Yahoo!7 & Travel.com.au Link

INDUSTRY survivor Travel.com.au has stitched up an agreement with Yahoo!7 to supply content for its main site – www.yahoo7.com.au. The deal covers air, hotel and car – boosting the profile and potential revenue for Travel.com.au, which has yet to post a profit. Investors are adopting a wait and see attitude with the company – a recent rights issue fell well short of the A$1.6 million target, forcing the under-writer to pick up the slack. Staff are optimistic, however. There has been some recent offline advertising in the weekend press, while the local Lastminute website – which Travel.com.au runs – is performing strongly.
 
Ends

Accommodation To Make Cents For Sensis – Travel Next?

 
 
 
 
 
 
 
TELCO giant Telstra has moved into travel, emerging as a major industry force with the launch of GoStay by Sensis, its directories and online search division.
 
GoStay (www.gostay.com.au) is an accommodation listings and booking business Sensis has created in conjunction with Australian Online Travel, part of the AOT Group.
 
The move heralds a major strategic shift and follows rumours that Sensis tried but failed to buy online accommodation market leader, wotif.com.
 
Go Stay is effectively two products: a website and accommodation guidebook.
 
The website features 2000 properties supplied by AOT, while the guidebook features 5000 properties sourced by the Sensis sales team.
 
AOT, which owns the Needitnow.com.au and Travelmate.com.au wesbites, is providing fulfillment for both products through the website and a 1300 number.
 
Sensis has also signalled it wants to expand into other areas of travel, including air and car.
 
“Anything is possible,” said Jane Blackley, Group Marketing Manager, Verticals, at Sensis.
 
She said Sensis is looking at sectors that work across the online, print, voice and mobile platforms.
 
Meanwhile the company has unleashed a massive marketing campaign to support GoStay.
 
The campaign includes a record-breaking letterbox drop to 3 million Aussie households – almost half the Australian population.
 
“It’s the biggest distribution of a guide like this ever done in Australia,” Ms Blackley said.
 
GoStay marks the first time Sensis, which makes virtually all its revenue from advertising, has moved into retailing – a sign of things to come.
 
Parent company Telstra has been hit by consumers transitioning from fixed line phones to mobiles, and is looking at Sensis to drive extra revenue.
 
The Sensis sites – which include White Pages, Yellow Pages, Trading Post, City Search and many others – have around 2.5% of the Australian online market.
 
Microsoft (many sites) and Google (single site) lord it over everyone with around 20% total market share, according to the latest Hitwise stats on the market share of parent companies.
 
Yahoo! is on 9% followed by eBay (6.36%) News Corporation (2.97%) and Telstra (2.46%).
 
At present there are no pure travel companies in the Top 20.
 
Hitwise says ‘Destinations and Accommodation’ is one of the most popular internet categories with about 1% of total traffic.
 
The ‘Travel’ category comes in at 2.3%.
 
 
Ends
 

Quenten Smith Goes Bezurk

TRAVEL Search Engine, Bezurk, has appointed Quenten Smith Sales Director, Asia Pacific. Quenten joins Bezurk from Yahoo! South East Asia, where he has been in charge of travel industry partner development.

Travel Wired: Opinion

By Martin Kelly

STICKS and stones may break my bones but words can never hurt me. Or as Eric Idle from Monty Python said: “Sticks and stones may break my bones but words will make me go into a corner and cry by myself for hours.”

In retrospect, that should have been the approach from Webjet boss David Clarke, who took offence at the semantics of a Flight Centre press release, igniting a war of words that may yet end up in the courts.

Clarke was offended by the assertion from Flight Centre that www.flightcentre.com.au is the “entrenched” Number One travel agency website based on Hitwise statistics for the six months to December 31.

He also didn’t like Flight Centre claiming that “no online travel retailer in the Australian market currently generates significant profit.”

Irked, Clarke fired off a riposte that challenged Flight Centre to start talking online financials before making such claims on the basis that Webjet needs to reassure its shareholders that online travel retail is profitable.

Webjet made $924,524 after tax profit for the period in question, roughly half of it from service fees, a proportion which is now closer to 60 per cent. Flight Centre does not reveal its online results.

And that should have been the end of it – until a report emerged that Webjet had complained to the Australian Competition and Consumer Commission about the claim.

It now appears that the story was wrong – Webjet has made so such complaint – but Flight Centre boss Graham Turner reacted with another press release.

“The simple fact is that www.flightcentre.com.au has now won the 2004 and 2005 awards based on research from independent web monitor Hitwise,” he said.

“Webjet’s criticism is particularly puzzling when you consider that it continues to promote its own success in the Hitwise rankings for the June quarter last year.”

Turner also took a swipe at Webjet’s accounting.

“On the issue of profitability in the online travel agency sector, Flight Centre is fundamentally opposed to the practice of aggressively issuing shares and options in return for products and services – which would usually be considered basic operating expenses – received from third parties.

“Webjet seems to minimise expenses in this manner. Flight Centre believes this is undesirable and potentially misleading to investors as it can cloud the true underlying profitability of the company doing it.”

Not surprisingly, Clarke took great offence, called his lawyers and fired off a confidential letter to Flight Centre, which it was considering as this story went to press.

“We view the Flight Centre comments with the utmost seriousness. It impugns the integrity of Webjet and its directors … and is demonstrable nonsense.”

As is this whole fracas, all over a word that now seems to sum up the whole bizarre situation, created out of nothing – entrenched.

Ends.

Mate, It's A Bloody Ripper Ad

By Yeoh Siew Hoon
 
Warning: Yeoh Siew Hoon’s article is rated PG. Profane language is used liberally throughout, so reader discretion is advised.
 
When my friends in Australia first sent me an email titled, “So where the bloody hell are you?”, I thought, “Bloody typical. So rude, so direct, so upfront. Just like Australians.”
I was going to shoot back a reply saying “None of your f……. bloody business” (just to prove that we Asians can swear as well as them) when I realised they were writing to tell me about the brand new A$180 million advertising campaign launched by the Minister for Tourism Fran Bailey.
“So Where the Bloody Hell Are You?” is a campaign designed to make tourists sit up and take notice, and book their trip right away. “It is a distinctively Australian invite that says, come to our place now,” the minister said.
Well, the minister is right in one sense. It did make me sit up and take notice, and then I laughed my bloody head off.
I laughed because I want the job of the advertising agency that came up with that bloody tagline – imagine, being paid that kind of money to swear at your customers.
I tell you, it’s a bloody dream job.
Now I don’t have the same kind of job as you that requires me to deal with bloody customers (ie people like me) every day but if I did, I swear I’d want to swear at me all the time. I don’t do it because I know I could get badly punched, not bloody paid.
So I’d like to thank the Australians for liberating us from that bloody silly notion – whoever wrote that management book that said we shouldn’t swear at our customers should be bloody hanged. They are to blame for our f……. stress levels. Swearing is not hazardous to your health, unlike smoking.
I have to confess though that I am bloody confused as I am sure some Australians are as well. Just two years ago, the Australians wanted us to see them “in a different light” – a softer, gentler, more emotional side – with their new branding “Australia: A Different Light”.
Now they want us to see them as they are – direct, upfront, open, friendly folks. The TV commercials which show frames of real Australians saying, “We’ve bought you a beer”, “We’ve got the sharks out of the pool” and “We’ve turned on the lights” are really a way of saying, “This is who we bloody are, this is what we bloody have, so what the hell are you doing over there, get your butt over here now.”
Fran Bailey calls it “unashamedly Australian”.
Now some of my Australian friends told me they cringed when they heard the tagline but I’d like to reassure them that really it will not cast Australia in a different light from that first different light.
We have always enjoyed the humour and honesty of Australia. It’s just that we may have to get used to being sworn at when what you really want is our money.
Bloody hell.
Ends.

