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Sources for information shown in this section are generally the companies or associations concerned, and may not be marked. Other sources marked. Travel Business Analyst is marked 'TBA'. Reports on many of these topics in our Travel Business Analyst newsletters, Net Value (NV), People-in-Travel (PinT) monthly-reports, blogs (Foxtrots, Trottings), social and business media (Facebook, Linked In) contain some important additional information, qualification, and analysis.

IATA 2019 forecasts
17 December 2018
IATA (International Air Transport Association) forecasts airlines' net profit will be US$35.5bn in 2019, above the US$32.3bn now forecast for 2018, which had been revised down from US$33.8bn forecast in June.
  Other forecasts for 2019* (some percentage calculations are ours from IATA data):
-Seat sales 4.59bn +5.8%.
-RPKs +6.0% against +6.5% forecast for this year. ASKs +5.8% - comparison not given (CNG).
-Unique city pairs 21,332 this year +6.5%. No forecast for 2019, but IATA reports that this year’s total is double the number in 1998.
-Spend on air transport US$919bn +7.6%.
-Airlines’ revenue forecast US$885bn +7.7%. Passenger revenue excluding ancillaries forecast US$606bn +7.4%.
-Average net profit per seat sold US$7.75 +4.0%.
  This IATA measure is misleading, if not wrong. For example, an Emirates traveller flying Berlin-Dubai-Singapore is two 'passengers' (according to IATA’s definition; we use the accurate 'seats sold'), but the passenger’s fare is just one, for Berlin-Singapore. And so a US$1000 fare would become US$500 per 'passenger'/seat sold, and the net profit calculated on that.
  Also, IATA should use operating profit (or operating- as well as net-profit), because net-profit can be affected by many factors, some not airline-related. Operating profit is closer to being comparable between airlines.
-Net profit. North America airlines US$16.6bn +12.9%; per seat sold US$16.77 - CNG. Europe airlines US$7.4bn -1.3%; per seat sold US$6.40 - CNG. Asia Pacific airlines US$10.4bn +8.3%; per seat sold US$6.15 - CNG. Middle East airlines US$800mn +33.3%; per seat sold US$3.33 - CNG.
-Average return airfare US$324; CNG.
-Airlines to pay US$136bn +5.8% tax.
-Fuel share average 24.2% of airlines' operating costs, against 23.5% forecast for this year.
-GDP to grow +3.1%; +3.2% forecast for this year.
-Fuel average US$65/barrel (Brent prices), US$73 forecast for this year. Jet fuel US$81.3/barrel, against forecast US$87.6 this year.
  IATA should switch to West Texas Intermediate, as the supply of oil from Brent’s North Sea fields is reaching its limit. As a guideline, WTI’s price is about 15% below Brent.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Travel Traffic Index, Europe
14 December 2018
Our Europe ‘TBA Travel Industry Index’ from the current Europe edition of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Sep +5%E; Aug +4.9%P; Jul +4.9%.(Percentage change over previous year. E=estimate, P=provisional.)

Our outlook
13 December 2018
The following extracted from our input for an external report.
Assessment of travel business in the past four months:
-Equal. Equal in this sense is not positive, because the outlook was not good - and the actual was not good. The main determinants have been the negativity that is predominant today - between countries and economies. Some of the significant countries seeking positivity are Canada, France, Germany, Japan. But those pushing negativity are the same number - Brazil, Italy, UK, US. Sort-of outside is China. The EU is generally positive, although it has its negative members, notably Italy, and, for the moment, the UK, although its influence in EU matters has already brexited.
Assessment of travel business in the next four months
-Worse. Because the negative activity (from the markets noted above) will drag down overall sentiment. Will as many travellers still want to visit the US in its present turmoil, which is not just inside politics? (Likewise for others.) Plus, even in France there are protests for…something not quite clear but, broadly, everything. These worldwide economic/political matters have pushed terrorism from the headlines. Will that come back?
Evaluation of 2018
-Worse. Worse than expected because Brazil and Italy joined the negatives. And the US - where elections were perhaps expected to bring a return to positivity, seems to have just exacerbated the divisions.
Prospects for 2019
-Equal. Because there are too many unknowns, although the outlook is delicate given the number of conflicts. And how will the conflicts play out - America-v-China trade war (and will President Trump create others, if only as diversions for his legal struggles?); US internal politics; UK internal politics plus the Brexit matter; will Germany’s CDU make an easy transition to no-Merkel; will Italy break-up into League-North and 5Star-South, or break the EU; will North Korea get noisy again?

Travel Traffic Index, Asia Pacific
12 December 2018
Our Asia Pacific ‘TBA Travel Industry Index’ from the current Asia Pacific edition of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Sep +5%E; Aug +5.1%P; Jul +5.2%.(Percentage change over previous year. E=estimate, P=provisional.)

