eHotelier Newsletter

Evening Standard - WHITBREAD has shelved plans for a £50 million hotels sell-off. The company, which has spent two years reinventing itself by pulling out of brewing and pubs, bought the Swallow hotels chain in 1999.

Most have been brought under the umbrella of Marriott, the hotel chain Whitbread owns in Britain alongside its no-frills Travel Inn operation.

But Whitbread identified 12 Swallow hotels it reckoned would never fit properly into the Marriott operation. By late last summer, the company had lined up a venture capital group to buy the properties for about £50 million.

But in the wake of September 11, the deal collapsed. Whitbread believes it could sell the dozen hotels only at a knock-down price. So it has decided to continue operating them under the Swallow name until the market picks up and a new buyer emerges.

Meanwhile, Whitbread's chief executive, David Thomas, is looking for buyersfor its Pelican restaurant operation that embraces the Cafe Rouge and Bella Pasta chains. Presentations have just been made to six potential buyers and a deal is expected by April.

After September 11, Whitbread decided to delay capital spending on a number of projects in an attempt to ensure that its balance sheet did not come under pressure in 2002.

But the company is making tentative moves to expand overseas with some of its operations. These could include Costa Coffee outlets, David Lloyd health clubs and Travel Inn hotels. Such a move would initially be in partnership with a property company or retailer established in the target country.

In Britain, Whitbread plans a drastic overhaul of its 200-strong Beefeater chain, which Thomas admits looks tired and old-fashioned. The company is experimenting with a new style of restaurant to replace most Beefeaters. Some have already been converted to a format known as Out & Out.

(Reuters) - Europe's second-largest travel firm, Thomas Cook AG, on Saturday forecast a rebound in global travel by the end of this year and said it sees its own profits stable in 2002, aided by cost-cutting initiated after the Sept. 11 attacks on the United States.

Thomas Cook Chairman and Chief Executive Stefan Pichler said he believes the German firm's summer and 2002 year bookings in Europe will be down from last year even as demand creeps back.

"We will not have an outstanding year 2002, but...we might end up slightly below 2001 in terms of booked guests," Pichler said in an interview while visiting the World Economic Forum in New York.

"I am quite optimistic with the beginning of the winter 2002-2003 we will have strong signs of recovery, strong bookings," he said.

Thomas Cook, jointly owned by German airline Lufthansa AG (LHAG) and retail group KarstadtQuelle (KARG), owns tour groups, low-cost airlines, and hotels, and has operations throughout Europe, India, North America and Egypt.

Thomas Cook holds about 30 percent of the market share for packaged travel in Europe. Rival Preussag AG (PRSG) (PRSG), Europe's largest travel firm and owner of Thomson Travel and Lunn Poly Shops, controls about 33 percent of the package vacation market.

Shortly after the Sept. 11 attacks, the Oberursel, Germany-based travel firm started a cost reduction program and cut airline capacity to counter weaker demand and offset high insurance and security costs.

Thomas Cook slashed about 2,600 jobs and closed some travel agencies as bookings dropped sharply in the immediate aftermath of the attacks.

Pichler said the company does not see further capacity reductions, but maintains a flexible approach to manage any changes in the market.

Thomas Cook would have a clearer picture of summer bookings and summer capacity by mid-February, he said.

"As we have seen in the aftermath of Sept. 11 with more focus on some destinations like Spain, we see now the spread of destinations coming back again, which is a good sign of recovery," Pichler said.

Pichler dismissed suggestions that Lufthansa might float its ownership of the travel group, noting that Thomas Cook benefits from leveraging its aircraft operations with the flagship carrier.

"We are quite happy with this shareholder structure. It works very smoothly," he said.

Pichler also said consolidation within the European travel industry has ended for now. He expects the next phase to be globalization as operators expand into emerging Asian markets, such as India and China.

Despite the tragedies of 911 last year, official figures for arrivals released last week by the Tourism Authority of Thailand (TAT) showed a better-than-expected growth rate in the last few months of the year.

