Asian Hotel Market:  A Very Fragile Recovery Process

HotelBenchmark Special Report - April 2003

Whilst the performance of the Asian hotel industry mirrored that of the rest of the world during 2001, the region responded with some different tactics during 2002, which appear to have stimulated performance. At the end of 2002 it appeared as though the region may well have reached the bottom of the cycle and recovery was looming on the horizon. However, the conflict in Iraq and the recent SARS virus will undoubtedly have hindered the fragile recovery process.

Following the financial crisis of 1997/8, the Asian hotel market had began recovering, albeit slowly. However, a number of events during 2001 - the overall global economic slowdown, particularly in the US and Japan, and then the unprecedented events of September 11 – conspired to dampen hotel performance across the world. The situation was exacerbated because the millennium year, with its high demand for entertainment and accommodation, was an unprecedented affair, and therefore the comparative 2001 hotel performance was always going to be challenging. But even suffering from a holiday hangover, no one could have seen how badly things would turn out.

In this report we analyse how Asian hotels have performed post 9/11 compared to the rest of the world and illustrate how the industry may well have reached the bottom of the cycle, with a potential recovery looming, depending upon the fallout from the recent war in Iraq and the SARS epidemic. We analyse the relative performance of the various sub-regions – Northeastern Asia, Southeastern Asia and Australasia - and comment on reasons for the different performance of these regions. All data to compile this article has been extracted from the HotelBenchmark Survey by Deloitte & Touche. This database tracks the monthly performance of some 295,000 rooms across the Asia Pacific region and is widely regarded as providing the industry with the most comprehensive, authoritative and independent assessment of industry trends.

During 2000, the World Tourism Organisation estimated that international tourism grew by 45 million arrivals, reaching unprecedented levels. Within East Asia and the Pacific, international visitor arrivals grew 10.5%, reversing a two-year declining trend. Pre 9/11, the World Tourism Organisation estimate that visitor arrivals to the region were continuing to grow strongly, up 9.9% and well ahead of the global growth rate of 2.8%.  Post 9/11 however, visitor arrivals to the region fell 10.3%, and although this loss was substantial, it was not as marked as the declines experienced in other regions of the world - notably the Middle East and the US where the number of international visitor arrivals fell 30% and 24% respectively. To a certain extent the region benefited from being perceived as a relatively “safe” destination, as well as having a large intra-regional demand base (accounting for 70% of arrivals to the region), that was generally less effected than international demand. Preliminary 2002 data from the World Tourism Organisation suggests that international arrivals actually grew 3.1% to reach 715 million trips, (the first time ever that international arrivals have exceeded the 700 million mark).  For the first time, Asia Pacific stole the number two spot from the Americas reporting 130 million international tourist arrivals for the year, a 7.9% increase over the previous year.  

Although the events of 9/11 are widely attributed for the industry’s weak performance during 2001, in reality, the pressure was felt a lot earlier in the year. Global revPARs when measured in US dollars, generally began to drop in April 2001, although for Asian hoteliers negative revPAR growth was reported in all but one month (February) during 2001 (see Chart A). During summer 2001, hotel revPARs remained under pressure.

There was a slight recovery in August, which gave the industry hope that the key conference months - and the most profitable - of September and October would be better than initially forecast. Then, the events of 9/11 happened, leading to double-digit revPAR declines. Not surprisingly, in September it was the US m arket that was most affected with revPAR falling 23% compared to September 2000. Asia Pacific reported its worst declines in September too, with a revPAR fall of 19% compared to the previous year. Hotels in Europe and the Middle East experienced a time lag, with the deepest reversals reported in October and November. Within Europe, revPAR fell by 14% in October before recovering marginally in November and falling back again by 13% in December. With the prospect of retaliation against al Qaeda in Afghanis tan, demand for hotels in the Middle East faltered, with revPAR declines of 35% and 37% reported in October and November respectively.
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Within Asia there was a marked difference in the performance of the various sub-regions. We have analysed the performance of the three major sub-regions Northeastern Asia, Southeastern Asia and Australasia (as defined by the World Tourism Organisation) to illustrate this fact. 

As can be seen from Chart B, the Australasia market started to decline in April 2000 and remained in decline until April 2002. The exceptional month being September 2000 when Olympic fever boosted both occupancy and average room rates to usually high levels.

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Hotels in Northeastern and Southeastern Asia managed to maintain positive revPAR growth until March 2001 when they fell into decline until April 2002. Hotels in Southeastern Asia and Australasia were most affected by the events of 9/11. In November 2001 hotels in this region reported a 27% revPAR decline. One of the reasons for this is that significant decline in demand occurred in Indonesia, where, following the civil unrest precipitated by the events of 9/11, the US government issued a travel advisory as security fears were heightened. As a consequence occupancy levels in the last four months of 2001 fell 24% in Bali and 13% in Jakarta.