Indices, Travel Stocks
11 December 2018
The Baird/STR Hotel Stock Index in November for US hotel companies was  4447 +1.6% (over previous month). YTD, the stock index was -9.0%. 
  The ‘TBA Travel Stocks Index’ for November , from the current editions of our Travel Business Analyst newsletters, shows: World 222, Asia Pacific 98, Europe 184, US 384.
  The worldwide ‘TBA-100 Airline Stocks Index’ for November , from the current editions of our Travel Business Analyst newsletters, was at 230.
  The worldwide ‘TBA-100 Hotel Stocks Index’ for November , from the current editions of our Travel Business Analyst newsletters, was at 172.
  The worldwide ‘Net-Value Travel-Tech Index’ for travel stocks of OTAs (+Amadeus) in November , from the current edition of our monthly Net Value report, was at 126.
Notes: The Baird/STR hotel index is based on 1000 at February 2000. The TBA Hotel and Airline stocks indices are based on 100 at December 2000, the ‘TBA All-Travel Index’ 100 at December 2006, the ‘Net-Value Travel-Tech Index’ 100 at December 2014 – or when first listed if later.

Travel Traffic Indices - world, US
10 December 2018
Our world ‘TBA Travel Industry Index’ from the current editions of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Sep +6%E; Aug +5.6%P; Jul +5.4%.
Our US ‘TBA Travel Industry Index’ from the current editions of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Sep +5%E; Aug +4.7%P; Jul +4.7%.
  Percentage change over previous year. E=estimate, P=provisional.

What's working; what's not. Airlines in Asia Pacific
7 December 2018
Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-August. Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +9%; Cathay +2%; China Eastern +8%; China Southern +12%; Japan +4%; Singapore +11%.
  We would include Air Asia, but it is less transparent than others, and publishes only quarterly data - although when it started it promised to be above industry norms. Over a year, the AA group sells about 70mn seats, compared with say 126mn at the region's largest full-service-airline group, China Southern.
  Notes (on notable details):
-Air China. International still stronger, at +15%.
-Cathay. Still too weak; given the pressure to keep air fares low, the group is still looking unprofitable.
-China Eastern. As is becoming common, some of the airline’s figures do not add up. Based on the figures the airline published in 2017 and this year, international grew +1%; the airline’s data shows +11%. We presume the airline is showing the correct data, but for the present, there is some doubt.
-China Southern. Still the fastest-growing of China’s Big-3, with international also still impressively-strong at +18%.
-Japan. International looking good, at +8%.
-Singapore. We have criticised elements of the group's businessplan over many years - and still do. But now the results are starting to look good. We note that our criticisms were not misguided, but that the group is now doing much of what we proposed - essentially three years after we proposed it.
  But we do admit to one surprise - that the core Singapore Airlines is doing so well - +9% for the month, and although YTD +4% is OK, it is not good. Silk Air (the subject of one of our proposals, which is now happening - to merge into the core SA) could be fading because of that planned merge - +5% for the month against +8% YTD. Scoot (which we said should not have been created, but Tiger expanded instead; that has sort-of happened, although Tiger has been folded into Scoot) looks good with +13% for the month, although YTD is +17%. However, Scoot's seat factor is only 81% for the month and 86% YTD, although for the low fares and high costs (certainly on those medium-haul routes) it needs to be closer to 90%.
-Others of note: Air Asia YTD is +14%.

Indices; airline, hotel stocks worldwide
6 December 2018
Airline stocks
The November ‘TBA-100 Index’ of airline stock prices worldwide, from the current editions of the Travel Business Analyst newsletter, shows 230. Previous month 215. (Base: December 2004 or when first listed.)
Hotel stocks
The November ‘TBA-100 Index’ of hotel stock prices worldwide, from the current editions of the Travel Business Analyst newsletter, shows 172. Previous month 167. (Base: December 2000 or when first listed.)

