Trend watch at ITB Berlin

Other than making new contacts, renewing old relationships and negotiating new contracts, trade shows are a great place to "trend watch". Some might call it catching up on industry gossip - who's left, who's moving where, who's doing what - but the truth is, it's a good microcosm of what's happening in the industry at any particular time. P@SSPORT takes a look at the trends and issues which surfaced at ITB Berlin and how they will impact Singapore.

At ITB Berlin, the talk was of the economic uncertainties in the US and its spillover effects on the European economy and the Asian market.

It's clear that the economy in the continent would be affected to some degree given the strong trade links between North America and Europe but the degree to which it will dampen travel appetites of the Europeans remains to be seen.

The more immediate concern is the plunging US dollar relative to the Euro and how that would influence travel patterns of Europeans. Would more Europeans head to US now that they will get more bang for their Euro and would that mean less travel to Asia?

Travel continues as the US dollar weakens

Major tour operators like TUI believe the weak US dollar will act as a counterpoint to economic worries and keep travel appetites robust.

Mr Mathias Tewes, Manager Planning & Contracting Asia for the German-based wholesaler, told P@SSPORT: "Of course the US economy is causing some worries in Europe and in Germany but, on the other hand, we have a very strong Euro against the USD and it might attract people to visit North America."

He said that while bookings for the summer period started a bit slow in most long-haul markets, "it is picking up again" – a good sign for destinations in Asia.

In line with global trends, German travellers are also booking later and later and observers says it's hard to forecast business too far out – this pick-up however can be taken as a positive sign that interest in Asia as a region remains strong among the Germans.

TUI, said Mr Tewes, experienced a "very good" summer in 2007 and an "excellent" winter 2007/2008 (November-April). "Thailand, Vietnam, Indonesia and Singapore showed significant increases," he said.

And the same trend looks likely to be repeated, he added.

He said that Singapore was performing very well even with high increases on rates.but hotel capacity will continue to be a challenge.

Redefining for greater opportunities

To Mr Tewes, what's most important is that Singapore hoteliers "respect us as loyal long term partners, extending reasonable rates and keeping allotments".

While Mr Tewes noted that Singapore had not lost its importance as a stopover for Germans, he said that with a resurgence in interest among German travellers in Indonesia, it was possible that many requests for a stopover in Singapore may not be able to be fulfilled, which means operators may have to look for alternative hubs.

To every trend however is a counter-trend and one tour operator, who is playing at the other end of the market from the more mass and mainstream segment of TUI, is re-looking at Singapore as a stopover as well as a destination in its own right.

To compete in a market that is being rapidly consolidating and being dominated by giants such as TUI, Geoplan, a niche specialist in Asia, is redefining itself and has decided to move into the premium luxury space.

"Because of this, we need to look at Singapore Airlines and Singapore again. SIA's new A380 flights from London and new boutique hotels like New Majestic and Scarlet are making Singapore more interesting to the luxury traveller who is always looking for something unique and different," said CEO Mr Stephan Kraft, who has been developing programmes in Asia for close to two decades.

"We need more of such hotels in Singapore, especially in Little India and Chinatown."

In many ways, Mr Kraft noted, Singapore is in a similar position to Geoplan – it's a small player in a region of big, diverse destinations and it too needs to specialise in the luxury premium market.

"It needs to be choosy about which markets it goes for, as we have to ourselves. We cannot compete on size with players like TUI so we have to redefine ourselves and narrow our niche even further."

A destination in its own right

And Mr Kraft is right on the need to redefine. Singapore has in fact been reinventing itself as a destination in its own right, with a positive 2007 tourism performance report testament to that transformation. Since 2004, visitor arrivals to Singapore have grown by 25% to 10.3 million in 2007 and tourism receipts by 45% to $13.8 billion.

To position Singapore as a top-of-mind weekend destination for cities in close proximity, the STB has also launched a Uniquely Weekend campaign last year in which Singapore is promoted as a destination for weekend getaways to seven cities in the region, namely Bangkok, Chennai, Guangzhou, Hong Kong, Jakarta, Johor Bahru and Kuala Lumpur.

In the most recent PATA report released on 19 March 2008, Singapore is also ranked as one of the top ten tourist destinations in the Asia Pacific.

Growth of the online marketplace

With the online marketplace as a growing trend, Mr Kraft said that his business lends itself naturally to direct online bookings..

According to him, two-thirds of Geoplan's bookings come through its website, which will be revamped in July 2008 to reflect the new positioning. The new website, www.geoplan.de, will offer customers contact points through all channels, including Skype.

"We are investing in communications and will be offering not just a call centre but a full customer service on the backend," said Mr Kraft.

Mr Tewes of TUI offers a different scenario, saying: "Online is an ongoing trend but still not affecting our nature of business too much. We have allotments, reasonable selling prices and good products and people believe in travel agents and many want to buy a package."

Read related stories: