Newsletter - January 8, 2002

TOURISM BOOMING IN S.W. CHINA

The Diqing Tibetan Autonomous Prefecture in Yunnan Province, southwest China, hosted 1.24 million domestic and overseas tourists in 2001, an increase of 14. 3 percent year on year.

The tourists brought the prefecture a total of 883 million yuan (about 106 million U.S. dollars) in revenue, up 24 percent, local tourism officials said.

Diqing has been promoting itself as "Shangri-La" described by British writer James Hilton in his book "Lost Horizon", published in 1933.

"Shangri-La" is said to be a Tibetan word for paradise, or an ideal place.

Local officials in Diqing point to the area's snow-capped mountains, lamaseries and people from different ethnic groups living together in a harmonious and peaceful way as evidence that their prefecture enshrines the features of "Shangri-La".

To attract more tourists, the local government has initiated a series of projects to improve infrastructure and tourism facilities, including highways, airports, hydropower stations, hotels and program-control telephone system.

To protect the ecological environment, the prefecture has focused on tourism development to replace the revenues it used to earn from the logging industry, which was banned in the late 1990s.

The efforts have paid off. The environment and landscape have become more beautiful, and the tourism industry is playing an ever-more important role in local economic and social development, according to the officials.

PHUKET’S  FUTURE  IN QUESTION

‘The Nation’  - Bangkok   -  Plans for sustained and environmentally friendly development are being ignored as unbridled growth continues to scar this international tourist resort

Does anyone have a plan to develop this international resort in the southern part of the country in a sustained and environmentally friendly way?

Certainly, as the Town and Country Planning Department at the Office of Environmental Policy and Planning, and the National Economic and Social Development Board, indicated when they unveiled their separate plans at a recent seminar organised by The Nation and the Phuket Gazette.

"For several decades we have had a very good development plan, a well-balanced one, but it was not implemented. Worse, even today, the local people are not properly consulted about the various plans for Phuket. How can it succeed?" asked Wichit Na-Ranong.

Wichit comes from an old mining family and now has extensive interests in hotels and tourism on the island. "Look what has become of Phuket today," he said cynically.

The audience at the Royal Phuket City Hotel was silent but they had answers in mind. Wichit, also president of the Thai Federation of Provincial Tourist Associations, said any plans being implemented now faced an uphill task as unchecked development in the past few decades had meant that the measures would come into conflict with tourism-related businesses, which have mushroomed all over the island.

Pongpayome Vasaputi, the governor of Phuket, who has been given a trial mandate by the government to run the island like a CEO, explained the kind of difficulty he was facing when enforcing orders. "When we say, 'hey, you cannot do this', they get angry and resist everything that the provincial government tries to do."

He gave an example of a visible conflict that will not see an easy solution. Mai Khao beach, where turtles come and lay their eggs, is not suitable for hotel development. "We have to curtail it, but can the authorities do so and remain resolute?"

O B Wetzell, managing director of the Development Management Group, said that development had run over the top of Phuket in the last 20 years like a locomotive, doing some severe damage.

The engine of the train, he said, was tourism. "Stopping it is not an option. The train has already left the station, but this does not mean there will be no conflict." He pinpointed four areas of conflict in the planning of the resort island: between individual rights and the common good; between the central government and the province; between the province and the tambons; and between small business and big business (the last was illustrated by the differences between Tesco Lotus or Big C and the older wet markets).

"For a model for change in land use for Phuket I suggest the tourism business. Phuket's survival depends on finding out what the target market really wants, and more importantly, what will keep the tourists coming back. Phuket has to consider future market viability," said Wetzell.

"We all have to dare to dream and pay some more taxes, so tomorrow for Phuket will be brighter."

Paiboon Upatising, the elected senator for Phuket, said that the government was now trying to put a sustained development plan in place, which is why they had decided Phuket would have a chief executive officer. "All the problems get sent to him; he has to take it all."