Market Monitor, December
5 December 2018
An extract from the Market Monitor in current issues of the Travel Business Analyst newsletter – which also includes monthly growth data for principal travel companies in the three regions. Percentage change unless noted otherwise. E=estimate, P=provisional, TBA=Travel Business Analyst.
[] TBA Travel Industry Index, World: 2018: Sep +6%E; Aug +5.6%P; Jul +5.4%.
[] TBA Travel Industry Index, Asia Pacific: 2018: Sep +5%E; Aug +5.1%P.
[] TBA Travel Industry Index, Europe: 2018: Sep +5%E; Aug +4.9%P; Jul +4.9%.
[] TBA Travel Industry Index, US: 2018: Sep +5%E; Aug +4.7%P; Jul +4.7%.
[] World airline stocks index, on 100: 2018: Oct 215; Sep 235; Aug 245. TBA.
[] World airport passengers: 2018: Jul +5.8%; Jun +8.7%; May +5.6%. ACI.
[] World air traffic, RPKs: 2018: Sep +5.5%; Aug +6.4%; Jul +6.2%. IATA.
[] World hotel occupancy, pts: 2018: Jul +0.1; Jun +1.2; May -0.7. TBA.
[] World hotel rooms planned: 2018: Oct +15.1%E; Jul +5.9%. STR/TBA.
[] World hotel stocks index, on 100: 2018: Oct 167; Sep 187; Aug 187. TBA.
[] World travel stocks index, on 100: 2018: Oct 218; Sep 240; Aug 243. TBA.
[] World travel-tech stocks index, on 100: 2018: Oct 135; Sep 141. Net Value.
[] World visitor arrivals: 2018: Jun +5.8%; May +6.5%; Apr +2.2%. WTO.
[] AsPac airlines seat sales: 2018: Aug +6.9%; Jul +6.5%; Jun +10.6%. AAPA.
[] AsPac airport passengers: 2018: Jul +6.6%; Jun +10.7; May +6.3%. ACI.
[] AsPac air traffic, RPKs: 2018: Sep +6.7%; Aug +9.5%; Jul +9.4%. IATA.
[] AsPac hotel rooms planned: 2018: Oct +13.6%; Jul +15.4%. STR TBA.
[] AsPac hotel occupancy, pts: 2018: Jul -0.5; Jun +0.1; May -1.3. TBA.
[] AsPac outbound travel, estimate: 2018: Jul +5.4%; Jun +9.9%. TBA.
[] AsPac travel stocks index, on 100: 2018: Oct 88; Sep 97; Aug 103. TBA.
[] AsPac visitor arrivals: 2018: Jul +6.5%; Jun +11.4%; May +9.2%. WTO.
[] Europe airlines seat sales: 2018: Aug +6.4%; Jul +6.1%; Jun +8.8%. TBA.
[] Europe airport passengers, intl: 2018: Jul +5.4%; Jun +8.0%. ACI.
[] Europe air traffic, RPKs: 2018: Sep +5.4%; Aug +5.4%; Jul +4.6%. IATA.
[] Europe hotel occupancy, pts: 2018: Jul +1.0; Jun +2.3; May +1.4. TBA.
[] Europe hotel rooms planned (new system): 2018: Oct +8.9%. STR TBA.
[] Europe travel stocks index, on 100: 2018: Oct 191; Sep 214; Aug 216. TBA.
[] Europe visitor arrivals: 2018: Jun +5.8%; May +8.8%; Apr +1.7%. WTO.
[] US air international passengers: 2018: Aug +6.7%E; Jul +6.7%E. gov.
[] US hotel occupancy, pts: 2018: Jul -0.2; Jun +1.1. Smith.
[] US hotel rooms planned: 2018: Oct +6.2%; Jul +5.5%. STR.
[] US resident departures, overseas: 2018: May +7.4%; Apr +0.3%.
[] US travel agency sales: 2018: Oct +11.0%; Sep +8.1%. ARC.
[] US travel stocks index, on 100: 2018: Oct 375; Sep 408. TBA.
[] US visitor arrivals (2017 restated Sep 18): 2018: Mar +14.3%; Feb +7.5%.

Travel business updates
4 December 2018
[] IATA (International Air Transport Association) reports for October RPKs +6.3%. By region - Asia Pacific +7.6%, Europe +7.4%, Middle East +3.9%, North America +4.6%. International +6.3% - - Asia Pacific + 5.8%, Europe + 7.5%, Middle East + 4.4%, North America +5.6%. Domestic + 6.4%- Australia + 1.0%, Brazil + 3.4%, China + 12.2, India + 15.0%, Japan + 1.7%, Russia + 11.7%, US + 4.3%.
[] STR (nee Smith Travel Research) reports on US hotels 25 November-1 December: occupancy +1.0% to 57.3%, average room rate +2.2% to US$120.23.

November travel stocks’ ups and downs
3 December 2018
Travel stock prices (US, Asia Pacific, Europe) in November. Airlines: biggest growth, China Southern +26%; biggest fall, Easyjet -7%. Hotels: Wyndham +16%, NH Hoteles -16%. Tech: Travelport +2%, cTrip -13%. Others: HNA +37%, Thomas Cook -33%.
  Previous month: Airlines: biggest growth, United +0.0% (flat); biggest fall, Turkish -26%. Hotels: Peninsula -2% sic, Wynn -21%. Tech: LastMinute +17%, Travelport -11%. Others: EuroTunnel +1%, HNA -34% sic.
  TBA Travel Stocks Index: World 222, Asia Pacific 98, Europe 184, US 384. Index previous month: World 218, Asia Pacific 88, Europe 191, US 375.
  NVTT (Net Value Travel Tech) Stocks Index: 126; previous month 135.
  Stockmarkets. Biggest growth, Hong Kong +6%; biggest fall Dublin -4%. Previous month: smallest fall Zurich -1%; biggest fall Korea -13%.
-These good-growth figures must be read against the big fall the previous month. Only 5 (out of 23 stocks) are above their price before that fall (ie, end-September) in Europe, 10/27 Asia Pacific, 5/28 US, 3/8 tech.
-Top airline was actually India’s Jet with +38%, but this is boosted by an expected sale of the airline.
-China’s airlines are usually closely matched in stock movements. But this month, although just behind China Southern was Air China with +20%, China Eastern was only +12%.
-In Asia Pacific, three hotel groups were still falling. All airlines grew, except the Singapore Airlines group, flat. HNA had the fastest growth (but fell most in October), although it is still half its end-2017 price. Investors do not seem to have confidence in HNA’s supposed reorganisation.
-In Europe, we were impressed to see Lufthansa’s stock grow +22%. So often, traffic performance and stock prices seem out of sync. This time, the stock growth better matches traffic growth, around +11%.
-But for the rest in the region, some surprising results. Both no-frills-airlines, Easy and Ryan, fell - and all other airlines grew. (Norwegian, hard to categorise, was flat.) Four of our five hotels continued to fall. And 7 of the 8 ‘Others’ fell.
-In the US, only two stocks continued to fall - although these were big companies, Boeing (to be hit by US-led trade wars?) and Marriott.
-Travel-tech stocks were another surprise - six of the eight still falling. Only Booking/Priceline and Travelport grew.