World Catches Aussie Disease

TOURISM Australia will roll out further viral elements to its new So Where The Bloody Hell Are You campaign over the next few weeks, building on the outstanding success of the initial online push.
 
More than 100,000 people from 150 countries have already downloaded the new TV ad, which spearheads a fresh A$180 million three-year marketing drive from Tourism Australia.
 
Featured on www.australia.com and www.wherethebloodyhellareyou.com, the somewhat provocative advertisement is delivered on a platform provided by Vividas that enables it to be easily emailed and viewed.
 
This “viral” element has already been used very effectively by marketers in other sectors (check out www.bigad.com.au) and saw Where The Bloody Hell Are You make its way around the world in less than 24 hours.
 
Those numbers are set to climb higher as the campaign – the aim of which is to make Australia less of a “one day I’ll go there” kind of place, to a “go right now destination” – is rolled out around the world over the next few months.
 
Manager Consumer Communications Paul Davies said Tourism Australia the campaign is aimed at “experience seekers” from key markets such as North America, the United Kingdom and Europe.
 
Davies said “experience seekers” come from all countries and age groups, and tend be very high digital users.
 
“So introducing a viral element to the campaign was one of the more obvious ways of targeting this audience.”
 
He added: “They are the kind of people who ask ‘what shall we do?’ rather than ‘where shall we go?’ ”
 
And now they have the answer.
 
Ends.

Online Majority For Flying Kangaroo Within Year

QANTAS wants to have 60% of its domestic flight bookings transacted online within 12 months.
 
The airline group aims to save A$80 million in distribution costs over the next year “in tandem with a program to accelerate the Group’s (total) domestic online bookings from 44% to 60%.”
 
CEO Geoff Dixon said Qantas has already driven its distribution costs down by 25% over the past three years, largely by cutting travel agents commissions and going direct to consumers.
 
Its most recent commission cuts on July 1, when it slashed domestic commission from 5% to 1%, bore immediate fruit with A$50 million saved in the six months to the end of 2005.
 
Meanwhile, online bookings across all Qantas Group airlines, which includes Low Cost Carrier Jetstar, have increased 500% over the past four years.
 
But it was not all good news from the Internet with disintermediation hitting the profit of Australia’s largest wholesaler, Qantas Holidays.
 
“In both the domestic and outbound markets the effect of unbundling due to the increased use of online bookings has seen air land revenues fall 20 per cent.”
 
Dixon said Jetstar, which already does more than 90% of its bookings online and increased its pre-tax half year profit 45.6% to A$27.7 million, will play an ever-growing role.
 
“The Jetstar strategy involves expanding the domestic network, launching international operations and bringing the (loss-making) Jetstar Asia operation closer to the Jetstar Group,” Dixon said.
 
“New Jetstar joint ventures are also planned for other parts of the world.
 
“This will mean considerable growth for both brands, especially Jetstar internationally in the next three years, Qantas in new international markets, and the movement of Australian Airlines into the Qantas Airlines structure.”
 
Total Qantas Group international market share fell by 1.2% to 31.3%, reflecting the assault on Australian skies by “predominantly government owned” carriers from the Middle East.
 
Its domestic market share was 66.1%, according to the latest statistics.
 
Overall Qantas reported a 3.4% decline in pre-tax profit to A$483.5 million for the half year, thanks largely to fuel and restructuring costs.
 
Ends.

ebookers Writedown Sours Cendant Results

Cendant has written down a massive US$425 million on its ebookers business, according to the 2005 annual results. 
 
Just recently, Cendant forecast an "impairment" (writedown) charge for ebookers, a European travel e-business, of “between US$200 million to US$300 million”.
 
Meanwhile, product pricing has also emerged as a significant issue for Cendant with its GDS and car hire business recording higher transaction volumes but lower revenue.
 
Revenue from GDS and supplier services (Galileo) fell two per cent during 2005 – contrasting with a six per cent increase in global GDS segment volume “offset by decreased subscriber fee income.”
 
Once again volumes were way up for Avis and Budget – 18 per cent – but pre-tax earnings slumped 10 per cent because of increased vehicle costs and fleet expansion to support demand.
 
To arrest this trend, Cendant has “initiated domestic price increases to mitigate the impact of higher fleet cost and has achieved modest year-on-year increases in pricing thus far in 2006.”
 
In other news, the company will persist with its plan to separate Cendant into four independent, publicly traded, pure play companies later this year.
 
President Ronald Nelson said: “We remain on track to complete the spin-offs of Real Estate Services and Hospitality in the second and third quarters of 2006, respectively, and the separation of Travel Distribution from Vehicle Services in October.”
 
Ends.

People Come, People Go

Zuji has appointed former Octopus Travel Australia boss Peter Smith to head up its local operations. He replaces Jo O’Brien, who left the company to take up the CEO role at Tramada Systems.
 
Meanwhile, Zuji is interviewing for – Head, Hotel Business – a new role created following the departure of Regional Manager Hotel Business, Travelocity, Sue Graham.
 
Ms Graham recently started as Director of Sales and Marketing at CiEvents, a division of Flight Centre.
 
In other news, Peter Crowe, Head of Search at Yahoo! Australia and NZ, will leave the company at the end of this week to pursue private business interests.
 

Rock & Roll At Joi de Vivre But No Overnight Success

 
By Martin Kelly
 
Chip Conley saw the pool at the Pheonix Hotel and thought : “What a great place to have a party.”
 
It was 1987 and he set about turning it from a faded “no-tell motel” in the seedy Tenderloin district of San Francisco into the most talked about hotel in town.
 
“The first year it was not clear if we were going to succeed or not,” Mr Conley said. “The second year was better and by the third year we were in People magazine.”
 
The key was concept, commitment- and rock and roll. “We deliberately targeted the rock and roll industry from the start,” Mr Conley said.
 
“I knew the (legendary) rock promoter Bill Graham and he started sending customers our way. He said there were no other hotels for bands to stay in San Francisco – they were all boring and expensive.”
 
So the rock stars headed for the Pheonix Hotel and its great party pool, giving the new hotel instant celebrity and endless free PR. But strip away the glamour and it was all business.
 
Almost 20 years later, the dumpy motel on the wrong side of town is still going strong – the foundation of what is now Joie de Vivre Hospitality, one of the best two or three boutique hotel operators in the world.
 
JDV now has 37 hotels (up from 24 in 2004) – all either in or near San Francisco.
 
Along the way, Mr Conley, the founder and CEO, has learned a few things about the fast-growing boutique hotel industry, which is attracting a lot of attention – and people fresh to hospitality – in Asia-Pacific.
 
“Check your ego at the door, otherwise you’ll spend a fortune to lose a fortune,” he said.
 
“Make sure you are very clear about what your primary niche market is, and make sure it is large enough to keep your hotel full 365 days a year.
 
“That’s the problem Ian Schrager had at the Clift (374 rooms). If it was a 200 room hotel it would be fine,” Mr Conley said, revealing how competitive – and important – personalities can be at this end of the market.
 
Ian Schrager, founder of Studio 54, is probably the world’s most famous boutique hotel operator. Apart from the Philippe Starck designed Clift, his properties include the Dealno in Miami, the Mondrian in Los Angeles, and Morgans in New York.
 
It hasn’t all been plain sailing for Joie de Vivre. The early 2000s were particularly tough, highlighting the downside of its reliance on the fortunes of San Francisco, the IT and tourism industries.
 
“Room revenue dropped over 40 per cent in San Francisco. There was the tech wreck, 9/11, SARS, and the convention centre was size-constrained. We were vulnerable to failure but hung in there.”
 
Not without pain. The company took stern measures, cut costs and retrenched up to five per cent of its staff. Mr Conley, who owns a number of the properties, didn’t take a CEO salary for three years.
 
