Never say die!

By Steve Shellum, Publisher/Editor, HOTEL Asia Pacific

How do you cope if you have five outlets to keep running – and few, if any, guests? Trevor Bilney, executive chef of the Bali InterContinental Resort, rose to the challenge with creativity, passion and determination

TREVOR Bilney, executive chef at the Bali InterContinental Resort, is a fighter through and through. Last October 12, the former judo professional needed every last ounce of inner strength he could muster.

When guests disappeared almost overnight from the award-winning property on Jimbaran Beach - and every other hotel on the shocked island – Bilney had to act with courage and confidence.

Business had to go on, no matter how hard it was to concentrate on the job. He was in charge of 142 F&B staff, who looked to him for leadership in their time of desperation.

After helping to deliver supplies to local hospitals, Bilney gathered his staff. “We will do everything we can to safeguard your jobs,” he assured them. “We’re in this together.”

Then he grabbed his surfboard and “disappeared” for a couple of hours.

A couple of months later, Bilney sits under the stars outside the hotel’s Timan Gita restaurant and looks back at that time of heart-rending crisis. “It seems like yesterday, but we’ve learned so much,” says the fit and tanned Australian. “And we’ve achieved a great deal.”

What are the main lessons learned?

“The biggest challenges – even now - are keeping morale up and costs down,” he says. “All we can do is work our way through it.”

Immediately after the bombings, Bilney sat down with his whole team and started to work through, and rewrite, the processes.

“It is crucial to work as a team, to involve everyone at every level,” he says.

“We’ve always run an efficient operation, but we now faced huge new challenges and had to make plans. We all got together and talked it through for about a week, looking at how we could maintain high standards while containing costs. We were determined not to close down restaurants, and to keep operating 24 hours a day and, so far, our guest-satisfaction statistics have remained the same.”

The hotel had some substantial events coming up, and Bilney had placed his orders well in advance. He immediately contacted all his suppliers, and did some straight talking. “We wrote to all the suppliers asking for their assistance and understanding, and their support was incredible. 

“We used to order, say, 3,000 eggs and 200 pineapples at a time, but we had to cut the orders back to 300 eggs and 10 pineapples. It obviously hurt the suppliers greatly, but none of them blamed us. They all understood.”

Despite the cutbacks in quantities, Bilney had to maintain quality and offer the few remaining guests a full range of F&B choices in all the outlets, ranging from the signature Singaraja seafood restaurant and the award-winning KO Japanese restaurant to the poolside Jimbaran Gardens. Plus 24-hour room service.

“People still want to eat here, and they expect to see substantial offerings,” says Bilney. 

He maintained the normal food inventory of about 450 items, but had to put in place new systems to strictly control their usage.  

“From a chef’s point of view, requisitioning took on a whole new meaning. All of a sudden, we had to take a very close look at mushrooms, because they are very important in all the restaurants.

“It became a significant issue because, previously, our chefs could have all the mushrooms they wanted and not even think about it.

“We all had to change our attitudes, and fast. We could not let people behave in the normal way and take what they wanted, whenever they wanted it.”

Bilney set up a communal area for food items, from where everyone could take what they needed, with each item being strictly monitored and controlled. “Direct issuing is much more controlled and much more fair, and prevents a general free-for-all,” he says. “It also creates camaraderie.”

Bilney also closed down the cool rooms to allow him to consolidate and better control costs. “There is no point in bulk buying and holding on to stuff for three months to try and make a killing. We have to look at our inventory on a day-by-day basis, and adjust accordingly.

“As we print our own menus inhouse, we have a great deal of flexibility.”

Perhaps the biggest challenge was trying to keep morale up among staff, who were not only worried about losing their jobs but also had to be kept busy when guests were few on the ground.

“There was a whole stack of leave we had not taken, including myself, so we mapped all that, and that kept us entertained for quite a good time. Imagine trying to graph out the leave entitlement of 142 people, and trying to fit it all together while keeping everyone happy.”

The hotel has substantially stepped up staff training and has, in fact, hired a new training manager since the tragedy happened.

It is sending as many staff as possible to other Six Continents properties, including six staff, led by Wiji, sous chef at the Jimbaran restaurant, who were sent to the  Tokyo Bay Yokohama Grand for a month to hold a Balinese food promotion. None of them had ever been out of Bali before.

“But we have to be careful we don’t create a brain drain which will strip us of our best people. These guys are amazing with faces, names and details,” says Bilney.

Key to maintaining smooth operations – and sanity – is how you manage relationships with the owners, staff and guests, says Bilney.