  Info from the Travel Business Analyst newsletters. Details in next month’s newsletters.

What's working; what's not. World’s top-3 no-frills-airlines
30 November 2018
Our calculation of seats sold by the leading NFAs (no-frills-airlines) in September in the world’s three main regions, from WYSK:What-You-Should-Know, published by Travel Business Analyst, shows: Ryanair* +7%; Southwest +4%.
  Air Asia is less transparent, reporting Qs only; Q3 +9%; other Q3s Ryanair +5%, Southwest +4%.
-The airline reports growth of +6% (rounded), but the data it provides calculates to +6.8%.

What's working; what's not. Airlines in Europe
29 November 2018
Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over January-August.
  Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France (from February this year available only combined with KLM, but we now have obtained separated data) +0.1%; British +4%; Easyjet +4%; Lufthansa +7%; Ryanair +6%.
  Notes (on notable details; on whole-group for Air France (=AFKL), British (=ICAG), Lufthansa (=LHG):
-AFKL +3%. KLM, which has been doing better than AF, now at +5%. And Transavia, which should be moving well ahead as a no-frills-airline, only +6%. Remarkably, still no data on the group’s Joon subsidiary, which is still not included in the AFKL total although according to stockmarket rules, it should be.
-ICAG +8%. Iberia (our estimate) a strong +11%. AerLingus (our estimate) +13%. Vueling (our estimate) +10%.
-Easyjet. Seat factor at 96%, probably the highest for this year.
-LHG +11%. Continued good results; easily Europe’s best. Austrian +8%. Brussels (our calculation) +13%. Eurowings (our calculation) +24% sic. Lufthansa +7%. Swiss +10%.
-Ryanair. Seat factor at 97%, but we are not confident about how Ryan calculates this.

Travel business updates
28 November 2018
[] Luxembourg-based Corporacion America Airports, which operates 52 airports mainly in Latin America (in Europe in Armenia and Italy), reports passengers-handled in Q3 at 22.1mn +5.8%.
[] Hotel-room pipeline. We calculate, from STR data (nee Smith Travel Research), for October, the number of hotel rooms in the pipeline has grown: World +15%, US +6%, AsPac +14%, Europe +18%. Because of a change in STR methodology, growth rates for World and Europe are our estimates.
[] The Japan Airlines’ group reports October seat sales:
-Domestic 3.08mn +1.7%.
-International 767k +4.8% - Americas routes 116k +6.5%, Europe 65k -1.0%, Southeast Asia 284k +3.3%, Oceania 21k +8.4%, Hawaii/Guam 105k +5.9%, Korea 50k +3.6%, China 126k +9.4%.
[] MKG reports that Paris hotels have lost business, primarily because of the violent demonstrations* in the city November 24.
  MKG reports that most hotels lost the equivalent of at least one day of bookings in December, equal to a revenue loss of 20%, which means US$11.5mn (€10mn).
  In the first 10 months, occupancy had grown four points - occupancy levels not revealed. Our data shows +6.4pts to 77.4%.
More demonstrations are planned for December 1. The purpose of the demonstrations are confused, starting with complaints about an environmental tax on vehicle diesel fuel (even though the total cost of fuel has fallen since September) to a general one covering many price and political demands (one even for the firing of the president and shutdown of one of the country's legislative bodies).

Asia visitor spend
27 November 2018
Thailand’s DMO claims No1 place in 2017 visitor spend in Asia with US$57bn.
  WTO (World Tourism Organization), whose figures Thailand used, reports next as Japan US$34bn, Hong Kong (part of China, but not included in China’s counts) US$33bn, China US$33bn, Taiwan US$12bn.
  WTO has unclear ways of measuring spend.
  In arrival counts, WTO shows China 61mn, then Thailand 35mn, Japan 29mn, Hong Kong 28mn, Malaysia 26mn.
  But this WTO is also flawed because - as the best example - Malaysia counts certain arrivals from neighbouring Singapore, but Singapore does not count that same type from Malaysia. In fact, Singapore is a bigger visitor destination than Malaysia, yet WTO shows it as not much more than half Malaysia’s size.
  That also affects the as-important spend-per-visitor. From WTO data, we calculate highest in Asia is India US$1768 followed by Thailand US$1624, Singapore US$1417; China is only US$537.