Breaking the 10-million barrier for the first time, visitor arrivals were up by 5.82 percent over 2000, to 10,061,950 arrivals in 2001.

The positive result is being attributed largely to a surge in arrivals during November and December from East Asia and Europe, which accounted for a staggering 82.44 percent of all arrivals to the Kingdom.

While October, which marks the beginning of Thailand’s high season, saw a drop off in arrivals, a dramatic recovery in November and December kept the industry afloat.
East Asia and Asean generated total arrivals of 5,786,403 (+4,34%); Europe 2,508,566 (+8.98%); the Americas 682,995 (+2.97%); South Asia 350,874 (-0.32%); Oceania (+11.03%); Middle East 215,145 (+17.95%); and Africa 97,413 (+15.3%).
-TravelWeeklyEast.com

Hotel spas have been putting a smile onto a growing number of faces in the sector. Helene Møgelhøj finds out why.

The spa industry is currently booming. Growth rates in the US are in the region of 25% per annum and, despite limited data, are thought to be even higher in the UK and Europe. At the same time, a survey carried out by PKF in the US has shown that hotels' spa department profits grew by approximately 50% from 1998 to 1999 and that high-end spas generate revenues in the region of US$30-40 per occupied room. In general hotel spa guests are not very price sensitive and adding a spa often means more guests, who spend more money and are more likely to return. And of course a quality spa facility helps enhance a hotel's overall competitiveness by distinguishing it from the competition.

It is not surprising, therefore, that hotels have increasingly been jumping not so much onto the bandwagon but into the hot tub. But many are not doing this alone. For while guests may be familiar with the hotel brand and know it means comfortable surroundings and a good night's sleep, its knowledge of the spa sector is an unknown. Spa brands, in contrast, provide consumers with something to benchmark their expectations against and having a quality spa operator associated with the hotel adds reassurance. Consequently, specialist spa operators and hotel companies, aware of the mutual benefits, are increasingly forming strategic alliances.

But before embarking on the development of a spa it is important to decide what type of facility should be developed. This will to a large extent depend on the location, target audience and resources available. A plethora of treatments and different types of spas currently exist and the term 'spa' is used quite loosely. The eager guest may find the term applied to anything from a solitary whirlpool bath to a full-service health centre offering therapeutic treatments.

Among the different types of spas associated with hotels are the following.

Spa-goers fall into three main categories: holidaymakers who just want to relax at a resort and use the spa facilities from time to time; those who take a trip with the specific purpose of improving their health and altering their lifestyle; and dedicated spa-goers who attend spas several times a year.

But regardless of their category, spa-goers have similar goals. They want to learn how to manage stress, to look more youthful, to tone their bodies, to improve their general fitness level, to lose weight and to improve the quality of their life through the integration of the mind, body and spirit.

But before rushing out to develop a new spa it is worth bearing in mind that the most basic ingredients of the spa experience are currently being redefined. Modern spas are at the cutting edge of design, fitness and exercise as well as cuisine. Indeed modern spas must do much more than offer massages or trendy treatments to be ranked world class and stay ahead of the ever-increasing competition.

At present there are conflicting views within the industry as to what will drive future growth in Europe. Some believe that tomorrow's clients will be looking for the kind of serious approach delivered by Champneys. They will look to the latest development in the US spa market, the so-called 'wellness centre', which has a medical and preventive health rather than beauty orientation. Others believe that the real growth will come from the leisure, rather than the health side of the industry.

If the US experience is anything to go by then the latter view is likely to prevail. For US spa-goers in general consider themselves to be in good or excellent health. Nevertheless, they worry about staying healthy, including monitoring what they eat and getting enough exercise.

From the above it is evident that people are becoming increasingly concerned with health and wellness. Therefore the inclusion of a spa facility in hotels, both in urban and especially at leisure destinations, is becoming a prerequisite rather than a 'nice to have', and also a potential source of considerable profits. This is especially true at leisure destinations where people are looking for an ever-increasing range of activities. When travelling, people want to return from their trip, be it business or pleasure, feeling revitalised and refreshed. So, go ahead and take the plunge!

