Pub tycoon meets Six Continents directors

Times Online  -  Hugh Osmond, the leisure entrepreneur, was locked in talks last night with senior directors of Six Continents in an effort to persuade them to postpone plans to demerge the hotel and pub operator.

Mr Osmond, who wants to buy Six Continents and break it up, was accompanied by Alan McIntosh, finance director of Capital Management & Investment (CMI), his bid vehicle, while Six Continents (6C) was represented by Tim Clarke, chief executive, and Richard North, finance director.

The former PizzaExpress entrepreneur was expected to outline the terms of a possible bid worth about 650p a share, equivalent to £5.64 billion, or more than £7 billion including total debt, estimated at between £1.5 billion and £1.7 billion. If 6C refuses to adjourn the shareholder meeting scheduled for March 12, he is poised to launch a hostile bid, possibly as early as the end of this week.

Ahead of the meeting, Mr North confirmed that Mr Osmond had requested a meeting to discuss his putative bid: “If he comes and puts a proposal to us, we will obviously have to put it to our board.”

News of the meeting came in the wake of a further volley of claims and counter-claims from the two sides.

In a statement 6C claimed that many ideas for the business outlined by Mr Osmond had been “borrowed” from the demerger listing particulars published last week, “particularly the plans to dispose of non-core assets and to make use of longer-term financing techniques to unlock value”.

The group reiterated that it had already been exploring some form of “structured financing” for Mitchells & Butlers, its pub and restaurant arm, that could raise an estimated £1.5 billion. This would allow it to return capital to shareholders.

The company also said that after further progress on reviewing its hotel business, it now expected to achieve cost savings of at least $100 million (£63 million) a year against its recent estimate of $65 million.

Mr Osmond said he could not work out how 6C would be able to leverage its assets through a refinancing “when its cashflows are so poor”.

Shares of 6C fell by 16p to 609p.

Six Continents sees bigger demerger benefits  

(Reuters) - British pubs and hotels group Six Continents SXC.L said on Tuesday its planned break-up would lead to bigger benefits than initially expected as it sought to shore up its defences against a growing pack of predators.

The owner of InterContinental and Crowne Plaza hotels, which has already received one takeover approach from UK entrepreneur Hugh Osmond, said it would make an extra $35 million of annual cost savings at its demerged hotels group and could refinance its pubs and restaurants to return more money to shareholders.

Analysts and investors questioned the lack of detail in the proposals but said they were a good sign that Six Continents was starting to respond to its critics.

"We obviously welcome this, but we need to see more details of what both sides (Six Continents and Osmond) are proposing before we can make a decision," said Hilary Cook, director of investment strategy at Barclays Private Clients, which owns Six Continents shares.

Under fire for poor performance and lacking focus, Six Continents confirmed last week it would break itself up, creating two separate listed businesses -- InterContinental Hotels Group (IHG) and Mitchells and Butlers (M&B) -- and returning 700 million pounds ($1.1 billion) to shareholders.

But its plans have been thrown into disarray by Osmond, the founder of pubs group Punch Taverns PUB.L and former owner of restaurant chain PizzaExpress PIZ.L .

Industry sources told Reuters on Sunday that Osmond plans to make a multi-billion pound, largely stock-based bid for Six Continents this week through his firm Capital Management and Investment Plc CMIP.L .

He is expected to retain and refinance the pubs business through, for example, sale-and-leaseback agreements, while selling the hotels and returning the proceeds to shareholders.

JOB CUTS

Six Continents said on Tuesday it now expected to make $100 million of annual cost savings at IHG by the end of 2004, up from a previous estimate of $65 million made only last week.

The firm was not immediately available to say where the extra savings would come from or whether they would include further job cuts on top of the "significant reduction in headcount" pledged at the beginning of last week.

"You've got to question how well that number (the $100 million) is calculated," said Mark Reed, an analyst at stockbrokers Teather & Greenwood.

Six Continents, which also runs All Bar One pubs and Harvester restaurants, said it was exploring ways of refinancing some of M&B's assets, which could lead to a "significant additional return of capital" to investors

Both IHG and MAB were also looking at selling assets as a way of increasing returns for shareholders, the firm added.

"It's the classic defence to any potential takeover -- do what the other person's trying to do themselves," Teather & Greenwood's Reed said. "I guess it makes the Hugh Osmond bid less likely to succeed."

In reply, Osmond said it should not be hard for Six Continents to cut costs, claiming in a statement that the group has increased central costs in its hotel business by 37.5 percent since 2001 according its last annual report.

At 1416 GMT, Six Continents shares were 2.3 percent lower at 610-1/2 pence in a wider UK market .FTSE down two percent. That valued the firm at about 5.3 billion pounds.