Airline ancillary revenue
26 November 2018
Idea Works, a consultancy specialising on airlines’ ancillary revenue* (AAR) and Car Trawler, which provides online car rental distribution systems, forecast AAR will be US$92.9bn +13% this year, +312% on CT’s estimate for 2010, which we calculate is +19.3% AAGR (annual average growth rate).
  Based on IATA's forecast of 4.3bn airline seats sold this year (CT defines this figure as 'travellers', indicating it has misinterpreted IATA's data), that would mean US$21.60 per passenger per flight.
1. CT and IW report 2018 in the past tense. We have changed these to ‘forecasts’.
2. Ancillary revenue (in the travel business usually used only for airlines although it could be used for other travel sectors) is generated by extra activities and services - for airlines this would be anything in addition to the air fare. Activities for airlines could be commission from hotel bookings, sale of frequent flyer points to partners. A big problem for measurement is that some airlines - usually no-frills-airlines but now often all types of airlines - charge extra for baggage transport and food (= ancillary), and others do not.
3. A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.
4. At press time, CT and IW had not answered our request for clarifications.

Travel Traffic Indices - Europe, US
23 November 2018
Europe Index
Our Europe ‘TBA Travel Industry Index’ from the current Europe edition of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Aug +5%E; Jul +4.9%P; Jun +5.8%.
US Index
Our US ‘TBA Travel Industry Index’ from the current editions of the Travel Business Analyst newsletter, shows monthly traffic growth of: 2018: Aug +5%E; Jul +4.7%P; Jun +4.7%.
 (Percentage change over previous year. E=estimate, P=provisional.)

US arrivals confusion
14 November 2018
Reports on the US inbound visitor business by the US Travel Association (USTA) and Tourism Economics (TE) require amplification. The base is new reported growth in visitor counts.
-Reports good GDP growth for the US economy. However, for the inbound business (although not for domestic- and outbound-travel) GDP has minimal impact.
-Reports ‘solid [economic] growth’ in Asia, Europe, South America, and the rest of North America. More than a few observers might question ‘solid’; there are a few growth slowdowns, and weak growth. That trend is not normal; we would think ‘steady growth’ is normal, but not ‘strong’.
-Reports the revised US arrivals figures, not noting they are incorrect. As we reported (see 17 September), the new system categorises all foreign passport holders as visitors, even if some are US residents. Obviously, this practice boosts the overall total. We cannot know by how much, but we estimate small - perhaps accounting for 1-2% of the total.
-Reports revised data, which shows visitors were -1.8% in 2016, +0.7% in 2017, and forecasts +3.5% this year and +3.7% in 2019 to 83mn visitors. Excluding Canada and Mexico, the new data shows -1.5% in 2016, +2% (presumed 2.0%) in 2017, and USTA forecasts +3.2% this year and +5.1% in 2019.
-Reports the US has lost share (data not given), and to regain its 2015 share by 2024, AAGR (annual average growth rate) will need to be +7.5% for the next five years - which it says was the rate achieved over 2010-15. This, however, is disingenuous in that these are presumably based on unaltered figures for earlier years, and that USTA stopped the calculation in 2015 - presumably because the following two years were well below that +7.5%, as noted above.
-Notes the Canada and Mexico share is 50%. Canada dropped, rebounded in 2017, and is forecast to grow this year and in 2019. Mexico dropped in 2017, but forecast to grow this year and in 2019. No data on these forecasts.
-Europe’s share is 20%, falling -6% in 2016, growing +1% in 2017, and forecast to grow +3% (3.0%?) this year, and +4.5% in 2019. These are below the +5.5% growth 2010-15.
-Reports that Asia’s share is 16%, but growth below the +12% 2010-15; it grew +5% in 2016 and 2017, and forecast to grow +3% this year, and +6% in 2019.
-Reports that arrivals from China might be ‘softening’, but from India might be stronger. Our data shows a -1% fall from China in Q1, and +7% from India. But also notable (not noted by USTA) is that Japan - which has a 5% share compared with China’s 4% (and India’s 1%) - fell -4% in Q1.
-Reports that worldwide economic growth has slowed this year, with growth peaking in early-2018. Trade has weakened following a tariff war started by the US. These comments contradict USTA on the economic outlook.
-Forecasts a fall in US GDP over the next two years, and China would suffer a ‘bit more’ over that period. Adds that consumers are unhappy about higher prices.
-Reports that 50% of US visitors are longhaul travellers. It forecasts the worldwide longhaul total will be 350mn in 2019 (current totals not given). The longhaul share is 25%, and that this is a 77% growth over 2009-19. We are not sure of TE’s calculations, but this indicates the share was 14% in 2009, and the AAGR was 5.3%.
-Wonders if China will ‘weaponise’ travel (ie outbound travel China to the US) as a tool in the US/China trade war.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