As both Charts A and B reveal, the industry has experienced positive revPAR growth particularly in the last quarter of 2002, however this is not surprising given the poor comparables for 2001. To assess whether the industry is really recovering from the events of 9/11 we have furthered analysed performance on a moving/rolling 12-basis.  This technique removes any seasonal bias from the equation and reveals that all parts of the world are still trading at a revPAR deficit to Jan 2000 levels (see Chart C).
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Although the decline in revPAR appears to have bottomed out in all regions of the world it is noticeable that Asia was the first region to recover, with revPAR beginning to make an improvement from April 2002 onwards. Europe turned the corner in May whilst the Middle East had to wait until July to see an improvement in revPAR. The recovery has taken even longer in the US where it took until August 2002 for the downward spiral to be halted. As a result of the swifter recovery, by February 2003 Asian hotels were achieving revPAR levels virtually comparable to January 2000 levels. This compares to a 4.1% revPAR deficit (US$2.11) for the US, a 4.1% revPAR deficit (US$3.30) for Europe and a 6.1% revPAR shortfall (US$2.79) in the Middle East over the same period.

So what tactics have Asian hotels adopted to enable them to recover their performance more swiftly than other areas of the world? Analysing the components of revPAR – occupancy and average room rate – it is apparent that on a rolling-12 basis Asia is the
only region of the world to have experienced occupancy increases between January 2000 and February 2003. Occupancy levels were up 5.2% to 70.3% in February 2003 compared to 66.7% in January 2000, and in fact February 2003 occupancy levels were
on a par with February 2000 levels, indicating that demand across the region was being sustained. However, the improvement in occupancy has had a cost as average room rates across the region, when measured on a rolling 12-basis have tumbled 5.0%
between January 2000 and February 2003. At US$91.35, average room rates are US$4.58 below January 2000 levels and US$5.43 below the September 2000 high of US$96.78. In contrast, within Europe and the Middle East, occupancy levels have fallen 5.2% and 2.7% respectively. In the Middle East this has combined with a decline in average room rates of 3.5%. Both the US and European markets have defied the odds by experiencing positive average room rate growth (up 1.9% and 1.2% respectively) during the period January 2000 to February 2003. Whether it has been price discounting that has stimulated demand within Asia, or whether the regions’ perception as a relative safe haven has been instrumental will never be known, but if investors are to realise value in their transactions then average room rates must continue to grow, as they have been for the last six months.

To further understand the dynamics of the Asian market we have analysed performance on a rolling-12 basis for the three major sub-regions as illustrated in Chart D. In February 2003, both Northeastern and Southeastern Asian were reporting revPAR levels above January 2000 levels at 5.7% and 4.3% respectively, the Australasia market was still under pressure with revPAR 15.6% below January 2000 levels. The difference is in part explained by the relative strength of the Australian dollar to the US dollar, as in local currency the revPAR differential was just 3.3%. Both the Northeastern and Southeastern regions have exhibited similar trends in terms of growth (decline and then recovery) whilst the Australasia market entered a sharp decline in March 2000 experiencing a US$11 fall in revPAR before recovery commenced in February 2002. As of February 2003 Australasia revPAR is still some US$10 below the high recorded in March 2000.  As a consequence, average room rates across the region are some US$15 below the highs recorded in February 2000.
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Chart D reveals a wide discrepancy between the revPAR levels being reported by the Asian sub-regions. Over the 38 months from January 2000 to February 2003 Northeastern Asian revPAR has averaged US$84 compared to US$45 revPAR for Southeastern Asia hotels and US$56 for Australasia hotels. The main reason for the differential in revPAR is due to the average room rates achieved by the different regions.  Hotels in Northeastern Asia (which includes the cities of Tokyo, Hong Kong and Seoul) on average achieved room rates of around US$114 over the 38-month period compared to the US$71 average room rate reported by hotels in Southeastern Asia and US$78 for Australasia hotels. An analysis of the year-end 2002 data from the HotelBenchmark Survey for 22 cities across Asia reveals that the top six performing cities, with an average room rate over US$100, are all located in Northeastern Asia, whilst the five of the six worst performing cities are located in Southeastern Asia.
 
 

Source: HotelBenchmark Survey by Deloitte & Touche

Generally speaking, hotels in Northeastern Asia achieve higher occupancy levels than their Southeastern Asia counterparts, with average occupancy levels between January 2000 and February 2003 being 74% for Northeastern Asia hotels compared to 63% for Southeastern Asia hotels. One of the reasons for this is that Northeastern Asian hotels are located in the hub of the financial activity of the region (the exception of the Lion City of Singapore) and so attract a robust mix of commercial and touristic demand from both international and intra-regional travellers. Additionally, many of the Southeastern Asia markets are still reeling from an over-supply situation caused by rapid development in the 1990’s. It should also be noted that many of these countries suffered from currency devaluation relative to the US dollar during the Asian financial crisis in the 1990’s, which is one reason why average room rates in relative terms are lower than the rest of Asia.  