The shares have climbed as much as 45 percent in the past month on hopes of a bidding war.

Britain's Hilton Group Plc HG.L , private equity firms such as Kohlberg Kravis Roberts and Blackstone and several U.S. hotel groups are all believed to be interested in bidding for all, or parts, of Six Continents.

MacDonald Hotels' shares tumble after first-half profits warning

The Herald  -  Shares  in Macdonald Hotels fell more than 8% yesterday after the company warned of lower first-half profits as a result of a downturn in corporate spending. 

Although revenue per available room across the 110-property estate was 2% higher during the first four months of the current financial year, Bathgate-based Macdonald said there had also been a "noticeable deterioration" in the general economic and political outlook. This has led to a decline in corporate custom, both in terms of business travellers and conference spending. 

"Accordingly, the board now expects to report lower profits in the first half," said Frank Callaghan, chairman of Macdonald. Last year, the hotel chain made pre-tax profits of £6.8m during the six months to April 4. 

A spokeswoman for Macdonald said the average lead time for advance book-ings by business travellers had fallen to the point where it was impossible to predict future trading beyond a few weeks. Although leisure travel - and particularly the weekend break market - has remained robust, Macdonald generates about 60% of its turnover from the corporate market. 

"You can't see what's going to come through," the spokeswoman said. "It's patchy all over - you couldn't hone in on any one particular area." 

While Macdonald has a number of hotels within the M25 corridor around London, it has no properties within the capital city proper. It is therefore more protected than some of its competitors from the downturn in the international travel market. 

David Pope, hotels and leisure analyst at Brewin Dolphin, said he was leaving his profits forecast for Macdonald unchanged at £16m for the full year to October 3. He explained that his forecast was already one of the lowest among sector analysts, with most estimates at between £17m and £18m prior to yesterday's announcement.

The announcement, contained within the chairman's statement at yesterday's an-nual meeting, caused little surprise among industry observers who have been monitoring the effect of the global downturn on the travel and tourism sector. 

However, shares in Macdonald were marked 17p lower yesterday to close at 181.5p.

News@PATA

PATA ANNOUNCES GRAND AND GOLD AWARDS WINNERS    

PATA is pleased to announce the 26 winners of the 2003 PATA Gold Awards. The winning organisatons and individuals will receive their awards during the 52nd PATA Annual Conference in Bali, Indonesia, April 13-17, 2003. The honours include  three "best of show" Grand Awards and 28 Gold Awards. The 2003 PATA Grand Award for Marketing will be presented to Hong Kong Tourism Board for its "HSBC Mega Hong Kong Sale". The Grand Award for Environment will go to JW Marriott Phuket Resort and Spa for its "Mai Khao Marine Turtle Foundation". The Grand Award for Heritage will go to Maharashtra Tourism Development Corporation for its "Ajanta-Elloa Conservation and Tourism Development Project". The full list of the 2003 PATA Gold Award winners appears at the end of this edition of News@PATA.

LEMOTO WINS PATA ESSAY COMPETITION

Ms. Natasha Lemoto of Sydney-based South Pacific Co has won the PATA YTP Essay Competition entitled, A Vision for Pacific Asia Tourism in 2025. PATA Vice President, Mr. Peter Semone, said: "Natasha’s 1,500-word essay was of a high standard, topical and displayed excellent research and analytical ability." Ms. Lemoto focused on six key global issues: 1) regional co-operation 2) environmentally sustainable development 3) co-operative research 4) "common cents" marketing 5) entrepreneurship and human resource development, and 6) cultural preservation. The full text of the essay will be reproduced in the March-April edition of PATA Compass magazine. For further information e-mail: ytp@pata.th.com.

SHARMA WINS PATA FACE OF THE FUTURE

Mr. Vivek Sharma, Sales Manager, SITA World Travel has won the 2003 PATA Face of the Future Award. Mr. Sharma, 31, has more than 12 years of experience in the tourism industry and specialises in sales, marketing, and product development. Mr. Sharma currently sits on the board of the PATA New York Chapter. For further information e-mail: ytp@pata.th.com.

CONTRIBUTE TO THE PATA FOUNDATION SILENT AUCTION

The PATA Foundation is asking your support for the 13th Annual Silent Auction to be held at the 52nd PATA Annual Conference in Bali, Indonesia, April 13-17, 2003. PATA members and PATA chapter members may donate travel arrangements such as airline and cruise tickets, hotel accommodation, tour packages, sightseeing or gift items such as artwork, handicrafts, and merchandise. Proceeds will go to the PATA Foundation, which funds grass-roots tourism-related projects such as environmental, cultural, and educational programmes. The travel industry can help these worthy causes by making product or service donations to the Silent Auction. For more information, contact the Silent Auction co-ordinator, Mr. Tongchan Srinava. Tel: (66-2) 658-2000 ext. 115. Fax: (66-2) 658-2010. E-mail: aye@pata.th.com.