“The hotel’s excom (executive committee) is very important in times like these. Every department of the hotel is facing its own challenges, and it is crucial that everyone understands the pressures from every perspective.

“The girl in sales is fantastic and keeps loyal regulars coming back. I regularly take her chocolates and cookies.”

Bilney also emphasises to his staff the fact that the hotel is part of a global chain. “We have had an amazing amount of support from both head and regional offices, and this is crucial in instilling confidence about the future.”

Although the group provides manuals on dealing with crisis situations, Bilney has learned first hand that you cannot plan for every occurrence.

“There are no text books or crisis manuals that can tell you how to deal with a situation like this. You have to write your own as you go along.”

He adds: “We prepare our whole careers to ensure we maintain maximum output at the best possible quality, and a situation like this allows professionals to rise to the challenge and prove their worth.

“This is when expats really earn their keep, with their networks of friends and contacts built up over many years in many places.

“It is our duty to make sure we demonstrate resilience and keep making money, even when it is hard.”

How does Bilney personally cope with all the pressures” “I go to the gym, surf and run a lot. You have to give yourself a break, get on the surf board, to avoid burnout. You need your day off.”

Thistle hotel group sale lands Orb in fresh row

The Observer  -  Jersey-based Orb Estates, currently the subject of a Serious Fraud Office investigation, faces further controversy after the sale of its Thistle hotel portfolio to Allen Rankin, a Tynside based multi-millionaire. It has emerged that Rankin is a close business associate of an Orb adviser censured by the Takeover Panel for failing to disclose his links with Orb

The SFO is looking into the disappearance of £33 million belonging to failed dotcom firm Izodia, in which Orb has a 29 per cent stake. The money was transferred into an account of an Orb associate company, although it is not clear where it is now. Izodia's shareholders gave Orb until last Monday to come up with the cash and have now started legal proceedings.

The hotels sale may raise concerns among Izodia's investors, who will be surprised by the news. Several other firms were circling the hotel chain, which Orb bought last year for £600m. But, in a shock move, Rankin has stolen a lead. Under the deal the Thistle chain's debt and financing structures will be transferred to Rankin's offshore company, Incontrast.

This would separate the hotels from Orb Estates and its liabilities, raising concerns over what claims - if any - Izodia's shareholders may have on the sold-off assets. Orb has so far failed to say what it will do with the cash.

The deal will draw attention to serial entrepreneur Jon Pither, who has strong links with Orb and Rankin.

Pither was ousted as Izodia's chairman when shareholders complained to the Takeover Panel that he was not suitably independent to advise the company on an indicative bid by Orb. Shareholders were alarmed when they learnt Pither was a non-executive director of Abingdon Capital, an adviser to Orb.

In addition, he has a place on the board of Prestige Travel, with Orb director Charles Helvert, and was once a director of Orb-backed oil exploration firm Atlantic Caspian Resources, along with former Orb director Peter Catto. Catto resigned as an Izodia director last year, as did another of its executives, Jarlath Vahey, who also had connections with Orb.

Now it has emerged that Pither sits on the board of two companies run by Rankin - Ultimate Leisure and Metnor Group - raising fresh questions over the tangled nature of Orb's business relationships. An Orb spokeswoman said: 'We don't talk to journalists.' Rankin and Helvert declined to return calls. Pither was uncontactable at the time of going to press.

WTO: Official War Statement

At this  time, when the Iraq conflict has erupted, I wish to transmit to you the information gathered and the analyses developed over the past months by our Organization, in particular through the work carried out by the Recovery Committee, which our General Assembly established a year and a half ago to face the difficult situation that we were entering at the time, and which has continued until now. Obviously, it is not the purpose of this letter to pass judgment on the political dimension of this conflict - it is not the World Tourism Organization's place to do so. It is our mission, however, to underline whenever necessary tourism's contribution to peace, and conversely, its vulnerability to acts or war and terrorism. Above all, it is our duty to spare no effort in ensuring that world tourism can recover as strongly and as rapidly as possible in the wake of a major shock.

Since 11 September 2001, we have been experiencing the most serious crisis in the history of world tourism. Djerba, Bali, Mombassa. The attacks have come one after another, targeting foreign visitors who have become innocent victims of conflicts with which they have nothing to do. Despite this, fear has not managed to sweep everything away and tourism has not collapsed as some were only too quick to predict. In 2001, despite the combination of the tragic attacks in New York and Washington and the worldwide economic downturn that had already begun, the number of international tourist arrivals fell by just 0.5 per cent, while domestic tourism increased in all countries. In 2002, despite an economy still in the doldrums, tourism managed to turn the trend around. 

