Adjust font size:
Ms Karen Tan, Executive Assistant Manager, Revenue & Marketing, Fairmont Singapore & Swissotel The Stamford and Regional Director of Revenue & Marketing, Asia Pacific, Swissotel Hotels & Resorts
With Asia markets on the rise and continuing to drive strong occupancies and high rates, hoteliers in Singapore are watching the market in Europe with a degree of detachment.
While they would like to maintain their market mix – and longhaul travellers do tend to stay longer and have higher yields – the shifting markets are causing hotels to re-align their priorities and most are switching focus to regional markets.
Caught in the middle are the ground operators who want to bring in more European business but whose hands are tied because costs such as air fares and hotels are out of their control.
Mr Patrick Fiat, General Manager of Royal Plaza on Scotts, is typical of a hotelier who has seen business from Europe drop over the years, together with an upswing from Asia. He told P@SSPORT that the longhaul market from Europe or US continues to lag behind the Asian regional market and “has dropped from 35 per cent in 2008 to 28 per cent in 2009”.
He said he was concerned with the “social and economic issues in Europe” as well as the airline strikes – “Air France, BA, Lufthansa and we are again expecting another strike in March with Air France and BA. All these, as well as the weakening of the Euro, will keep the European market weak. Even some travel agents in Singapore are switching to the Australian market.”
Mr Kellvin Ong, General Manager of Rendezvous Hotel, added, “European agents are still feeling the financial crisis and they claim that Europe has not fully recovered. They’re still trying to renegotiate this year’s rate for specials.”
However he remains optimistic about the market, saying, “There will still be people travelling despite the economy. Rather than splurge on five star accommodation, they will probably stay at four or even three star properties and look into budget airlines and cut their trips.”
Ms Karen Tan, Executive Assistant Manager, Revenue & Marketing, Fairmont Singapore & Swissotel The Stamford and Regional Director of Revenue & Marketing, Asia Pacific, Swissotel Hotels & Resorts, shares his optimism, saying, “There were mixed market sentiments amongst European tour operators at the ITB. In 2009, some markets in Europe saw increase in tourist arrivals to Singapore, in spite of the financial slump in 2009. The current weak British pound has made travel from the country costlier.
“Although most of the world's top destination economies including those in Europe are still not totally out of the woods from the after-effects of the financial crunch last year, overall longhaul travel is expected to pick up in 2010.”
Mr Darren Tan, Managing Director of World Express, said that he left ITB feeling quite optimistic “about the economic recovery in Europe and there is still interest and demand from the longhaul travel markets for Singapore”.
“The growth will not be as fast as from the Asian markets which should do very well for Singapore this year with the Integrated Resorts and Universal Studios being a big draw. The worry is that demand and hotel occupancy will rise too fast and from our perspective, we don't want a repeat of 2007 when hotel rates went up so fast it hurts leisure travel and travel agents.”
Ms Judy Lum, Vice President-Marketing of Tour East, said interest in Asia was returning and that despite the weak economy, European tour operators were reporting strong forward bookings for the region. “They want the hotels to maintain their rates in order to stimulate stronger forward bookings.”
She added, “Despite the depressed Euro and Pound, forward bookings seem encouraging, I suppose 2009 is the worst we have seen. The consolation for us in the longhaul markets is that holidays are integral to one's well being and most will still consider a holiday despite the struggling economy. Nevertheless, for Singapore, we must ensure competitiveness to enjoy the benefits from these markets.”
So how can Singapore stay competitive in the European market?
Well, for starters, Mr Fiat does not believe that industry players will be putting too much focus on the longhaul market for the time being. “We have already seen for the last two years a trend towards a focus on the regional market.”
Hotels, he said, enjoyed high occupancy for March and April also looked positive. “We can see as well that the second half of 2010 will experience very high occupancy of around 85 per cent to 90 per cent and room rates have already increased from 18 per cent to 22 per cent as compared to last year.”
Ms Lum, whose company does strong business with European tour operators, said a lot depended on air access and hotel costs “as they make up most of the package costs”.
“Most of my clients did not accept the proposed increase made by the hotels, they were quite disappointed that increases are around 10 per cent or more. Those who came ready to contract did not conclude their contracts despite explaining to the hotels about the depressed Euro and Pound.
“Many quoted challenges working with our national carrier and have chosen to fly Malaysia Airlines and other Middle Eastern carriers to Bali which does not stop in Singapore.”
The general sentiment too is that the two Integrated Resorts which have generated a lot of buzz in Asia are also more geared towards the regional markets than to Europe.
Said Mr Fiat, “The two IRs will not have too much impact on the European market as they have their own entertainment parks in Europe and, of course, the two IRs will be the main attractions for the regional market.”
Mr Ong agreed. “The two IRs in my opinion are geared more towards the Asian markets as there seems to be vast interest from around the region especially around the opening of Universal Studios and the casinos.”