It also went on the front foot. “We total revamped the website. One of our greatest strengths was also a weakness – we had too much choice. So we created the Hotel Matchmaker, and by doing that were able to take the emphasis away from price.”
 
The Hotel Matchmaker, a cartoon brunette known as Yvette, asks guests five questions such as: “What kind of people do you connect with – fun loving/energetic, serene/soulful, charming/urbane, adventurous/active, gentle/quiet, professional/tailored?”
 
“Yvette” then recommends a hotel based on the response. It could be the cinema-inspired Hotel Bijou, the arts and literary infused Hotel Rex or the Hotel Del Sol, a “boutique motel” – each of which has been created in the image of a niche-oriented magazine.
 
“We focus on the psychographics versus the demographics of our guests,” Mr Conley said.
 
In addition to the Hotel Matchmaker, a better booking engine and online incentives, JDV also ramped up its internet distribution through web retailers Expedia.com, hotels.com, Hotwire, Orbitz and Travelocity.
 
As a result of these actions, online distribution trebled within a year. Growth may have slowed but in 2005 online sales still grew 35 per cent.
 
Mr Conley said he believes that operators should take all the distribution they can get – but online allocations must subject to strict yield management.
 
For example, each JDV property is yield-managed individually.
 
“It’s like when the first supermarkets opened – the way people bought things changed,” he said.
 
“That’s what are doing for the hotel business. We have to accept that they are not going away and we have no choice but to distribute through these sites. But it is important to regulate how much inventory we give them.”
 
Overall JDV pricing is competitive – offering a best price guarantee – and the company takes a pragmatic approach.
 
“When I first started, I liked to charge guests 10 per cent less than guests thought it should cost. But I learned over the years to charge as much as I can,” he said.
 
“Because running hotels is a cyclical business you need to sock some money away to see you through the bad times.”
 
However, it is difficult for boutique operators to price higher than the premium chain hotels.
 
“I don’t think it is sustainable to price above the chains unless you have something that is absolutely unique,” Mr Conley said.
 
After coming through some tough times, Mr Conley is confident about the prospects for niche operators.
 
But to survive and prosper, Mr Conley warned, a hotel must offer guests three things: amazing service, a great bed and a high-speed internet connection.
 
Another tip is to use an existing shell to create a boutique hotel.
 
“It’s really hard to create a soulful hotel from scratch – and expensive, too.”
 
He concluded: “The future is still very bright for boutique hotels because people are looking for personalized service on all levels.”
 
 
Ends.

Travel Wired: Opinion

By Martin Kelly
 
I should be excited, but I’m not. Expedia and Travelocity have finally landed in the Asia Pacific retail space, and it feels very much like just another news story in a fast-moving world.
 
Which is not to say they won’t succeed, they probably will. Both companies already have successful regional hotel operations, and have simply expanded into retail, albeit via different routes.
 
Expedia has opened an Australian website, while Travelocity now owns 100 per cent of Zuji, recently upping its stake from around 13 per cent.
 
Their arrival is something the industry has been talking about for years, anticipating it as a catalyst for massive change.
 
Expedia alone spends more than $100 million each year on technology and pretty much defines Dynamic Packaging, while Travelocity, part of the Sabre empire, is hell-bent on global growth.
 
They are genuine global giants, boasting business models purpose-built for the 21st Century.
 
Yet now these marquee players are here, it feels to me like an anti-climax.
 
For a start, it’s been a long time coming and Asia is merely the latest in a long list of web outposts for each company.
 
For example, Travelocity already has a site in Denmark, that well known economic powerhouse, while Expedia has been operating for some time in Holland.
 
Both countries have less people than some Asian cities, and they are here now because the region has enormous growth prospects.
 
For Expedia, Australia is an easy first step with a common language, strong economy, political bonds, and a web-savvy population who aren’t afraid of spending money (even they don’t have it) and trying something new.
 
They also have an eye on Japan, and own a large chunk of eLong in China.
 
Travelocity has come through the back door through buying the remaining 87.3 per cent of Zuji (which operates in six regional markets) for US$34 million, which seems high but isn’t.
 
Australia’s Webjet is capitalized at twice that – US$70 million on the ASX, while last year Travelocity forked out a humungous $US1 billion for Lastminute.com in Europe.
 
There’s a lack of hype – as usual each company is voluble without giving anything away, every message an exercise in corporate communications.
 
Travelocity boss Michelle Peluso has made no comment beyond a joint press release with Zuji, so no sizzle or excitement there, while Expedia is still in soft-launch mode with www.expedia.com.au offering just hotels.
 
Another reason for the flat feeling may be that anticipation often exceeds the reality, and also a sense that the online travel world has moved on.
 
This is especially true in Australia, where online uptake has been particularly strong.
 
Airline sites remain dominant but online retailers are gaining market share.
 
One analyst suggests that online agencies could have a 25% of airline ticketing by the end of this year.
 
Australian consumers also appear to have made their mind up about where they are getting these fares – and that is from Flight Centre and Webjet.
 
These companies have broken from the pack and now dominate the online travel retail market with a market share of around 14% each, according to recent Hitwise figures.
 
It is no coincidence they have great booking engines that allow consumers to check prices across all carriers and solid, integrated marketing that works across different platforms.
 
No-one else is close in the Australian market.
 
Third-placed lastminute.com.au has 5.54% market share, while a handful of other companies garner between 1.5% and 3% of online travel eyeballs.
 
Zuji is among this group and hardly setting the world on fire with just 2.67% for zuji.com.  
 
Expedia.com has 1.99% and Expedia.com.au 1.21%.
 
Obviously they have a long, long way to go. So I’m not getting that pumped – yet. But only a fool would bet against them having long-term success, anti-climax or not.
 
Maybe then I’ll get excited.
 
Ends.
 

Aussie Balance to Shift By 2010

MORE than half of all Australian travel purchases will be made online by 2010, according to researcher Frost & Sullivan.
 
It says Australian online travel sales will have a compound annual growth rate of 27 per cent over the next five years.
 
This sharp growth curve will lift online travel revenues from A$1.4 billion or 18 per cent of the overall travel market in 2005, to A$4.6 billion (54 per cent) by the end of this decade.
 
These findings form part of Frost & Sullivan’s Australian Household e-Commerce Market Report.
 
In a general sense, it found that the convenience of online booking engines has grown in direct correlation to suppliers improving their websites and consumer uptake of broadband.
 
“In terms of suppliers, the market in Australia is likely to consolidate hugely over the next one to three years,” the report said.
 
“Sophisticated online booking engines are leaving the rest for dead, and the usability demands on them are only going to increase.”
 
The report also slammed the lack of top-quality content.
 
“Relevant content in general but for accommodation sites in particular is mostly poor.
 
“This is the next major battleground for online travel players – up to date, highly detailed and entertaining content (short videos, virtual tours etc) about holiday services and destinations will become a significant conversion tool.”
 
It concluded: “More needs to be made of customer communities (travel experience reviews, video diaries etc) – travel sites generally are high on convenience but low on loyalty.”
 
Ends.

All The Big Names at Search Engine Room 2006

Search Engine Room, Australia’s leading search engine marketing and SEO conference, is happening in Sydney on March 14. It’s a fast-paced, info-packed event featuring local and international speakers from Yahoo!, Google, News Interactive, Hitwise, Frost & Sullivan, dgm, Sensis Interactive, IP Australia, 24/7 Real Media and many more. There’s also great networking, an eight-booth exhibition and drinks at the end of the day for delegates. What more could you want? Visit www.searchengineroom.com.au for details and bookings.

Talking Up The Internet – At Last

By Martin Kelly
 
It’s taken forever, but Flight Centre, the biggest travel retailer in the Asia-Pacific, is finally getting enthusiastic about the Internet.
 
Graham Turner, Executive Chairman and Managing Director of Flight Centre, now even sounds positive about the online world.
 