With 715 million international arrivals representing an increase of 3 per cent, the industry was back to positive growth. Although this recovery will eventually be less spectacular when the revenue figures become known, tourism's performance last year was much better than what everyone expected, once again demonstrating our industry's resilience. Although the Americas suffered in 2002, due to the continuing weakness of the U.S. generating market and the economic difficulties of certain important countries, which affected intraregional traffic, the Asia-Pacific region, for example, continued with a rapid growth of 8 per cent. While destinations in North Africa were affected, those in Sub-Saharan Africa and Southern Africa generally held up well. The biggest surprise was the Middle East: despite all the tensions in the region, it saw an 11 per cent increase in international arrivals, thanks largely to the strong growth in intraregional traffic. Europe held its own with a 2.4 per cent increase in flows.

The sector's performance over the past few months has confirmed our previous analyses: the need to travel, whether for business or leisure, is too deeply ingrained in our societies to be easily effaced. In spite of all the obstacles and risks consumers may perceive, they will do what they can in order to travel, even if it means reducing their expenditure, changing their destination, postponing their trip, shortening their stay or favouring domestic tourism to the detriment of international tourism. This exceptional steadiness of demand makes it possible to overcome higher costs on the supply side, resulting from higher expenditures in energy, security and insurance, with repercussions on the entire sector, air transport most of all, thus constituting further handicaps. In this difficult situation that we are entering, and with the hostilities in Iraq poised to deal yet another blow to a tourism industry that is already in a weakened state, a fundamental source of confidence remains, based on consumer behaviour.

Although history never repeats itself quite the same way, we can look back to many instances of global or regional crises, such as the successive conflicts in the Balkans, where pre-crisis growth rates were recovered quickly after a brutal shock. The most appropriate reference point for the current situation is undoubtedly the Gulf War. It should be recalled that on that occasion, tourism did not go into recession. Growth slowed down to 1.2 per cent in 1991, but never turned negative. The following year the industry posted a spectacular 8.3 per cent jump. 

This new conflict comes at a time when the sector we are responsible for is perhaps at the lowest point of the curve. Tourism consumers and enterprises are just like other economic operators; when turbulent times are on the horizon, they put off their decisions because there is nothing they dislike more than uncertainty. Even before it began, the Iraqi conflict had already had a negative impact on our industry by fuelling fear, creating a wait-and-see attitude, discouraging bookings, and delaying investment plans.

FROM THIS point on, the situation is bound to clear up. This reduction in uncertainty, which has already been reflected in the markets, is in itself good news, even if we all would have preferred a clarification resulting from something other than the worst possible solution as far as our sector is concerned: war. Tourism and war do not get along well together. They are like fire and water, and nothing good ever happens when the two meet. A large number of enterprises, already weakened by two years of business difficulties, are threatened in the short term, along with tens of thousands of jobs. Now that war has failed to be averted, we can only hope that it is as short and as geographically limited as possible. But above all, we should keep in mind that there are two powerful reasons to remain reasonably hopeful, which I underlined recently during the inauguration of ITB Berlin. 

The first is that never in the history of tourism, has there been a deep and lasting recession. Tourism has always bounced back and it has always done so quickly. In these difficult times, the tourism industry is not a particularly weak sector of global activity. On the contrary, it is a factor that ensures stability and promotes recovery. If the conflict remains short and contained, it is not out of the question for recovery to come during the second half of the year. The second reason for hope has to do with the fact that the tourism industry has always come out of the turbulent times it has encountered in much better shape than it has gone into them. The economic and financial crisis of Asia-Pacific and Russia in 1997- 1998 is a clear example: these destinations came out of the recession, stronger and more firmly on the road to sustainable development. 

We can see this happening once again. Research by the WTO has shown that the adjustment period we are going through is accelerating changes in consumer habits and transforming the fabric of industry. It has seen the arrival of new operators, especially in air transport with the emergence of low- cost airlines, while others have disappeared. It has led to restructuring and regrouping, the implementation of new technologies, the modernization of marketing techniques, the strengthening of cooperation between the private and public sectors, to the benefit of all involved.

In this troubled context, the reports and analyses of our Recovery Committee take on greater importance than ever, and I appeal to all our Members to draw on the information and recommendations they contain, in the decisions that will have to be made in order to limit the impact of this new shock. Over the next few weeks, the WTO will be paying particular attention to the situation of countries affected by terrorist acts, and that of the most vulnerable regions: the Middle East (and by extension, North Africa), and South Asia. During the meeting of our Regional Commission for the Middle East, to be held in Bahrain from 28 to 30 April, a mobilization of efforts will be sought to boost intraregional and long-haul tourism for the benefit of the destinations concerned. For South Asia, the Regional Commission meeting to be held in Nepal from 1 to 3 April will be accompanied by a seminar on "Crisis Management", which is a new application of the efforts that have been undertaken in this area under the auspices of the Recovery Committee following its meeting in Cairo last September. 