ENCOURAGING YOUNG TOURISM PROFESSIONALS

PATA has launched a membership category for young tourism professionals (YTPs). With a membership fee of US$25, PATA YTPs (who must be under 35 years old) can benefit from numerous PATA member benefits, not least a US$99 delegate registration fee for the 52nd PATA Annual Conference in Bali, Indonesia, April 13-17, 2003. For more details on PATA YTP membership, contact PATA Manager-Development, Mr. Aaron Tan. Tel: (66-2) 658-2000 125. Fax: (66-2) 658-2010. E-mail: aaron@pata.th.com.

EDIT GET-TOGETHER DURING CONFERENCE IN BALI

To celebrate its 25th Anniversary EDIT Programme, the staff of the School of Travel Industry Management (TIM), University of Hawaii at Manoa, would like to invite all former Executive Development Institute for Tourism (EDIT) programme alumni, faculty, and participants to attend an EDIT reception during the 52nd PATA Annual Conference in Bali, April 13-17. To view some memorable moments in the history of the EDIT Programme, visit http://www.tim.hawaii.edu/edit/Bali.ppt. For details of the reception, contact Ms. Rachel Soma. Tel: (1-808) 956-4902. Fax: (1-808) 956-5378. E-mail: rsoma@hawaii.edu.

PATA STRATEGIC INTELLIGENCE CENTRE WORLDWATCH

** Where does Asia stand on any upcoming war in Iraq? Here is an overview compiled by the Associated Press: Japan ­ lack of unity could give Iraq the wrong message. Australia ­ prime minister’s approval rating dropping but he is holding firm to his commitment to stand by the United States. Indonesia ­ opposes unilateral action. Pakistan ­ peace process must be given a chance. Malaysia ­ mystified by Washington's stance towards Iraq. Singapore ­ will decide position once war becomes inevitable. China (PRC) ­ opposes a rush to war but urges Iraq to also do its part. India ­ warns against any action that undermines U.N. authority. Philippines ­ supports military action if authorised by the U.N.. Chinese Taipei ­ yet to commit and is not a member of the U.N..

** More than 60 percent of corporate travel managers said their companies had no immediate plans to reduce travel in light of recent security issues. In a survey of 150 managers conducted by the U.S.-based National Business Travel Association, 62 percent said they were evaluating trips on a case-by-case basis and 49 percent said they were reducing travel to high-risk areas. For further information visit www.nbta.org/hsr/homeland_security.htm.

** Thailand will place more emphasis on attracting tourists from Asia, Australia and New Zealand to offset the likely effects of a U.S.-led war with Iraq.

2003 PATA GRAND AND GOLD AWARD WINNERS

GRAND AWARDS

Marketing
HSBC Mega Hong Kong Sale
Hong Kong Tourism board

Environment
Mai Khao Marine Turtle Foundation
JW Marriott Phuket Resort and Spa

Heritage
Ajanta-Elloa Conservation & Tourism Development Project
Maharashtra Tourism Development Corporation

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GOLD AWARDS

Government/Destination (State/City)
Joint first prize:

1) Kerala
Kerala Tourism

2) Tourism Tasmania International Marketing Campaign
Tourism Tasmania

Carrier (International)
Splendour Card
Singapore Airlines

Carrier (Domestic)
Air Sahara Sixer
PATA India Chapter

Industry (Hotel)
Rebranding Programme of the M Hotel Singapore
M Hotel

Industry (Tour Operator/Travel Agent/DMC/PCO)
Marketing Greece as A Premier Destination
Interdynamic SA

Industry (Distribution Network)
Amadeus Bond
Amadeus India

Industry (Convention/Exhibition Venue)
Singapore Intelligence Centre
Suntec Singapore International

Industry (Credit Card Company)
BPI Credit Cards Travel Madness 2002
Philippine Department of Tourism

Ecotourism/Travel-Related Project
Bintan Mangrove Discovery Tour
Island Leisure International

Corporate Environmental Programme
ECOTAJ Environmental Initiatives of Taj Group of Hotels
|Taj Group of Hotels

Heritage & Culture -- Heritage
Banyan Tree & Angsana Gallery: Showcase for Asian Culture & Heritage
Banyan Tree Hotels and Resorts

Heritage & Culture -- Culture
2002 Cultural Kaleidoscope Programme
Hong Kong Tourism Board