The famously blunt Turner, known for outrageous statements, has been talking up the group’s Search Compare Book’ advertising campaign, on which it has spent a fortune in the Australian market.
 
“We expect further strong growth,” Turner said, after earlier forecasting that www.flightcentre.com.au will sell between A$150 million to A$200 million worth of travel product over the next year.
 
Let’s hope he is right, because Turner – the driving force behind Flight Centre’s astonishing growth – it has more than 1000 outlets in several countries – has been wrong on just about everything else over the past 18 months.
 
For a start, he thought that Low Cost Carriers such as Jetstar in Australia could not survive without paying commissions to travel agents.
 
"I think that you'll find that its losses will be large, and not just on numbers and loadings," Turner told the ABC's Inside Business program.

"They just won't be able to get the yield without having a multi-channel distribution system."

Yet in a reflection of changing travel industry dynamics, Jetstar made $44 million before tax for the 04/05 financial year.
 
Turner added: "We aren't selling much of it, and if I was (Jetstar CEO) Alan Joyce I'd be quite worried.”
 
Instead it’s Turner who should be worried because the Flight Centre business is floundering with steadily declining profits at a time when many other (albeit smaller) travel agent businesses are doing well.
 
Jetset Travelworld, for example, declared a record profit of $5.7 million for 2004/05 – 42.5 per cent up on the previous financial year.
 
Chairman Brian Wild said cost containment was major factor and he also cited the new National Ticket Centre as a tactically valuable initiative that clearly demonstrates the group’s value as a sales channel to airlines.
 
By contrast, Flight Centre’s profit over the same period fell 17% to $67.9 million – despite surging sales and earlier assertions by Turner that it would increase by around 15 per cent. 
 
The major reasons appear to be an inability to contain costs combined with falling margins and the challenges of running a large company across different markets, something Jetset does not have to worry about.
 
Things have only got worse since the full year result.
 
During the September quarter, Flight Centres sales increased 14.2 per cent to $1.9 billion but pre-tax profit slumped 21 per cent to $23 million. Margins fell to a new low of 12.7 per cent (13.6 per cent a year ago).
 
So much for Turner’s earlier assertion that Flight Centre did not expect to be affected in any way by the Qantas travel agency commission cuts.
 
What else is there – apart from poor leadership on service fees, badly-negotiated airline agreements and the ‘Full Throttle’ restructure, which so far has had no impact on the bottom line?
 
Well, there is the issue of Turner’s increasing control over the company, despite losing his golden touch.
 
Numerous key executives have left over the past six months, including former Chairman Norm Fussell, who stepped aside in July, handing that mantle to Turner.
 
Chief Executive Officer Shane Flynn left a few weeks later.
 
Neither has been replaced on the board, now reduced to just three people – Turner, and the two non-executive directors – Peter Barrow and Howard Stack, who have both been there since 1995.
 
Time for an injection of new blood, you’d think, but the company has yet to make good on its July 29 pledge to appoint two non-executive directors “in due course”, although a company spokesman said the hunt is on.
 
Meanwhile, Flight Centre’s share price has slumped to around $10 – half its 12 month high of around $20.
 
So, scratching around for good news, Turner has emerged with the internet. At least it’s looking up. As for the rest of the formerly bullet-proof Flight Centre business, only time will tell. Clearly, many challenges remain.
 
Ends.

Expedia Launches in Asia-Pacific

US giant Expedia has opened its first branded site in the Asia-Pacific region with the launch of www.expedia.com.au in Australia.
 
The site only offers hotel and attractions at this stage but Managing Director Arthur Hoffman said car hire and flight sales would follow “sooner rather than later”.
 
Japan, the world’s second largest tourism market, is also on the Expedia radar.
 
“We are actively looking at Japan,” said Hoffman, although the company has yet to decide its entry strategy, which could take one of three forms: organic, joint venture or acquisition.
 
Expedia also has a presence in China through its 52% shareholding in elong, the second largest online travel retailer in that market.
 
“Australia is a little easier to enter into under our own brand and leverage our global platform,” Hoffman said.
 
The Australian online travel market is very competitive and relatively mature by regional standards.
 
However, the online travel marketplace tends to be dominated by the major domestic airlines – Jetstar, Qantas and Virgin Blue – and hotel sites like Wotif.com and Hotel Club.
 
At this stage, while online retail brands such as Webjet and Travel.com.au are popular, no single company dominates in terms of traffic or brand recognition.
 
A confident Hoffman believes that Expedia will rapidly make inroads and that consumers will warm to its cutting-edge technology.
 
“Every year Expedia invests more than US$100 million in technology,” he said.
 
Meanwhile, after a rocky start following its August stock market spin-off from InterActiveCorp, Expedia shares are now trading at US$26.10 – well up on the US$18.49 of late October.
 
Expedia operates branded sites in the United States, Canada, United Kingdom., German, France, Italy, Netherlands and now Australia.
 
Ends.

Katz Buys One-Way Ticket To Oblivion With eboookers

THE mastermind behind Cendant’s aggressive expansion of its Travel Distribution Business, Sam Katz, has fallen on his sword after a review of the eBookers business – which he bought for US$350 million in February – revealed huge losses.
 
In a convoluted release, Cendant Chairman Henry Silverman said TDS business would be hit with a $US200 million to US$300 million “impairment charge due largely to reduced return expectations at ebookers” in the 2005 accounts.
 
Which begs the question – how much did ebookers actually lose and why did Cendant pay so much for it?
 
It also throws the spotlight on other big Katz buys – such as Orbitz for US$1.2 billion – plus the acquisition by American rival, Travelocity, of another European loss-maker, Lastminute.com, for US$1 billion.
 
The US giants have been on a buying spree as they chase growth outside the slowing North American market. However, it is now clear that some valuations are questionable, at best.
 
But Katz, who has been with Cendant for 10 years and in charge of TDS since 2001, won’t be around to provide insight, slipping out the back door with no official comment.
 
Chairman Silverman spun the announcement hard, looking forward not back, hyping the 2006 forecast rather than dwelling on 2005.
 
“TDS has clearly fallen short of its 2005 targets due principally to our international online business, particularly ebookers,” Silverman said.
 
“We face company-specific issues that we have identified and are addressing, not with quick fixes but with significant new investments, including the development of a single, global online platform.
 
“While with hindsight our past projections were too high, the fact is TDS is a strong business that we expect will achieve approximately 11% EBITDA growth next year.”
 
Cendant has now delayed the planned stock exchange spin-off of its TDS business until at least October while it hunts for a new leader and attempts to put its house in order before going public as a so-called “pure play”.
 
Ebookers operates 14 sites across Europe. It is an amalgam of numerous smaller companies operating across different channels and platforms that was cobbled together in the years before Cendant took an interest.
 
Ends.

 

 

 

Gadgetry Over Getting Out There

By Martin Kelly
 
THE brilliant premise of Total Recall – a movie inspired by the Philip K. Dick short story We Can Remember It For You Wholesale – was that holiday memories could be implanted.
 
So rather than heading to the airport to check-in, you’d go to the travel agent, leaf through some brochures, consider the choices, and request – as did star Arnold Schwarzenegger – a holiday in Mars or somewhere else out of this world.
 
Then you’d sit in a big chair, receive some medication, get the implant, and wake up to a brand new day – refreshed, invigorated and with enough holiday memories to last a lifetime.
 
Imagine that, having a holiday without actually taking one (although as Schwarzenegger discovered, they can still go horribly wrong).
 
Funny thing is, that’s what may be happening in the struggling Australian domestic tourism market, with consumers enjoying home life and consumer items over travel experiences.
 
A new study from the Bureau of Tourism Research reveals that domestic tourism cis in long-term decline, while outbound travel from Australian markets continues to increase from its 2001 low.
 