Despite this, many of the Southeastern Asian cities have reported the best revPAR improvement year-to-date over 2001 levels according to the HotelBenchmark Survey – December 2002. Jakarta has been the region’s star performer during 2002 with a 27% improvement in revPAR driven by a 7% advance in average room rates and a 19% rise in occupancy. Admittedly, at 44%, hotels in Jakarta still have the lowest occupancy level of any market in Asia, but the city continues to try to absorb the new supply added during the late 1990s and improve its image abroad caused by political and civil unrest.  Encouragingly, the city appears not to have been affected by the Bali bombings in October, which resulted in November demand on the island of Bali falling 62% to reach occupancy levels of just 15%. Consequently, Bali reported a 13% decline in revPAR (when measured in US dollars) for the year-end 2002, one of the poorest performances of any city surveyed.

Boosted by the Americas Cup, hotels in Auckland sailed into second place as one of the regions best performing markets in 2002 with a revPAR increase of 28%, driven by a 8% rise in occupancy and a 19% increase in average room rates. Ho Chi Minh City, Shanghai, Kuala Lumpur, Bangkok and Beijing all reported double digit increases in revPAR when measured in US dollar terms. Seoul, Sydney and Xian were the only other cities to record positive revPAR growth. In total, ten cities reported positive revPAR growth in 2002 when measured in US dollar terms and ten cities showed an improvement in average room rate. Only six cities reported declines in occupancy for the year, with Osaka reporting a 10% fall in demand. Whilst part of the fall in demand is attributable to the fact that the city lost occupancy during the 2002 Football World Cup - occupancy levels fell 25% as displaced domestic demand opted to stay away - the performance of Osaka must be taken in context of the exceptional performance that the city witnessed during 2001 following the opening of Universal Studios, and the fact that the city appeared to be unaffected by the events of 9/11. Meanwhile both Seoul and Tokyo benefited from World Cup Fever, with revPAR increasing 37% and 26% respectively during the month of June.

The future prospects for the Asian hotel industry are inextricably linked to the profound change socially, politically, economically, demographically and environmentally that is occurring in the region. A number of leadership changes have already occurred and several more are likely. Safety and security is now a driving force in travel and tourism, and countries that continue to be troubled by political unrest are likely to lose out on the potential economic benefits of tourism. With the region stimulating 60% of global tourism demand and travellers to the region spending over US$170 billion annually, the travel and tourism product is clearly an integral part of many countries economies. By 2020 the World Tourism Organisation predicts that China will be the world’s number one tourism destination and fourth major source of tourists. Australia is one country banking on the future of the Chinese inbound market and hoping that by 2012 the number of Chinese visitors will skyrocket to 1.4 million, making this Australia’s biggest tourism market.
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Against this backdrop one could have anticipated that hotel performance should continue to improve during 2003, particularly in China where 2002 visitor arrivals were 10% ahead of 2001 levels. That said, the fallout from the U.S.-led war in Iraq and health fears wrought by a killer outbreak of atypical pneumonia (SARS) are currently having a devastating impact on Asia’s travel industry. Tourists are staying away, some flights to the region have been cancelled, hotel bookings and airline reservations are plummeting and fewer people are attending international sporting events and trade exhibitions. The prospect of a U.S.-led war in Iraq had put consumers on edge prior to the onset of hostilities and in the short term we can expect continued fear of travel due to the possible threat of retaliatory terrorism. This coupled with the downward spiral in consumer confidence is likely to further delay recovery of the travel industry and to put a damper on spring travel. A swift resolution to the conflict in Iraq is clearly desirable, as the continual uncertainty is impacting booking levels because consumers are unwilling to commit to future bookings. Thus, many of the emerging patterns in leisure travel can be expected to continue and perhaps even intensify. As the industry continues to live with uncertainty it must swiftly adjust to changing consumer buying-patterns and in particular the shorter lead-time of bookings through new and developing distribution channels

About the Author:

Julia Felton is director of Deloitte & Touche’s travel, tourism and leisure team based in London. In particular she was responsible for the launch of the HotelBenchmark Survey, which is now firmly established as providing the industry with the most comprehensive and authoritative source of independently collated monthly performance data. The survey monitors the performance of over 6,000 hotels across the world in terms of occupancy and average room rate and 14-monthly bulletins are generated. Within Asia the survey tracks the performance of some 1,150 hotels. Anyone wishing to learn more about the survey should e-mail us at HotelBenchmark@deloitte.co.uk or visit our website at www.HotelBenchmark.com

Coronavirus never before seen in humans is the cause of SARS

Unprecedented collaboration identifies new pathogen in record time

GENEVA -- Today, the World Health Organization announced that a new pathogen, a member of the coronavirus family never before seen in humans, is the cause of Severe Acute Respiratory Syndrome (SARS). The speed at which this virus was identified is the result of the close international collaboration of 13 laboratories from 10 countries. While many lines of evidence have found strong associations between this virus and the disease over the last weeks, final confirmation came today.

“The pace of SARS research has been astounding,” said Dr. David Heymann, Executive Director, WHO Communicable Diseases programmes. “Because of an extraordinary collaboration among laboratories from countries around the world, we now know with certainty what causes SARS.”