Education & Training -- Publication
Destination Specialist Alaska
Institute of Certified Travel Agents

Education & Training -- Educational Programme
Accor Joins ECPAT and TAT to Protect Children
Accor

Consumer Travel Brochure Award
For Your Fascination...Nature Based Tours
Aitken Spence Travels

Travel Advertisement Awards -- Print Media
Tick Campaign
Maharashtra Tourism Development Corporation

Travel Advertisement Awards -- Electronic Media
Dynamic Korea - The Echo of 5,000 Years
Korea National Tourism Organization

Travel Poster Award
Haven't Been There
TBWA-ISC Malaysia

Destination Article ­ Newspaper
"A Walk on the Wild Side"
Mr. Carl Duncan
San Francisco Chronicle

Destination Article ­ Magazine
"Magical Realism"
Mr. Paul Miles
Traveler’s Tales

Industry Business Article -- Trade Publication
"Safe, Not Sorry"
Mr. Steven Shellum
Hotel Asia-Pacific

Travel Photograph
"Hidden Valley, Sacred Peaks"
Emphasis Media
Silkroad

Travel Guidebook
Lonely Planet Bhutan, 2nd Edition
Mr. Stan Armington

Public Relations Campaign Award
Thailand Grand Festival 2002
Tourism Authority of Thailand

Travel Video Award
Korea, Your Perfect Venue
Korea National Tourism Organization

CD-ROM Award
Green Symphony
Kerala Tourism

Web Site Award
www.discovertasmania.com
Tourism Tasmania

------

HONOURABLE MENTIONS

Travel Poster
Celebration
Star Cruises

Consumer Travel Brochure
The Finest Hotels of the World - the Best of the Greek Mainland
Interdynamic SA

Destination Article -- Newspaper
"Road to Nowhere"
Mr. Michael Currie
The Weekend Australian

Destination Article -- Magazine
"How to Stop Worrying and Learn to Love Bombay"
Mr. Peter Jon Lindberg
Travel+Leisure

Asia Pacific: Online Travel Takes Off

Similar to books and CDs, the Internet is an ideal medium to search for travel products. In fact, online travel is the largest ecommerce category in the United States.

"The Asia Pacific online travel market is emerging," independent research company, PhoCusWright, cautions, "yet its fragmentation and cultural nuances make it among the most complex in the world."

The analyst predicts that the market will grow from AU$4.6 billion (US$2.7 billion) in 2002 to AU$13.5 billion (US$8 billion in 2004). This represents a growth from 3.5 percent of the total travel market to 9.5 percent over the same period.

amrinteractive adds, "approximately half of the Australian population over 15 go online regularly. Of those, seven percent research travel once a week. Over half have used the Internet to research travel at some point."

In light of those trends, several players are now fighting it out for market share. While business models are very similar, alliances with major airlines and travel companies vary.

Online since 1996, Travel.com.au is one of the oldest companies. Brands include travel.com.au, lastminute.com in Australia and New Zealand, travel.co.nz and travelfree.co.nz. Their newsletters are emailed to over 550 000 users every week.

"We still rely on commission earned from the sale of product as the major source of income for both brands," says travel.com.au CEO, Bill Gair, "although we are seeing a significant and increasing contribution from the sale of advertising and marketing opportunities on our sites."

The publicly listed company floated on the Australian Stock Exchange in 1999 just before the tech shakeout in April the following year.

"Travel.com.au is focused on online initiated travel," Gair continues. "With the complexity of the Australian travel market, a pure robotic site cannot offer all the options such as expert advice. Even people who spend all day on the Internet will not necessarily understand all the rules of travel and successfully find their best option for them."

He adds, "product depth is also the key. All airlines, all wholesalers."

Lastminute.com is "focused on a busy lifestyle that is emerging where there is little time to plan and the Internet is the perfect place to go to be inspired," Gair concludes.

Relative newcomer, ZUJI, opened their Australian site in July last year.

ZUJI offers a range of travel products and services from air tickets to hotel bookings, car rentals, travel packages and land tours. Travelocity.com, who are also a joint venture partner, powers the portal.

Other partners include sixteen Asia Pacific airlines. These include Air New Zealand, Cathay Pacific, China Airlines, Garuda Indonesia and Qantas.

Jo O'Brien, ZUJI general manager, Australia, says there are three key points of differentiation.

Firstly, "ZUJI.com.au as an online travel portal has a breadth of product offering and the technology to support that offering that is unrivalled in this region. Through ZUJI, travellers can access a comprehensive range of travel products and services at competitive prices. This includes more than 400 airlines, 56,000 hotels and more than 50 car rental companies, as well as travel guides on more than 300 destinations across the world."

