travel

Prospects for 2012

Cruises

Travel agents

Business market

Britain in boom

Plain sailing?

Face-to-face booking

New connections

The next 12 months will present

Passenger numbers are up but

How the high street is fighting back

Demand for flights to China and

golden opportunities for the

choppier waters lie ahead | Page 9

against the internet | Page 11

India is breathing fresh life into the

tourist trade | Page 5

corporate sector | Page 13

June 2011

Distributed within the Daily Telegraph, produced and published by Lyonsdown which takes sole responsibility for the contents

To the end of the world and back Where’s everyone going? An industry report on travel and tourism

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Foreword

Travel and tourism – in this issue

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On the brink of a boom The travel trade is one of Britain’s major moneyspinners and it’s set to grow further, provided the success story isn’t derailed by rising industry costs

By Stephanie Sparrow Travel and tourism are of vital importance to the British economy. The sector is one of our six biggest industries and our third-largest export earner; it accounts for almost £90bn direct spend each year, contains over 200,000 businesses and provides 4.4 per cent of the nation’s jobs. not surprisingly, the government wants to capitalise on this success by increasing incoming tourism and encouraging more stay-at-home holidays. There should be plenty to draw people to these shores over the next year with the Queen’s diamond Jubilee and the 2012 Olympic and Paralympic Games (see p5).

These Great British showcases are expected to act as catalysts for increasing traffic and draw a further four million visitors over the next four years. This in turn could create 50,000 new jobs. However, as our report shows, the industry also faces major challenges and further growth probably requires further government support.

One of the biggest bones of contention within the industry is air passenger duty (aPd) (see p8).

UK holidaymakers and business travellers already pay the highest rates of aviation tax in europe and this can impact on incoming travellers as

well as those leaving. The industry is marshalling customer support, with easyJet launching an online petition and trade body aBTa leading an alliance of more than 25 airlines, airports, tour operators, destinations and trade associations to call for a “fair tax on flying”.

Chancellor George Osborne announced an immediate consultation on aPd in the Budget to explore how the aPd banding structure could be reformed as well as assessing options regarding premium economy class and regional airport differentials. The consultation period closes this month and a clearer picture should emerge in the autumn.

Political unrest and volatile volcanoes mean that travel can be fraught with uncertainty and consumer confidence will be key to further growth. Holidaymakers want to feel that their holidays are protected no matter whether they are booked over the internet or on the high street (see p11). aBTa is looking for reform of the government’s aTOl scheme, which was originally set up to protect package holidaymakers flying out of the UK. Under the government’s current proposals, still only about half of holidaymakers will be protected. aBTa is calling on the government to include scheduled airlines in the proposals to

ensure that there is a comprehensive scheme of financial protection for all customers.

Over the past few years the airline industry has learned to contend with rising fuel costs, taxation and increased threats of terrorism. It is now facing the challenge of the european Union emissions Trading Scheme (which will apply to airlines from 2012), the prospect of corporate customers wanting to implement sustainable travel plans and an increasing trend among the same customers to switch their short-haul travel to high-speed trains (see p13).

Consultants PricewaterhouseCoopers predict that business travel, having suffered highs and lows during the recession, will continue to remain “super-cyclical”. The medium-term outlook is positive with long-haul premium air travel returning, but a shift in short-haul travel patterns will continue to hit short-haul flights. a shift in the method of business travel in the future, from air to rail, will further affect the short-haul business travel sector. Few would have predicted this a couple of decades ago, but what this report reveals most clearly is that the travel and tourism sectors remain adaptable and forward-thinking, as tourism businesses stay one step ahead of political and economic pressures and strive to go beyond customer expectations.

Here comes 2012

5

Cabin pressure

8

Wave of change

9

High-street hopes

11

Up and away

13

olympics and Diamond Jubilee herald tourism bonanza

Airlines braced for new tax and fuel cost rises Cruise industry’s boom times may be over Travel agents fight back against the internet The revival of business travel

Contributors Publisher Bradley Scheffer brad@lyonsdown.co.uk

Production Manager Nicki Sitaras nicki@lyonsdown.co.uk

Managing Editor Lucie Carrington lucie@lyonsdown.co.uk

Project Manager Emmanuel Arthur emmanuel@lyonsdown.co.uk

Editor Stephanie Sparrow editor@lyonsdown.co.uk

For more information on any of our supplements please contact us: Telephone 020 8349 4363 Email info@lyonsdown.co.uk Online www.lyonsdown.co.uk

Creative Director Martin Nolan studio@lyonsdown.co.uk

Stephanie Sparrow Stephanie Sparrow is a freelance business journalist and editor.

She started her career on Travel Trade Gazette before moving onto Caterer & Hotelkeeper and Personnel Today.

Phil Davies Phil Davies is an experienced freelance travel/cruise industry writer and editor who contributes to a range of magazines, websites and newspapers including Travel Weekly, Cruise Trade News and Telegraph Media group titles. He is a former editor of Travel Trade Gazette and online news service and website www.TravelMole.com

Media Training, works frequently as a conference moderator and plays stand-up bass for The Johnsons, Somerset’s finest country music band.

Jeremy Skidmore Jeremy Skidmore has been a journalist for over 20 years. He was editor of the trade paper Travel Weekly and is a regular contributor to various national newspapers. He also appears on TV and radio programmes as a travel industry expert and commentator, and is an experienced conference moderator.

Cover photograph: Martin Poole/Getty Images

Amon Cohen Amon Cohen is international editor for Business Travel News, a columnist for Buying Business Travel and business travel supplement editor for Supply Management. He also runs the company Travel

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Industry view

New angles on South Africa After a successful World Cup in 2010, the country is aiming to capitalise on its global exposure and is targeting UK visitors in particular

The UK travel trade can take advantage of the World Cup effect The 2010 fIfA world Cup saw an 18 per cent increase in arrivals between January and July 2010, and research among attendees showed that 83 per cent of respondents planned to return to South Africa and 94 per cent would recommend the destination to family and friends. other world Cup developments which should boost its appeal to the travel trade include: • Enhancements to Johannesburg and Cape Town airports and the building of the new La Mercy airport in Durban • An increase in the total available rooms to more than 181,000, including new hotels such as the one&only in Cape Town, the Southern Sun Hyde Park Sandton in Johannesburg, and radisson properties in Cape Town, Johannesburg and Port Elizabeth

Come to South Africa – beautiful beaches and friendly people

THe 2010 FIFa World Cup may be long over but it heralded the start of a new game for South africa, and it’s one in which the UK travel trade can be a winner.

“South africa’s successful delivery of the World Cup increased awareness of South africa as a destination. Our focus in 2011 is to convert that into increased bookings,” says Fiona Buchner, regional director for europe at South african Tourism.

In the process, UK airlines, tour operators, travel agents and other travel sector companies stand to benefit from increased help in selling the destination.

The UK is already South africa’s biggest source of visitors globally, supplying 453,030 arrivals in 2010, up by 1.5 per cent on 2009. But Buchner and her team are working to deepen UK travellers’ awareness of South africa’s attractions, to the benefit of the UK travel trade.

“We are on the verge of signing some large joint marketing agreements with key UK trade players. It’s part of a strategy that also includes extra marketing and sales campaigns,” says Buchner.

The main focus will be on selling the chance to get to know individual South africans.

“Traditionally South africa is associated with wildlife, adventure and affordable luxury, but we are now also focusing on our welcoming people,” says Buchner.

For instance, the marketing will be stressing the opportunities for visitors to meet people such as game rangers and trackers. “a ranger may have dinner with tourists at their game lodge, giving them the chance to benefit from his or her knowledge of the birds and animals, how they live, breed and interact, right down to the relationships and family history of particular prides of lions,” she says.

“It’s all about highlighting the chances for visitors to meet real South africans.”

There will be an increased focus on South africa’s wide variety of bed and breakfast accommodation, where visitors can benefit from their hosts’ knowledge of the area’s best activities and restaurants.

The marketing of art galleries will stress the chance to meet artists, and for tourists visiting mountain resorts such as Hogsback in the eastern Cape province, the chance to go to pubs where they can meet the locals.

For the UK market in particular South africa Tourism is aiming to expand the perception of South africa.

“The UK market already understands South

africa pretty well, but we have some surprises to offer,” says Buchner.

How many people know, for instance, that South africa is a hotspot for stargazing? “Game lodges are in areas of low light pollution so many lodges offer stargazing sessions, with the chance for visitors from the northern hemisphere to see the southern stars,” she says.

The country also boasts the Karoo, a semidesert covering over 100,000 square miles of the Cape region, which usually offers the clear skies so important to astronomy enthusiasts.

“Traditionally South Africa is associated with wildlife, adventure and affordable luxury, but we are now also focusing on our welcoming people” also here is the South african astronomical Observatory near the town of Sutherland, where visitors can visit the site of SalT, the Southern african large Telescope, capable of seeing a candle flame at the distance of the moon.

Other new angles on South africa include its melting-pot modern arts culture, where traditional african cultures are contributing to new art forms seen in, for instance, the architecture of Soccer City Stadium in Johannesburg, known as The Calabash, because it resembles the african pot of the same name.