The study also shows that domestic tourism is becoming a two-tier industry, with tourism and accommodation businesses located near low-cost carrier hubs doing well, while those without air access struggle.
 
There was an eight per cent drop in overall domestic trips between 1998 and 2004, despite booming air travel (+12 per cent) and a correlated spike in the use of hotels, resorts or motels (+10 per cent) over the past three years.
 
Key domestic tourism trends between 2001 and 2004 include:
 
  • People taking fewer and shorter trips while spending less
  • Strong growth in VFR at the expense of holidays
  • Some domestic leakage to outbound travel for holidays
  • Domestic travel spend slipping as a budget priority
 
Suffering most are the short trips, either day or overnights, hurting operators who work at the margins of the travel distribution chain.
 
Meanwhile, young people are turning off domestic travel en masse.
 
The sharpest decline in domestic nights has been among young singles living at home (-22 per cent), while the trend also applies to working singles (-6 per cent) and young couples (-9 per cent).
 
One theory is that the growing dependence on – and fascination with – technology may be partly to blame.
 
It seems that an increasing number of people, loaded with debt and a beautiful new wide-screen TV, are taking what amount to virtual holidays in their living room or home theatre.
 
“The abundance of television travel shows may be providing at least some viewers with a ‘virtual’ experience of destinations profiled rather than encouraging people to visit these places,” the report says.
 
The report also cites: “A rapid advancement in communications (including mobile phones, DVDs, digital cameras, pay television, personal computers and the Internet) and dramatic growth in community willingness to embrace this technology.”
 
Can you believe it? Some people would rather watch Catriona Roundtree (Getaway) or Ernie Dingo (The Great Outdoors) rather than doing it themselves.
 
Then they can sit around and play with the latest electronic gadget, sending texts and photographs of the family sitting on the couch watching a really good travel show.
 
Maybe that’s what people want. Consumer spending on toys has gone through the roof, while the travel spend is either static (international) or going backwards (domestic).
 
“The contribution of all leisure travel (day, overnight and overseas travel combined) to total household consumption declined steadily from 12% to 10% between June 2001 and December 2004,” the report says.
 
“This is despite strong growth in consumer spending outpacing the increase in the Consumer Price Index of 9% over the same period.”
 
The biggest drop has been travel by the residents of Australia’s capital cities, where house prices are largest and mortgages biggest, in particular Sydney and Melbourne, the largest source markets for domestic overnight leisure travel.
 
While international travel has been a bright spot, its share of total household consumption barely increased from 2.5% to 2.7% between 1998 and 2004.
 
What can the industry do to ensure travel remains a priority among Australians? Don’t ask me, Getaway starts in a few minutes and my wife is keeping a space warm on the couch.
 
Ends

Japanese, Aussies lead Asian Online

By Martin Kelly
 
JAPAN, Australia and New Zealand are the clear leaders of the Asia Pacific online travel industry pack.
 
According to researcher PhoCusWright, Japan is out in front with a 38 per cent market share by dollar value, while Australia and New Zealand have 30 per cent.
 
However, it is worth noting that Japan has a population of 127 million, compared with just 24 million for Australia and New Zealand.
 
The next biggest Asian markets by dollar value, says PhoCusWright, are South Korea (eight per cent), Singapore (seven per cent), China (six per cent), and Hong Kong (three per cent).
 
Then come Taiwan, Malaysia, and India, all on two per cent. The rest of Asia – and there’s still a few countries to go – comprise just three per cent of the total Asia Pacific online marketplace.
 
PhoCusWright doesn’t see the Asian status quo shifting that much over the next three years, forecasting steady growth.
 
By the end of this year analyst Ram Badrinathan estimates that online leisure/unmanaged business travel industry in Asia Pacific will grow 31 per cent to US$15.9 billion.
 
That figure is set to reach US$25.6 billion by 2007 – or 61 per cent growth over two years.
 
However, “payment systems remain a key obstacle. The pure e-commerce model, where purchase and fulfillment are completed seamlessly through the Web, is not a reality in most markets except Australia.
 
“Suppliers and travel service providers that have developed innovative work-arounds to deal with market issues will be most successful.”
 
He adds: “Most online agencies in APAC are seizing the lodging opportunity.
 
“In a region where less than 10 per cent of the room supply is managed by chains, online agencies see explosive growth in hotel aggregation and automation.
 
“These businesses, while widely needed, are slow to develop. Online travel agencies will still be roughly half the size of the supplier-direct channel –which includes the booming low-cost carrier segment – in 2007.”
 
Ends.
 

Cheap As Chips – And Loving It!

 
 
 
  
 
 
 
 
 
 
 
By Martin Kelly
 
BEING known as cheap doesn’t scare Tiger Airways CEO Tony Davis. In fact, he reckons it is great branding.
 
“We definitely want to have the lowest price – Tiger Airways is the home of S$1 airfare,” he says.
 
Plus fees and charges, of course, although advertising laws in its home base of Singapore mean these don’t have to be included in the advertised price.
 
Davis, a speaker at the Wired 2005 conference, sees no issue with this and doesn’t believe he is tarnishing the brand through what some may see as concealing hidden costs.
 
The only thing he cares about is selling airfares and working his aircraft hard.
 
In fact, you get the feeling he lie awake at night fretting Tiger’s four Airbus A320 aircraft aren’t flying enough between midnight and dawn.
 
Part of this issue has been resolved with Tiger scheduled to fly overnight between Singapore and Darwin four times a week from December 19.
 
Tickets started selling last Friday and cost from S$49.98 or A$39.98.
 
Tiger also recently started flying between Macau-Manila-Singapore and now flies to 11 cities in six countries.
 
“We had just three routes at the start of this year,” says Davis, who has a huge motivation to make Tiger Airways the ‘Ryanair of Asia’ (as he puts it).
 
After all, it’s his money at stake. Davis owns 16 per cent of Tiger through family company Irelandia.
 
The balance is held by Singapore Airlines (49 per cent), Temasek (11 per cent) and Indigo (24 per cent).
 
And he is clearly driven to achieve growth with a philosophy of: “Stack it high, sell it cheap – think retail.”
 
This has led to the rapid expansion, with a 60 per cent increase in revenue and website visits since July.
 
“We had 60,000 visitors a week to our website earlier this year – now it’s around 120,000 a week as people get back online to check what we are doing.
 
“Around 75 per cent of our seat sales currently come from the internet, both from the public and agents, while the balance comes from call centres and airport outlets.
 
“This shows that the Low Cost Carrier model of using online marketing and technology to reduce operating costs is working in Asia as well.”
 
According to Hitwise statistics quoted by Davis, Tiger (at 14.86 per cent) has the highest online market share of Low Cost Carriers in Singapore, although Singapore Airlines (25.63 per cent) still dominates the airline sector.
 