Secondly, she says, "ZUJI's offering to the market is enhanced through leading-edge technology. Its sophisticated booking engine lets the traveller navigate and book with ease, while its robust Internet infrastructure ensures speedy, reliable and secure transactions. Innovative travel planning tools like Price Guru and Flight Guru are unique to ZUJI and not available on any other travel website in the region."

Flight Guru has the ability to prompt the traveller with stopover options available with selected airfares, while Price Guru tracks the lowest return airfares for up to five destinations, and sends an email alert to the traveller when an airfare reaches a specified price.

Thirdly, "ZUJI complements its online offering through superior customer service from its dedicated contact centre based in Melbourne, that offers support through phone, web chat, email and fax," according to O'Brien.

The company's business model is based on almost all revenue coming from partner and supplier commission. Income is earned on the sale of all travel products including air, hotel, car, package and insurance sales.

Advertising is planned for this year but only travel related products.

WebJet's model is also transaction sales based with no advertising. The independent company operates under a marketing and distribution agreement with Australia's number one airline, Qantas.

"The company is purely online and offers an end-to-end mechanism," says business development manager, Dean Maidment.

Secondly, "customer service agents guide consumers through online ordering," he explains. "This is complimented by web cam and chat. Agents also provide post sales support."

WebJet's long-term aim is to have a completely automated site. At this stage, customers do not have to call an 1800 number for bookings. Phone is only required for holiday packages that are yet to be automated.

Maidment says a completely virtual provider pushes costs down. "Customers can order 24/7 and agents can service multiple customers. Provided Customer Relationship Management tools (CRM) are in place. By contrast, many other sites support phone networks."

Pricing is the fourth key point of differentiation, according to Maidment. "The motto is 'do it yourself and save'." Customers receive a discount on Qantas fares due to the alliance.

The bulk of revenue comes from airline tickets. Second are ancillary services such as car hire.

"There may be some advertising in future," Maidment adds. "But only if that is related to travel. You won't see an ad for Sex in the City, for example."

The model of AirfareMarket is different again.

"AirfareMarket.com is Australia's only free travel comparison service," says manager, Robert Chamberlain. "We don't just list our travel deals from one provider. Rather, we provide services from a group of travel companies operating both on and off the Internet. Put simply, our business model is more like that of eBay or Shopper.com than that of WebJet or Travel.com.au. We are an online marketplace."

As a marketplace, AirfareMarket provides independent online travel services. Deals are sourced from travel agents, booking engines and other websites. "Not from where we can earn the greatest commission," according to Chamberlain.

Revenue is sourced from other travel companies. Some pay a subscription fee to use Airfare Market's travel technology to promote and sell their travel deals. Also, to a smaller extent, revenue is received from advertising on the site

The four players undertake an interesting mix of both offline and online advertising. This indicates a different approach to brand building that is targeted not only at the net savvy.

"Understandably, travel.com.au use our own database and websites as the main focus for our advertising," says Gairs. "Aside from that, we also focus on search engine optimisation and several key online alliances."

ZUJI also focus their advertising efforts online.

O'Brien says, "to date, we have focused on online advertising via creative banner shapes, text links, direct e-communication and viral e-marketing. ZUJI also use public relations."

"As our market encompasses those consumers who are Internet savvy," she adds, "we felt that this was the appropriate place to begin. We have selected partners who are best able to access the online consumer who travels and has a propensity to transact and have been pleased with the results thus far. In addition we have signed alliance agreements with Yahoo! Australia and New Zealand and ninemsn."

ZUJI are now looking at integrated offline and online advertising campaigns sometime during this year.

By contrast to travel.com.au and ZUJI, WebJet's advertising is predominantly offline. "Travel is not a random online purchase," Maidment explains. "A customer will purchase a CD surfing on ninemsn but not travel."

In the past year, WebJet billboards have been continually placed in the Eastern capital cities in close proximity to airports to ensure maximum exposure to regular travelers.

They also have a continued regular presence in the Qantas in-flight magazine and occasional tactical advertising opportunities in association with targeted magazines such as Vacations & Travel.

WebJet compliments the print focus with radio and television promotions.

"Offline advertising, consisting of television advertising and roadside billboards," Maidment says, "bring in those people who are net savvy as well."

WebJet also use email marketing to establish long-term customer relationships.

"By using traditional forms of advertising," he concludes, "we aim to develop a trusted consumer brand."

Chamberlain says AirfareMarket also advertise in "magazines and journals affiliated with the travel industry. We are keen to subscribe more travel agents and travel companies to our online services. Currently, we have businesses such as Harvey World Travel, BestFlights, Debretts Travel and Gateway Travel signed up to our listing services. "

AirfareMarket also advertise online through websites such as the Australian Travel Network, and through the press.

