Adara, a travel data co-op and provider of traveller intelligence for travel brands, is expanding operations in India with the appointment of Suchit Huria as sales director.
Huria brings over 13 years of sales experience in the digital marketing industry. Prior to joining Adara, he was sales director at Httpool, where he led sales for performance and brand solutions.
Based out of New Delhi, Huria will be responsible for growing Adara’s footprint in India and expanding the pool of data partners to deliver consumer insights to travel marketers.
Since its expansion into the Asia-Pacific in 2014, Adara has established a strong presence in the region with offices and key hires in Singapore, Australia, Japan and Hong Kong.
The company is looking to partner with hotels, airlines, online travel agencies and other travel players in India.
“In a large and dynamic market like India, there is a huge opportunity to leverage data-driven insights for creating personalised travel experiences that can address the varied and evolving needs of consumers,” said Brandon Meyers, chief revenue officer at Adara.
“We have seen some great traction in our early days in India. With Huria onboard, we look forward to growing our operations and bringing our travel data offerings to travel marketers across the country.”
Having spent more than 15 years working in the hospitality industry, Wing Prakoso, co-founder at Hore! Indonesia, only knows the staffing issues in the sector too well.
He said: “It is difficult to get competent daily workers, especially when hotels have events or are fully booked. The problem is not because no one can be employed, but because millennial workers lack motivation and commitment to work, and also have attitude problems.”
Prakoso: staffing issues in hospitality sector led to forming of hiring platform
On the other hand, he is also concerned about the growing number of vocational school and university graduates who remain unemployed as hotels cut back on manpower amid current economic situation.
Keen to address this challenge of supply and demand, Wing and two friends in January 2018 launched Hore! Indonesia (which stands for Hire On Ready & Educated) as an platform for hospitality recruiters to hire ready and educated staff to complete daily jobs.
Through the platform, hoteliers can access a ready pool of qualified workers, who have been interviewed, filtered and tested for their abilities. For young people, Hore! offers a flexible way to earn money and build up their experiences while providing flexibility in work hours.
Wing elaborated: “Hore! Indonesia is similar to Grab and Go-Jek. Hotels select the workers, who will then respond whether he or she can or cannot do the work.”
To become members, interested hotels and workers just have to sign up on the website. How then does Hore! ensure that its pool of workers are competent and ready for hire?
Wing explained: “Every worker who registers as a member of Hore! must go through several stages before being allowed to find work. First, they must fill in the profile data and be interviewed by our team, who then gives a review and rating. After that, we will provide training (to them) based on reviews and ratings.”
Hotels or parties can also rate the services of the workers. The higher the rating, the higher the renumeration rate for a worker. The rating also determines the quality and performance of the worker.
He added: “The rating also applies to hotels. Workers have the right to give an assessment, whether the hotel gives a reasonable fee, treats workers well, among others. This is to ensure the welfare of our members.”
Both hotel or workers can submit complaints, which will be followed up by an Hore! staff to mediate and seek a solution for both parties.
Workers who have received complaints will be temporarily suspended and sent to a training or workshop, Wing told TTG Asia.
To date, 1,350 workers have joined Hore! Indonesia as members. The platform has also established cooperation with 40 hotels, 10 restaurants, two event spaces, and one catering service in Surabaya, while in Jakarta it has partnered with seven hotels, one event space and one catering service.
Going forward, Wing hopes to attract more young people to join the platform and increase the workers’ hourly wages, which are currently paid at an average of 120,000 (US$8.40) to 150,000 rupiah.
Next on the start-up’s agenda is expanding into other cities, such as Yogyakarta, Bandung and Bali.
“We hope to work more with big (hotel or restaurant) brands. We also intend to collaborate with tourism institutes and vocational schools.
“We aim to be the platform that will empower young generations for a greater good and to contribute to Indonesia’s hospitality industry,” Wing concluded.
China and India continue to be big drivers of Expedia Group’s Thailand bookings, while the UAE, Israel and South Africa are emerging as high-value markets according to the group’s data.
Thai accommodation partners are enjoying steady growth as evidenced by Expedia Group’s data, which showed the overall inbound demand to Thailand has increased by 10% year-on-year over the past 12 months.