IATA measures future worries
26 October 2018
IATA (International Air Transport Association) forecasts airline seat sales will double to 8.2bn in 2037.
  That looks less impressive on an annual basis - 3.5% AAGR (annual average growth rate) - and which may indicate a significant slowing in some markets. Possibly China, which has pushed overall growth over the past 10 years - although IATA forecasts China will overtake the US as the largest aviation market (traffic to, from and within a country) in the mid-2020s.
  The swing to Asia, apart from China, is also:
-India forecast to overtake the UK into 3rd place around 2024.
-Indonesia forecast to grow from 10th largest in 2017 to 4th in 2030.
-Thailand forecast to become 10th in 2030, pushing Italy out of the top-10.
  Other measures, for 2037 - assuming no change in the overall business and political scenarios:
-Routes to/from/within in 2037: Asia Pacific  market size 3.9bn seat sales, +4.8% AAGR 2017-37, additional +2.35bn seat sales; North America 1.4bn +2.4% +527mn; Europe 1.9bn +2.0% +611mn; Middle East 501mn +4.4% +290mn.
  IATA signals two important factors in its forecasts. The first is that geographical reshuffling of traffic to the 'East' - although that is a misnomer for a world body such as IATA. It means Asia. IATA includes ‘Pacific’ in the definition, but the Pacific is a small share of the AsPac total, possibly 10%.
  The second factor is the possibility of ‘significant’ negative impact on growth if ‘tough and restrictive protectionist measures are implemented’. We understand that IATA means significant in size, not importance.
  IATA forecasts that if protectionism expands into ‘reverse globalisation’, aviation would continue to grow, but more slowly - IATA is admirably clear on its outlook - depending on the overall scenario. It forecasts that the seat sales count would vary from 5.7bn for the worst scenario, to 10.3bn for the best, see table.
  Obviously, IATA does not know what negative changes there could be - nor do we. But we believe that if the negative trends continue in three places currently under threat (Brazil if Jair Bolsonaro wins this Sunday, UK, US) the difference will be slight. On IATA's 3.5%, to 3.0% if bad. If, however, the US drags the world into trade (=economics) fights, that could become 2.0-2.5%. Or worse - if the nasty words being voiced often at present turn into what is all-but threatened, war - then all forecasts are postponed, and falls almost certain.
  Apart from traffic forecasts, IATA notes that aviation is one of the few industries to set specific environmental targets. We note that the travel business overall - theoretically represented by two rival bodies, WTO and WTTC - have issued only exhortations. Airlines start mandatory emissions reporting from January 2019.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

IATA traffic forecast, 2037



Seat sales┼,bn




Reverse globalisation




Trade/economic wars




Constant policy




Maximum liberalisation




Notes: AAGR=annual average growth rate. ┼Based on IATA forecasts. Source: IATA/Tourism Economics & Oxford Economics, *Travel Business Analyst.

PATA data dump
19 October 2018
PATA* has published its annual report on 2017 travel counts. The only measure revealed is the total visitor count into Asia Pacific - 646mn +5.7%.
  PATA seems unaware of the value or otherwise of certain statistics, highlighting, for instance first percentage growth in visitors (Colombia +43% is top!), and then actual-numbers (Turkey +3.7mn) - both of which are academic observations.
*Notes: PATA=Pacific Asia Travel Association. PATA’s destinations include many not usually associated with Asia Pacific – such as Canada, Chile, Colombia, Peru, US, and sometimes Turkey (yes). PATA’s data should thus be read with that qualification in mind. PATA gives no support (including response to questions) to subscription publications such as ours, and so we are unable to clarify what may be misleading.

ITB Asia - more misleading data
18 October 2018
The opening report on Messe Berlin’s ITB Asia, now being held in Singapore, contains troubling mis-statements - some of which we have detailed before. These include: 
-Exhibitors 1000 +20%. Earlier this year MB reported a +21.8% growth, which would have taken the exhibitor total to 1136. Now it says 1000, but that would mean +6.4% growth, not the +20% it now reports.
-Buyers 1000. For 2017, it listed data only for ‘quality’ buyers, and so we presume this year includes those that cannot be so described. Based on the ‘quality’ total in 2017, that 1000 would represent a +5.2% growth. MB does not report growth.
-Corporate and MICE participants +49%; no other data given.
-New exhibitors +20%; no other data given.
  MB’s data for 2017 - percentage changes our calculation on earlier data:
-Exhibitors 940 +11%.
-'Quality' buyers 951 (the number not classified as 'quality’ was not given; no figure given in 2016, and last before 2017 was 850 in 2014).
-Conference time 6140 +19% minutes.
-Visitors 11,000 +8%.
-Business appointments 22,000 (new measure).