The successful identification of the coronavirus means that scientists can now confidently turn to other SARS challenges. For example, various laboratories continue to work to unravel the genetic information of the SARS virus and compare the sequences obtained from viruses in different parts of the world. Experts are gathering at WHO this week to map future work on SARS.

“Today, the collaboration continues as top laboratory researchers have come to WHO to design the next steps, a strategy for transforming these basic research discoveries into diagnostic tools which will help us to successfully control this disease,” said Heymann.

This collaboration has brought together leading scientific expertise, and was established after WHO issued a global alert on SARS on 12 March 2003. The priority has been to find the cause and to develop diagnostic tests. Two laboratories in China recently joined this network of laboratories from Canada, France, Germany, Hong Kong Special Administrative Region of China, Japan, the Netherlands, Singapore, the United Kingdom, and the United States of America.

“Today, the first part of the mission of our network has been fulfilled, as researchers have both detected a hitherto unknown virus and established it as the cause of SARS. The new coronavirus has been named by WHO and member laboratories as “SARS virus, ” said Dr Albert Osterhaus, the Director of Virology at Erasmus Medical Center in Rotterdam. Erasmus completed the work to definitely prove that the new coronavirus causes SARS.

Over the past three weeks, due to the urgency surrounding the worldwide threat to health of SARS and early indications this was a new member of the coronavirus family, research has proceeded under the assumption that SARS was caused by a new coronavirus.

The 13 laboratories have been working on meeting Koch’s postulates, necessary to prove disease causation. These postulates stipulate that to be the causal agent, a pathogen must meet four conditions: it must be found in all cases of the disease, it must be isolated from the host and grown in pure culture, it must reproduce the original disease when introduced into a susceptible host, and it must be found in the experimental host so infected.

Credit for the coronavirus findings, which definitively pinpoints the cause of SARS, is attributed to the 13 laboratories, working in conjunction with WHO.

“The people in this network have put aside profit and prestige to work together to find the cause of this new disease and to find way new ways of fighting it,” said Dr Klaus Stöhr, WHO virologist and the coordinator of the collaborative research network. “In this globalized world, such collaboration is the only way forward in tackling emerging diseases.”

WHO and the network of laboratories dedicate their detection and characterization of the SARS virus to Dr Carlo Urbani, the WHO scientist who first alerted the world to the existence of SARS in Hanoi, Vietnam, and who died from the disease in Bangkok on 29 March 2003.

For more information contact:

Dick Thompson - Communication Officer
Communicable Disease Prevention, Control and Eradication
WHO, Geneva
Telephone: (+41 22) 791 26 84
Emaithompsond@who.int

Singapore Visitor Arrivals 1 - 7 April 2003

AsiaTravelTips.com  -  The first seven days of April saw a decline of 78,000 (-56%) in visitor arrivals to Singapore, largely due STB said to weak travel sentiments as a result of SARS and war. All major markets registered double-digit decreases in arrivals, with Indonesia, Japan and Malaysia recording the largest absolute declines.

Visitor arrivals from Japan dropped by 58% or 7,300, contributed by a reduction in seat capacity by airlines and the widespread media coverage on SARS in affected areas, including Singapore.

SARS, coupled with a reduction in air capacity, resulted in a 61% or 5,900 decline in arrivals from Australia.

Compounding effects of war on Iraq and SARS, and weak economic circumstances in the USA had a significant impact on arrivals (-67% or 3,700) to Singapore.

The increasing number of atypical pneumonia cases in Hong Kong affected visitor arrivals to Singapore, with a dip of 82% or 5,500 compared to the same period last year.

Key visitor markets such as Indonesia, Malaysia, Thailand, Japan, USA, Canada, Australia, Korea, Brunei, Philippines, New Zealand, Spain, France, Belgium and Mexico have issued travel advisories or alerts against travel to SARS affected countries including Singapore, which contributed to significant decreases in arrivals from these markets.

Carlson Hotels Worldwide Seeks to Add Two Brands to Canada; Regent International Hotels and Park Inn

Carlson Hotels Worldwide, a major global hotel organization, announced an aggressive plan to grow the company's five hotel brands in Canada to more than 100 hotel locations during the next five years. 

Samuel Winterbottom, executive vice president of development for Carlson Hotels Worldwide, is leading the development initiative that will expand the presence in Canada for all of the company's hotel brands: Regent International Hotels, Radisson Hotels & Resorts, Park Plaza hotels, Country Inns & Suites By Carlson and Park Inn hotels.

“We see significant opportunity for growing our brands in Canada to serve both business and leisure travelers,” said Winterbottom.  “Each of our brands offers a distinctive value proposition to customers and proven business building systems for owners and investors by providing a complete range of hotel products and services including luxury, full-service and limited service.”

The company currently has 32 hotels operating in Canada under three brands: Radisson Hotels & Resorts, Country Inns & Suites By Carlson and Park Plaza hotels.  The five-year development plan calls for 75 more hotels, including the addition of two brands not currently represented in Canada: Regent International Hotels and Park Inn.  Globally, Carlson Hotels Worldwide includes 861 hotels in 66 countries.

Radisson Hotel & Resorts (www.radisson.com and www.radissoncanada.com):  As the Carlson hotel brand with the largest presence in Canada with 22 current locations, future development plans for Radisson include cities such as Edmonton, Fort McMurray and Banff, Alberta; Kamloops and Nanaimo, British Columbia; plus expanded presence is planned for Montreal, Quebec City, Toronto, and Vancouver.  Radisson is one of the world’s leading upscale, full-service hotel companies.  The brand derives its name from the famous French Canadian explorer, Pierre Esprit Radisson.

Country Inn & Suites By Carlson (www.countryinn.com):  One of the fastest growing, mid-tier lodging chains, Country Inn & Suites By Carlson is expected to build on its current nine properties in Canada by adding hotels in Edmonton;
Halifax; Vancouver; Victoria; Thunder Bay; and Montreal; plus expand its current presence in Calgary; Ottawa; Toronto; Winnipeg; and Saint John.  Country Inns & Suites received the highest ranking for guest satisfaction among mid-priced hotel chains with limited service in J.D. Power and Associates 2002 North American Hotel Guest Satisfaction StudySM.

Park Plaza (www.parkplaza.com): Park Plaza hotels, positioned in North America in the mid-scale to upscale segment of the full-service hotel category, has 34 hotels globally--including a hotel currently open at Vancouver airport.  Park Plaza is expected to build on its presence in Canada by focusing on cities such as Edmonton; Banff; Halifax; Montreal; Quebec City; and further expansion in Vancouver. 

The company’s development plans also include introducing two additional hotel brands to Canada, Regent International Hotels and Park Inn hotels. 

Regent International Hotels (www.regenthotels.com): One of the most respected brands in the luxury segment of the lodging industry, Regent will focus on development in cities such as Toronto, Montreal, and Vancouver. 

Park Inn (www.parkinns.com):  Positioned within the economy to mid-scale segment of the limited service hotel category in North America, Park Inn has its sights on several cities, including Thunder Bay; Halifax; Edmonton; Regina;
Saskatoon; Winnipeg; and Kamloops.

Reach of Carlson Organization Brings Strength to Carlson Hotel Brands

The strength of Carlson Hotels Worldwide is found in its award-winning business delivery technology, which reaches consumers globally through the Internet and travel professionals in 125 countries, providing instantaneous, convenient service.  The “Curtis-C” reservation system is accessible through airline reservations systems worldwide, toll-free numbers and the Internet.  The hotel brands’ award-winning Web sites offer an enhanced reservations process and online personalization features to help more Web users shop for a hotel, make or change a reservation or plan an event at any Carlson hotel worldwide.  Hotels can offer narrative information, photos, virtual tours and streaming video of their properties, in addition to local attractions, weather, maps and driving directions. 

The brands of Carlson Hotels Worldwide offer the hotel industry’s only patented online relationship program for travel agents called “Look To Book,” which allows them to automatically earn points toward valuable merchandise and incentive awards in return for booking Carlson hotels.  This exclusive, highly successful program includes travel agents in 106 countries worldwide.  It is one of the company's showcase programs for providing business support to its hotels. 

For consumers, the Gold Points Reward Network allows members to earn points based on dollars spent or nights stayed at any of Carlson Hospitality’s participating hotel, resort and restaurant locations in the Americas, Europe, the Middle East, Africa and at additional partner locations such as Thrifty Car Rental, Radisson Seven Seas Cruises, and Carlson Wagonlit Travel , just to name a few.  Members earn even more points when they visit www.goldpointscanada.com and shop the dozens of featured online retailers.  Gold Points can be redeemed for future hotel stays, restaurant dining, exciting travel offers and hundreds of quality, brand name products.

Carlson Hospitality Worldwide is one of the major operating groups of  Carlson Companies, Inc., a global leader in providing corporate solutions and consumer services in the marketing, travel and hospitality industries.  In addition to having an already strong hotel presence in Canada, the Carlson reach can be found in other divisions such as Carlson Wagonlit Travel and Carlson Marketing Group. 

Carlson Wagonlit Travel Canada (www.carlsonwagonlit.ca) is the second largest travel company in Canada with 850 employees serving both corporate and leisure customers in 300 wholly-owned and associate offices across the country.  Major clients for CWT Canada include:  3M Canada Inc., Alcatel, BP Energy, Bristol Myers Squibb, Canada Post, Clarica, Dupont Canada Inc, General Electric, General Motors of Canada Ltd., Honeywell Ltd., Nortel Networks, Oracle, UBS Bank Canada, Royal Bank of Canada, Toronto Dominion Bank, Ontario Government.  Carlson Hotels Worldwide is a preferred hotel supplier for Carlson Wagonlit Travel. 