Specific help for UK travel sector companies will be provided by Sa Tourism, including footage of andrew Smith and Hannah St Paul, a UK couple who took part in the “20 experiences in 10 days” marketing campaign last year.

They were one of four couples, recruited internationally, who were accompanied on their travels around South africa by a television crew. experiences included great white shark cage-diving, gourmet dining, clubbing, mountain biking, picnicking, museum visits, hot-air ballooning and luxury safaris.

The film, used for television and online footage and advertisements, brought the freshness and authenticity of reality Tv to a destination marketing campaign, as the couple had no idea what experience the next day would bring.

It also highlighted the friendliness of the South africans they met on their travels, and will be made available to companies in the UK travel sector to provide a taste of the modern South african tourist experience.

The personal experience theme is to be continued using celebrities.

“We are now in the process of recruiting selected UK celebrities with an interest in areas such as art, architecture, adventure activities and food, who will talk about their experiences in South africa to the UK media,” says Buchner. The campaign will be launched towards the end of 2012.

Meanwhile, deals are already in the offing.

IndaBa, South african Tourism’s regular travel and tourism trade show, recently attracted 267 delegates from the UK – the largest delegation of all. “delegates will have been doing deals bearing in mind the UK’s economic situation, and we encourage local South african providers of accommodation, hospitality and tourist experiences to set prices carefully,” says Buchner.

She cites the costs of a three-course meal in a good (but not top-flight) restaurant in Cape Town at around the equivalent of £30 for two, with wine.

Business tourism is also an area ripe for growth.

Many business travellers to South africa combine their visit to a conference, meeting or event with a holiday or, following a business visit, come back for a vacation later.

“We have a UK representative in london who focuses on meeting the needs of these business tourists,” says Buchner. for more information on South African Tourism’s services see www.southafrica.net

• The upgrading of South Africa’s transport and communication links, including a £17.5m investment in new roads and the completion of the gautrain, providing a fast new rail link between Johannesburg and Pretoria city centres and Johannesburg’s or Tambo international airport

Upcoming events that should increase international interest in South Africa include • The International Small Business Congress, Johannesburg, 2012 • International Rugby Board Junior World Championships, Cape Town and Stellenbosch, 2012 • Fourth World Conference on Doping in Sport, Johannesburg, 2013 • World Congress of Paediatric Cardiology and Cardiac Surgery, Cape Town, 2013 • The World Transplant Games, Durban, 2013 • International Association of Child and Adolescent Psychiatry, Cape Town, 2014 • Baptist World Congress, Durban, 2015 • The Fourteenth World Forestry Congress, Durban, 2015 • 23rd International World Congress of Nephrology, Cape Town, 2015

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Domestic tourism

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Booming Britain Royal connections and sporting history will boost British tourism over the coming year but there is still work to be done

By Stephanie Sparrow BrITISH TOUrISM – which generates £90bn a year and employs 2m people – is on the up.

Historical events are working in Britain’s favour. recent worldwide coverage of the royal Wedding has boosted the nation’s profile, and the Queen’s diamond Jubilee celebrations on 5 June 2012 are set to provide a further fillip. The anholt-GMI nations Brand Index shows that monarchy is important to tourism prospects with 60 per cent of potential visitors to the UK saying they want to seek out places with royal connections.

“The challenge now is to use (royal) events to grow tourism,” says Patricia Yates, director of strategy and communications at visitBritain, the public body which promotes overseas visits to our shores. To this end visitBritain is this month launching a £100m, four-year international marketing campaign promoting the UK as a top tourist destination. The campaign is cofunded by government and the private sector and draws on celebrities such as dame Judi dench and Slumdog Millionaire star dev Patel. It will run across television, social media and print in visitBritain’s 21 core foreign markets which include europe, america and the emerging markets of Brazil, russia, India and China (BrIC). visitor figures to the UK for 2011 are already looking promising, with 30m inbound travellers expected – a rise of up to 3 per cent on 2010. The amount they spend in this country is predicted to increase to £17.4bn, up £670m from last year.

While monarchy is a great tourist pull for the UK, 2012 will see the ultimate opportunity to boost visitor numbers as the country prepares to stage the Olympics and Paralympics and to host 14,700 Olympic and Paralympic athletes and 10m ticketed spectators.

“This is Britain’s moment,” says Yates. “We have a great opportunity to showcase Britain, to revitalise ourselves in established markets such as america and europe and to establish ourselves in growth markets such as India and China.”

Major hotel projects are already in place in london to make the most of the potential the Olympics affords. according to promotion agency london & Partners, the capital currently has over 90,000 hotel rooms and this is expected to increase to nearly 100,000 in time for the games. all price points are catered for, from the fivestar luxury of the newly refurbished St Pancras renaissance at St Pancras International Station (from where the high-speed Javelin service will take 25,000 visitors an hour to and from the Olympic Park) to the mid-market options that will be on offer close to the Olympic Park from InterContinental Group’s Holiday Inn and Whitbread’s Premier Inn. However, the impact of the games should be felt further afield with events taking place all over the capital and the country. For example, the marathon will finish on The Mall, Manchester United’s Old Trafford ground will host football matches, while sailing competitions will take place off the south coast. There is hope that the economic benefits will be shared beyond london.

There are also hopes that the Olympics will whet tourist appetites for a return visit to Britain.

Interviews with 50,000 overseas tourists, as part

Is this Britain’s moment?

of the government’s International Passenger Survey, showed that 77 per cent had been to the UK at least once in the previous 10 years – and often many times more.

The government voiced its support for tourism with the launch of its tourism policy document in March this year. “We want to take tourism in Britain to a whole new level and harness the huge

“We have a great opportunity to showcase Britain, to revitalise ourselves in established markets such as America and Europe and to establish ourselves in growth markets such as India and China” – Yates potential this area holds to grow our economy,” Prime Minister david Cameron said.

The policy includes a target to attract 4m extra visitors to Britain over the next four years, which should add £2bn and 50,000 new jobs to the domestic economy. It also sets out the government’s aims to encourage more UK residents to holiday at home and to turn the UK into what the Prime Minister described as “one of the top five most efficient and competitive visitor economies in the world”.

However, in the middle of all this enthusiasm for the future of British tourism, notes of caution can be heard from some industry experts who think the government should do more. at the InterContinental Hotel Group, said to have more guest rooms than any other hotel brand in the world, president, europe, Middle east and africa Kirk Kinsell believes the government’s tourism policy does not go far enough. “expensive visas, sky-high vaT and damaging aviation taxes are costing the economy tens of thousands of more jobs. We need a joined-up, dynamic response from the government to

help its fifth biggest industry to stimulate economic recovery,” Kinsell says.

Many see tourism as the only export to be hit by vaT. Furthermore, the current rate of 20 per cent makes the UK uncompetitive compared to eU countries, where all but the UK, denmark and Slovakia are charging a reduced rate on hospitality services. In France, for example, it is a mere 5.5 per cent.

The British Hospitality association, which represents 40,000 establishments, is also pressing for change. Chief executive Ufi Ibrahim says: “vaT has become one of the most pressing issues facing the industry. The present high rate is making UK tourism very uncompetitive. In the latest World economic Forum Global Travel & Tourism Competitiveness Monitor, the UK ranks 133rd out of 133 countries in terms of price competitiveness.”

However, Ibrahim welcomes the tourism policy’s aim to make the UK easier to visit. The policy document pledges to cut passport queues at UK ports and airports. It also outlines plans to make tourist visa applications simpler, faster and more convenient by increasing the number of visa biometric Id centres around the world, putting applications online and publishing application guidance in more local languages.

However, even if these practical concerns are addressed, there is still the issue of the fragile economic recovery in europe and north america which currently account for 85 per cent of all international visits to Britain.

To get around this, the tourism industry has to look further afield to new and emerging markets. Fundamentally it has to capture a growing market share of travel from the BrIC countries.

Forecasts from visitBritain suggest this is not a pipe dream. For example, India is likely to double its current number of 400,000 visits to the UK to 900,000 visits by 2020, while tourists from China are set to hit 300,000 in 2020, up from 150,000 last year.

“From these developing markets we are looking at first-time visitors who may be making their first long-haul trip,” says Yates. “We want to inspire them to choose Britain – by highlighting our history and culture, scenic beauty and the

warmth of the welcome they will find.

“That theme of an invitation to Britain will feature in all our marketing work across the region – whether that is an invitation from a celebrity in our Tv advertising, from friends and family who have visited Britain on our social media sites, or from our commercial partners in their good value offers.”

Keep the home fires burning Domestic tourism is benefiting from economic uncertainty as many British holidaymakers choose to stay home Domestic tourism is experiencing double-digit growth, with the staycation (holidaying in Britain) apparently a long-term trend. This is the feedback on British holiday habits from VisitEngland, the national tourist board responsible for marketing England to the domestic market.

According to VisitEngland, pessimism about the economy and our personal finances have increased sharply over the past six months to the benefit of the domestic tourist industry. More than half of us expect to take more domestic breaks and two in 10 people who used to go abroad are choosing to stay in the uK instead this year.

The government wants to encourage this trend.

It believes that the proportion of uK residents who holiday in the uK each year should match the number who holiday abroad. for longer stays, of four nights or more, this would mean 29 per cent of travellers holidaying in Britain, rather than the existing figure of 20 per cent. It would create an estimated £1.3bn more spend and 26,000 new jobs.

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Industry view

Line of beauty Meadows, forests and Alpine pastures provide a stunning backdrop for passengers on Swiss mountain railway the Brienz Rothorn Bahn vISITOrS TO Swiss mountain railway the Brienz rothorn Bahn are in for a rare experience – and this one comes with sausages.

Tourists travelling on the cog-wheel railway that steams to the summit of the Brienzer rothorn in Switzerland can sample hot sausages cooked in the locomotive’s steam boiler on the way. “locally-made sausages containing a mixture of meat and cheese are cooked in the steam boiler of the locomotive and then served to passengers with special ‘cograil’ bread made in Brienz at the Planalp station halfway to the summit,” says Tanja Burgener of the Brienz rothorn Bahn.

The line is looking to expand its appeal to British visitors. It currently attracts around 2,000 UK tourists annually, either independent travellers booking through its website or as part of tours organised by operators such as Great rail Journeys, Thomson Holidays, Shearings Holidays and Switzerland Flexi Tours.

“We want to spread awareness of the line in the UK, not just as an attraction to railway enthusiasts but to families and others,” says Burgener.

It is the only steam-powered cog-wheel railway system with three generations of steam locomotives providing daily steam train services throughout the summer season and naturally attracts steam rail fans. “rail enthusiasts in particular will enjoy

Steaming ahead through stunning country

seeing the historic locomotives, some of which date back to the opening of the line in 1892,” says Burgener.

Steam aficionados who want to get handson experience of running the locomotives can book ahead to get the chance to try out the job of stoker or engineer.

But the destination offers plenty of other attractions to individuals and groups with many other interests.

History buffs will enjoy the details of the building of the line. It includes six tunnels and was completed on 31 October 1891, when the locomotive of the train which carried materials reached rothorn Kulm, the summit station. It had taken a team of up to 640 workers just a year to complete. lovers of scenery, and keen photographers in particular, will find a huge variety of subjects on which to focus.

The 7.6km ride takes just an hour to travel from Brienz to rothorn Kulm station some 1,678 metres above. The line passes first through

romantic meadows and forest, then cuts through high rock faces and finally travels over gently sloping then steep alpine pastures on its way to the rugged summit.

The carriages offer breathtaking views from panoramic windows on the way up to the station at 2,244km above sea level. Here, the view stretches from the alps of central Switzerland to famous peaks such as the eiger and Jungfrau, and as far as the Chasseral in the Jura mountains.

Hikers can also use the station’s line as the starting point for mountain treks. There are six suggested hiking routes of varying lengths, including one that offers sweeping views of the eiger and the Jungfrau. Hikers can also look down on lake Brienz, at 500m the deepest lake in Switzerland and famous for its deep turquoise waters.

Botanists will enjoy identifying the wide variety of alpine flowers in the meadows, and wildlife enthusiasts can see animals such as the mountain chamois, eagles and alpine marmot, a kind of squirrel that lives around the summit of the rothorn. large groups of ibex, the mountain goat that lives in the alps, can also be seen, especially in the mornings and early evenings when they gather around the Hotel rothorn Kulm at the summit.

The hotel offers meals in its panorama restaurant with a choice of menus for groups, as well as romantic rooms for those seeking a longer stay.

Special group deals available to tour operators and travel agencies include trip and lunch packages, workshop tours with english-speaking guides for rail enthusiasts, and half-day and day tours.

Trains can be chartered for private non-scheduled trips for groups with a choice of either the historical wagons or more enclosed panorama

All aboard – it’s not just for enthusiasts

cars, and snacks and drinks can be served along the way.

The line is open from May to October and offers special deals from 2-19 June and 8-23 October, when the round trip from Brienz to the summit at rothorn Kulm is available for the price of a one-way ticket. Special rates are available to tour operators, coach companies and wholesalers. www.brienz-rothorn-bahn.ch

Five-star service in the sun

Email marketing – better than a postcard for repeat business. . .

Whether on business or on holiday in Barbados, Platinum Services’ clients can expect the VIP treatment from the moment they land

Make shrewd use of email marketing to help your customers extend their holiday mood and they’ll return to you again and again

FOr 12 years Platinum Services has been the leader in vIP luxury airport services in Barbados, providing fast-track (meet and assist), luxury transportation and concierge services.

With its focus on quality, the company aims to ensure that every passenger’s travel experience is enjoyable and hassle-free.

Barbados is known primarily as a holiday destination but business travel there has grown tremendously in recent years. Platinum Services was created with both markets in mind: to give business people the speed of service they need and to enable the holiday traveller to reach their villa or hotel with ease so they can start soaking up the island sunshine.

The company caters to all of its guests’ needs from the moment they step off the plane to the moment they enter their luxurious hotel room.

The dedicated Platinum team has one mission: to serve the client.

Platinum’s arrival, departure and in-transit services eliminate many of the hassles associated with travel today and ensure guests can concentrate on the real reason for their visit.

There is minimal or no queuing at Grantley adams International airport, no unnecessary

waiting time and no worries about flight transfers.

Services also include exquisite luxury ground transportation with a vehicle fleet including Mercedes and Bentleys, to name a few. Guests can also book their travel through the islands on one of the private jets, where a top chef will cater on all in-flight services. and Platinum’s concierge services can take care of requests ranging from last-minute concert tickets or dinner reservations to the in-depth, long-term planning of business events or the perfect island wedding.

Many around the world have used Platinum Services, from royalty and celebrities to top CeOs. as one guest puts it: “The best service we have ever experienced at an airport... We can’t wait until our next visit!” www.platinumservicesbgi.com

ManY PeOPle try to make their holiday experience last much longer than the break itself. They enjoy the build-up of excitement beforehand and then like to have something to look forward to upon return.

Today’s email marketing technology allows travel marketers to set up automated campaigns that will capitalise on this cycle. It enables businesses to keep their brand fresh in the minds of their target audience, build customer relationships to increase loyalty, cross-sell other products and even promote the next holiday.

Your customer’s experience should begin at home on the day the holiday is booked, not just on the day that their plane takes to the sky. So when you receive their booking, send them an email thanking them for choosing you.

Then, two weeks before the holiday, email

them details of the weather forecast for their destination. and when they return, ask them for feedback which you can then use in marketing.

Your email software should have an automation feature that takes care of these tasks for you by sending out emails automatically on specific days.

By enriching the holiday in this way you can help to ensure that your company remains at the forefront of a customer’s mind. and a positive experience means they are more likely to return to you again and again.

Travel email experts Pure360 have put together a guide to email marketing strategy which covers this topic in more detail. Go to the website to download a free copy or call 0844 586 0001. www.pure360emailmarketing.co.uk

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Industry view

7

Get more from your market Our experts explain different ways to boost revenues and cut costs, whether it means exploiting new technology more effectively, gathering better business intelligence or reclaiming VAT

Keith Povah

Jonathan Boffey

Francesco Rosato

Online bookings account for over 50 per cent of the travel industry, but many hotels are not using technology efficiently.

How can technology reduce costs and optimise sales?

Online travel services wholesalers rely on accurate, clean data delivered as quickly as possible. How can technology help?

Businesses and travellers are losing thousands of pounds by failing to reclaim VAT on foreign travel expenses. What can be reclaimed and who is entitled to it?

Many hoteliers lose time and money by not using IT creatively.

For instance, our rT Channelmanager software means hoteliers can update rates across multiple online travel agents (OTas) in the same amount of time it would take to update just one. This means they can deal with a larger number of OTas to increase exposure, resulting in higher revenue.

Hoteliers also commonly fail to realise that if they build relationships with OTas , they can discuss rates, packages and commission to suit both parties’ short-term changing needs. Once renegotiated, new updates can be put in place quickly using rT Channelmanager.

To stay competitive hoteliers also need to know their competitors’ room rates. rTSuite Shopper gives hotels real-time access to competitors’ rates and generates an alert when these change, so rates can be tweaked accordingly.

Can technology help hoteliers to choose the best OTAs to maximise their revenues? rateTiger deals with over 700 OTas globally and our sales managers can advise the best mix to suit a hotelier’s offering. For instance, if most business comes from Germany our data can show which are the most popular websites, and identify suitable niche sites, such as those specialising in spa holidays or golf weekends.

“To stay competitive hoteliers also need to know their competitors’ room rates” What about other kinds of online marketing?

rateTiger is on eBay and Facebook, so hoteliers can use eBay as a channel to its 14 million active users, and gain a Facebook presence.

Hotels can also access users’ reviews on 25 different review websites, using rTreview. It also displays reviews of their competitors, so hoteliers can assess competitors’ strengths and weaknesses and change their marketing strategies to suit.

Triometric is a specialist in XMl, the language used to pass data such as room availability and rates, around the net. The better the quality of the XMl and the fewer technical problems, the faster information arrives on screen. a slow response can mean a supplier appears on page five of a search or, worse, does not appear at all. The aim is to appear on page one, slot one.

Fast response times mean increased ‘look to book’ ratios, as searchers are less likely to get impatient and go elsewhere.

Of course suppliers can monitor the quality of data on their own systems, but that slows their response times. It’s easier to buy in a service like ours, which is dedicated to monitoring response times and constantly works to reduce them.

“If a dispute arises, solid data can be accessed that reveals exactly what happened when” Are there any other ways technology can be used to optimise revenues? data can be analysed to provide useful business intelligence for clients. For instance, we can break down information to show how many requests a supplier has for hotels in Paris, the duration of stays, whether certain hotels are unavailable, or which of their partner websites have the best look to book ratios. data can also help with dynamic pricing, where prices for hotel rooms are changed quickly according to short-term supply and demand, so as to boost revenues.

www.ratetiger.com

How much is going unclaimed? a 2008 european Community study identified about €5bn of vaT that could have been refunded to businesses.

Why don’t companies reclaim the money themselves?

Few realise that the vaT can be reclaimed, and companies which do know about it often do not bother to claim as it is complex and time-consuming. expenses on which you can reclaim vaT vary among countries, as does the rate you can reclaim. For instance you can reclaim the full vaT on restaurant meals in austria, but none in Belgium and only 25 per cent in denmark.

“Expenses on which you can reclaim VAT vary among countries, as does the rate you can reclaim”

What if transactions go wrong?

If a dispute arises, solid data can be accessed that reveals exactly what happened when. This can reduce disputes and make resolution easier.

What about other applications?

Providers of smartphone apps - usually travel websites – also rely on high quality and speedy delivery of XMl data, so they can also benefit from Triometric services.

Keith Povah is division president, rateTiger Suite at erevMax, which provides advice and software to help hoteliers optimise online sales and revenue.

vaT-registered UK businesses and non-domiciled business travellers can reclaim vaT paid in europe on business expenses such as accommodation, conferences and exhibitions, meals, advertising and professional fees.

They can also reclaim sales tax paid in some non-eU countries, such as australia, Canada, Japan, Switzerland and norway.

UK travel sector companies which send staff overseas to investigate new destinations could benefit from reclaiming vaT, and so could many of their business travel customers.

Jonathan Boffey is business development director at Triometric, which monitors and analyses web services to help boost performance for hotel groups, intermediaries such as hotel or flight wholesalers and multiple website operators. www.triometric.net

How can your service help?

We act as your agent and process your claims and only charge a fee once your claim has been approved by the tax authorities, with no up-front fees.

We can also work with travel sector companies wanting to offer our services to business travellers. non-UK domiciled individuals can also benefit, so in addition to our london office we recently opened an office in doha to serve our many Middle east-based customers.

Francesco Rosato is finance director of uturn Tax refund. www.uturntaxrefund.com

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Air travel

Cabin pressure These are challenging times for the airline industry as it faces increasing taxation and rising fuel costs “Air passenger duty is already higher in the UK than anywhere else in Europe and therefore now is not the right time to increase this tax” – McCall Airlines urge end to blanket security checks US-style diplomacy is having a knock-on effect on airport queues

Rising fuel cost – just one of the challenges facing airlines

By Phil Davies

HavInG JUST about survived the global economic downturn, the airline industry faces a double whammy. On top of rising passenger taxes on air travel it has to cope with next year’s cost of entry into the european emissions Trading Scheme – a key pillar in the eU’s climate change policy which caps the carbon dioxide emitted by business and creates a market and price for carbon allowances. and that’s even before factoring in the impact of higher fuel costs, which Willie Walsh, chief executive of British airways/Iberia parent International airlines Group, warns is the “big challenge” facing airlines. His attitude is hardly surprising given that fuel costs soared by 31 per cent to €1.128bn (£1bn) in the three months to 31 March, up from €862m (£760m) in the same quarter a year earlier.

This year’s Budget estimated an income of £2.2bn by 2015/16 from the eU emissions Trading Scheme and £400m this coming year.

UK air passenger duty (aPd) and similar taxes paid in other countries by easyJet passengers alone totalled £153m in the six months to 31 March. aPd has risen by between 140 per cent and 325 per cent since 2007.

The no-frills carrier’s winter half-year losses almost doubled to £153m, which it partly blamed on aPd. easyJet claims planned increases – after a 12-month freeze of the tax until april 2012 – will raise the extent to which short-haul flights are overtaxed for their carbon emissions.

Currently, aPd adds £12 to the cost of an economy flight within europe, £60 to the US and £85 to australia, with higher charges imposed on business and first class tickets. It is believed high rates of aPd allied to the soaring oil price are to blame for a 4 per cent decline in long-haul travel in February to countries beyond europe and a 5 per cent fall to north america.

Changes from a two-band system of variable aPd charges to the current four-band system some years ago created anomalies that have had a serious

AiR PASSEngER DUTy AT A glAnCE APD adds

£12

to the cost of an economy flight within Europe

£60 £85

to the US

to Australia

impact on many tourism-dependent economies.

The Caribbean, for example, has been especially hard hit by the tax as flights to the region from the UK carry a higher aPd rate than to Hawaii and US cities which are further away.

Chancellor George Osborne announced an immediate consultation on aPd in the Budget to explore possible reforms to the banding structure as well as assessing options regarding premium economy class and regional airport differentials.

The result is not expected before the autumn, so trade bodies such as the Board of airline representatives in the UK (Bar), which represents 86 carriers, are keeping up the pressure for a more proportionate tax regime through a “fair tax on flying” lobby that is being spearheaded by aBTa (association of British Travel agents). recent research by the airport Operators association showed strong support for the abolition or reduction of aPd to compensate for the

introduction of emissions trading. easyJet is so concerned about the impact aPd is having on the industry that it has launched a campaign to government, with online petition, focused on minimising any increase in the tax its passengers pay.

The carrier claims that a short-haul londonnice flight is taxed at £172 per tonne of carbon dioxide emitted, but a london-los angeles flight is taxed at £95 per tonne. easyJet chief executive Carolyn McCall said: “The government should reform aPd to make it fairer for the public and to encourage greener behaviour by airlines. aPd is already higher in the UK than anywhere else in europe and therefore now is not the right time to increase this tax.” according to Bar UK chief executive Mike Carrivick the airlines and UK consumers want the same thing – “a fair tax on flying that does not discriminate against air travellers by using them as a cash cow to reduce the nation’s debts”.

Carrivick argues that the UK’s position as a global leader in aviation – one it has held for decades – is being challenged like never before. and countries such as France, the netherlands and United arab emirates are reaping the benefits of increased jobs and prosperity through the transfer of aviation market share away from the UK thanks to the government’s out-of-touch aviation tax policy.

“The consultation on aPd announced in the Budget indicates an acknowledgement by the Treasury that cumulative increases and structure changes have reached a tilting point where damage to the industry outweighs the revenue benefits,” Carrivick says. “We urge the Chancellor to fully consider the negative effects of the current tax and not to apply double taxation from 2012 when airlines also pay into the eU emissions Trading Scheme.” according to Peter von Moltke, chief executive of UBM aviation, airline data group OaG’s parent company: “UK air passenger duty, although frozen until 2012, continues to have an impact on business and leisure air travel demand, and we expect to see further reductions in UK domestic services.”

Stricter security checks at airports are being put in place in response to possible retaliation by terrorists following the killing of Al Qaeda leader osama bin Laden.

It is expected that full-body scanners in use at three airports – Heathrow, Birmingham and Manchester – could be extended across the uK. But the government is being urged by the aviation industry to target the highest risk passengers – based on their age, origin, background and travel plans – rather than maintaining a blanket approach that treats all travellers as an equal threat.

British Airways chairman Sir Martin Broughton has argued that uK airport officials should employ a narrower, more focused approach to targeting potential terrorists. British Airline Pilots’ Association (BALPA) general secretary Jim McAuslan, echoing this view, says: “resources must be targeted at the greatest threats rather than the current blanket approach.”

Passenger duty unbundled Air passenger duty was introduced in 1994 with a £5 rate for the uK/Eu and £10 elsewhere. Since then, it’s seen several increases and a doubling for passengers travelling other than in economy class. (reduced rate = economy class; Standard rate = premium class). four bands were introduced in 2009 based on the distance from London to the capital city of the country concerned (with the exception of the russian federation which is split east and west of the urals). The rates of duty are: Band

Economy Premium class class

A

0–2,000 miles from london

£12

B

2,001–4,000 miles £60 from london

£120

C

4,001–6,000 miles £75 from london

£150

D

over 6,000 miles from london

£170

£85

£24

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Cruises

9

Not all plain sailing on the ocean blue Cruises have been a boom area of the travel industry in recent years but a sea-change could lie ahead

By Phil Davies

On THe surface, the UK cruise industry appears to be going from strength to strength with record numbers of passengers for both ocean-going and river vessels.

More than 1.6m Britons took an ocean cruise last year, a rise of 6 per cent on 2009, while river cruising achieved a growth rate of 8 per cent, attracting almost 134,000 UK passengers. British travellers spent £2.3bn on cruises in 2010 as prices rose by around 8 per cent from an average £120 to £130 a day.

But the rate of passenger growth is slowing from a UK market average of 9 per cent over the past five years, despite departures from UK ports performing particularly well. For example, the spectacular growth in the ultra-luxury cruise sector of 15 per cent in 2009 more than halved to 6 per cent last year.