Trump Slump Bumped
17 September 2018
-there have been extraordinary changes in US visitor counts that turn a fall into growth.
The US has produced a new set of figures on visitor arrivals in the US. It reverses the Trump Slump into a Bump. But the new counts do not correct what may have been a fault; they deliberately miscategorise figures, which produces a Trump Bump.
  We are shocked, but we have seen no other reports that have analysed the changes.
  Here is the story:
  Earlier this year, many reports on visitor arrivals in the US were reporting a ‘Trump Slump’ - a fall in visitors prompted by the negative actions and words of the newish US president, Donald Trump. When he was not banning or trying to ban certain types or citizens from visiting the US, his words were unfriendly.
  Not only did his words ascertain that the US was on its way to becoming great again, but, almost concomitantly, non-Americans (=foreigners) were not so good, at best.
  In those circumstances, there should have been little surprise that the number of visitors would fall. Even if the banned nationals were tiny suppliers of visitors to the US (we guess some country-markets in the hundreds, and maybe 10,000 over a year), many others would, sensibly, have reconsidered a visit to the US.
  Would a France national, moslem, born in France of parents from Morocco, continue to assume a visit to the US would be trouble free?
  But a fall in visitors, of course, even if a likely outcome of specific actions, was not welcomed by the US administration. Its discourse was, and is, that everything is better for everyone in the US, and possibly better than since the beginning of time.
  This is not to say that we accuse the US government of helping the US administration to falsify facts. But its actions nevertheless raise suspicions.
  Last April, the US government said it was checking visitor-arrival counts because some visitors may have been miscategorised.
  The country’s DMO (NTTO, National Travel and Tourism Office) says some arrivals were incorrectly reported as showing US as the country of residence. The passport country for many (NTTO says ‘a large number’, but provides no further definition to enable others to define it thus) of the affected records was Brazil, China, India.
  This month, NTTO announced that the problem has now been fixed.
  But, we declare, it has not been corrected.
  The NTTO says any visitor-arrival that listed the US as the country of residence has now been changed to show the passport country as the country of residence. This is actually changing what may have been a mistake (obviously most arrivals with India passports were/are not residents of the US, even if some were recorded as US residents) to a clear mistake (assuming all those non-US-citizen visitor-arrivals were/are not resident in the US).
  This exercise has reversed the Trump Slump into a Trump Bump.
  In general terms, based on our notes above about the unwelcome sentiment in Trump’s US for ‘foreigners’, the visitor-arrival count now seems wrong. That said, we accept that few figures ‘seem’ right all the time; there are always surprises.
  The NTTO says the change (it says ‘corrective’ but as we have noted, these are not corrections, this is just re-categorisation) means the mistake (if that is what it was) in 2017 affected 3.7mn visitors in 2017 - almost a full Trump Year - yet only 540,000 visitors in non-Trump 2016.
  The other broad figures (more, with an accompanying table, in a WYSK report, what-you-should-know, from Travel Business Analyst):
-The new figures show there were 38.9mn +2.0% overseas visitors in 2017. The old figures were 35.2mn -6.2%.
-For total visitors (ie including Canada, Mexico), new 76.9mn +0.7%, old 73.3mn -3.1%.
-There were no changes for visitors from Canada, Mexico in 2017, but changes in 2016 and 2015. Although the changes in those earlier years were small, why were those 2017 figures ‘corrected’ before the ‘mistake’ in the categorisation was discovered? Even though the Canada and Mexico visitor-arrival counts are so big (almost 40mn in 2017), no visitor was mis-categorised?
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

UK travel trends: trouble x6; London down
7 September 2018
UK; trouble x6
We’ve worked on UK travel data for the first three months of this year. It is trouble x6; falls in every month, both inbound and outbound.
  Remember, the fall of the UK currency after the Brexit vote in 2016 was expected to boost visitor arrivals, but also prompt a fall in outbound travel.
  Outbound may be matching expectations, falling -5.4% in Q1. But inbound also fell every month in Q1 (January by a painful -15%), and -5.6% for all-Q1.
  Could the difference be business travel? Commentary (as above) relates the currency fall primarily to leisure travel. Business travel or even others such as sports-, event-, religious-travel are less affected by currency changes.
  Could it be that business travellers are having fewer reasons to visit the UK until the post-Brexit economic rules are set?
London down, not even out
London visitor data (from Visit Britain) is not timely. Figures are surprising nevertheless.
  In Q4, arrivals fell 8%. Remember that this was not supposed to happen. After the Brexit vote in 2016, the fall of the UK currency was supposed to boost visitor arrivals, although probably also prompt a fall in outbound travel.
  It hasn’t happened like that. Even before the UK is out of the European Union, the London visitor count is down.
  Of course a fall can have many causes. But the size of that Q4 fall, -8%, is a surprise - that is 400,000 fewer visitors in that period, say 4000 fewer daily.
  Then comes #2 shock - Q1 figures show a -10% fall! There are fewer visitors in Q1 than in Q4, but that bigger percentage fall produced a bigger actual fall - around 5000 fewer visitors daily.
  The Brexit surprises continue.