The key word for success was not "CEO", he said, but "participation". Enforcing laws would not work as long as local people do not feel they are being allowed to participate. Without participation by "stake-holders, the more you enforce the law, the more resistance you will get", he said

He also slammed eco-tourism in Phuket. "Everyone is talking about eco-tourism. What they mean is they take tourists to one place - one hundred boats, two hundred boats." He contrasted this with eco-tourism in Australia, which was well prepared, governed and managed.

Methee Tanmanatragul, managing director of WM & K Co Ltd, a property developer, raised many fears about tourists coming to Phuket. The Tourism Authority of Thailand said 3.6 million people visited Phuket last year, bringing in Bt60 billion in revenue.

"It is very exciting for Phuket, but now the ugly side of tourism is affecting Phuket." is not only the beach hawkers, but even on some of the famous beaches in Phuket you cannot find a sea view."

James Batt, joint managing director of Laguna Resorts & Hotels, anticipated that this year costs would rise, including insurance premiums, and profits that were inadequate to service debt would lead to a scramble to increase market share by discounting rooms.

"There will even be pressure from some tour operators to discount our rooms or else. This will be resisted as Phuket is still excellent value for money," he said.

Batt said that, in terms of hard currency, prices at Laguna had risen less than 20 per cent in the past five years. He called for greater law and order. "We have to find a way to ensure that Phuket enjoys its deserved economic stability for many years to come. Our guests simply don't understand why there is no peaceful place for them to sit on the beaches, which are now filled with hawkers."

Wichit cautioned against the granting of power to the tambon administrative organisation, or a so-called Or Bor Tor, to raise taxes and spend the budget. "Because of a lack of awareness and technical knowledge rather than bad intentions, these are destructive weapons if you don't use them properly. , appropriately and carefully, as seen by most of the last decade. It cannot change overnight. That's where I see all the danger."

LEELA TIES UP WITH KEMPINSKI FOR ITS THIRD HOTEL IN INDIA – THE LEELA PALACE, BANGALORE

January 2002: Kempinski Hotels & Resorts, founded in Germany over a 100 years ago, has signed a sales and marketing agreement for its third hotel in India at Bangalore with Leela Hotels. Kempinski already represents The Leela Group’s existing hotels – The Leela Kempinski in Mumbai and The Leela Palace in Goa and thus this announcement strengthens Kempinski’s presence in India and confirms its policy of global expansion with its prestigious portfolio comprising of 33 luxury properties worldwide.

Designed by world famous architects, Wimberley Allison Tong & Goo (WAT&G) California, who have to their credit ‘Palace of the Lost City’ at Sun City, South Africa, The Leela Palace, Bangalore is built in an art deco form, drawing its inspiration from  the Royal Palace of Mysore.

The Leela Palace, set amidst 8 acres of lush green gardens and lagoons is in close proximity to the business district, 5 minutes from the Bangalore airport and within walking distance from the KGA golf course.

The hotel features 6 floors offering 254 luxuriously appointed rooms. Each room has a private balcony which overlooks the azure pool or verdant gardens.  Two line telephones, Italian marble-four fixture bathrooms, a private bar, high speed internet access, in-room dining and personalised butler service are some of the notable features. Other facilities include :  a state-of-the-art business centre, 25,000 square feet of comprehensive banqueting and conference space, three signature restaurants and a Cigar Bar, a health spa and fitness centre measuring 12,000 square feet offers 13 Ayurvedic and western holistic treatments.

From the hand-crafted carpets to the soft pastel walls, from the carefully selected crystal to the finest bone china, everything is the best the world has to offer, at the Leela Palace, Bangalore.

SINGAPORE TOURISM WOUNDED BY 9/11, GLOBAL SLOWDOWN

Agence France Presse  -  Singapore visitor arrivals dived 14.7 percent in November from a year earlier, victim to the terrorist strikes in the United States and a weakening global economy, officials said Thursday.