All four online travel companies are unconcerned about the level of competition.

Gair says, "the level of competition reflects the gradual market shift to online transactions. It is to be expected there will be other players."

"Travel.com.au had always predicted that there would ultimately only be four or five global brands," he continues, "and we do expect to see some consolidation. It is premature to talk of travel.com.au in that context. But we have an excellent alliance and partnership with lastminute.com, Europe's most visited travel and leisure website."

"The overall market is growing," O'Brien responds. "We believe that ZUJI is in an excellent position to advantage of this growth. We welcome any competition that encourages consumers to go online."

ZUJI quote research by PhoCusWright. "The Asia Pacific online travel market expected to grow AU$4.6 billion (US$2.7 billion) in 2002 to AU$13.5 billion (US$8 billion in 2004) and from 3.5 percent of the total travel market to 9.5 percent over the same period," she says.

O'Brien also quotes RedSheriff figures that place ZUJI number four on the list of most popular travel portals in December last year. "Since launching in July 2002, we have achieved consistent growth of both new members and transactions month on month."

In January, RedSheriff figures reveal just over three million unique visitors with a market reach of just over 40 percent.

Qantas and Virgin Blue top the list, in that order, with Wotif.com, lastminute.com and travelmate.com.au making up the rest of the five.

Zuji.com is sixth and zuji.com.au is twelth.

WebJet is number 22 on the list and, as a new player, AirfareMarket is yet to make their mark.

Maidment says WebJet also welcome "legitimate players. If a competitor brings a customer online, a comparison point is only a click away."

The view is underlined in comments made by managing director, David Clarke. In the 2002 Annual report, he says, "the year has seen the continued growth and strengthening of major airline sites such as qantas.com.au and virginblue.com.au."

He continues, "it has also seen the entry into the Australian market of ZUJI, a travel site backed by a series of airlines. There has been considerable press conjecture during the year in relation to the impact of these activities. It is our view that all of these developments are responsible and major entities which substantially strengthen your company's longer-term position."

Chamberlain agrees. "More competition provides more business opportunities for AirfareMarket.com."

"The online travel sector is one of the fastest growing sectors of the Internet," he concludes. "There is still significant opportunity for further competition. However, many established online travel companies may be forced become more efficient in their way of conducting business, and will be placed under further pressure to report profits and cut their overheads. "

US Hotel Industry in Worsening Scenario: Report

e-Turbo.com  -  The US hotel industry has been in a worsening scenario as Americans have changed the way they travel after the terrorist attacks on the country about 18 months ago. The recovery of the hotel industry, which was predicted shortly after the terrorist attacks on Sept. 11 2001, hasn't happened, the Wall Street Journal reported Monday.

Moreover, the report quoted a leading accounting firm, PricewaterhouseCoopers, as saying that there has been a permanent restructuring of demand for the hotel industry at a new, lower level. "When businesses start doing something new for two years, it becomes a cultural change," said Bjorn Hanson, head of lodging consulting for PricewaterhouseCoopers, adding that "it becomes the norm."

The report said since the Sept. 11 attacks in 2001, hotel chains and industry experts have repeatedly predicted a recovery, arguing that travel cutbacks were a temporary phenomenon due to economic and security worries. But so far this year, the industry profit benchmark of revenue per available room has dropped nearly 2 percent from the already miserable performance seen a year ago, according to new research from Bear Stearns Cos.

The report partly attributed the troubles plaguing the US hotel industry to frequent security alerts and talk of war. For the one-week period following each federal security alerts between October 2001 and November 2002, US hotel occupancies declined an average of 3.5 percent, the report quoted the PricewaterhouseCoopers as saying.

Jones Lang LaSalle Hotels Promotes Scott Hetherington to Managing Director, Asia 

Jones Lang LaSalle Hotels is pleased to announce the promotion of Scott Hetherington to Managing Director, Asia. Currently based in Singapore, Mr Hetherington has overseen the firm’s hotel corporate advisory, investment sales and related activities in Asia since 2000.

Announcing the promotion, CEO of Jones Lang LaSalle Hotels Asia Pacific Mr David Gibson said “This further reinforces our commitment in Asia, strengthening Jones Lang LaSalle Hotels’ global leadership in providing specialist hotel investment services to our clients.”

Commenting on the trends he has witnessed during his time in Asia, Mr Hetherington said, “Over the past three years, investors have retained a strong appetite for hotel assets, however transactions have been limited reflecting the availability of product and market transparency. We have witnessed increased demand for hotel investment services in Japan and as a result we now have a team of four located in Tokyo. A rapidly developing economy and an influx of foreign interest in key China cities is also generating increasing demand for our services.”