During this difficult period for the Arab-Muslim world, it is important for it to be able to use tourism, as many of its governments wish to do, as an instrument of openness and as a channel of communication with the rest of the international community. It is our mission to respond to this wish -- in particular, by introducing the Arabic language among the instruments of our work -- and to show our solidarity with the Arab- Muslim world. The fact that many countries of the Gulf region - Bahrain, Qatar, Saudi Arabia, Kuwait -- have joined the WTO over the past two years, with others preparing to do the same, shows that we are achieving this.

It goes without saying that, above and beyond the specific efforts imposed by the circumstances, we will not slacken in the endeavours that we have already undertaken for the benefit of other parts of the world, particularly those in favour of the least developed countries of Sub-Saharan Africa, and to which we have made a commitment in our programme of work. We cannot ignore and we ought not neglect the specific needs of each region or group of countries

I wish to conclude by underlining that despite the crisis - or perhaps because of it, insofar as it has opened the eyes of many with regard to the economic importance of tourism - the tourism sector is gaining worldwide recognition, and our work on the tourism satellite account has contributed to this. After all, despite the crisis, tourism has continued to be among the top export categories at the international level, with receipts of 464 billion dollars in 2001. In 2002, decisive advances were made, with the successful celebration of the International Year of Ecotourism declared by the United Nations, and the inclusion of tourism in the Plan of Action adopted by the World Summit on Sustainable Development in Johannesburg. 

It is now internationally recognized as an important tool in the fight against poverty, and the STEP (Sustainable Tourism for Eliminating Poverty) initiative, undertaken in conjunction with UNCTAD, is aimed at enhancing this contribution. At the same time, the World Tourism Organization is itself growing in influence and visibility in the international community, and has begun its transformation into a specialized agency of the United Nations. We hope to complete this conversion by the end of the year, and to take the decisive step during our General Assembly in Beijing in the month of October. Beyond the Iraq crisis and upon its conclusion, we are convinced that the need for multilateral cooperation within the framework of the United Nations system will be felt more strongly and more urgently than ever. It is important that tourism be a stakeholder in such cooperation. (Francesco Frangialli, WTO Secretary-General  

War exacerbates Hong Kong’s woes
Shock: Rugby Sevens in Hong Kong may be axed

TTG Asia  -  The hostilities in the Middle East have added to the already depressing scenario in Hong Kong caused by pneumonia.

Hong Kong Hotels Association executive director, Mr James Lu, said the outbreak of war immediately affected hotel bookings, especially from longhaul markets. "There is already a global reduction in travel desire for both business and pleasure by air away from home base," Mr Lu said.

"While this is understandable, a prolonged war may even cause longer periods of business slowdown for the hotel industry in Hong Kong. It will also affect the world economy and make the recovery process more unpredictable."

Hong Kong Association of Travel Agents chairman, Mr Michael Wu, said the travel industry had expected the war for months and was prepared for the effects. He said immediate cancellations were about 20 per cent.

Longhaul bookings were usually made three months in advance; people had already anticipated the invasion of Iraq and taken that into account when making travel arrangements. Mr Wu said agents were offering postponements of 14 to 28 days to groups which had wanted to delay their tours to Hong Kong.

Shock: Rugby Sevens in Hong Kong may be axed

Hong Kong travel industry has been thrown into turmoil with the likelihood that the world-famed Rugby Sevens are in doubt.

France and Italy have told organisers of the event that they are not coming, citing the pneumonia scare rather than war as the reason.

The mighty All Blacks of New Zealand, who have won more Sevens crowns than any other team, are also likely to withdraw from the event. If they do, it will sound the death knell for this year’s championship.

The gala three-day event is scheduled from March 28-30 and all tickets to the 48,000-seat stadium have been sold. About 15,000 overseas fans were expected. Regional and international business meetings are always scheduled for the period, with executives twinning the glittering rugby festival with corporate affairs.

Young hotel or old hotel? Where is the better salary?

Written By: Keith Kefgen & Christopher Mumford    HVS International

Does age matter? We live in a society that is increasingly concerned with age and, in particular, about combating the ageing process. Like people, some hotels age more gracefully than others, some, like the Waldorf Astoria in New Yo rk, grow into legendary grandes dames.

With this in mind, we questioned whether there is a disparity between old hotels and new hotels in terms of executive compensation and, beyond that, if an opening hotel commands a premium in compensation. Do younger hotels compensate better, do the challenges of older hotels command higher remuneration, or do hotels all pay the same regardless of age?

The below graph illustrates the findings from our compensation survey of first class and luxury hotels in Chicago, New York and San Francisco. We compared the average General Manager total cash compensation (base salary plus bonus) against hotel property age.

As the results show, General Managers of luxury hotels older than 30 years are paid slightly more than their peers at younger hotels. Our research also showed the same results in a comparison of other executive positions such as Director of Sales and Marketing and Controller, as well as the size of bonus payments relative to property age. From our survey range, hotels of 30 years and more are typically larger hotels (an average of 759 rooms against 641 for hotels between 15 and 30 years) which may partly explain their marginally higher average salaries. At first class hotels, remuneration is fairly consistent across the range.

But what about hotel openings? Is there not a premium in remuneration to compensate for what one General Manager described as “giving birth sideways”? Do hotel companies restructure executive compensation for openings? For such a critical event, do hotels have to pay above market price in order to attract talent?

Not so, according to Jim Kuthy of Omni Hotels, “We do not find there is an overriding need to pay premiums for hotel openings. With internal candidates, we are usually transferring them and promoting them for a job well done and they receive the appropriate salary increase as part of that promotion, and for external candidates we generally pay market rate.” Jim goes on to point out that there are other ways to remunerate executives for an opening than by just increasing base salary, “We structure an incentive scheme outside of the company norm, for example, by putting into effect a one year incentive scheme based on criteria such as pre-opening booking levels or post-opening service satisfaction levels.”

The same holds true at Starwood Hotels and Resorts, which has a pre-opening policy of adhering to standard salary policies for opening properties, i.e. the remuneration package at an opening hotel is the same as that for an existing property. There may be occasions however when tips for line staff are augmented during the opening phase to offset loss of gratuities as the hotel’s business levels get up to speed.

One seasoned hotelier with experience of two openings in New York City however warns that once down that road there is no turning back. Paying over the market tariff at line level can severely jeopardize a hotel’s profitability in the future. With regards to executive compensation, he agrees that you have to be competitive but premiums are not necessary. Rather he feels that there are usually enough people who are interested in joining a new hotel or a new company that an appropriate market value salary and benefits package will negate any need to offer a substantial premium.

There are variations by market and market conditions however. Remote resorts, for example, may find they need to pay a premium to attract the necessary talent.  One luxury hotel that opened in a major US city within the last year found that they were hiring in late 2000 at the peak of a strong economy and that the only way to attract someone happy with their current employer was either by establishing a strong personal connection, or by offering an attractive financial incentive. In addition, there are occasions when, for an opening, the best candidate for the job is someone who is already in a similar position and has the relevant experience for the task rather than someone coming in to learn the job. In these instances it may be necessary to increase the financial reward to offset the subsequent delay in career promotion.

Hotel openings are generally regarded as highly challenging, stressful, demanding, yet ultimately rewarding, assignments and many opening teams suffer from burn-out and are soon replaced post opening. While it would seem that there could be a case for compensating executives for these inconveniences, our research indicates that remuneration levels at opening hotels are subject to the same criteria as at existing properties. Furthermore, it appears that salary levels are generally highest at large, well-established properties - proof that old age can have its benefits.

Keith Kefgen
President 

Christopher Mumford
Managing Director

HVS Executive Search
372 Willis Avenue
Mineola, NY  11501
516-248-8828 Ext. 220
516-742-1905
 

Six Continents leads the way with its Corporate Responsibility Programme

The results of Six Continents PLC's (www.sixcontinents.com) performance in the Business in the Community's (BITC) 1^st Corporate Responsibility Index were announced at the end of last week at a conference at the Millennium Conference Centre, London. 

This new Index, for the first time, provides a framework for comparing the management processes and performance of a range of companies in different sectors with those of their peers. Six Continents  PLC is the first hotel company to join as founder member¹. 

Six Continents PLC was awarded full marks for corporate values, leadership, risk management and policies in the Corporate Strategy section of the Index.

Richard Winter, Company Secretary & General Counsel, Six Continents PLC, said: "The BITC Corporate Responsibility Index provides evidence of real commitment to environmental and social issues by companies in the UK. We are proud to be a founder member and to lead the way for our sector by being transparent about our responsible business practices.  The Index is an important benchmark to monitor our performance across the whole corporate and social responsibility agenda." 

The results of the 7^th Business in the Environment (BiE) Index of Corporate Environmental Engagement were also announced.  Six Continents PLC was awarded sector leader status in the Leisure, Entertainment and Hotels sector, demonstrating leadership and commitment to the environment.  The company was awarded full marks in the areas of leadership, policy, objectives, targets, employee communication and training and stewardship.  