 
BACKGROUND
 
The following background comes from www.tigerairways.com
 
CORE BUSINESS STRATEGY

The Tiger Airways Low-cost carrier model is based on three customer-focused core strategies:
 
1)  Market stimulation – creating opportunities for new travelers and empowering budget-conscious people to fly more often;
 
2) Stringent cost controls throughout our operations so that we can keep our fares low for travellers;
 
3) Capacity utilisation – maximising the number of sectors served per plane in a day with efficient air traffic planning
 
DESTINATIONS
 
Tiger Airways flies to 11 cities in six countries from Singapore Changi Airport:
 
Country
City
Airport
Australia
Darwin
Darwin InternationalAirport. NEW! Flights to commence 19th Dec 2005
Macau
Macau
Macau InternationalAirport
Thailand
Bangkok
Bangkok InternationalAirport
Chiang Mai
Chiang Mai International Airport
Hat Yai
Hat Yai International Airport
Krabi
Krabi Airport
Phuket
Phuket International Airport
Vietnam
Hanoi
Noi Bai InternationalAirport
Ho Chi Minh City
Tan Son Nhat International Airport
Indonesia
Padang
Mingangkabau International Airport
Philippines
Manila (Clark)
Diosdado Macapagal InternationalAirport
Two-Letter Code: TR
Three-Letter Code: TGW
FLEET SPECIFICATIONS:
  • Four Airbus A320 aircraft, all powered by International Aero Engines (IAE) V2500 engines, a modern jet engine with proven track record of reliability and efficiency
  • Tiger Airways uses a single aircraft type for operational efficiencies which lowers cost
  • Tiger Airways A320 aircraft have a single-class configuration of 180 seats
  • Tiger Airways aims to have one of the newest fleets among the low cost carriers
  • Tiger Airways purchased 8 new A320 aircraft from Airbus and will take delivery of 2 aircraft in March 2006, 3 more aircraft in Winter 06 and 3 more aircraft in Summer 07. 
SAFETY:
  • Tiger Airways has committed S$110 million for a 5-year maintenance contract with SIA Engineering
  • 24 hour Fleet Technical Management and provision of maintenance, repair and overhaul (MRO) services by SIA Engineering
  • Our aircraft maintenance program satisfies the safety standards required by Civil Aviation Authority of Singapore (CAAS)
  • Our pilots are trained inline with industry standards and aviation regulations to ensure the highest safety standards are met
  • Our cabin crew are all trained and qualified on evacuation procedures and drills, fire fighting, security, survival training, first aid, use of emergency equipment in preparation to handle any situation
SECURITY:
  • Bullet-proof cockpit doors installed across its fleet
  • Security cameras installed in passenger cabin for customer and crew safety
ends

Meta-Search Model Comes Under Fire But Wins Key Support

By Martin Kelly
 
Asia Pacific’s largest online travel agent, Zuji, has belittled Meta-Search and said it will not be supporting any of the new players that have emerged in the region – Bezurk.com, Fare.net or Qunar.com.
 
This mirrors the approach of major online retailers in the United States, few of whom are involved with the likes of Mobissimo and Kayak – no doubt ultimately seeing them as competition.
 
However, big suppliers like the InterContinental Hotels Group and Cendant hotel distribution companies are backing the concept, as they have done elsewhere and the Meta-Search Engines are claiming strong industry interest.
 
Meta-Search Engines are shopping comparison sites that provide consumers with comparative pricing across three main travel categories – air, hotel and car.
 
Highlighted companies pay the Meta-Search Engines for customer leads on a cost-per-click or cost-per-acquisition basis.
 
Zuji CEO Scott Blume told delegates at the recent Wired 2005 conference in Singapore he doesn’t believe Meta-Search will work in Asia-Pacific.
 
“Meta-search is going to struggle in this region,” Mr Blume said. “I think a lot of players are not going to get behind it – we certainly aren’t. I also think it’s a big ask for a lot of Asian consumers.”
 
But a show of hands among Wired 2005 delegates showed that most disagree, with a significant majority believing that meta-search will succeed in the region.
 
Bezurk CEO Craig Hewett said Zuji’s views were not reflective of the industry and that his company plans to launch its Singapore and Australian sites by the end of this year.
 
“We've approached pretty much a who's who of the travel industry across Asia-Pacific and have had an incredibly enthusiastic response to what we're doing,” Hewett said.
 
“The fact that InterContinental Hotels group have been our anchor partner and provided early feedback on our business model has given other major hotel partners confidence.
 
“We have also received great support from similar travel sites to Zuji.”
 
So what has Zuji got against Meta-Search? Following are some points emailed to TRAVELtech by the company:
 
“The Meta-Search model relies on the commoditisation of travel down to a single price point for a single travel component.
 
“Sometimes the best deal for the consumer may not be in saving a few dollars on a flight, but in looking for packages which give value adds or savings on the cost if a total trip – which are not displayed on Meta-Search.
 
“This makes comparison shopping impossible apart from standalone flights or stand alone hotel nights. In Asia, the cost comparisons will have the added complexity of multi-currency.
 
“We view our content as proprietary, and are very cautious about deciding where Zuji content will be made available, and how we market our products and services to travellers. 
 
“We have decided not to provide our content to Meta-Search Engines in Asia.”
 
Ends

Cendant Corporate Product Switch in AP

CENDANT has replaced Travelport with KDS Corporate as its principal online travel and expense management product offering in the Asia Pacific less than two years after launching the product in the region.
 
The switch has been made after reports the US-developed technology did not translate well to international markets.
 
By contrast, KDS Corporate has been developed for the global marketplace and is much better suited to the Asia Pacific.
 
Cendant Corporate Travel Solutions will use KDS Corporate to drive regional growth in the corporate market.
 
General Manager APAC, Johnny Thorsen, believes is on the verge of a “breakthrough” in terms of online uptake among local corporate bookers.
 
Mr Thorsen said Australian travel corporates had the highest level of online adoption in the region with around 20 per cent of all business bookings made online.
 
“Right now the main difference between Australia and Asia is the level of readiness for online procurement – Asia is probably one to two years behind,” he said.
 
“We expect the early adopters to materialise next year in markets such as Singapore, Hong Kong, Malaysia, Thailand, South Korea, India and the Philippines
 
“This will followed by an acceleration of activities in 2007.
 
“The low cost carriers will be the driving force behind the change in Asia, as the new dedicated terminals for LCC’s go into operation in both Singapore and Kuala Lumpur.”
 
He said other factors would include:
 
  • Savings available as a result of intelligent travel policy
  • Controlled usage of one-way fares
  • General level of internet bookings for leisure travel continue to increase, resulting in easy adoption of corporate booking engines
  • Further savings available as a result of automating the booking and fulfilment process
 
Mr Thorsen said any clients of Travelport will be switched over to KDS Corporate, which is the market leader in Europe.
 
ends

Yahoo! Southeast Asia: New Pricing For Singapore Site

YAHOO! Southeast Asia is experimenting with the key travel channel on its Singapore portal, moving away from advertising and site rental deals to a cost per click model for travel suppliers.
 
It is one of the the first outposts of the US internet giant to adopt this approach, which it is trialling up to Christmas.
 
According to Head of Search at Yahoo! Southeast Asia, Grant McCarthy, the early results are encouraging but no long-term decision has been made.
 
Mr McCarthy said Yahoo! Southeast Asia opted to deploy cost per click to bridge a “value gap” between what the company believed its online real estate was worth and what travel agencies have been prepared to pay.
 
“The gap between those two was so great it would have been uneconomic for us to continue down that path without testing other options,” Mr McCarthy said.
 
Hence the move to cost per click, which has seen the departure of major Asian retailer Zuji as the imbedded travel agency and a shift to a variety of suppliers offering either flights or hotels – in addition to a range of content from the likes of Lonely Planet.
 
At present, Asia Travel Mart is selling flights, while Asiarooms.com is providing the hotel options.
 
Manger Zuji Singapore, Sean Seah, said the company could not justify the new Yahoo! pricing scheme using its internal benchmarks but continues to advertise on the site, which has a major local profile.
 
“When we started with them three years ago, we were very much a brand building model,” Mr Seah said.
 
“Now we are into maximising the effectiveness of our return on investment, which we measure internally by either cost per click or cost per booking.”
 
Zuji is still represented on Yahoo’s Australian site, while pending new owner Travelocity dominates travel on the US portal.  
 
Ends

Road Test – And Guess What? Price Really Does Matter…

NOTHING beats hitting the road to really find out what’s going on in the travel industry. It’s where rhetoric gives way to reality. So what have I learned after four trips between Sydney and Singapore over the past 12 months?
 
Well, l now know it’s a waste of time getting a quote from my travel agent because I’ll always save by booking online through Singapore Airlines out of Sydney – anywhere between A$100 to A$300.
 