"The global economic slowdown coupled with the negative repercussions from the September 11 terrorist attacks in the USA affected arrivals from all regions," the Singapore Tourism Board said in its monthly report.

There were 533,499 arrivals in November, with the 14.7-percent plunge following a 10.6-percent fall in October and pushing full-year figures from January to November into negative territory down 2.1 percent over the same period in 2000.

"Arrivals from the top 12 markets fell by 17.9 percent," the tourism board said, with only Indonesia (up 5.2 percent) and China (up 24.9 percent) posting growth.

Visitor traffic from the US recorded its third consecutive month of double-digit decline since hijacked aircraft destroyed the World Trade Center in New York and ploughed into the Pentagon on September 11.

Overall visitor arrivals from the US fell 27.8 percent to 23,956 in November, with business-related traffic down by a sharp 39.6 percent.

Arrivals from Japan were down a massive 60.1 percent to 32,240.

In November, the tourism board announced a 13 million-dollar (7.0 million US) stimulus injection to counter the slump following September 11.

"There is no sector left untouched -- from airlines to attractions and hotels to travel agencies," board chairman Edmund Cheng said.

Before September, visitor arrivals for 2001 were slightly up on the previous year but were now expected to plummet by as much as five percent for the whole year

CONRAD HOTELS EYES UK SITES

A luxury brand of hotels is set to expand, with executives looking at sites in the UK for possible development.

Conrad Hotels, part of the Hilton Hotels Group, was established 16 years ago, pledging an "exceptional style" for business and leisure travellers.

There are 13 Conrad hotels on four continents, including properties in London and Dublin.

The latest Conrad has been opened as the Waldorf Towers, an exclusive 180 room hotel in New York which was opened in 1931.

The hotel, which occupies the upper floors of the world famous Waldorf Astoria, has been the New York home of every sitting US President since Herbert Hoover.

It is located on the corner of Park Avenue and 50th Street in the heart of Manhattan.

David Michels, chief executive of the Hilton Group, said: "There is without question more room in the market for additional luxury hotels to complement the existing portfolio of Conrad properties."

Stephen Bollenbach, president of Hilton Hotels Corporation, said: "We have the opportunity to bring the Conrad style of hospitality and service to even more customers."  

STARWOOD EARNS MORE TOP SPOTS ON CONDE NAST TRAVELER'S EELITE GOLD LIST THAN ANY OTHER HOTEL CHAIN

Starwood boasts more hotels on Conde Nast Traveler's 2002 Gold List and Gold List Reserve than any other hotel company. The hotels and resorts that won raves from Traveler's readers include many of Starwood's world-class properties from the company's diverse portfolio of brands including: The Luxury Collection, St. Regis Hotels & Resorts, Sheraton, Westin and W. Conde Nast Traveler's 2002 Gold List and Gold List Reserve sections include the following Starwood properties:

TAJ HOTELS EYE GLOBAL HOTEL CHAIN

Mumbai -   India’s largest hotels group is now looking at acquiring an international hospitality chain that could catapult it to the top league among the global hotel majors.

Indian Hotels managing director RK Krishna Kumar told Business Standard: “We had been talking with the Raffles group in recent times to buy out their dozen-odd hotels, but talks have fallen through. We are still looking at other options.”

In the aftermath of September 11, Krishna Kumar feels it is an ideal time to buy international properties as valuations have taken a beating.

“We are looking at premium-end chains that will help us position the Taj brand in the top bracket in the hotels industry. In addition, we would also look at individual luxury hotel properties if such opportunities arise,” he added.

However, he declined to mention any of the hotel chains that the Tatas could be talking to.

“If we go ahead with such an acquisition, we would look at roping in a strategic partner — not another hotel chain, as they would seek management control — but passive financial investors,” Krishna Kumar said.

