China travel industry news

The region’s leading luxury travel event celebrates a successful third year in Shanghai, despite economic downturn

Asia Luxury Travel Market, the region’s leading event exclusively for the luxury travel industry, took place in Shanghai from 15th – 18th June for the third consecutive year, with exhibitors describing it as “the best yet”.

The three day event brought together the top 300 Asian luxury travel buyers from 19 countries, close to 280 exhibitors from 36 countries and over 100 media from 11 countries.

The world’s most sought after destinations, ultra-luxurious accommodation, resorts and spas, elite transportation and unique travel experiences were represented at the exhibition where buyers and sellers meet on a unique pre-arranged appointment system. Throughout the three day event over 12,000 private, face to face appointments took place.

“ALTM 09 has been a great success and we have received very positive feedback from the attending exhibitors and buyers,” said Debbie Joslin, Group Exhibition Director, ALTM. “It is now clearly established as a “must” for key players in the luxury travel industry who are targeting the important and still growing Asian markets.”

Continued via e-Travel Blackboard MICE News.

Roy Graff / ChinaContact China Luxury Travel, China travel events altm, shanghai

Hosted buyer and visitor registrations have opened for ‘The China Incentive, Business Travel and Meetings Exhibition’.

Taking place 08 – 10 September 2009 at Beijing’s China National Convention Centre and co-hosted by the Beijing Tourism Administration (BTA), the event will bring together an expected 4,000 local, regional and international buyers and visitors with more than 250 regional and international exhibitors showcasing destinations, hotels, venues and other products and services.

Benefits of the Hosted Buyer program include hosted flights and accommodation and complimentary access to the education program. To be accepted as a hosted buyer, strict qualifying criteria apply, including the number of events held annually and the potential for future business, particularly in China.

Commenting on the event, CIBTM exhibition director Graeme Barnett said: “The Hosted buyer program reflects the nature of buyers our exhibitors want to do business with.

“Delivering quality buyers who place business inbound and intra-regionally across Asia but also outbound from China ensures we satisfy the needs of both international and local exhibitors. I would encourage anyone involved in the planning and staging of meetings, incentives, events and business travel throughout the region to contact us and secure a hosted buyer place.”

International exhibitors who have already re-booked their stands for CIBTM 2009 include the Philippines Department of Tourism, Thailand Convention and Exhibition Bureau, Tourism Flanders, Vienna Convention Bureau, Barcelona, Egyptian Tourism and the Ministry of Culture and Tourism of the Republic of Indonesia.

New exhibitors this year are Abu Dhabi Tourism Authority, Dubai Department of Trade and Commerce Marketing, Millennium Hotels, Tourism Fiji and Skyteam.

Chinese exhibitors include the Beijing Tourism Administration, Ctrip.com, Gloria International Hotels, Hotel Reservation Service, Regalia Resort & Spa, Tialun International Hotels, Zhong An, Ocean Spring Resort, Shanghai Jinjiang International Travel Ltd, Travelsky and Zendai Art Hotel.

via MICEBTN – China Incentive opens hosted, visitor registrations.

China Business Travel, China travel events beijing, CIBTM

Large decline in visits from China to Singapore. May used to account for a very large outbound presence thanks to the May Day holiday. However since 2008 this holiday was cut to just 3 days. Singapore should still enjoy short city breaks by Chinese but if we look at the figures, the total for the year may be more than 30% down compared to previous year. However I am sure that Singapore tourist board will aggressively market in China to get the numbers back up.

In May 2009, Indonesia (129,000), India (90,000), Australia (59,000), Malaysia (55,000) and P.R. China (52,000) and were Singapore’s top five visitor- generating markets. These markets accounted for 53.1% of total visitor arrivals for the month.

Singapore’s tourism sector saw sharper declines in visitor arrivals in May 2009 from markets such as China and Japan which can be attributed in part to the global outbreak of Influenza A (H1N1-2009), also known as Swine Flu.

via Singapore Visitor Arrivals for May 2009. Asiatraveltips.com

China Outbound Tourism Singapore

As part of the deal, China Southern Airlines said it will recruit 400 flight attendants to cater for international travellers during the Asian Games, who will also be expected to work as volunteers.