The entire transaction takes less than five minutes, and I can choose my own seat, although I’m praying for the day when I can pick the passenger who sits next to me (and that wouldn’t be the overweight Indian gentleman with six plastic bags and a ball of string I encountered on my last trip).
 
Interestingly, the pricing differences are not as pronounced ex-Singapore to key destinations such as London, Sydney and Shanghai. A quick comparison of the fares being offered on Zuji.com.sg and Singaporeair.com.sg revealed an average saving of around S$50 in favour of the airline site.
 
I checked the Australian pricing differential with Singapore Airlines, asking whether they had embarked on a strategy of deliberately undercutting travel agents.
 
The airline said no and commented: “It is misleading to compare the options available from Singapore Airlines’ website with those offered to the trade. 
 
“The website offers limited flight bookings only, whereas travel agents provide a full range of services and value-adds. One could never hope to emulate the valuable role of a travel agent in an on-line environment.”
 
Maybe, but A$100 is A$100, and three times that on one memorable occasion.
 
Spokeswoman Kate Pratley added that the internet constitutes 3% of all SQ’s sales and, while the “proportion is likely to increase in the years ahead, growth is slow and overall sales are increasing at a much faster rate.”
 
I find those comments surprising, but will continue doing my bit for the airline’s online sales – as will all those other business travellers I’ve compared fares with at check-in – unless I can get a better deal through my agent.
 
So what else have I learned?
 
  • There’s no point booking direct with a hotel because I’ll always get it cheaper online through a third-party site. Once again, the saving can be in excess of A$100 for a single night, let alone a whole booking.
 
  • Ergo, price parity – the practice of offering the same price across all channels – is generally just a smart-sounding term that means nothing for many hotels and groups when selling online. Four times out of five they will undercut themselves through other channels.
 
  • You’ll generally get a better deal at an independent hotel, which are increasingly (and indiscriminately) using the online channel to dump capacity at cheap rates. You can get a room in a top non-aligned four-star in Singapore for around A$100 including taxes, breakfast and free broadband connection.
 
  • Free broadband is important because some of the bigger groups are starting to charge like there’s no tomorrow – for example, S$28 for 24 hour access. In fact, it appears groups are looking to replace the revenue “stolen” by mobile phones with that generated by broadband.
 
  • The Asian Low Cost Carriers are damn cheap – and so are most of their websites. The booking engines are generally clunky and below par, although you can’t argue with the tiny airfares on offer throughout the region.
 
  • Apart from Zuji, there are no major regional online retail brands – and none really on the horizon (although there’s plenty of action in China). But that will all change as the market matures – and the best deals shift online.
 
Finally, one thing about Asia, everyone loves a bargain. Don’t we all. In fact, chasing deals has always been a part of travel. And right now, for simple transactions, that means heading to the Internet.
 
Ends.

Billionaire Caught In Travel Web

Cendant Corporation has sold down part of its shareholding in Webjet to investment entities associated with Melbourne billionaire Richard Pratt.
 
Thorney Holdings Pty Ltd now holds more than 7% of the online travel outfit after picking up five million shares at 36 cents from Cendant company Southern Cross Distribution Systems.
 
The transaction yielded a profit of around A$1.5 million for Southern Cross. Cendant still holds a 6.64% Webjet shareholding and has been a long-term investor in the company.
 
In a statement to the Australian Stock Exchange, Thorney Holdings revealed it has been building a stake in Webjet since early July, when shares were trading at 19 cents.
 
Webjet Managing Director David Clarke has also been a seller to Thorney Holdings, offloading five million shares at 32 cents earlier this month.
 
Meanwhile, Clarke said he had no qualms about the looming presence of S8 on the register through its likely takeover of Harvey World Travel, which owns around 20% of Webjet.
 
HWT has the option of going to 35%, but Clarke said this would not be enough to win control of the company.
 
He said HWT fully exercising the option would also result in a cash bonanza for Webjet, giving the company new options.
 
Richard Pratt, Chairman of Visy Industries, has made his fortune through paper manufacturing and recycling.
 
Ends.
 

The Unofficial Guide To Singapore

By Yoeh Siew Hoon

Let me tell you about my Singapore.

My Singapore is a bit like everyone’s. Clean, green, safe – the three most common adjectives used to describe it by residents, visitors and those who haven’t visited but have heard about it.

But to just describe it as clean, green and safe would be like saying it’s just a sterilized, well-washed vegetable (safe, healthy but rather unexciting) and that would be doing it a big disservice.

Truth is, my Singapore is a bit like a woman on the verge of turning 40. Which she is, by the way. This August 9, the nation celebrates its 40th year of independence.

Like a woman on the threshold of turning 40, Singapore is filled with all the fears and insecurities of ageing – will people still love me when I am all wrinkly and old – yet full of promise and possibilities – look at how far I have come and I have so much further to go.

And so you find Singapore today, caught between paranoia and promise.

At 40 years old, Singapore has built up a wonderful legacy.

Its infrastructure is world class. Its airport is talked about, admired and envied by everyone. Its hotels are second to none except in average rates where they are definitely down the table – which is good news for travellers.

Its mix of cultures – Indian, Malay and Chinese – has had time to simmer and stew into a seamless brew of scents and spices that is, forgive the pun, Uniquely Singapore.

And even though some travellers may complain about the price of beer here, this is one brew they love and travel miles for.

Over the last few years, like a more confident and matured woman, Singapore has also been lifting up its skirt a little. It’s cut loose on nightlife, entertainment and the arts scene.

The bar and club scene is vibrant, dynamic and fun, even non-stop. Now Singapore parties all night while cities like Bangkok go to sleep early.

Why, it even dared to strip down to bra and panties to dance on bar tops.

It tried a few daring moves. Hip, funky hotels (Scarlet), theme bars (Eski) and beach parties appeared. It skydived, reverse bungy-jumped and raced its way into the media spotlight.

But like all women, it can be fickle, maybe a little unsure about how far she should go before she is judged by a jury of her peers. A gay party, the Nation Party, was refused a licence and thus it moved its merry way to Phuket.

But one cancellation does not a nation make. And Singapore forges ahead. She knows she’s got 40 good years behind her, and a lot more years ahead.

But she should also know that heck, at 40, a woman had better stop flirting and teasing with change and instead, embrace it firmly and desperately, and go where no woman has dared to tread.


For the official guide to Singapore, visit www.visitsingapore.com

Virgin Sleeps Around, Seeks New Partners

By Martin Kelly

Man cannot live on bread alone – nor can the most modern of travel businesses survive and thrive using a single sales channel such as the Internet – even when it is delivering more than 90 per cent of business.

Virgin Blue, which generates between A$6 and A$9 million in online revenue every day, has just taken another major step in its distribution diversification program, launching its Application Protocol Interface (API).

Launch customers are online retailers travel.com.au and lastminute.com.au,  powered by Arnold Travel technology, while links will be provided to Zuji and Carlson Wagonlit.

The API provides these companies with a “doorway” into Virgin Blue’s new and more flexible Navataire Skylights7 booking platform – giving them live access to most inventory.

 

The integration costs are significant, and borne by the agents, but Virgin Blue claimed the upside is enormous, and that long-term benefits can be found on a number of levels – notably access, speed and better customer service.

It also gives online retailers a “hands free” approach to increasing productivity and commissions through the carrier, which can reach eight per cent if sales targets are reached or exceeded.

Manager e-Commerce at Virgin Blue, Steven Greenway, said the days of Low Cost Carriers enjoying explosive growth solely through the online Business to Consumer sales channel have largely disappeared as the sector matures.

“All Low Cost carriers will use a multi-channel strategy as they grow into new more, complex markets and customer segments in order to drive revenue – the trick is to avoid overhead costs,” he said after speaking at TRAVELtech in Sydney.