Helene Møgelhøj's work as a consultant at PKF has included hotel spas in Buxton and at a five-star luxury resort development on the Dead Sea in Jordan. Helene is member of the British Association of Hospitality Accountants, Tourism Society, Tourism Concern and a committee member of the tourism and leisure division of the British Consultants Bureau.

French Hotel Group Accor saw hotel sales up 6.6% in 2001 form £2,736 million to £2,818 million thanks to its economy brands.

Accor’s economy sector hotels such as Ibis and Formule 1 have held up well in Europe with sales up 3.9% but its economy portfolio in the US which includes Motel 6 and Red Roof Inns fell 7.1%.

Meanwhile its mid-market portfolio which includes Novotel and Mercure and its upscale brand Sofitel fell 4% in 2001 compared to the previous year.

ASEAN's 10 national tourism organisations have agreed to redirect all but a small portion of their marketing expenditure to within the ASEAN region this year.

A Visit ASEAN Campaign was launched at the ASEAN Tourism Forum in Brunei in 2001. Under the first phase, the ASEAN NTOs raised US$190,000 from their own resources but managed to get another nearly US$ 1 million from other sources like the UN Development Programme whose US$200,000 was a first by the agency which normally focuses on development projects, not marketing.

However, ASEAN tourism officials said the UNDP money had been allocated for other ASEAN projects which did not proceed and the agency was persuaded to divert the funding for tourism promotion instead. That money was spent on global \ TV advertising and other big-ticket marketing campaigns to build awareness of the ASEAN brand.

In 2002, in view of the new realities confronting global tourism, ASEAN officials have fallen back on what they call Plan B. The ASEAN NTOs are raising US$600,000, about 90% of which is to be spent within the region, mostly on activities directed at the consumer. Money will be spent on advertising, printing of collateral material, PR activities and participation in each other's consumer travel fairs. ASEAN airlines, government-run TV & radio stations and other distribution channels are to be requested to lend support.

The remaining 10% will be spent in the long-haul markets but only on items like joint participation at trade shows. There will be virtually no advertising. It will up to individual ASEAN NTOs to fly the flag for ASEAN travel through their normal offices and distribution channels in those markets.

Because not all the 10 governments will be able to cough up the individual contribution of US$ 60,000 immediately, it has been agreed that the better-off countries will pay-up first in order to get the campaign rolling. The others will follow later

The Pacific Asia Travel Association (PATA) has pledged to support a new campaign to restore consumer confidence in travel. Spearheaded by the Association of Asia Pacific Airlines (AAPA), the campaign, themed "Travel Moves People," communicates to the public that travel is an essential part of life. This is accomplished through messages that reach out to the emotive sentiments of consumers. "Our objective is to motivate people to travel -- to create momentum that will propel our industry into recovery by mid-2002 and beyond," said Mr. Peter de Jong, PATA President and CEO.

PATA, as part of its active endorsement of the campaign, has asked its members to consider contributing funds, advertising space or even travel prizes that can be used in lucky draws. "Challenging times such as these call for unity and cooperation," said Mr. de Jong. "We can accomplish a great deal by working together as an industry, and PATA and its members are grateful to the AAPA for recognising the importance of all segments of travel and tourism."

The advertising and public relations campaign is funded by voluntary contributions from key stakeholders in the travel and tourism industry, including Airbus and ABACUS. The campaign will run through April in key regional markets such as Hong Kong SAR, Japan, Malaysia, Singapore, Brunei, Korea (ROK), Chinese Taipei, Thailand, Vietnam and the Philippines.

Quebec -- With northern winds gusting at more than 50 kilometres an hour and 30 centimetres of fresh snow, the setting is just right for Hawaiians Cindy Lee and Ryan Morita as they prepared for their wedding on Saturday in North America's only ice hotel. It offers a wedding chapel and bridal suite built entirely out of ice and snow and includes a dog sled to lead the bridal processionWestern markets. He did not specify which regions Thomas Cook might target.

Newsletter - February 5, 2002