Bangkok was the top tourist destination by arrivals for the third consecutive year
Based on demand generated by Expedia Group’s extensive portfolio of travel brands, the US remains as the largest market to Thailand, with demand growing by 20% year-on-year.
China now is the second largest market to Thailand, surpassing Japan, Hong Kong and South Korea for the first time in the past two years.
Alongside China’s strong performance, India also upped its game, moving up three ranks to gain a place in Thailand’s top 10 international markets.
Notably, Chinese and Indian travellers show growing appetite for premium accommodation – more than 60% of the bookings made by Chinese, 55% of bookings made by Indians were for four- and five-star hotels.
This trend is in line with the Thai government’s focus to attract more high-end arrivals from China and India.
In terms of popular destinations, Bangkok, Phuket and Pattaya are the most visited cities among Chinese and Indian travellers.
Hua Hin (110%), Koh Phi Phi (100%) and Koh Lipe (100%) are rising markets with Expedia seeing triple-digit demand increase during the same period.
In particular, the data uncovered that Chinese travellers are the driving force behind the strong demand for packages into Thailand – almost one in three international package bookings were made by Chinese. China is also the fastest growing market for packages as demand skyrocketed by 200% year-on-year.
India is trending in the same direction, with package demand up by 160% . Other markets tracking triple-digit growth in package demand include Ireland (130%), South Korea (120%) and Indonesia (100%).
Diving deep into some new emerging international markets that showed impressive growth momentum, Expedia Group confirms that the UAE, South Africa and Israel are the new high-end markets that hoteliers should capitalise on.
Travellers from these markets typically spend 15% more on accommodation and stay one day longer than the average international counterparts. Moreover, a whopping 70% of the total bookings made by these nationalities were in four- and five-star hotels where travellers paid 50% more on daily accommodation.
Accommodation partners wanting to capture this new stream of high-value travellers need be aware of the peak seasons, Expedia advised. The OTA’s data showed that UAE travellers prefer travelling from June to September and December to January, while both Israeli and South Africa travellers prefer travelling from December to February.
Exports generated by international tourism reached US$1.7 trillion in 2018, up 4% over the previous year, with Asia-Pacific leading growth, a new report from UNWTO shows.
For the seventh year in a row, tourism exports grew faster than merchandise exports (+3%), reflecting solid demand for international travel in a generally robust economic environment.
Tourism exports grew faster than merchandise exports for the seventh year running
Strong growth in outbound travel from many source markets around the world fuelled revenues. This accounts for 29% of global service exports and 7% of overall exports of goods and services. These figures consolidate international tourism among the top five economic sectors in the world, behind chemical manufacturing and the fuel industry but ahead of the food and automotive industries.
“Rather than growing in volume we need to grow in value. We are pleased to see that both emerging and advanced economies around the world are benefiting from rising tourism income,” said UNWTO secretary-general, Zurab Pololikashvili.
“Revenues from international tourism translate into jobs, entrepreneurship and a better situation for people and local economies, while reducing trade deficits in many countries” he added.
International tourism receipts increased 4% in real terms (adjusting for exchange rate fluctuations and inflation) to reach over US$1.4 trillion in 2018, about US$100 billion more than the previous year. This is consistent with the 6% increase in international tourist arrivals in 2018.
By regions, Asia and the Pacific led the way with 7% growth in international tourism receipts, followed by Europe with a 5% increase. The Middle East saw 3% growth, while Africa (+1%) and the Americas (0%) recorded more modest results. Central and Eastern Europe and North-East Asia (both +9%) were the subregions with the strongest growth.
Growth in receipts was fuelled by strong demand for international travel in the context of a robust global economy.
Among the world’s top ten source markets, France and the Russian Federation both recorded 11% growth in outbound spending in 2018, while Australia saw a 10% increase.
China, the world’s top spender reported US$277 billion in international tourism expenditure in 2018, a 5% increase in real terms from a year earlier, while the US, the second largest, spent 7% more, to reach US$144 billion.
International expenditure from the UK grew 3% in 2018, and 4% from Italy, while Germany and South Korea both reported rather flat results. Further down the ranking, Spain enjoyed 12% higher spending on international tourism in 2018.