“Relying on the web alone for sales growth produces a restricted framework – growth can be achieved but only in increments.”

Consequently, Virgin Blue is also expanding its GDS coverage – adding Amadeus to its existing relationships with Galileo and Sabre.

“The GDS are very efficient in terms of aggregating content and providing agents with a tool to book airfares,” Mr Greenway said.

“At the end of the day, the GDS, as much as we say we hate them, provide a service. Pricing, however, generally outstrips value.”

To overcome this, Virgin charges a A$15 premium for the GDS fares, which are usually premium rates available to corporate or government clients, or international markets it does not have access to, such as the Pacific Islands.

Therefore Virgin Blue is able to keep key corporate and agency customers happy by giving them better GDS coverage (ie: service) a necessary move if the company is to continue growing beyond its low cost base.

Other distribution options are also emerging in the Australian market. Virgin has had discussions with Bezurk, a travel search engine set to launch soon, but has not yet signed with them.

Greenway said while travel search engines can deliver online sales leads on a “cost per click” basis, the technology they use to screen scrape deals “pounds” the member websites, affecting usability for (commission free) customers going direct.

However, he said, the likes of Sidestep and Kayak are going well in the and that usually adopts American trends so the odds are that travel search engines will probably work in this market.

On the product side, Greenway said Virgin will ramp up its wholesale offering and improve Dynamic Packaging technology to better integrate a “limited number of simple products”.

So, Virgin Blue is in the process of becoming a hybrid carrier as it gets squeezed at both ends of the market by Qantas (top) and Jetsar ((bottom).

“But we are staying true to our low cost base and still believe in user pays,” said Greenway. It’s just that the times – and market – is changing.

Ends

 

 

Hotel Bookings – Growth Engine For Retail Travel Sites

By Martin Kelly

HOTELS have clearly emerged as the growth engine for online retail travel companies and Asia Pacific is set to play an increasing role with the likes of Expedia, which started trading as a stand-alone company last week, boosting its regional presence.

Travelocity is also experiencing extraordinary growth, reporting a 41% increase in hotel room nights during the June quarter when compared with 2004, while packaging revenue grew 81% and now comprises 30% of total revenue. By comparison, air transaction revenue grew 9%.

Over the same period, Expedia's major accommodation brand – Hotels.com – recorded more than more than $US500 million in quarterly gross bookings for the first time in its    history.

Expedia's Regional Director of Hotels and Destination Services, Cameron Jones, said the company is experiencing double digit hotel booking growth in most Asia Pacific markets.

"Hong Kong in particular has experienced exceptional growth," Jones said.

Jones said Expedia has added new staff in Hong Kong, Tokyo and Sydney to service and grow the existing customer base.

In other developments, Jones said the integration of the Expedia and Hotels.com technology platforms would be complete by the end of September, allowing hoteliers to manage inventory on both sites through a single extranet.

He added there has been strong regional adoption of Direct Connect, which allows Expedia to sell live inventory straight from a hotel's Property Management System.

Meanwhile, Expedia reported that international gross bookings increased 73% during the June quarter.

"Revenue grew 14%, primarily driven by the international merchant hotel business, acquisitions and the air business," the company said in a statement.

"Merchant hotel revenues increased 9% for the second quarter, (however) revenue per room night was flat, resulting from a 5% increase in the average daily room rates, offset by a decrease in merchant hotel raw margins.

"Air revenues increased 7% during the quarter, primarily from a 21% increase in air tickets sold, partially offset by an 11% decline in revenue per air ticket.

"Expedia, Inc.'s domestic air and merchant hotel businesses operate in a challenging competitive environment, due primarily to increased competition from third party distributors, increased promotion by suppliers of their own websites and higher overall occupancy rates and load factors.

"This environment is generally expected to continue."

Ends

GDS In Star Chamber

SOME of the world's leading airlines are pushing publicly and aggressively for GDS distribution alternatives through the Bangkok-based Star Alliance.

At a press conference in Japan last week, the Star Alliance told media that it would actively support new entrants to the distribution marketplace -provided the price is right.

And in a further backhander to the incumbents, Star Alliance Chief Executive Officer Jaan Albecht says the "new entrants" – known as GNEs – may provide better service for less money.

"Our 16 member carriers currently pay a combined total of around US$2 billion in annual GDS fees and we see a definite potential to reduce these," says Mr Albrecht.

"The GNEs will not only allow the member airlines to cut distribution costs, but also permit the carriers to explore new functionalities which the current GDS do not provide."

He says Air Canada, Lufthansa, SAS, Singapore Airlines and United are at the forefront of this initiative on behalf of all Star Alliance members.

The aim is to draw up a single strategy for selecting GNE partners.
 
"It is our aim to finalise the GNE selection by the end of the year," says Albrecht.

Star Alliance was established in 1997and claims its members represent almost 29% of world airline revenue.

Members are Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, Spanair, TAP Portugal, Thai Airways International, United, US Airways and VARIG Brazilian Airlines.

South African Airways will be integrated over the next 12 months.

Ends.

Upcoming Events

No Vacancy Australia

No Vacancy Changes It Up

Sydney, November 1 & 2

Exciting times ahead for No Vacancy, founded in 2007, which has been acquired by National Media from founder Martin Kelly, who also publishes TravelTrends.biz.

The new era kicks off with No Vacancy - The Accommodation Business Expo at Sydney’s new International Convention Centre on November 1 & 2.

“We’ll be taking No Vacancy to another level, combining high quality content with a large trade show featuring up to 150 exhibitors across all verticals, transforming it into the business hub of Australia’s accommodation industry,” says Harvey.

He says the accommodation industry is worth more than $18 billion to the Australian economy. “Yet surprisingly, given the size of the industry there is no dedicated exhibition designed to meet all its needs.”

“No Vacancy - The Accommodation Business Expo will fill this void and offer hoteliers and other accommodation industry professionals a platform to discover products and ideas to optimize their properties, create amazing guest experiences and ultimately boost their profits.”

Historically No Vacancy has been very much an accommodation marketing conference, but the new look exhibition will embrace all aspects of the accommodation business. 

Content is still central to the event and will be expanded upon with more topics, more sessions and more speakers.

The exhibition will showcase the best quality suppliers across design and decor, property management, operations and finance, housekeeping, spa and leisure, in-room and guest-facing technology, and marketing, distribution and reservation solutions.

“We are really excited about where we can take No Vacancy and look forward to working closely with the community that's been supporting the event since 2007,” said Harvey.

For more information, contact:

Mark Harvey, MD, National Media
Phone: +61 7 5510 5101  //  0419 775 488
Email:
mharvey@nationalmedia.com.au

TRAVELtech Australia 2018

Returning in 2018

Change is the only constant in travel and so it is with TRAVELtech, which will be returning early in the second quarter of 2018.

The event has been bought by National Media - one of Australia's most respected event management companies - from founder Martin Kelly, who also publishes TravelTrends.biz.

Kelly says he’s happy TRAVELtech is in good hands and will remain connected in a programming and moderation role.

“I’ve really enjoyed creating and running TRAVELtech but it was time to step aside and let someone else with the capacity to accelerate their evolution take it on,” says Kelly.

He will now focus on further developing TravelTrends.biz, while also consulting to travel companies on communications, innovation, industry trends and strategy.

Mark Harvey from National Media says TRAVELtech, founded in 1999, will evolve into a much larger event.

"We have plans for become the main exhibition and conference in Asia Pacific for travel technology buyers, travel agencies, tour operators and transport professionals to source, learn and network," he says.

"It will bring together a large selection of specialist suppliers showcasing the latest innovations across distribution, reservation, business operation and sales and marketing."

For more information, contact:

Mark Harvey, MD, National Media
Phone: +61 7 5510 5101  //  0419 775 488
Email: mharvey@nationalmedia.com.au