Richard Winter added: "We are pleased with our results this year but are committed to constantly evaluating our performance with a view to making future improvements at both a strategic and operational level."

¹ Six Continents PLC is included in the Leisure, Entertainment and Hotels sector.

About Six Continents

Six Continents PLC is a leading global hospitality group with over 3,300 hotels across nearly 100 countries and territories and over 2,000 restaurants and bars in the UK and Germany.

-           Six Continents Hotels is a leading global hotel group whose brands include InterContinental Hotels & Resorts, Crowne Plaza Hotels and Resorts, Holiday Inn, Express by Holiday Inn and Staybridge Suites.  It owns, operates or franchises more than 3,300 hotels and over 515,000 guest rooms in nearly 100 countries and territories around the world. 

-           Six Continents Retail is the UK's leading managed pubs, bars and restaurants group with over 2,000 outlets including brands such as Vintage Inns, Harvester, Toby, Browns, All Bar One, It's A Scream, O'Neill's, Edward's, Ember Inns and Goose.

-            Britvic Soft Drinks is one of the leading UK producers and distributors of branded soft drinks with brands such as Tango, Robinsons, Britvic and the UK franchise for Pepsi.  

Shangri-La/Earnings: Surge in 2002 profit despite modest revenue growth

(Dow Jones)--Hong Kong-listed hotel operator Shangri-La Asia Ltd. Friday announced a 58% surge in 2002 net profit to US$93.1 million despite posting only modest revenue growth.

However, the result still came in below a consensus forecast of US$104.4 million from four analysts surveyed by Multex Global Estimates.

The hotel operator said revenue rose marginally to US$600.5 million from US$ 599.6 million in 2001.

Its 2002 earnings growth was reined in by realized losses of US$14.4 million on investments and the booking of a US$13.3 million provision for properties under development.

It declared a final dividend of 5 HK cents, down from 8 HK cents in 2001.

JJW Hotels & Resorts adds Hotel Pierre, Paris to its expanding portfolio

It was announced that JJW Hotels & Resorts, the hotel group subsidiary of MBI International & Partners had purchased the Hotel Pierre Paris, for the sum of €11M.  This hotel will be known as Median Paris Arc de Triomphe.

Located in the heart of the 17eme arrondissement, within minutes from the Champs Elysees, the 50 room hotel will become the flagship of the Median brand and complement the portfolio which has recently been strengthened with the newly re-branded Median Paris Porte de Versailles and the forthcoming re-opening of Median Paris Saint Lazare. Median Hotels represent the JJW Hotels & Resorts mid-range activity, offering conveniently located, top of the range three star properties with F&B facilities.

Hotel Median Paris Arc de Triomphe is the latest acquisition in JJW Hotels & Resorts 75 strong group which also includes such prestigious properties as the Five Star The Grand Hotel Wien in Austria and the Pinheiros Altos luxury golf resort in Portugal.

Malta: Hoteliers asked to rethink strategies

Hoteliers were yesterday asked to think twice before lowering room rates and to safeguard the bottom line. 

“Depleting rates does no one any good and only hurts the bottom line,” Malta Hotels and Restaurants Association president Winston Zahra Jr said yesterday.

Speaking to the trade at the InterContinental Hotel, Mr Zahra emphasised that lower rates did not lead to an increase in volumes and statistics confirmed this.

“The MHRA council feels strongly that rate depletion helps no one and it appeals to members and others in the industry to think hard and consider any decisions regarding room rates. We must work collectively because depleting rates hits the bottom line,” Mr Zahra said.

The MHRA yesterday announced the results of a hotel survey for the fourth quarter of last year, covering the period October to December, and prepared by consultants Deloitte & Touche. The survey also included data for 2002, as a whole.

Presenting the results, Raphael Aloisio, said that hotel performance for the last quarter of the year had generally improved with occupancy rates remaining stable and rooms rates increasing.

“Consequently, overall turnover levels have improved. Tourist arrivals during Q4 increased, but have not yet recovered to their pre-11 September levels,” Mr Aloisio explained.

For the year as a whole, he added, while lower volumes led to lower occupancy levels, average room rates rose. However, Deloitte & Touche said, the improvement was generally not good enough to compensate for the fall in volume, “so that overall revenues fell in the three- and four-star sectors and increased slightly in the five-star sector”.

A similar differentiation between the three- and four-star sectors compared to the five-star sector is also seen in terms of Gross Operating Profit margins and profitability levels, which only improved in the five-star sector.