This year is likely to be another year of strong growth for the region’s luxury travel market, with particularly high willingness to travel manifested by Chinese and Indian millionaires, according to research commissioned by ILTM Asia Pacific.
Japanese millionaires, on the other hand, remain reluctant to travel internationally, a trend that persists despite a stabilising economy and increased inbound touristic flows.
With trend towards in-depth destination experiences, arts and culture will increasingly feature on Asian millionaire’s itineraries; Quechua sitting on ancient Inca wall, Peru
Having interviewed 903 millionaires across China, India, Singapore, Hong Kong, South Korea and Japan, Agility Research & Strategy looked at the travel trends among millionaires.
Among other findings, the research revealed that shopping, which until a few years ago was cited as the top reason to travel across all six markets covered by the study, is becoming less relevant.
Asian millionaires’ interests are becoming more sophisticated: city tours, diving, beach, food, amusement parks, spas and hot springs are some of the most mentioned reasons to travel. The next few years is likely to see them displaying a greater interest in art & cultural travel, on the tail of the opening of major museums and cultural institutions throughout the region.
Millionaires’ reasons to travel are also shifting from status and recognition to personal growth and quality of life. Increasingly, business trips become a mix of business and leisure, and millionaires plan their trips with the whole family, to spend quality time together.
There is increased awareness that luxury travel is more than about accommodation and transportation. Food experiences remain high on the millionaires travel bucket-list, starting from a varied breakfast at the hotel, continuing with a local, authentic and safe lunch to sample the local cuisine, and ending with fine dining at a Michelin-rated restaurant.
Meanwhile, Japan remains “a very attractive destination for Asian millionaires”, thanks to its image as a safe and diversified destination rife with opportunities for authentic local experiences.
Online and digital is gaining traction both as a channel to search for information and as way to research and book travel. At the same time, traditional channels such as recommendation from friends and family, TV and magazines still hold considerable sway over millionaires travel decisions.
In China, over 85% of millionaires surveyed take into consideration a hotel’s eco-friendliness.
ForwardKeys’ analysis of Chinese outbound travel in the first four months of this year revealed a 12.7% growth in FIT.
“The growth was extraordinary, given the ongoing trade tensions, currency inflation and a slowing economy,” remarked Olivier Ponti, vice president, Insights at ForwardKeys.
The strong performance is being fuelled by Shanghai, where FIT outbound bookings for a trip between May and August are 22.4% ahead compared to the same period in 2018; Guangzhou, where they are 28.7% ahead; and 11 second-tier cities which are collectively 25.8% ahead.
Chinese FIT to Europe on the up
The trends were particularly marked during the Chinese New Year, at the end of January and early February, which is the busiest time for Chinese outbound travel, accounting for around three quarters of total international air departures during the first three months of 2019.
Chinese FIT outbound travel grew by 18.8% during 2019’s Chinese New Year holiday, compared to the equivalent holiday period in 2018.
FIT travel has also surged – and is set to surge – over recent and upcoming public holidays, Qingming on April 5, Labour Day at the start of May and the Dragon Boat festival on June 7-9.
“The way the Chinese government has allocated public holidays has created more opportunities for people to take breaks abroad. For example, in 2019, the Labour Day holiday has been extended from one day to four days, May 1-4, for 2019, which means that, this year, Chinese travellers can take three days of paid leave and enjoy an eight-day vacation,” Ponti observed.
An increase in seat capacity has also helped to fuel the growth in travel to Europe. For example, between January 1, 2018 and June 30, 2019, seat capacity from China to London increased by 24.8%, compared to the equivalent period a year before, thanks to the addition of nine new routes.
Capacity to Paris increased 8.1%, thanks to five new routes and capacity to Rome increased 31.7% from one new route.
In 2Q2019, 88 flights per week are scheduled between China and the UK, up from 65 weekly flights in 2Q2018. And there is more to come, as bilateral trade agreements provide for further capacity growth from China to the UK, France and Italy.
Meanwhile, Ponti catutioned: “It is important to notice that trends can vary significantly from one year to the other and marketeers can’t just repeat what they have done the year before. Destination popularity can be heavily influenced by currency fluctuations and by immigration rules.”