Industry projections suggest the overall rise will come in at 5 per cent this year to 1.7m cruises, while the foreign holiday sector is expected to remain stagnant at best during a time of continuing economic uncertainty and squeezed disposable incomes.

The landmark figure of two million UK cruise passengers is forecast to be surpassed in 2014 as the industry seeks to convince more first-time cruisers to take the plunge. value and variety helped spur last year’s increase, according to industry body the Passenger Shipping association. Two-thirds (66 per cent) of UK passengers cited value for money as the main reason for selecting their most recent cruise, and nearly a quarter cited the all-inclusivity of cruise pricing.

Anchors away: 1.6m Britons took a cruise last year

With only 5 per cent of British holidaymakers taking a cruise, there’s a vast untapped market for cruise lines to go after.

But take a peek under the waterline and a more turbulent picture emerges of an industry whose growth is beginning to waiver with a number of concerns being flagged up about the future.

While no-one doubts the upward trajectory cruising has experienced in the past decade – a doubling in UK passenger numbers – serious potential hurdles remain on the horizon.

Soaring fuel prices, environmental regulations

With only 5 per cent of British holidaymakers taking a cruise, there’s a vast untapped market for cruise lines to go after and european Commission employment laws affecting on-board staff could all combine to blow the industry off course.

Cruising also faces a perception problem among the vast ranks of non-cruisers whom the lines are so desperate to attract. latest consumer buying trends, released in May at the annual UK Cruise Convention in Southampton, included data which suggested a high level of ignorance about ship-based holidays, with hugely polarised opinions for and against cruising.

While there were positives covering the customer experience and value for money, the flip-side highlighted concerns ranging from sea sickness to the size of cabins. Those saying they never want to take a cruise felt seaborne travel was the preserve of the elderly, infirm or

super rich – a perception the industry has been desperate to shed since the advent of the first family-friendly super ship 20 years ago.

Few cruise company bosses will publicly admit the industry has an image problem. But andy Stewart, norwegian Cruise line global sales and passenger services executive vice-president, says: “There is a hurdle we still have to get past that (cruising) is for the newly wed and nearly dead. There’s an industry job to overcome this given that the product has a broad appeal and the value is second to none.” and royal Caribbean International UK and Ireland vice-president and managing director dominic Paul agrees that the cruise industry faces a “big challenge” conveying to the public the range of facilities available on large resort-style ships which can encompass surf simulators, ice skating rinks, water parks, multiple dining options, children’s clubs, spas and gyms, to name but a few.

Market leader Carnival UK – parent company of P&O Cruises and Cunard line – has been the most aggressive in seeking to highlight the issues facing the industry.

The UK arm of Miami-based cruise conglomerate Carnival Corporation decided two years ago to shut entry-level line Ocean village and shift its pair of ships to australia where they were seen as offering a better return on investment.

The company also took unprecedented action earlier this year to slash the commission it pays travel agents from levels often exceeding 15 per cent to a base of 5 per cent. The move was designed to stop retailers using high commission to fund massive discounts of cruise holidays. It is widely expected that other lines will follow suit.

The architect of the cut, Carnival UK chief executive david dingle, does not mince his words when tackling big issues of this nature.

He believes most agents “will welcome the end of ungainly throat-cutting as commissions are shredded to chase bookings, and all will welcome the chance to sell on service rather than price”.

He has also made it clear that the giants of the industry are prepared – like Carnival

UK Ocean Cruise Market year Passengers (000) 2001 776 2002 820 2003 964 2004 1,029 2005 1,071 2006 1,204 2007 1,335 2008 1,477 2009 1,533 2010 1,622 2011 1,700

% Change 2.9 5.7 17.4 6.7 4.1 12.4 10.9 10.5 3.8 5.8 4.8*

*Provisional estimate.

Source: Passenger Shipping Association

Corporation – to maximise their returns by moving assets – ships – around the world. dingle has often said the same thing with reference to the taxes, legislation and regulation which cruise lines face in the regions in which they operate.

However, the immediate priority is to encourage higher prices through a better consumer appreciation of the value of taking cruises, where food, entertainment and childcare are all part of the price.

Travel agents, which account for more than 79 per cent of UK cruise sales, must also become more effective in persuading non-cruising higher spenders to get on board, according to dingle who says: “Price is a blunt and unsophisticated tool in growing the market.” and he makes it clear that the shape of cruising faces a sea change with the cost of fuel “most likely” to double over the next decade at the same time as stricter environmental protection rules are imposed.

These two factors alone will mean cruising closer to home, the dropping of more distant ports of call and a reduction in the speed that ships travel in order to save fuel. In short, this will mean that the ships will become destinations in their own right rather than the places that they visit.

“I believe that increasingly our efforts will be on selling the onboard experience rather than portraying a cruise as a way of seeing a host of big-name places all in one holiday,” dingle says. “That will mean more sea days, fewer fast dashes to that extra landmark port and, for ex-UK cruising in particular, increasing visits to ports close to home. Maybe the balance will tilt more towards fly-cruising, but with expensive aircraft fuels and high departure taxes, this is questionable.”

He believes cruise companies and travel agencies will change in the way they sell the concept of cruising by talking less about destinations and more about the ships themselves.

“Thankfully, as we look forward to the radical impact which high fuel costs will have, the cruise industry is now building ships of a scale capable of providing variety and experiences unimaginable maybe only ten years ago,” says dingle. “The future of cruising will be to look to the finest destinations of all – our ships.”

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Industry view

Asia’s emerging wonder With tourist numbers set to soar and a major promotional campaign under way, the government of Sri Lanka is encouraging investment in the country lOCaTed aT the tip of the Indian subcontinent the small island nation of Sri lanka (aka Ceylon, aka Serendib, aka Thambapanni) was a popular trading hub between east and West for centuries.

The 14th-century explorer Marco Polo proclaimed Sri lanka the finest island of its size in the world.

But while the country has long been known for its unspoilt golden sandy beaches, it has often been overlooked as a mainstream holiday destination.

Few have ventured beyond the beaches to explore the rest of the country.

The island is positioning itself to be an all-year-round holiday option with much more than the beautiful coastline to enjoy after three decades of civil unrest that ended in 2009 the country is enjoying the dividends of peace. It is open for business in all spheres and tourism in particular has seen a tremendous boom with visitors now flocking back to the isle in significant numbers.

In 2009, visitor arrivals increased by 2.1 per cent, while international tourist numbers worldwide decreased by 4 per cent. By the end of 2010,

Sri lanka was enjoying a 46 per cent increase in tourists with an extra 24,000 visitors from the UK travelling there. There has been a buoyant start, too, to 2011 with year- on-year arrivals increasing a further 40 per cent. as a result of its new-found popularity, the demand for flights from tourists wanting to visit the country almost threatens to outstrip supply. airlift to Sri lanka is at an all-time high with new entrants such as Jet airways, Gulf air and Kingfisher adding indirect routes to Colombo. Sri lankan airlines, the national carrier, has been expanding its reach by adding new destinations to its portfolio and increasing the frequency of flights to others to meet the demand.

Similarly, the need to provide hotel beds has never been greater with demand there also expected to exceed the numbers available in the short term.

The Sri lankan government has ambitious plans to attract more than 2.5m tourists by the year 2016 and they seem to be on track to achieve the target. To reinforce the vision, Sri lanka has declared 2011 visit Sri lanka Year and is promoting the island with the “refreshingly Sri lanka” campaign: eight facets of Sri lanka are being celebrated, highlighting the country’s rich culture, heritage, wildlife, landscapes, festivals and its people.

The country is positioning itself to be an allyear-round holiday option with much more than

the beautiful coastline to enjoy. More than 80 per cent of the island’s attractions are in its interior with eight Unesco heritage sites as well as many other sites of archaeological interest. Sri lanka has a recorded history of more than 2,500 years for visitors to explore. and with 16 national wildlife parks it offers the ultimate island safari with big game such as elephants, leopards and sloth bears on view, as well as blue whales, sperm whales and dolphins off the coast.

The opening up of the east coast of the island to visitors has brought a new dimension to tourism. The harbour towns of Hambantota and Trincomalee are key gateways to that area along with the second international airport currently under construction in Mattala. Heading south from Trincomalee, untouched beaches can be found as well as some of the best surfing in the world.

With so much to offer in this compact island,

the prospect of investing in Sri lanka has never looked so attractive.

In order to cater for the rapidly growing demand from tourists, the country needs to build more than 25,000 hotel rooms and create the associated infrastructure to support the influx of visitors.

The Sri lankan government is offering incentives and concessions to people interested in investing. recent investors have included the Hong Kongbased Shangri la leisure chain, which recently broke ground to build a luxury hotel complex in the heart of Colombo facing the Galle Face Green promenade, a prominent landmark in the city.

Swiss hospitality chain Mövenpick Hotels & resorts has also secured a management deal to operate a 180-room property in the city, which is expected to open by mid-2013. for more information about Sri Lanka email infouk@srilanka.travel www.srilanka.travel

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Travel agents

11

Back to the high street Having lost out to the internet, travel agents are fighting back by tapping into customers’ need for reassurance when they book their holidays

By Jeremy Skidmore

Travel aGenTS are enjoying an increase in business for the first time in many years, according to market analyst Mintel. a recent survey among 25,000 adults last year showed an increase in those using travel agents to book their holiday – up from under 46 per cent in 2007 to 50 per cent.