While trends have improved, performance, the MHRA said, was still below pre-11 September levels.

In the fourth quarter, there was a stable aggregate occupancy of 57.6 per cent against last year’s occupancy of 57.5 per cent, with a growth in average room rates of 8.7 per cent. The five-star market showed the most healthy performance with an eight per cent growth in occupancy and a 1.5 per cent growth in average rates. The four-star markets registered a one per cent drop in occupancy and a 1.8 per cent increase in rates. The three-star hotel sector posted a two per cent drop in occupancy, however experienced a very healthy 8.4 per cent growth in average room rate.

Taking the year as a whole, there was a 3.5 per cent drop in occupancy with aggregate occupancies falling from 69.3 per cent in 2001 to 65.8 per cent in 2002. This decline was offset by a 3.3 per cent increase in the average achieved room rate.

Tourist arrivals for the last quarter of 2002 showed a marked improvement over the corresponding period in 2001. The survey estimated that, based on available data, tourist arrivals for Q4 increased by seven per cent, but this was still around four per cent lower than pre-11 September levels.

“Estimated tourist arrivals for 2002 as a whole are 1.13 million, a decline of four per cent over 2001 and nearly seven per cent over 2002,” Deloitte & Touche said.

Mr Zahra said that indications from a telephone survey carried out by the MHRA for the first quarter of 2003 show “that occupancy rates during January, February, March and April are in the same region as last year, however there are signs of rate depletion especially in the four- and five-star sectors.”

Prospects for 2003 were, however, upbeat, although these have now been dented after the United States initiated military action against Iraq on Thursday morning.

Mr Zahra said the industry was clearly concerned at the negative impact this conflict would have, “coming so soon after 11 September”.

In a short address, tourism minister Michael Refalo said that last year’s forecasts were correct and that Malta had recovered from the trauma that other destinations were still suffering. He said major tour operators were edgy, even more so with another Gulf war just beginning.

Dr Refalo said the government and MTA were monitoring the situation in Iraq on a regular basis. He augured that the conflict in the Gulf would not last long, thus giving impetus and confidence to the industry for the summer months

Dubai hotels hope to bounce back

Gulf News  -  Hoteliers in Dubai have been prepared for the war in Iraq so they are not too surprised by a slight drop in business. While occupancy levels are not as high as they were this time last year, hotels are confident the market will bounce back quickly.

Said Marc Dardenne, general manager, Ritz Carlton Dubai."We are at present 40 per cent occupancy and this time last year we were 85 per cent."

Ahmed Baki, area marketing director for Sheraton, said: "Definitely things have dropped a little bit - but not as much as expected. Different markets such as the European and U.S. business travellers have dropped a little."

The story is the same at Fairmont Dubai. The hotel has "obviously been a bit quieter than usual," said Claire Malcolm, public relations director.

Dardenne said: "We are making sure that the people are being well cared for. There is nothing much more we can do until the war calms down and we can get back to business. In the meantime we are doing things like looking after rooms and maintenance."

Across town near the airport, the Al Bustan Rotana Hotel is faring well. "We are not too busy but everything feels normal," said Helana Al Sayed, public relations manager. 

"We are still getting people at the hotel on business and holidays. Most of our guests are coming from the UK."

The Sheraton - which has a mix of hotels across the emirate  - is also "doing well", said Baki.

In Bur Dubai, Four Points Sheraton is doing well thanks to the business mix it attracts. Sheraton Deira is also "not in bad shape," though Sheraton Jumeirah Beach is "suffering a little bit" due to a drop in leisure travellers. 

Baki is confident that Dubai's tourism industry will bounce back quickly. "This market will be quick to recover when the crisis is over. This is because it is established as one of the premier leisure destinations." 

At Fairmont, occupancy levels are about 50 per cent. "Our main priority at the moment is the safety of our staff and guests. We expect that people will lay low for the next week," said Malcolm.

Malcolm, who is expecting the hotel to remain quiet over the next few weeks, said that many people had deferred their stay instead of cancel it outright.

"Many people are putting off their stays until April - just until things are clearer."

In downtown Dubai, Astoria Hotel is still doing good. "So far so good, we have not yet had any cancellations and everything is going on as normal," said Kamlesh Rajani, manager. "Most of our guests are from India, about 50 per cent, but about 30 per cent are from the UK and Europe."

At the Holiday Inn Bur Dubai the effects of the war are not yet "really" being felt, said Ziad Bassila, sales and marketing director, Holiday Inn Bur Dubai.

The hotel - which is running at between 60 per cent to 70 per cent occupany - had four cancellations on Wednesday night as opposed to 47 arrivals.