In terms of recent trading performance, the markets have experienced volatility, principally due to the global economy, however according to Mr Hetherington, future expectations remain positive. “Of particular note is Bali, where anecdotal evidence indicates a return of demand in December.”

Mr Hetherington’s career with Jones Lang LaSalle Hotels is testament to the firm’s global expertise. Before undertaking his current role in Asia, Mr Hetherington was responsible for Jones Lang LaSalle Hotels’ Investment Sales throughout Europe for a period of ten years. Prior to this, he was based at Jones Lang Wootton in Sydney where he undertook sale, valuation and market feasibility assignments for hotels throughout Australia.

Over this 18-year period, Mr Hetherington’s transaction record has included the Regent London; the Hotel Vier Jahreszeiten, Hamburg; the Four Season, Milan; and the Hyatt Regency, Istanbul. He has also been involved in portfolio transactions and the sale of public hotel companies.

In addition, Mr Hetherington has undertaken and overseen individual and portfolio hotel valuation assignments throughout Asia and Europe. His clients have included Mandarin Oriental Group, Amanresorts, Hong Kong and Shanghai Hotels, Six Continents and Ladbroke/Hilton International.

Do You Know Where Your Travelers Are? Rosenbluth To Hold `Secure Action in Insecure Times' Security Symposium for Industry Leaders 

Responding to the increased potential for war and the heightened terror alert, Rosenbluth International, the world's third largest travel management company, will host "Secure Action in Insecure Times." The symposium, a timely and thought-provoking conversation with corporate travel managers and security directors, was designed by Rosenbluth to help clients, potential clients and other travel industry stakeholders better prepare for the impact of a global crisis on the travel industry, regional business community and business travelers.

"Secure Action In Insecure Times" will be held on February 21, 2003, from 9 a.m. to 12 p.m. in The Grand Ballroom of The Rittenhouse Hotel at 210 West Rittenhouse Square in Philadelphia, PA. The Keynote speaker will be Mark A. Holman, Public Policy Advisor of Blank Rome Government Relations LLC, and Former Deputy Assistant to The President For Homeland Security. The interactive morning event will also include panel discussions with industry leaders and Rosenbluth clients, presentations from Rosenbluth executives on the Company's crisis plan, and a live demonstration of Rosenbluth's Global Security Suite.

"Rather than passively worrying over the unknown and unforeseen vulnerabilities that are now a part of our new reality, Rosenbluth has decided to proactively prepare a comprehensive crisis plan, and we have encouraged our clients to do the same," said Hal F. Rosenbluth, chairman and chief executive officer of Rosenbluth International. "This symposium is an opportunity for regional corporate security and travel leaders to strengthen their preparedness and, ultimately, ensure the safety of their business travelers."
Rosenbluth International, an aggressive leader in the crisis preparedness movement in corporate America, has committed significant resources to protecting the security of its clients through innovative technology, highly-trained associates and a detailed security plan. The Company previously announced a five-point crisis plan for its associates and clients, and has been offering the free distribution and implementation of its traveler tracking/security technology, TrackPoint, to both its customer and non-customer base since December.

About Rosenbluth International

Rosenbluth International, headquartered in Philadelphia, Pa., is one of the largest privately held companies in the world. Rosenbluth International provides comprehensive corporate travel management services worldwide.

Top UK hotels slip a little extra on the bill

Sunday Telegraph  -  Britain’s most celebrated hotels have been accused of misleading guests by adding "discretionary" service charges to room bills. The charges, which range from five to 12.5 per cent, have been levied at such establishments as the Savoy, Le Meridien, the Connaught and Claridge's.

The levy is put on automatically, even on bills that are paid in advance - before any service has been received.

Trading standards officers have received a growing number of complaints about the practice, while consumer groups yesterday accused the hotels of employing "a weasely way of bumping up the room prices" and guests reacted angrily, saying that they would be tempted to stay elsewhere.

Although automatic service charges have now become commonplace in restaurants, they were once unheard of in hotels and have only been introduced in the past two years: in many cases, guests are left unaware that the charge has even been added. The hotels claim that the practice helps to soothe their British guests' traditional awkwardness about tipping. At the Savoy, however - where rooms cost between pounds 219 and pounds 750 a night - there were threats of protests and boycotts when The Sunday Telegraph told guests of the "optional" five per cent service fee.

Gary Sparkes, 41, and Sheila White, 37, from Hornchurch, Essex, had spent pounds 235 for a room for one night as a late Valentine's Day treat. They said that they would not accept the charge quietly. "They probably do not expect guests here to complain," said Mr Sparkes, "but I can assure you that I will make a big fuss about this.

"The policy is an insult. We are perfectly capable of tipping in the usual way. At a hotel that costs as much as the Savoy, you do not expect to be charged extra for service. I was not aware that we would be, so I have been tipping in the usual way as we go along."

Mark Newman, an Australian guest, said that he might be tempted to stay elsewhere. "I always leave some cash on the dinner table before I go; I always leave change in the room for the cleaners and chambermaids: I do not expect an extra service charge. Nobody likes to look cheap, so if it gets awkward when I check out, I will be tempted to stay elsewhere next time."

The five per cent charge is levied at all of the Savoy group's hotels, which are jointly owned by the Blackstone Group and Colony Capital, two US investment banking companies. Guests at its other London hotels, the Berkeley, Claridge's and Connaught, will also find the levy has added to their bills as a matter of course.

Pam Carter, the director of public relations for the Savoy, said that the group began adding the charge to customers' bills last year. She confirmed that it also applied to pre-paid bills that were settled before the service had actually been experienced.

She said: "I must stress it is discretionary. Everyone has the right to take the service charge off. This is a way of rewarding the backroom staff who don't get seen. The money is added to staff salaries.

"I think it does make tipping easy for a lot of people. In this country we are probably a little bit more awkward about it than in the United States. Very few guests refuse to pay."

Mrs Carter also insisted: "We have been very open about it all the way down the line. Everybody who rings to book is told."

Ten minutes later, however, The Sunday Telegraph rang the Savoy's reservation department and asked repeatedly whether the quoted price of pounds 219 plus VAT for a double room was the total cost of staying there: the service charge was not mentioned. " pounds 219 plus the VAT, it's just simply that," the staff member said.

Only when asked specifically whether there was a service charge did he say: "There is a service charge, which is five per cent. The reason I omitted to mention it is because you are not obliged to pay it."

Le Meridien in Park Lane and One Aldwych also add an optional 12.5 per cent service charge to all guests' food and drink bills.

A spokesman for One Aldwych, where a suite can cost up to pounds 925 per night, said that the charge was published on all menus and that all the money went to the staff. It was "completely open and transparent", he said and was indicated on the final bill with the words: "opt. s/charge". A spokeswoman for the Le Meridien chain, which is owned by the Japanese company Nomura International plc, said: "This does not apply to all our UK hotels. The majority of the money is shared among the staff." She was unable to clarify what happened to the remainder that was not given to staff.

Kim Winter, the editor of the Which? Hotel Guide, published by the Consumers' Association, last night condemned the practice.

She said: "Customers want a clear pricing system. This is a weasely way of bumping up the room prices while making them look cheaper than they actually are. It's all very well the hotels saying that this is optional, but how many of us are going to have the gall to stand there at the reception desk and cross out the service charge?"

A spokesman for the Department of Trade and Industry said that trading standards offices in London and Glasgow have received complaints about the "optional" charges. He warned hotels that they must make their extra charges as clear as possible to guests before the final bill arrives.

"Consumers should be given as clear and as transparent information as possible. They must be allowed to know the full cost of what they are paying."

He added: "Guests should also remember that the charge is discretionary. They are perfectly within their rights to refuse to pay it."

More Australians Preferring Home Over Int'l Travel

e-Turbo.com  -   A increasing number of Australians were preferring security at home over international travel as the Middle East conflict loomed, a leading online hotel booking company said today. Wotif.com chief executive Graeme Wood said the company was witnessing the greatest swing towards domestic holiday bookings in its history.

While sales to overseas destinations including New Zealand and Singapore had posted sustained growth, major tourism regions in Australia had benefited in the rise in domestic travel. Sales in Wotif.com's top five leisure destinations - Hunter Valley, Sunshine Coast, Gold Coast, Yarra Valley, and South Coast NSW reported at least a 40 per cent rise in bookings in the past month. "Renewed Australian interest in Bali attests to the fact that Australian travellers are increasingly resilient in the face of turmoil, but at the same time they aren't willing to take chances for chances sake," Mr Wood said. "We've seen much of our outbound business redirected into Australia. "Aussies are rediscovering Australia as a secure and convenient alternative to overseas travel, and providing the industry with a much-needed boost."

Mr Wood, whose company specialises in last-minute accommodation bookings, said that during the past six months the length of the average holiday had dropped. But at the same time there had been a rise in the frequency of domestic travel.

"More people are holidaying locally more often, with customers replacing long-haul trips with two and three- day getaways locally and interstate," Mr Wood said. "Travel plans that were once made months ahead are being made a matter of weeks or