This year, a few countries have eased their visa regulations in a bid to attract more Chinese visitors. For example, Ukraine has introduced an e-visa from January 1.
Singapore now allows Chinese travellers to enter visa-free for up to 96 hours, either on the way to a third destination or on the way back home. Japan has also further simplified the visa application process for Chinese students and repeat visitors.
It’s boom time for Russian arrivals in Asia-Pacific countries, which ForwardKeys attributes to a doubling in seat capacity on direct flights from Russia to select destinations in the region.
Direct flights from Russia to Asia-Pacific more than doubled as airlines increased their seat capacity substantially. Overall seat capacity was up 37.6%, with the highlights being a 124.8% increase in seats to Thailand and 153% to Vietnam.
Aerial view of tourists from Russia and other countries on a basket boat tour of the Mangrove Palm forest in Cam Thanh village, Hoi An
Total international arrivals in Asia-Pacific were up 3.8% from May 2018 to April 2019. However, Russia’s 54.5% increase meant Europe was the top growing origin continent, up 6.3%.
ForwardKeys notes the extent of Russia’s sharply renewed enthusiasm for Asia-Pacific after reviewing historical figures. The volume of arrivals rocketed towards the end of last summer, according to ForwardKeys’ data.
Growth in Russian leisure travellers (up 62.8%) dramatically outstripped business travel (up 27.5%) and they’re staying for 16 nights on average. In line with general trends towards shorter lead times, the Russians are booking fewer days in advance, 65.8 days, down from 78.1 days.
ForwardKeys vice president, insights, Olivier Ponti, said: “For the Asia-Pacific region, Russia is now the ninth top origin country – by share – outside of Asia-Pacific itself. It’s due to a combination of increased seat capacity on direct flights, high-profile political visits and astute marketing… as well as agile capacity meeting demand.”
IATA has downgraded its 2019 outlook for the global air transport industry to a US$28 billion profit, from US$35.5 billion forecast in December 2018, in the face of rising fuel prices and a weakening of world trade.
The association also restated its 2018 net post-tax profits, estimated at US$30 billion.
In 2019 overall costs are expected to grow by 7.4%, outpacing a 6.5% rise in revenues. As a result, net margins are expected to be squeezed to 3.2% (from 3.7% in 2018). Profit per passenger will similarly decline to US$6.1 (from US$6.9 in 2018).
Costs rising across the board; regional differences significant
“This year will be the 10th consecutive year in the black for the airline industry. But margins are being squeezed by rising costs right across the board – including labor, fuel and infrastructure. Stiff competition among airlines keeps yields from rising. Weakening of global trade is likely to continue as the US-China trade war intensifies,” said Alexandre de Juniac, IATA’s director general and CEO.
“Airlines will still turn a profit this year, but there is no easy money to be made.”
Moreover, the job of spreading financial resilience throughout the industry is only half complete with a major gap in profitability between the performance of airlines in North America, Europe and Asia-Pacific and the performance of those in Africa, Latin America and the Middle East.
“The good news is that airlines have broken the boom-and-bust cycle. A downturn in the trading environment no longer plunges the industry into a deep crisis. But under current circumstances, the great achievement of the industry – creating value for investors with normal levels of profitability is at risk,” said de Juniac.
Costs
The high price of fuel from 2018 (US$71.6/barrel Brent) will continue in 2019 with an average cost of US$70.00/barrel Brent expected. This is 27.5% higher than the US$54.9/barrel Brent in 2017. IATA says fuel costs will account for 25% of operating costs (up from 23.5% in 2018).
Non-fuel unit costs are expected to rise to 39.5 cents per available tonne kilometre from 39.2 cents, because of higher labor, infrastructure and other costs.
Overall expenses are expected to rise 7.4% to US$822 billion.
Overall revenues are not keeping pace with the rise in costs. For 2019, total revenues of US$865 billion are expected (+6.5% on 2018).
Passenger demand
IATA expects passenger demand to strengthen with global GDP growth expected to remain relatively strong at 2.7%, albeit slower than in 2018 (3.1%). Governments and central banks have responded to slower economic growth with more supportive policies, which is providing an offset to trade weakness.
