another winnner for online travel agents while suppliers bouncing back though no-one really has any clear idea of trends. Summed up by Accor boss Simon McGrath who was confident of a solid year overall for the 150 property group but said would be patchy when you drill down. Said GFC knocked pricing back to 2006 levels but rate recovery would be much faster this cycle – a 'V' rather 'U'. Rejected suggestion it could be a 'W'. Channel shift – from GDS to web – big topic through the day, accelerating. Star Ratings, official and social, also in for a lot of comment, all of it negative. Clearly no-one is happy with present AAA Tourism rated system, which is in for an overhaul. Online from Hitwise showed that still less people visiting travel sites than pre-GFC, an interesting contradiction with outstanding performance from all accommodation websites. Anyway, that's it for now. More news soon.

Web portal Yahoo7 is hunting for a new Head of Travel following the resignation of Paul Fisher, one of Australia's most experienced online travel execs. Fisher has been with Yahoo7 since it acquired TotalTravel.com, in which he was a significant shareholder, last September. TotalTravel.com is a very deep site that makes its money from advertising with around 170,000 listings across a number of industry verticals. The sites are now in the process of being merged, a massive process that requires a huge amount of back end work. 

When TotalTravel was sold for a rumoured $20m, major shareholder Malcom Baker told the Australian Financial Review: "Now with the muscle that Yahoo7 and its owners can put behind us, we can overtake Wotif." In other news, Expedia.com.au, which recently launched its Travel Agent Affiliate Program in Asia Pacific, has eliminated its change and cancellation fees on all flights, hotels, packages and car reservations. 

SO many people trying to talk up the travel industry at the moment but three "Sales" emails in three days from Accor Hotels Asia Pacific, Oaks Hotels & Resorts, and Mantra Hotels, Resorts and Apartments suggests that the recovery, if it's on, is patchy. No question some markets are doing well – Sydney had a huge events-driven February – but others remain soft or under threat; eg Melbourne hotel market is facing dramatic oversupply.

Conflicting signals also in travel retail. Flight Centre half year profit up 96% off low base, Jetset Travelworld down 68%. Meanwhile, online retailers like Wotif.com booming, wholesaler Cox and Kings optimistic, others not so sure. Rebound or dead cat bounce? Yes and no. Hard to not think that some of those on the floor may never get back up.

Incumbent e-Channel has retained the massive Flight Centre paid search account – which covers several sites and worth in excess of $10m a year – after a intensely competitive pitch.

Flight Centre is renowned as an aggressive marketer no matter what the platform and is reputedly currently bidding on more than 200,000 key words.

Main site Flightcentre.com.au has been consistently ranked in the top two travel agencies for a number of years by Experian Hitwise due to its strong brand and heavy paid search spend, which is probably only second to the airlines – Qantas, Jetstar and Virgin Blue – and maybe some accommodation sites such as Wotif.com.

Flight Centre’s other sites, Escape Travel and Student Flights, also rank well. Meanwhile, Sydney company Switched On Media has won Flight Centre’s SEO business and reports good early results.

Just a day or two until until No Vacancy 2010 in Sydney on March 18 and things are really starting to hot up. Bookings are good with representation from most major offline and online accommodation brands plus all leading industry groups. It should be a great day with an audience of around 190. Haven't booked yet? Don't miss out. See who's down as a delegate so far. More …