Clearly, there is still a long way to go to reverse a trend that has seen millions of people switch to the internet to seek out the best deals from companies that do not have to pay travel agents’ commission. It’s a trend that has also seen the number of travel agencies in the UK drop from 11,000 ten years ago to 4,300 today.

“Not all customers have the confidence to book online and would prefer to speak to someone when making a high cost purchase such as a holiday” nonetheless, there does appear to be a shift back to agencies. Industry experts believe this is happening because holidaymakers want face-to-face reassurance that they will be looked after and their money will be safe if something goes wrong.

Hundreds of thousands of them have had their travel plans disrupted, or worse, lost their money

in recent years following political and economic unrest in various countries and the volcanic ash cloud eruption in Iceland.

This is not to mention the high-profile failures of low-cost flight and holiday companies such as Xl leisure which collapsed in 2008, and Goldtrail and Kiss Flights which went out of business in 2010.

In reality, those affected had booked through a variety of methods – including high street travel agents. nonetheless, holidaymakers, and the industry itself, recognise that agents can offer a level of service that isn’t often available on the internet. as Oliver Broad explains: “Customers seek reassurance and financial peace of mind because of the unsettled economic and political climate across the world.”

Broad is the chairman of the association of Independent Tour Operators (aITO) Specialist agents, a group of 130 independent retailers who sell the holidays of companies which are part of aITO. Sales for the group in March were up 13 per cent compared with the same period last year.

Many independent tour operators have decided to back independent agents by training them on how to sell their holidays and refusing to undercut them by offering a discount to customers who book direct.

Carl Burrows, sales director at explore, which specialises in selling adventure holidays, says: “We have benefited from a 10 per cent increase in travel agent bookings year-on-year which we attribute to an increased high street focus, involving training and day-to-day support.” He points out that while explore’s call centre and website handle the majority of enquiries travel agents are not undercut by the website and they quote the price as online.

Face-to-face brings peace of mind

even the major travel tour operators are reporting an increase in sales among the travel agents they own, after years of steady decline. In 2008, Thomson and First Choice merged and began a programme of shop closures, reducing their combined portfolio from 1,100 to the current figure of 860. However, they now plan to open a further 20 shops in the next two years. nick longman, director of distribution for Thomson and First Choice, said: “It is significant that we are continuing to invest in travel agencies because it underlines our faith in the retail sector as a channel for our customers to research and book holidays. “not all customers have the confidence to book online and would prefer to speak to someone when making a high cost purchase such as a holiday.”

However, although some agencies will offer an across-the-board guarantee against any company failure, in reality the customers’ money is not always safe for every purchase made through every agent (see below).

Safe as houses The laws on financial protection of holidays are complex, to say the least anYOne BOOKInG a package holiday, whether it is through an agent or online, will have their money protected and will not be left stranded following a company collapse, because they will be buying from a company that has a Civil aviation authority (Caa) air Travel Organiser’s licence (aTOl).

What constitutes a package is a matter of debate. In theory it is two or more elements of a holiday – that is a flight and accommodation – bundled together. However, some travel firms have been getting around this by selling different elements of a holiday separately. Internet holiday company Travel republic used this defence to win a court case against the Caa, which claimed the firm was flouting the law by selling packages without an aTOl. The Caa is trying to plug this loophole with a new “flight plus” rule that is due to become

law later this year. It will require anyone selling a flight plus other elements of a holiday to offer financial protection.

But this will not solve the anomaly surrounding airline ticket sales. a customer booking a seat on a scheduled airline that subsequently fails is not protected. It is quite possible for two people to be booked on the same flight, with one receiving a refund if the airline fails because he has booked the flight as part of a package while the other – who did not – is left out of pocket.

Sean Tipton, a spokesman for the association of British Travel agents, said: “If travel agents are selling something that is not protected, for example an airline ticket, they can offer the customer insurance, but it is up to them to do it. The current system is inadequate and extremely

consuming for customers. long term, we would like every holiday purchase to be protected.”

Buying online isn’t necessarily more risky. lawrence Hunt, the chief operating officer of low Cost Travel Group, which owns low Cost Holidays and sells directly over the internet, said: “We have had an aTOl since 2004. It is nonsense to say you are more protected if you book through a high street agent.” even those who do not offer the same level of financial protection believe there are already adequate laws in place to protect holidaymakers. Managing director of Travel republic Kane Pirie highlights consumer credit card laws. “Consumers are well protected under the charge Lawrence back protection on all credit cards Hunt: it’s safe to and around 99 per cent of debit buy online cards,” he says.

Travel for techies Virtually all travel companies, from the smaller operators to household brands, sell holidays via the internet. But who’s winning the smart holiday traffic race?

A small, but growing percentage of internet users are using their mobile devices to make travel bookings.

Kane Pirie, managing director of Travel republic, says “Currently, less than 10 per cent are booking on smartphones and the i-Pad, but it is growing fast.” fran Hall, the head of marketing at Lowcost Holidays, which also predominantly sells over the internet, says 4-5 per cent of visitors to its website were from mobile devices and, of that total, 1.5 per cent were booking. “we saw a big surge in mobile use after Christmas and it is definitely growing. we’re putting together a mobile site, which will be simple to use, and we think that will make a big difference,” says Hall.

The basket value – the amount people spend per booking – varies by device, according to Hall. on average they are spending £600-£700 when booking by phone and more than £1,000 when booking on an i-Pad, which might be due to the demographics of people buying i-Pads.

Paul richer, a partner at travel consultant genesys, which advises travel companies on the use of technology, says many companies have launched mobile applications which holidaymakers value.

“Apps where you can check flight times, and mapping apps, for example to show you where you are in theme parks, are useful,” richer says.

“But there is a limited number of people who will buy their whole holiday on a smar tphone because people want to see pictures of where they are going. The exception is when customers register with a particular company for certain holidays and have deals sent direct to them. Then they know what they are buying and are more likely to do it from a small screen.”

Kane Pirie: smartphone bookings are up

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Industry view

Forget Facebook – get the basics right Eschewing gimmicks, IT provider Ypsilon focuses on the fundamentals of content, security and development speed to keep enhancing its service for customers lOOKInG aT the industry today, it seems as if many IT providers are focusing on gimmicks such as apps or social media rather than security and content.

Ypsilon prefers to concentrate on the basic but vital needs of its customers. For a travel supplier, what is the point of having an app if the company’s payment flow is not secure?

Similarly, why would a tour operator need to have a presence on a social network when the system it provides does not guarantee full content?

Ypsilon is rare among IT companies in the travel industry in having undergone a vast audit and certification procedure in order to comply fully with the security requirements of the payment card industry (that is, PCI dSS – payment card industry data security standard). as such, it provides customers with the highest degree of payment security.

The encryption and storage of sensitive data has been upgraded in order to meet these stringent security standards. Many aspects of the operation, including personnel-related security, safety and traceability, general security and reliability, were involved in the process.

It took eight months to complete the audit and certification procedure of all of the codes, processes and system components included in the scope of PCI dSS. The certification covered verification of firewalls, switches, routers, wireless access point, network appliances, and other security appliances, web, application, database, authentication, mail, proxy, network time protocol (nTP), and domain name server (dnS).

The complete card holder environment – that is, the part of the Ypsilon network that possesses card holder data or sensitive authentication data – has also been audited and verified. as a result, Ypsilon is not only PCI dSS certified but is now also in a position to offer safe storage facility and credit card neutralisation services by usage of tokens to third party companies.

The travel industry as a whole has been heavily targeted by credit card fraudsters and, as a leading IT solution provider, we see it as our responsibility to ensure the highest degree of payment security for the protection of our customers. They are entitled to have confidence in the security of our systems and it is extremely important for any IT provider which stores, processes or forwards credit card details to ensure such protection.

Customers should always ensure that their IT solution providers have secure systems for handling credit card details.

Beyond security, the content we provide is also key.

The global deregulation of GdSs (global distribution systems) and the increased fragmentation of content means that consolidators and travel agencies worldwide are being confronted with new challenges. The latest one for all GdSs is to ensure full content agreements with all carriers.

The epic battle over distribution costs between amadeus and lufthansa in Germany or the pricing disputes between american airlines, Sabre and expedia in the US are prime examples of the new issues travel agencies and consolidators have to tackle in order to find new and profitable booking technologies.

The picture is further complicated by the deal

Ypsilon provides content for low-cost carriers

in prospect between Google and specialist travel technology company ITa Software.

Ypsilon not only provides content for more than 180 low-cost carriers but also offers a multi GdS booking engine to cope with constantly changing global market conditions. Carriers can load preferential fares in one GdS without surcharges but with surcharge in others, which forces the GdSs involved to either compensate travel agencies for the point of sale fee, costing millions, or the loss of content.

Connected to the big five global travel distribution systems – amadeus, apollo, Galileo, Sabre and Worldspan – the Ypsilon booking engine offers free selection of GdS and allows mixing of fare content from multiple GdSs. The destination GdS can be based on diverse criteria so, within the same booking engine, a different GdS can be selected based on the carrier, the route or the fare type.