But economic growth and household incomes will still grow more slowly, so total passenger demand, measured in revenue passenger kilometres, is expected to grow by 5.0% (down from 7.4% in 2018). Airlines have responded to the slower growth environment by trimming capacity expansion to 4.7% (ASKs).
Total passenger numbers are expected to rise to 4.6 billion (up from 4.4 billion in 2018).
Passenger yields are expected to remain flat in 2019 after a 2.1% fall in 2018.
Risk factors
Downside risks are significant. Political instability and the potential for conflict never bodes well for air travel. Even more critical is the proliferation of protectionist measures and the escalation of trade wars.
As the US-China trade war intensifies, the immediate risks to an already beleaguered air cargo industry increase. And, while passenger traffic demand is holding up, the impact of worsening trade relations could spillover and dampen demand.
“Aviation needs borders that are open to people and to trade. Nobody wins from trade wars, protectionist policies or isolationist agendas. But everybody benefits from growing connectivity. A more inclusive globalisation must be the way forward,” said de Juniac.
Regional roundup
All regions are expecting a reduction in profitability with the exception of North America and Latin America.
North American carriers will deliver the strongest financial performance with a US$15 billion post tax profit (up from US$14.5 billion in 2018). That represents a net profit of US$14.77 per passenger, which is a marked improvement from just seven years earlier (US$2.3 in 2012). Net margins, forecast at 5.5%, are down from 2018 levels owing to higher than expected fuel costs and slowing growth. The limited downside in this region has been underpinned by consolidation, helping to sustain load factors (passenger + cargo) above 65%, and ancillaries, which limit the impact of higher fuel costs, keeping breakeven load factors to 59.5%.
European airlines will deliver a net profit of US$8.1 billion (down from US$9.4 billion in 2018). That represents a net profit per passenger of US$6.75 and a net margin of 3.7% – both are the second strongest industry results, but below what North American carriers earn. Breakeven load factors are the highest at 70.2%, caused by low yields due to the highly competitive open aviation area, high regulatory costs, and inefficient infrastructure. In 2019, for example, en-route air traffic management delays doubled to 19.1 million minutes. Europe also is one of the more exposed regions to weak international trade and this has damaged prospects this year.
Asia-Pacific airlines will deliver a net profit of US$6.0 billion (down from US$7.7 billion in 2018). That represents a net profit per passenger of US$3.51 and a net margin of 2.3%. The region is showing very diverse performance.
Middle Eastern airlines will deliver a combined net loss of US$1.1 billion (slightly worse than the US$1.0 billion loss in 2018). That equates to a US$5 loss per passenger and a negative net margin (-1.9%). The region has faced substantial challenges in recent years, both to the business environment and to business models. Airlines there are going through a process of adjustment and announced schedules point to a substantial slowdown in capacity growth in 2019. Performance is now improving but the worsening in the business environment is expected to prolong losses in 2019.
Latin American airlines will deliver a net profit of US$200 million. This reflects a moderate improvement from the US$500 million loss in 2018, as the recovery of the Brazilian economy is offsetting higher oil prices. With a US$0.50 profit per passenger, the region’s net margin is expected to be a thin 0.4%.
African airlines will deliver a US$100 million loss (unchanged from 2018), continuing a weak trend into its fourth year. Each passenger carried is expected to cost the carriers US$1.54, leading to a -1.0% net margin. Breakeven load factors are relatively low, as yields are a little higher than average and costs are lower. However, few airlines in the region are able to achieve adequate load factors, which averaged the lowest globally at 60.7% in 2018. Overall, industry performance is improving, but only slowly.
Warm trade relations between Taiwan and India are helping to spur demand for corporate travel and business event exchanges.
Taiwan is currently the 16th largest trading partner of India, and bilateral trade between the two countries stood at US$7 billion in 2018 – up 11 per cent year-on-year.
Trust Lin, director, Taiwan Tourism Bureau, Singapore Office, told TTGmice: “Business travel has grown between the two nations. At present there are about 41,000 visitors from India to Taiwan (out of) our total international arrival of 11 million. India arrivals are growing and we see a lot of incentive travel demand. Hyundai (in India) took an incentive group of more than 400 pax to Taiwan in April this year while Asus (in India) brought a group of more than 350 pax in May.”