In Canada, Carlson Marketing Group is ranked by Report on Business as the fifth largest marketing communications agency (www.carlsoncanada.com).  Carlson Marketing Group, a relationship marketing company, helps global Fortune 1000 clients solve their critical business issues and increase return on investment (ROI) by designing marketing strategies that build better relationships with the audiences that clients depend on for their success: employees, channel partners, and consumers.  Marketing Magazine ranks CMG Canada as #1 in strategic consulting, direct marketing and market research.  More than 450 people are employed in full service offices in Toronto and Montreal.  The client list includes leaders in automotive, financials services, retail, pharmaceuticals and consumer products. 

Minneapolis-based Carlson Hotels Worldwide, part of Carlson Hospitality Worldwide, includes five hotel brands, totaling 861 hotels in 66 countries.

Antara  -  The 52nd Conference of the Pacific Asia Travel Association (PATA) held in Nusa Dua, Bali, since April 13 was closed by PATA Chief Executive Officer Peter de Jong on Wednesday night with the issuing of a declaration.

In his speech at the conclusion of the 52nd PATA Conference themed "Cultural and Tourism, from Heritage and Legacy", former Thai Foreign Minister Dr Surin Pitsuwan said that culture always changed following the changes in the community.

"That is why tourism must be able to educate the local community to enable them to adopt the various changes," he said.

Besides introducing the new board of directors chaired by Richard Gordon, deputy minister for tourism of the Philippines, a traditional fashion show by Indonesian designer Mardiana Ika also entertained the delegates.

Dancers from Cheju Province, South Korea, performed cultural attractions. Cheju province will host the next PATA conference scheduled on April 18 to 22, 2004.

In the press conference, Gordon called on all members to strengthen cooperation and take more concrete action in view of recent global situations.

"The tourism industry still face difficulties next year. That is why PATA members must take proactive and creative action," he said.

Meanwhile de Jong said some 100 to 200 participants failed to show up at the conference.

"Most of them are beaurocrats from SARS-hit such as Macao, Hongkong and China," he added. De Jong however said the conference could be held and was attended by almost 1,000 perticipants from the region.

Declaration

The conference issued a declaration calling on all 49 PATA members to stick to article IV of PATA's articles of association, which said that PATA aims to increase and helps the growth of tourism industries in the Asia-Pacific region in finding significant values of environmental ethics.

The ethics to support the implementation of responsible conservation and restoration is a combination unique of natural resources, social welfare and culture in the region.

To follow up on the support to resolution on environment programmes declared in the 40th PATA conference in Bali in 1991, the 52nd conference reminded all the association members to implement the nine-point declaration.

PATA members must enhance spirit of their people to safeguard and invest in their culturaal heritages, to educate all parties at tourist destinations and visitors on the importance of safeguarding the cultural heritages.

PATA members must increase the participation of the younger generation in safegurading cultural heritages, to urge industries in improving community welfare, and to empower their women to safeguard tourism as an integral part.

The declaration also called on the association's members to promote global understandings and peaceful relations through cultural exchanges as part of tourism and to promote integration of people's tourism and cultural heritages.

PATA members must prromote heritage and culture as products of tourism at tourist destinations in the regions and take concrete action in safeguarding and developing local languages.

Mueller: A young traditionalist

By Yeoh Siew Hoon TravelWeeklyEast.com

Ameritrade and Starwood Launch Marketing Partnership

(BUSINESS WIRE) Ameritrade Holding Corporation (Nasdaq:AMTD - News) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT - News) announced a marketing partnership designed to promote Ameritrade to Starwood Preferred Guest® members and to reward existing Ameritrade clients with Starpoint offers. Starting today, Starwood Preferred Guests can earn up to 20,000 Starpoints when opening a new individual or joint Ameritrade® account. For more details, visit www.ameritrade.com/spg/. Starting later this year, all Ameritrade clients will have the opportunity to stock up on Starpoints when adding funds to existing accounts.

"This powerful marketing partnership offers even more compelling reasons for self-directed investors to choose Ameritrade," said Anne Nelson, Ameritrade's chief marketing officer. "By strategically aligning ourselves with the Starwood Preferred Guest program, we can now provide a special opportunity to help our clients achieve both their travel and financial goals."


Interview: Dubai hotels bank on post-war boom

Shujaat Yar, Business Development Director, Le Meridien Dubai, speaks to Gulf News in an interview on post-war boom.

While occupancy levels in most of Dubai's 272 hotels still remain low, some have already made plans to cash in on the post-war reconstruction in Iraq that is expected to bring increased business to Dubai, including the hotel sector

As expected, engineers, planners, businessmen and decision-makers are expected to travel to Iraq via Dubai and Kuwait, which comes as welcome news to the region's aviation and hotel industries.

Most airlines have announced that they are either resuming flights to major destinations or increasing capacity. While some of the European carriers are still maintaining a 'wait and watch' policy for Kuwait, they are, however, increasing their capacity to Dubai.

Meanwhile, some Dubai-based shipping and logistics operators have begun helping the UN to transport humanitarian aid to the Umm Qasr port, and many other companies are waiting for the green signal from Baghdad.

Dubai will thus remain the major connecting point for Western businessmen and officials which will help the local tourism industry to regain some of the business lost due to the war.