NZ Tourism looks on bright side

Stuff.co.nz  -  The tourism industry is optimistic that war in Iraq will not lead to a big downturn, as new figures show that 5 per cent more tourists arrived last month.

Statistics issued yesterday showed that 222,200 tourists came to New Zealand in February - up 10,000 on the same month last year. That brought visitor arrivals for the 12 months to February to 2.07 million, a 7 per cent increase on the previous year, Statistics New Zealand said.

Industry leaders are relying on the experience of the 1991 Gulf War and the September 11 terrorist attacks to predict there will be only short-term effects from the war in Iraq. Tourism New Zealand said visitor arrivals were largely unaffected by those events, with numbers from the top four markets of Australia, Britain, Japan and the United States remaining relatively stable through both periods. c

Chief executive George Hickton said: "The figures in fact indicate that war has less of an effect on tourism than significant economic events such as the Asian economic crisis in 1997-98."

Arrivals to New Zealand dropped 1.3 per cent after the Gulf War but surged to 9.6 per cent the following year. Arrivals also jumped 7 per cent in the year after the September 11 attacks.

Tourism Industry Association chief executive John Moriarty said there had been a trend for several weeks for travellers to delay booking till as late as possible.

The timing of the war - at the end of an "excellent" season - was fortunate for New Zealand. He predicted a small surge in domestic tourism as New Zealanders stayed close to home.

However, latest figures from Statistics New Zealand showed that two per cent more New Zealanders left the country for short trips last month. Almost 64,000 people went overseas. Australia was the most popular destination. But 400 fewer people went to the United States than in February 2002.

Florida Tourism thriving despite war -- for now

(UPI) -- Despite the war in Iraq, it's so far so good for March in Florida where the month is traditionally one of the biggest for the tourist industry.

Elsewhere, the industry is nervous about the summer season, but there are pockets of optimism.

"We know there is going to be an immediate impact from the war because we've already been feeling the impact of the uncertainty of war," said Cynthia Keefe, spokeswoman for the Travel Industry Association of America.

"The booking cycles are shorter and shorter. People are putting off making reservations until the last minute," she said. "The good news is that the industry is accommodating the traveling public with lower fares and relaxing cancellation policies."

She said if the history of the Sept. 11, 2001, terrorist attacks repeats itself, the industry will be back on track once the outcome of the war is certain.

In Florida, not much is off the track yet. Theme parks in the Orlando area were jammed and lines were long this week as tourists didn't want to lose all the money they already have invested in their vacations.

"We were standing in line (at Walt Disney World), and we were having a conversation about biochemical warfare," said Maria Muscente of Ithaca, N.Y.

"That what the world has come do," said her husband, Paul Muscente.

In Miami, cruise lines are making a slight comeback.

"We're seeing a slight uptick in business on the cruise side. We're still selling cruises for the short term," said Keith St. Clair of TraveLeaders Group, a Coral Gables, Fla., travel agency.

"I think there's an honest feeling life has to go on."

The hotel industry in south Florida is also stable, and there are few reports of cancellations.

Orlando Velasquez, general manager for Holiday Inn South Beach, said he is on schedule for a sold-out March.

Christopher Pollock, president of the Greater Fort Lauderdale Lodging Association, said he has heard of no cancellations related to the war. He said occupancy levels at small hotels remained high.

The Las Vegas Convention and Visitors Authority has temporarily suspended television advertising because of the war.

"Any ads we had scheduled to run the week of the 19th have been pushed back until the week of the 26th," said Sophie Poulter of the R&R Partners agency.

"Television is going to be overrun with war coverage, and that's not necessarily the best venue for us to be getting our message out," said authority spokeswoman Erika Brandvik.

But Brandvik said there no reports of an unusual number of cancellations at Las Vegas resorts.

"We understand there is going to be an impact, but at this point, we're not feeling it," she told the Las Vegas Review-Journal.

Another winter hot spot for tourism, Palm Springs, Calif., also is doing well so far.

Most travel services in the desert said this week was "pretty much business as usual."

The Palm Springs visitor's center, in fact, said it was busier than normal.

In Hawaii, officials said there were no reports of any cancellations, but they said the number of visitors from Japan had been declining recently.

Montana, celebrating the 200th anniversary of the Lewis and Clark expedition, does not expect the war to affect tourism.

Officials say that because of its location, Montana ranks high when it comes to security, and if gas remains available, the state should weather the war nicely.

The Travel Industry Association said there are more postponements than cancellations, and that's a good sign.

It also points out that the AAA and the American Petroleum Institute said fuel is adequate albeit expensive.

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