Travel counters off to a poor start in tsunami aftermath
Travel stocks made a miserable start to the new year despite the period seeing a strong sentiment bounce due to the travel crush associated with Christmas and Lunar New Year holidays. Sentiment undoubtedly took a bash from the Indian Ocean tsunami in December.
Air China, added recently to coverage, made a weak entry, falling twice as fast as the Hang Seng Index. However, it was in good company; most others underperformed the index in January. Above that benchmark were CNAC, Regal, China Travel, and Star Cruises. As usual, these moves do not all seem to match current business situations. CNAC and China Travel may reflect sentiment on the mainland's continued travel growth, but, then, why not others such as the three mainland airlines?
Great Eagle's price (main brand: Langham) got slapped down - not a nice welcome for its takeover of management for what were Sheratons in Auckland and Melbourne and which became Langhams at the start of this year. The market may be right; Great Eagle/Langham will find it difficult to match Sheraton's marketing reach - although the hotels will be freed of paying management fees, so they can take some loss of business and still be profitable.
WTTC rating - who cares?
The World Travel & Tourism Council (WTTC) has updated its Competitiveness Monitor. Hong Kong ranks in only two of its eight categories (Openness and Social) and rival Singapore in two (Infrastructure and Technology). China was not ranked in any. Not all WTTC's criteria are travel-related. 'Openness' includes visa requirements, how much a country is open to tourism, trade, and taxes on international trade. 'Social' includes data on newspapers, computers, televisions and crime.
That said, the WTTC's credibility took a dive after it declared in 2004 that Montenegro was the fastest-growing visitor destination in the world - forcing me to scramble around for a world atlas.
Did Montenegro's visitor numbers increase from 100 to 1,000 - 900 per cent growth? Now the body declares that San Marino is the world leader in terms of technology. This time, I had my atlas ready.
Even if the WTTC's measures are literally correct, I am obliged to add: Who cares? It needs to draw up a list of priority destinations in the travel world and exclude clumps of rock.
There have been two ventures recently to measure visitor destinations using an approach that goes beyond simple numbers.
Travel Business Analyst measures destination quality in its Destination Quality Monitor in three categories - Tourism (friendliness of destination, ease of entry [documentation]/access [flights], and others); Terrorism/security (international and local); and Others (costs in destination, exchange rates, and others).
Its DQM is based on editorial analysis, and the authors accept that this is therefore subjective.
No destination received the maximum 10 points. A score of 9.51 or better qualified for the description 'Paradise on Earth'.
Hong Kong, along with Singapore, achieved the highest score in the Asia Pacific (9.25). This total - qualifying for 'The place to be' description - took into account factors including tourism, terrorism and security.
The closest in Asia was Thailand with 7.85. Outside Asia, Australia achieved 8.50, Britain 7.75, and the United States 7.25.
fixed focus
Richard Hartman, now head of InterContinental Hotels in Europe, was reflecting recently on his time on the mainland - he was one of a second wave of pioneers developing hotels there, which means 15 years ago.
Hotel owners had problems with two terms, he said:
Preventative maintenance - why fix it before it is broken?
Management contract - why own something and not run it by yourself or by one of your sons?
He might be surprised to learn that not everything has changed.
Compiled by Murray Bailey, research director and editor, Travel Business Analyst