Tata Sons vice-chairman NA Soonawala said that financing such a large deal may not be a problem. “If the need arises, Indian Hotels can draw from the group’s strengths,” he said.

Krishna Kumar said that Indian Hotels would ideally look at a chain with key properties in the US, Germany, France and the UK.

“Another advantage would be the centralised reservation system that such a chain will bring along,” he said.

Two years back, the Tata group had pulled off a coup by acquiring the Tetley group of UK, the world’s second largest tea company, which was more than double the turnover of Tata Tea, the acquirer.

More recently, Indian Hotels was almost on the verge of acquiring the super premium Carlyle in New York, but the deal fell through due to eleventh-hour financing problems.

The Taj group have restructured their international operations and have sold several business hotels in the US, including the Lexington in New York and Executive Plaza in Chicago.

Source: Business Standard – India

IHC BUDGET HOTELS TO SPORT ‘GATEWAY’ NAME

The Tatas-controlled Indian Hotels Company (IHC), which is re-entering the budget hotels category, has decided to give a major fillip to this business.

R K Krishna Kumar, managing director of Indian Hotels said, “The budget hotels will be under the Gateway brand name and these hotels will offer value for money to customers.”

The budget hotels will be premium in class and quality and economical in cost, Krishna Kumar said. Shashank P Warty, chief operating officer, Business Hotels group of Indian Hotels said, “Budget hotels are the fastest growing sector and will attract better growth rates in the next few years.”

However, details relating to number of hotels the company intends to set up and the proposed investment could be ascertained as the group is yet to give a final touch to the project. The Taj group forayed into budget hotels in the 80’s but did not expand the category.

This was because the hospitality chain was expanding itself in the luxury and leisure categories. The group has two Gateway properties which is situated at Chiplun and Bangalore.

The Oberoi group operates the budget hotels under the Trident brand name.

According to senior Indian Hotels officials, the company will be redefining the earlier budget hotel model. These hotels will serve as the alternative choice in metropolitan cities and the primary choice in smaller towns and places of tourist interest

According to analysts, the move will enable Indian hotels to achieve a higher topline growth, while the bottomline will be driven by its chain of five star hotels in the country and abroad.The Taj group is India’s largest hotel chain offering 56 hotels in 60 locations across South Asia and 6 hotels in other parts of the world.

It operates in three categories—luxury, business and leisure.

The luxury hotels division is the largest with a turnover of Rs 461 crore to the total turnover.

PATA STRATEGIC INFORMATION CENTRE WORLDWATCH

* In the United States, economists have predicted growth of around 0.3 percent for the first quarter of 2002 with an aggressive rebound to an annualised rate of 3.8 percent. In part, this will be fuelled by a surge in business activity as companies begin to restock inventories depleted in 2001. However, for New York City economists predicted a 3.1 percent decline in the Gross City Product (GCP), compared to growth of 5.2 percent in 2000 and 1.4 percent in 2001.

* A survey of more than 100 economists in 13 countries predicted low inflation during 2002, largely due to stabilising exchange rates and oil prices. Average inflation rates are expected to be 1.76% for 2001 and 1.75% for 2002.

* The Travel Industry Association of America has conducted three travel confidence surveys since Sept. 11 and has found that most Americans can be motivated to travel if air fare and accommodation discounts are big enough. A similar mindset exists in Australia where Virgin Blue is offering US$2.50 air fares for one-way flights from Melbourne to Sydney, Brisbane and Adelaide.

* Expect more to be offered to airlines to keep them flying to existing hubs, particularly as airports begin a battle for market share. According to some reports, Malaysia is considering offering Qantas rights to some domestic destinations within Malaysia.

* Japan is the latest country to consider the possibility of space tourism. For around US$5.3 million you can buy a ride on a five-person pod as early as 2008 and spend a day orbiting the earth at an altitude of 500 kilometres. Consideration is also being given to the development of a larger vehicle that will allow passengers to remain in orbit for as long as a month.