“Many Indian companies are also participating in tradeshows and exhibitions in Taiwan, such as Computex. Delegates stay on Taiwan for one or two nights after. Many companies that had participated in Taiwan exhibitions are also choosing to send their incentive groups to the destination,” he added.
Fueling business travel traffic from India to Taiwan is the latter’s New Southbound Policy, which provides subsidies, administrative assistance, souvenirs and more for incentive groups hailing from the 10 South-east Asian countries, six nations in South Asia, as well as Australia and New Zealand.
On the other hand, Taiwanese companies are also drawn to business events in India and efforts are underway to grow trade exchange.
Taipei Economic and Cultural Center, India ambassador Tien Chung- Kwang addresses the audience at Taiwan Expo 2019
The second edition of the annual Taiwan Expo in May saw participation from 130 exhibitors showcasing their state-of-the-art products through 230 booths this year. The event in New Delhi was jointly organised by Taiwan’s Bureau of Foreign Trade and Taiwan External Trade Development Council (TAITRA).
Earlier in January, the Vibrant Gujarat summit featured six companies from Taiwan – said to be the largest national delegation at the event.
A total of 20 trade and investment promotion events by TAITRA will take place in India this year.
Taiwanese companies are expected to invest about US$500 million in India by the end of 2019.
“The events we organised here have helped to educate Indian participants about Taiwan. They then choose to visit Taiwan for business and leisure. A lot of large Indian companies such as Mahindra & Mahindra and Tata Group as well as Indian SMEs are participating in events in Taiwan. Shows related to food, electronics and automobile are popular among Indian delegates,” said Walter Yeh, president of TAITRA.
“Tourism has the potential to change (communities),” said Samnang Nuonsinoeun. And tourism is precisely the tool the 17-year-old Cambodian and his fellow Liger Leadership Academy classmates have employed to bring about change within their communities.
Led by Samnang, Sreypich Khon, 17, Sopheak Thy and Marady Heang, both 16, Journeys of Change was launched in September 2017 as part of Liger’s innovative curriculum that aims to create Cambodia’s next generation of leaders, problem-solvers and entrepreneurs.
Seeing education as a key to eradicating poverty in the long term, the academy scours the country’s 203 state primary schools, testing more than 12,000 students to find the top 60 – who are often plucked from poverty – who each receive a full residential scholarship.
When tasked with the challenge of creating a company that can impact communities, the students immediately turned to Cambodia’s growing tourism landscape. The result is Journeys of Change, which offers cultural bike tours of Phnom Penh that are led by students.
Sreypich shared: “It started as an idea to share our experiences with foreigners visiting Cambodia. Tourists usually only go to major attractions, and don’t learn about the life of Cambodians and how we live. We really want to share that experience.”
The team subsequently received training from social enterprise Soksabike – a bike company that has been running tours in the north-western province of Battambang since 2010 – and set about interviewing, recruiting and training a team of guides aged 15 to 17 from their school.
The group also plotted the half-day 22km tour route that stops at 10 locations around the capital and surrounding countryside. Attractions include the Royal Palace, pagodas, markets and a ferry across the Mekong River to rural Arey Ksat.
The team also made sure breaks at small local businesses were included during the tours, ensuring the communities they passed through benefited from their tours, while tourists enjoy an immersive local experience.
Initially, the group hit roadblocks as they struggled to effectively market their business. Sopheak shared: “It was challenging because we didn’t have any customers at all for the first three months. A few months ago we had to shift our entire business model, and now we have had clients for seven weeks in a row.”
The team has also partnered with hotels and businesses to promote their start-up, as well as attended promotional events and made use of social media to drive business.
Now, Journeys of Change is gearing up to launch a second tour that introduces visitors to the capital’s colourful array of markets, and there are plans in the pipeline to start a sustainable shopping tour in the capital.
Samnang said: “We don’t want to use communities as a commodity; we want to empower them. And we want to show visitors the real Cambodia and share our experiences.”
Based out of New Delhi, Huria will be responsible for growing Adara’s footprint in India and expanding the pool of data partners to deliver consumer insights to travel marketers.