The multi GdS logic enhances the multi-source functionality that merges low-cost carrier with low-cost or regular carriers. Ypsilon not only merges consolidator net fares, GdS fares, low-cost carrier and charter but provides a multi-source/ multi GdS engine.

In addition, as part of the strategic partnership between Ypsilon and everbread, Ypsilon has integrated everbread’s Haystack content and made it available to all of its customers.

Haystack searches directly aTPCO, OaG, IaTa and other industry data feeds to create and validate itineraries completely outside the GdSs. Through Haystack, Ypsilon’s customers will gain access to affordable and better fares and pricing

For a travel supplier, what is the point of having an app if the company’s payment flow is not secure?

and still continue to book in their preferred GdS or direct connect. Haystack is both faster and returns more and cheaper flight options. leveraging Ypsilon’s low-cost feed, net fares and direct connects, Haystack integrates all data sources with the aTPCO feed to provide a single consolidated result. The system even allows consolidators to use multiple points of sale and agency Ids to identify the cheapest booking opportunity.

By including such a wide variety of sources – aTPCO published fares, private fares, consolidator net fares, low-cost carriers, charters, rail and many more – the Ypsilon-Haystack combination offers itineraries that include a comprehensive set of search results and features.

In addition to two one-way tickets, Haystack also provides split-tickets across any combination of low-cost and full-service airlines. This unique feature offers a mechanism for finding much cheaper ways to travel. Tour operators that are currently penalised by the high transaction costs of traditional GdS search can search thoroughly across all fare sources in a single search and get dynamic packaging at an affordable cost.

Patrick Coulomb, Ypsilon’s vice-president of sales and marketing, says: “The combination of Haystack and Ypsilon’s current products and highly efficient availability caching mechanism will allow our customers to enjoy an affordable, true multi-source search alternative for fares and pricing, giving them the freedom to book in their preferred channel.” www.ypsilon.net

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Business travel

Up, up and away After stalling in the recession business travel appears to be taking off again as new trade markets open up

By Amon Cohen

GOOd neWS for the travel industry – the corporate travel budget is back. Business travellers account for one in four scheduled flights from UK airports and the chances that they will be business class flights have improved significantly since the depths of the recession. according to the corporate payment services company airPlus International,14 per cent of the air tickets it handled in 2010 were in front of the magic curtain that divides business and economy class – up from 8 per cent in 2009.

The sobering news is that 14 per cent is far below the figure for 2001 when no fewer than 43 per cent of corporate travellers flew in business class. It is not only the recession that prompted a downgrade to economy in the intervening decade.

Many companies were already making savings by insisting european flights were in economy and using low-cost carriers where possible.

The revival in the fortunes of business class is more to do with the destinations of business travellers. Hogg robinson Group (HrG), one of

the country’s three largest travel management companies, is seeing a boom in flights beyond europe. “Bookings to China, India and the Middle east are climbing 30 per cent a year,” says Stewart Harvey, HrG’s group commercial director. “They are growing as consumer markets, not just as sources of primary materials or manufacturing locations.”

Harvey predicts that these trading trends will increase, with asia eventually accounting for as many bookings as the US, and africa following behind. “Some parts of africa, especially Kenya and nigeria, are showing the first signs of growth we saw in India and China ten years ago,” he says.

Paul Tilstone, chief executive of the Institute of Travel and Meetings, says companies are permitting more generous conditions for employees who travel further afield. “There is a duty of care angle,” says Tilstone whose members, including 50 per cent of the FTSe 100 and many government departments, spend £34bn annually on travel and meetings. “Travellers are fitting in more on their trips and staying away for a longer time. and employers are recognising they need to look after key personnel.”

However, firms are also keen to maintain

some control over the travel spend. as a result, companies are thinking harder about why, when and where their people travel. and more bosses are insisting on approving trips their staff make than was the case five years ago.

Inevitably, visits to sales prospects and, to a lesser extent, existing customers, are more likely to win the nod than meetings with other colleagues. Instead, internal travel is increasingly being replaced with video-conferencing and other forms of virtual communication (see box).

In spite of these closer controls, most travel management companies are experiencing doubledigit booking increases in 2011, according to Tom Stone, director of the travel sourcing consultancy Sirius.

With employees travelling more and further afield, travel costs are increasing. But there are two more reasons why businesses can expect their total air costs to rise. The first, says Stone, is that airlines are getting smarter at what they call yield management. larger companies have negotiated corporate deals with carriers, especially on long-haul routes, with discounts usually ranging from 20-50 per cent. now that aircraft are filling up again, airlines are responding by limiting the number of discounted seats on a flight. “It is one thing to have a deal, and another to have access to it,” Stone says.

The other inflationary pressure comes from the extras piled on top of the standard air fare, which Tilstone says has led one of his members to warn her board to expect a 10 per cent increase in the group’s air costs in 2011. The list of extras includes the UK’s dramatically increased air Passenger duty (see p8) and the introduction of similar taxes in countries such as Germany and austria. Then come fuel surcharges: Ba raised its surcharge three times between december 2010 and april 2011, taking the fuel bill to £250 on a business-class return trip to new York.

Harvey says he has seen the taxes and surcharges boxes on air tickets reach as much as £470 recently – and it could get worse. US airlines have started copying the european low-cost carriers’ fondness for what the travel industry calls fare unbundling. This is when airlines charge passengers for services that were previously included in the fare, such as checking in bags, or selecting an aisle seat. european full-service carriers have largely avoided this trend, but it is creeping in with them too. It is becoming increasingly important to check the total cost

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green or mean?

PricewaterhouseCoopers UK is saving money by pioneering sustainable business travel PricewaterhouseCoopers (PwC) has this month become the first uK business to create a private electric car club. Staff are encouraged to collect and return the vehicles provided by Hertz at designated points around London in the manner of the ‘Boris Bikes’. “we only need to replace two taxi journeys a day to make it cost-effective,” says Mark Avery, head of business services at PwC. However, as Avery himself points out, using the electric vehicles doesn’t just save money; it saves carbon too, and it is the twinning of these aims which lies at the heart of what PwC calls its sustainable travel programme.

PwC has won awards for greening its travel programme but, says Avery, “the agenda has broadened. In the early days it was about how we reduced carbon emissions. Then we added duty of care to travellers, and now it has morphed into what we call sustainability, covering how we do business through to governance and the welfare of our people.”

PwC’s consultants will always need to travel, but Avery’s team wants them to be sparing with their trips. Avery therefore works hard to communicate the alternatives to travel, such as videoconferencing. for example, every time someone tries to book a trip on the PwC online reservations tool, it displays a message asking them if they really need to travel. In the first quarter of 2011, PwC estimates video-conferencing helped avoid 61m miles of air travel, a 26 per cent improvement on the same period in 2010.

PwC also favours rail over air for journeys of less than three hours, so if the proposed trip is to Paris, the system will urge them to choose Eurostar too.

of an air ticket – not just the base fare.

With regard to business hotel costs, the picture is mixed, says Stone. He is seeing big room rate rises in international gateway cities such as london, Paris and new York, but softer pricing in regional locations. Figures from PKF Hotel Consultancy Services confirm Stone’s perception is correct. They show room rates in March – the most recent available – rose 7.4 per cent in london but only 1.4 per cent in the UK regions. Companies will experience different hits to their hotel bills according to where they travel.

Business travel trends Top five European destinations for UK business travellers Paris

Closer ties than ever thanks to up to 18 Eurostar services a day from London, taking just 135 minutes.

Dublin

The Celtic Tiger has had its claws clipped in recent years but remains a key neighbour and business partner.

Madrid

Perhaps the most surprising inclusion, but commercial links are increasing: witness the growth of Banco Santander and the merger of British Airways and Iberia.

Milan

Both a hub of the global fashion industry and Italy’s commercial capital.

Amsterdam

The Netherlands is home to some of Europe’s biggest businesses and the regional headquarters of numerous uS multinationals.

Top five long-haul destinations for UK business travellers new york

A quarter of a million people fly from Heathrow to New york every month, connecting the world’s two most important financial centres.

Singapore

The Asia-Pacific headquarters of numerous multinationals and a vital regional air hub.

Dubai

The economy has overheated but Dubai is still a regional powerhouse and increasingly the

crossing point for Europe, Africa, the Middle East and Asia. Brits are the emirate’s largest source of expatriate executives.

Hong Kong

only seven million citizens but 36 billionaires – Hong Kong is booming, and increasingly influential as westerners’ entry point into China Moscow Take plenty of roubles when visiting the russian capital. It has the world’s highest hotel rates.

Source: Hotel reservations made by Hogg Robinson Group

Business Reporter · June 2011

14

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Industry view

The last wilderness Politically stable, relatively affluent and with a hypnotically beautiful landscape, Botswana is opening up to tourists keen to see an untouched paradise In SOUTHern africa lies the idyllic and hauntingly beautiful country of Botswana.

Often cited as the best example of how an african country should be run, managed and developed, it has a stable and functioning multiparty democratic government and has been a peaceful and neutral state since independence from the UK in 1966.

Botswana’s economy is one of the world’s fastest growing. This is a result of the combined benefits of a stable political climate and vast natural resources generating a sizeable income from mining and the export of diamonds.