In an exclusive interview with Gulf News, Shujaat Yar, business development director of Le Meridien Dubai, said that good times are ahead for Dubai's hotel industry.

Excerpts:

What makes you confident about the post-war boom?
We certainly foresee a post-war boom in Dubai. Dubai, in general, has a very positive outlook. Business must go on.

The combined efforts of Dubai's public and private sector will bring about an unprecedented increase in the number of visitors to Dubai. The state-of-the art infrastructure and facilities as well as the varied activities Dubai offers are second to none and Dubai has established itself as the most preferred business and leisure destination in the region due to its strategic geographic location. People who have postponed their trips will certainly come back in larger numbers then ever.

Apart from the Arabian Travel Market, which will attract travel professionals, the impressive recreational facilities and development plans such as Dubai Summer Surprises, and the annual IMF/World Bank Conference will contribute towards the increase in leisure and business travellers.

The Department of Tourism and Commerce Marketing and Emirates airline have played a key role in promoting the tourism industry in Dubai to regional and global audiences. The 26 per cent increase in Emirates' capacity and the addition of new destinations to its growing network will take business in and from Dubai to greater heights.

What about SARS? How is it affecting your business?
The health concerns in South-east Asia will divert a fair amount of traffic into Dubai. The WHO advisory against travel to certain Southeast Asian countries will have an impact on traffic to these places. It seems this is the first time such a travel warning has been issued by the WHO. The influx of travellers from Gulf countries to Dubai is certainly going to begin shortly.

What are your views on the current market situation? What are your plans to regain business?
Our contingency plans were in place much before the war began as we anticipated changes in our business mix.

We had to reshape our business strategy to minimise the impact of the current situation. Our team has clear directions on the objectives, focus areas and competition date of the tasks in hand.

We were closely monitoring the progress and the changes required, in line with the needs of our business objective. Some primary markets were harder hit compared with others.

In any business, planning for opportunities is a normal way of growing and planning against the possible threats to business is another important aspect of the hotels marketing plan.

During these challenging times in the hospitality and travel industry, we have planned certain marketing strategies with our key partners. This is to reinforce that business is as usual in Dubai.

We will be hosting key industry people from various segments in our hotel as part of the combined strategy. This is also to stress that Dubai is a safe destination and unaffected by the current situation with business activities going on undisturbed.

Several organisations including hotels are going through a staff redundancy process. What has been your course of action?
In situations such as the one we are in currently where business is soft compared with the previous years, making your staff or team players redundant is not necessarily the best solution.

We are very proud to have 750 service-oriented team players. It is our firm belief that our team's involvement is crucial in maintaining our consistency in meeting customer expectations and managing a profitable business.

Redundancy of employees de-motivates them and a de-motivated member of your team is not going to give his or her best. No guest will accept 'lesser service' due to soft business conditions. A motivated team meets and exceeds guest expectations. This also brings about longevity of staff in an organisation.

Of course, one has to be vigilant for opportunities to maximise revenue and reduce expenses in a soft market condition but reducing the staff in service areas can have a negative impact in the long term.

Many hotels are coming up with massive discounts to attract guests. Have you slashed your prices?
Lower rates do not necessarily create demand, especially at times like this. Cheaper hotel room rates are not persuasive enough to make people travel more.

We have not reduced our prices. However, there are certain value-added promotions and campaigns in various markets which are in place. We have been in discussion with our key partners prior to the war for the planning and implementation of the promotions and campaigns for the months of May and June, which will be implemented as planned. In times like these, 'backyard marketing' has paid off well.

Our team was in the GCC countries before the war. This exercise has been beneficial and proves that it is better to be proactive than retroactive.

How are the restaurants faring?
We have maximised our F&B sales by increasing our market share of the local residents.

Our food and beverage loyalty card has been highly effective in creating customer loyalty. It offers great value for money and recognition.

The edge we have with our loyalty card is the fact that it can be used in 20 Le Meridien Hotels in the Middle East. A customer today is looking for recognition apart from food and service, which is what the loyalty card offers.

Has the competition increased in the industry?
Certainly it has but it has had a positive impact. Healthy competition is good for the industry. It offers guests a choice and it also makes hotels innovative and service-oriented in order to stand out.


The choice and quality of hotels in Dubai is unparalleled in comparison with any other city in the region

106 countries participated at MITTE

The Moscow International Travel and Tourism Exhibition (MITTE) occupied over 36,000 square metre gross and attracted exhibitors from 106 countries, 60 per cent of whom were internationals. MITTE had 125,000 visitors from all regions of Russia and neighbouring countries and 2,500 exhibitors.

The exhibition celebrated its tenth anniversary recently in Moscow. Bobby T Koshy, senior executive of the Sharjah Commerce and Tourism Development Authority said that select companies signed contracts in the area of USD 200,000 on-site.

MITT 2003 was visited by over 40 official delegations headed by ministers of tourism and directors and senior officials from national tourism organizations. The importance of the Russian market for the global tourism industry was stressed by Francesco Frangialli, secretary general of the WTO, who was present at the show.