“China Southern Airlines is honoured to join hands with the Asian Games as a key sponsor and part of the greatest Games in history,” said Tan Wangeng, president of China Southern Airlines.

China Southern carried the most passengers out of any airline in Asia, and the fourth-most in the world in 2008. It has been the biggest passenger carrier in China for thirty consecutive years.

via China Southern Airlines partners with Asian Games.

China Aviation industry Asia Games, China Southern

SeekinAlpha thinks Ctrip cannot maintain it’s past performance. Some good points but I think profit margins will not be squeezed as much as the article fears.  

“Ctrip.com fits the “optimistic” category as the stock is currently nearly 40 times the estimates for this year. The high valuation is largely justified by the expected growth as CTRP continues to capture market share and is expected to grow earnings by 28% next year. 

The company also recently made a stock purchase of Home Inns & Hotels Management Inc. (HMIN) to increase its stake in the company from 9.52% to 18.25%. The purchase was made at a price of $13.31 (Total value of $50 million) which has quickly produced a 24% unrealized gain. As long as HMIN continues to trade higher, that investment appears to be a wise move. However, HMIN has some of the same dangers as CTRP and could simply leverage the risks already associated with the company.

During the first quarter, Ctrip realized a healthy if not expected growth in both revenue and earnings. However, it appears the company is having to work harder and harder in order to manufacture these attractive numbers. Revenues from hotel bookings account for 43% of total revenues for the company. While the category saw sales increase by 9%, the total increase in volume was 17%. This means that margins on hotel bookings were significantly lower as a weak economy resulted in low pricing power.

Similarly air ticketing revenue (which also accounts for 43% of total revenues) increased by 16%. But in order to outpace the weak pricing, the company actually had to sell 40% more tickets. The obvious question (although I haven’t hear too many people asking it) is what happens when the company is only able to sell 10 to 15% more tickets and the price continues to drop. The result could quickly become lower sales which would set off alarms for institutional and retail investors alike.”

Posted via email from chinacontact’s posterous

Roy Graff / ChinaContact General

China Eastern Airlines (CEA.NYSE; 0670.HK; 600115.SH) is reported to have adopted Alipay as its online settlement tool to raise its competitive power in e-ticketing.

According to Beijing Business Today, the airline and Alibaba have signed a contract and will launch the online payment platform within the year.

Such online travel agents as Ctrip (CTRP.NASDAQ) and eLong (LONG.NASDAQ) rapidly consolidate their market position on e-ticketing, attracting traditional travel agents rushing to use e-commerce methods.

Air ticket booking via airlines’ websites accounted for just 3.5-4 percent of the total online booking amount.

Market hearsay goes that Air China (601111.SH) and China Southern Airlines (ZNH.NYSE; 01055.HK; 600029.SH) will also start cooperation with Alibaba by year end to boost online sales via their own channel rather than through agents, cut costs and improve profitability.

via China Eastern to join hands with Alibaba: report.

China Aviation industry, China Technology & Online travel Air China, Alibaba, Alipay, China Eastern Airlines, China Southern

Deutsche analyst says, “We downgrade Ctrip to HOLD on valuation as we believe that current valuation accurately factors in near term catalysts such as market share gain and air-ticket/hotel volume growth; we see limited near term price upside. However, we remain positive on Ctrip’s longer term growth potential given its execution ability, market leadership position and lowly-penetrated online travel market…Our channel checks suggest a continuous decline of domestic airfare in 2Q09. Hotel market has shown no signs of recovery with key operation data continuing to deteriorate.”

via StreetInsider.com – Deutsche Bank Downgrades Ctrip.com (CTRP) to Hold; Valuation Call.

China Technology & Online travel ctrip

China Eastern Airlines Corp confirmed in a statement on Tuesday that regulators have approved its parent company China Eastern Air Holding’s request to inject 7 billion yuan ($1.02 billion) into the airline.

When the injection is completed, China Eastern Holding will boost its stake in the subsidiary to 74.64 percent, nearing the 75 percent limit, according to China Business News. That would mean a recent 2-billion-yuan government funding the parent company got is unlikely to be injected into the carrier again.

The debt-ridden airline still faces difficult times ahead even with the 7-billion-yuan injection. It saw a record-high loss of nearly 14 billion yuan and an 11.59 billion yuan gap between its assets and liabilities last year.