Botswana has used its diamond revenues to cement political stability and to fund an ambitious social and economic programme – transforming

one of the poorest african countries into one of the most affluent.

In addition, Botswana owes its fame to two large ecosystems which have provided the opportunity for a thriving tourism industry: the Okavango delta – the world’s largest inland delta, up for consideration as a Unesco World Heritage site; and the Kalahari desert, which covers about 85 per cent of the country’s total territory.

Carefully controlled development has opened up the Okavango delta to tourism with upmarket, eco-friendly lodges and camps widely scattered across the whole 17,000km2.

With each one accommodating no more than 24 people there is a feeling of exclusivity and

luxury. The Central Kalahari Game reserve (CKGr) is the second largest reserve in the world and a true wilderness landscape. above all, Botswana is one of the continent’s last wildernesses. large numbers of africa’s key flora and fauna, together with africa’s largest population of elephants, colonise the near virgin paradise. It has become a destination of choice for wildlife and photographic safaris and cultural experiences.

Travelling in Botswana is a privilege, providing an opportunity to explore an extraordinary country where wild and hypnotic beauty provides lasting memories to treasure. www.botswanatourism.org.uk

When in Rome...

Whether it’s a helicopter flight, carriage rides, tour of the Colosseum or another uniquely Italian experience, ‘The Roman Guy’ is the man to talk to vISITInG rOMe with friends? entertaining vIP clients? Or looking for a one-off Italian experience?

Sean Finelli, aka The roman Guy, is the man to talk to.

He has an intimate knowledge of the Italian capital and can pinpoint the best guides for the Colosseum or vatican, the most authentic neighbourhoods and the best restaurants to eat at. He can help with practical matters, such as shuttle services and luxury drivers. But he can also introduce you to some of the city’s best-kept secrets which regular tourists seldom see. and beyond rome, he can arrange trips, tours and experiences around the country tailored to the individual needs of any party.

US-born but with Italian citizenship, Finelli

Sean Finelli, aka The Roman Guy

is well versed in Italian culture, speaks the language fluently and draws on a national network of contacts to help meet virtually any request.

He specialises in hotels, villas, drivers and tours and people hire him to show them around Milan, organise holidays in Sardinia or to reserve yachts out of Capri.

But he can handle almost anything that clients throw at him. Working on a corporate event earlier this year, he organised local restaurants and cleared a luxury hotel for the group but was also able to respond to a last-minute request from them for 14 horses and carriages to do a night tour. recently, he arranged for a party of wealthy clients to take helicopter flights into Tuscany to see the vineyards. not only did he secure the flights but he also made it possible for them to

land on the front lawn at the altesino estate at Montalcino. Claudio Basla, the wine producer, then came out to greet the guests as they arrived and offered them a private tasting of his reserve stock.

He arranges the services and, most importantly, sees them through to the end. It is not just a business for him; he does it because he loves the Italian culture.

You simply will not have the same experience without him.

The writer, Henry Pisano, is vice-president of player development at the Seminole Hard rock Casino in Hollywood, Florida and and he utilizes The roman Guy to impress his own clients. www.theromanguy.com

More from Lyonsdown in The Telegraph 12.06.2011

Employee engagement

21.06.2011

Finance and accounting

Bleak financial times have left employees feeling demotivated and insecure about their future.

How can businesses get more from their staff?

The role of the Cfo has changed from that of bean counter to business leader. find out how a well-run finance department can maximise shareholder value.

09.08.2011

Automation

Contact Centres 08.05.2011 for copies of this report email info@lyonsdown.co.uk

The german economy employs five times as many robots per capita as the uK and has an enviable manufacturing sector. Can uK manufacturers use automation and robotics to emulate germany’s success?

Business Reporter · June 2011

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Industry view

15

Where wellbeing tops the menu The ‘Yes I can’ philosophy is at the heart of customer service at Rezidor hotels and a cornerstone of the group’s worldwide success THe rezIdOr Hotel Group, one of the fastest growing hotel companies worldwide, has continued its rapid development with a third consecutive record year of openings in 2010.

Competition is fierce in the international hospitality business and to succeed requires truly creative brands that exceed clients’ expectations. rezidor’s carefully segmented portfolio covers the key hotel market sectors and features some of the best-known and most valued brands in the world, including the radisson Blu hotels and resorts, Park Inn by radisson and the lifestyle brand Hotel Missoni. Our reach ranges from Spitsbergen to Cape Town and from Cork to Beijing. radisson Blu hotels and resorts are first-class, full-service hotels that combine a stylish and contemporary approach to design with a culture of innovative thinking designed to meet the very specific needs of guests.

The innovations include a great choice of concept rooms with nespresso coffee machines in business class, a 100 per cent guest satisfaction guarantee programme and an easy-connect approach to IT with free high-speed internet access for all guests and meeting delegates. The fantastic range of bars, restaurants and leisure facilities includes spa and wellness centres and meetings and events venues.

Park Inn by radisson is a fresh and innovative international hotel product. Focusing on mastering the essentials, it offers an affordable hotel experience that’s warm and casual, spotlessly

clean, easy to use, safe and fun. above all else, it is Park Inn by radisson’s aim to provide quite simply “the best sleep in town” that makes it stand out from the crowd.

“Yes I can!” is the core service philosophy of the rezidor Hotel Group. More than just a slogan, it is at the heart of our customer satisfaction programme and a way of life for all employees at the group’s hotels. The philosophy is based on a positive service attitude – a “Yes I can!” attitude towards all guests every day. as a result, guests with any request are met with a positive response, and made to feel that their wellbeing is the sole priority of the member of staff assisting them. all of our employees genuinely believe in taking care of their guests and making them feel at home.

We have a long tradition of innovative service concepts, based on the needs of frequent travellers. Customer satisfaction is the basis for our success but is not enough on its own in the long run. Our responsible Business programme was introduced in 2001 in response to increasing demands from guests, corporate clients, employees and owners. (an environmental programme has been in place since the mid-1990s.)

In the programme, we are dedicated to three main areas of responsibility: health and safety of employees and customers; respecting social and ethical issues in the company and community; and reducing our negative impact on the environment.

Our ambition is to be a good company to work for, stay with and invest in. We take our commitment to being a responsible business seriously and aim to be among the leaders in our industry. recent highlights and achievements include: • Radisson Blu is the largest upscale brand in europe.

• Rezidor is one of the largest airport hotel operators in europe.

• We have a strong and expanding resort portfolio.

• Relaunch of Club Carlson, the loyalty programme.

• Highest employee satisfaction score in the history of the company.

• A “World’s most ethical hotel company” award by ethisphere in 2010 and 2011.

• Leading hotel operator in Russia, the CIS countries and the Baltics.

• Winners of RHIC-leadership award 2010 in russia and the CIS countries. www.rezidor.com

Customer satisfaction is the basis for our success

Capitalise on the rise of roam International roaming SIM cards could provide a new source of revenue for travel and tourism operators, as well as saving their customers money Travel and tourism companies have found the tables being turned. normally known for sending customers out to unexplored shores, the global downturn has forced many companies themselves to journey into uncharted waters in their quest to unlock new revenue streams and deliver shareholder value. Specifically, the travel extra market which previously dared not wander far from the solid ground of travel insurance and car hire has ventured into new territories.

One such move that is set to revolutionise the travel extras market is the shift to international

Occasionally, travellers have returned from foreign trips to find that the bill for their international mobile calls is as much as the trip itself roaming SIM cards. Travel companies are realising there is money to be made in helping their customer keep in touch while abroad.

The cost of mobile roaming has often been overlooked and underestimated. Occasionally, travellers have returned from foreign trips to

Travel companies realise there is money to be made in helping their customer keep in touch while abroad

find that the bill for their international mobile calls is as much as, if not more, than the cost of the trip itself.

One company bridging the gap between the travel industry and the telecommunications world is WorldSIM. WorldSIM provides a prepaid roaming SIM card that works in more than 200 countries. Customers simply pop it out of its holder and into their unlocked GSM mobile

phones, enabling them to make amazing savings on their calls when they travel.

In particular, WorldSIM’s innovative technology allows travellers to receive calls for free on their mobiles when they travel in more than 90 countries, including europe, africa, the Middle east, and even the US and Canada. Outbound call costs are a fraction of normal operator charges which often means that travellers can save up

to 95 per cent on their mobile phone costs when travelling. Travellers can now go global and yet be local when it comes to their communication needs.

WorldSIM boasts an impressive array of travel and tourism companies as its partners, all of whom have been attracted by WorldSIM’s value proposition. They range from travel agents and tour operators such as the worldwide Uniglobe franchise, to foreign exchange providers such as Travelex and the in-flight duty free sales operations of airlines including British airways, KlM, and virgin.

One reason for the popularity of WorldSIM in the travel and tourism industry is that as well as being able to save their customers money, companies selling WorldSIM continue to earn revenue from the SIM they have sold. So the company keeps earning commission each and every time the customer tops up their SIM anywhere in the world. So one SIM sale can generate a lifetime of commissions.

With the summer holiday season almost upon us WorldSIM believes there is plenty more opportunity for travel companies to take advantage of the lifelong rewards being offered. for more information email info@worldsim.com www.worldsim.com