The WTO was closely involved with many events scheduled alongside MITT 2003. These included the business and incentive travel seminar organised jointly with the Tourism Department of the Ministry of Economic Development and Trade of the Russian Federation (supported by ITE Travel Exhibitions).

The Russian Travel Awards winners were announced. The winners included Greenex (best Russian Travel Agency; PAC group (best Russian outbound tour operator); KMP Group (best Russian inbound tour operator); RVB Alean (best Russian domestic tour operator); Concord Group (best Russian business tour operator); Baltschug Kempinski Moscow (best Russian hotel in Moscow and St Petersburg); Radisson SAS Lazurnaya (best Russian regional hotel); Aeroflot (best Russian airline), RATA-News (best travel publication), Starwood Hotels and Resorts (most popular with Russian tourists international hotel group), Lufthansa (best international airline), Turkey (best national tourist office in Russia), Hertz (best car rental company); Ararat Park Hyatt Moscow (most successful launch in hospitality industry in Russia).

The Russian travel awards are organised by TTG-Russia in conjunction with ITE Travel Exhibitions. Stanislava Blagoeva-Duschell, director of ITE Travel Exhibitions said that the outlook for the future on the Russian market seems to be very positive, especially when the global travel industry is going through difficult times. –

Kerzner International taps distinguished hotelier Edward Steiner to top position at company’s One&Only Palmilla

Kerzner International Limited has named Edward T. Steiner to the position of Managing Director One&Only Palmilla and Regional Vice President, Mexico for the company's new operation in Los Cabos, Mexico.  Internationally recognized as one of the most distinguished hoteliers in the industry, Steiner comes to Palmilla having most previously served as Managing Director for Las Ventanas al Paraiso resort in Los Cabos.  Steiner takes charge at Palmilla as the property undergoes a $75-million transformation and expansion reflective of the company's dynamic approach to creating distinctive resorts that quickly become market leaders.  The One&Only Palmilla will reopen January 2004

Steiner, who will have overall operation responsibility for One&Only Palmilla, managed Rosewood Hotels' Las Ventanas since the resort's opening in 1997, creating international recognition and acclaim for the property, including a AAA five-diamond rating.  According to Kerzner management, Steiner was sought out to run Palmilla based on his accomplishments at Las Ventanas, and other notable properties in the United States, as well as a 20-year history and strength in the luxury travel market, including extensive experience in the areas of spa, golf and food and beverage.

Kerzner International acquired a 50% equity interest and long-term management rights for Palmilla in 2002 and promptly announced that the historic luxury resort would join the company's exclusive portfolio of One&Only properties.  When renovations are complete, the One&Only Palmilla, with an acclaimed 27-hole Jack Nicklaus signature golf course, will have 174 luxurious and innovatively designed accommodations, including spacious new villas overlooking the Sea of Cortez, a 25,000-square-foot spa inspired by the artistic and architectural themes of Mexico, a signature restaurant by one of America's most acclaimed chefs, Charlie Trotter of Chicago, Illinois, and designed by Adam Tihany, as well as new meeting facilities.

"Kerzner International is delighted to have Edward Steiner head up the Palmilla management team and bring his dedication and commitment to luxury resort standards to our newest One&Only property endeavor, said Butch Kerzner, President, Kerzner International and Chief Executive Officer of One&Only Resorts.  "With our commitment to making Palmilla one of the finest resort's in world, it is gratifying to have someone with his talent, experience and stature onboard to bring the One&Only brand vision alive and create lasting and memorable experiences for our guests."

Prior to joining Rosewood and Las Ventanas, Steiner was Hotel Manager at the four-star/four-diamond Watergate Hotel in Washington and at the five-star/five-diamond Grand Bay Hotel in Coconut Grove, Florida.  In 2003, Steiner was named "One of the Finest Hoteliers Worldwide" by the American Academy of Hospitality Sciences.  Other honors include "Hotelier of the Year 2001" (Los Cabos Hotel Association), "Outstanding Sales and Marketing Achievement Award 1999" (Rosewood Hotels and Resorts) and "South Florida Food and Beverage Director of the Year 1992" (Chefs of America).

"This is a unique and exciting opportunity to develop and reposition an already favorably recognized property into a world-class resort with a stellar international reputation.  Kerzner International's commitment to Palmilla to preserve and enhance its natural beauty and setting while at the same time creating a dynamically designed and operated resort perfectly mirrors my interests in providing our visitors with unparalleled experiences," said Steiner. 

Steiner holds a B.S. degree from Leicester University in England and advanced associate degrees in marketing, industrial relations and industrial organization from the City and Guilds of London University.

About One&Only

Created exclusively for the luxury resort market, One&Only properties are conceived as hallmarks of quality, offering guests the ultimate in accommodations, facilities and service in settings of unique and exceptional natural beauty.  These properties, featuring some of the top rated resorts in the world, include One&Only Le Touessrok and One&Only Le Saint Geran in the Mauritius, One&Only Kanuhura in the Maldives, One&Only Ocean Club in The Bahamas, <