Company executives told the newspaper that the carrier will also seek to issue additional shares to domestic and overseas investors to further cut its asset-liability ratio to less than 90 percent, apart from a bid to take over Shanghai Airlines.

China Eastern has proposed taking over Shanghai Airlines through a share swap, finalizing the long-anticipated merger between the two struggling State-owned carriers, a person familiar with the situation said Monday.

via 7b-yuan injection into China Eastern given greenlight.

China Aviation industry China Eastern

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announces the grand opening of the largest dedicated hotel customer contact centre in China: Starwood Customer Contact Center in Guangzhou.

“Starwood Hotels & Resorts continues to remain bullish on our long term growth opportunities in markets around the world. Today, China has the largest pipeline of new Starwood hotels outside of North America and continues to be a key growth engine for Starwood. There is tremendous potential for us in both domestic and international travel,” said Michael English, Vice president, Customer Contact Centers & Electronics Distribution of Starwood Hotels & Resorts Worldwide. “Therefore, it is timely that we set up a Customer Contact Center in China not only to provide our hotels here with improved support but to better position ourselves to take good care of the needs of our customers and build up deep loyal relationship with them as well.”

“The opening of this Customer Contact Center also presents to us the opportunity to provide the local talent with training and job opportunities. The Starwood China Customer Contact Center provides varied job opportunities in the area. We are looking at having this center operate 24×7 to support both China and global operational needs for Starwood,” said Qian Jin, Senior Vice President for Operations, China & Taiwan, Starwood Hotels & Resorts.

via Starwood Opens Largest Customer Contact Center In China.

Roy Graff / ChinaContact China hotel industry Starwood

First for the bad news:

The number mainland Chinese tourists visiting Taiwan has plummeted from an average number of over 3,000 per day in April, to 2,000 in May and fewer than 1,000 in June.

Hsu Kao-ching, secretary-general of Taiwan’s Travel Agent Association attributed the decline to mainland Chinese students taking their exams in June, and to the impact of the influenza A (H1N1) epidemic.

Airline companies also reported sharp drops in the number of passengers. Local carriers said that roughly 80 percent of available seats are now being sold, compared with 91 percent earlier. Combined Taiwanese and mainland Chinese airline sales figures reveal that 76 percent of seats were sold on average for the first three weeks in June. This is compared with 83 percent in May and 89 percent in April.

A sense of shock has overtaken travel agents and hotel operators, who had expected endless business opportunities to accompany the arrival of mainland tourists. Instead business has plunged by 70 percent.

via Taiwan Today.

But help is on the way:

Shanghai, June 24 (CNA) A new cruise recently marketed by local tour agencies that will take travelers from Shanghai to Taiwan via Hong Kong has gained warm market response, particularly among families with children, as the summer vacation is just around the corner, a cruise executive said Wednesday.

According to the executive with the Shanghai Spring International Travel Service, the newly designed trip has been very popular as the first three trips have been fully booked.

He told CNA that many Shanghai parents are very interested in cruising with their kids to Taiwan and Hong Kong during the summer break despite a cost of about 9,000 Chinese yuan (US$1,323) per person for a week.

On the first day of the week-long trip, tourists will fly from Shanghai to Hong Kong, where they will depart for Taiwan the second day on board the SuperStar Aquarius cruise vessel, the executive said.

via Taiwan could get lots more tourists with Shanghai cruise ship – Taiwan News Online.

Luckily, Taiwan does not really rely on Mainland Chinese tourists to sustain its industry:

According to exit and entry statistics from the Ministry of the Interior and the National Immigration Agency, from January to the end of May 2009, the number of visitors to Taiwan who do not carry a Taiwanese passport has increased by 13.87 percent compared to the same period last year. This year’s two millionth visitor arrived three weeks earlier than last year’s two millionth visitor. From January to the end of May, visitors from the Hong Kong and Macau market grew by 26.35 percent. The Tourism Bureau will continue to strive to promote Taiwan tourism so as to reach this year’s target of having four million visitors.

via Taiwan Tourism Bureau Announces That the Two Millionth Visitor to Taiwan Won NT$200,000 – MarketWatch.

Roy Graff / ChinaContact China Domestic Tourism, China Outbound Tourism Taiwan