IATA’s annual stats report
30 August 2018
IATA (International Air Transport Association) has published its WATS (World Air Transport Statistics), on 2017 data. Information includes* (all rounded percentage figures are IATA-rounded):
-Airlines seats sold 4.1bn +7.3% (in 2016, 3.8bn +7%).
-Asia Pacific sold the most seats, 1.5bn +10.6%, a 36.3% share (1.3bn +11.3% 35%); Europe 1.1bn +8.2% 26.3% (992.4mn +6.1% 26%); North America 941.8mn +3.2%, 23% (911.5mn +3% 24%); Middle East 216.1mn +4.6% 5.3% (206.1mn +9.1% 5%).
-Top-5 airlines by international RPKs - American 324mn, Delta 316.3mn, United 311mn, Emirates 289mn, Southwest 207.7mn. Top-3 by seats sold for 2016 - Southwest 151.8mn (we counted 125mn); American 144.2mn; Delta 143.3mn.
-Top-5 international city-pairs: Hong Kong-Taipei 5.4mn +1.8%, Jakarta-Singapore 3.3mn +0.8%, Bangkok Suvarnabhumi-Hong Kong 3.1mn +3.5%, Kuala Lumpur–Singapore 2.8mn -0.3%, Hong Kong-Seoul Incheon 2.7mn -2.2%. For 2016, top-3: Hong Kong-Taipei 5.2mn +2.1%; Jakarta-Singapore 3.4mn +0.9%; Bangkok-Hong Kong 3mn -3.1%.
-Top-5 domestic city-pairs: Jeju-Seoul Gimpo 13.5mn +14.8%, Melbourne Tullamarine-Sydney 7.8mn +0.4%, Fukuoka-Tokyo Haneda 7.6mn +6.1%, Sapporo-Tokyo Haneda 7.4mn +4.6%, Beijing-Shanghai Hongqiao 6.4mn +1.9%. For 2016, top-3: Jeju-Seoul Gimpo 11.6mn +4.6%; Sapporo-Tokyo Haneda 7.7mn -1.2%; Fukuoka-Tokyo Haneda 7.3mn -4% (probably 4.0).
-Nationality, a new measure. Biggest systemwide were US nationals, 632mn seats sold to them, an 18.6% share (810mn 21%), China 555mn 16.3% (no data), India 161.5mn 4.7% (ditto), UK 147mn 4.3% (ditto), Germany 114.4mn 3.4% (ditto). In 2016, US also top internationally*, and domestically; no data for 2017.
-New Model Airlines, an IATA definition that would combine what we call no-frills-airlines, low-cost-airlines, charter airlines, but not some others – see below. In 2016, NMAs had a 28.3% share of all seats sold, up from 27.1%; no data for 2017.
-Alliances. Star 39% (38%) share of RPKs (no comparison), Sky Team 33% and One World 28%; no data for 2016.
*High positions of the UK and US are partly explained by a large number of nationals living in other countries. For instance, Americans in Hong Kong, Japan, Singapore, UK. And British in Australia, Canada, New Zealand, Singapore, US. All these would be counted under their nationality, UK or US.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

ITB miscounts again
1 August 2018
We have found more misleading figures from Messe Berlin on its ITB Asia trade exhibition. It reports that 1000 buyers have signed on to attend this year, and that this is +12% growth. Yet on the figures MB published for its 2017 event, we calculate slower growth, +5.2%.
  This apparent incompetence (we do not believe it is deliberate) is becoming frequent enough for us to recommend readers beware all data from MB on its events ITB Asia in Singapore and ITB China.

Soccer goals
29 June 2018
With the soccer World Cup in Russia this month and next, Hotel Management magazine reports*:
-Occupancy forecast +8-10% to 80% during the two months, average room rate +15-20%. Source shown by HM: STR (nee Smith Travel Research).
-Over Jan-Apr, Moscow occupancy grew 6.7% to 65.8%. Source shown by HM: STR.
-In Rio de Janeiro, main location of the most-recent 2014 cup, occupancy was +12.6% to 81.6% in June and +18.3% to 80% (HM rounded) in July. Source shown by HM: STR. However, this is comparing pre-event and forecasts 2017 with actual 2014.
-Rio ARR grew +72.8% and +64.4% over the two months. Source shown by HM: STR.
-In Johannesburg, main location for the 2010 cup, occupancy was +27.7% to 78.5% in June and +7.4% to 63.7% in July.
-Jo’burg ARR grew +56.3% and +44.5% in the two months.
-Moscow has added 5500 rooms since 2014. Comparison is not given, and so this has little value. We reckon Moscow has about 45,000 rooms, which would mean a 3% AAGR (annual average growth rate). Source shown by HM: JLL.
-Russia has 179 hotels with 38,705 keys under international management; Moscow and St Petersburg 52% (together; breakout not given; we reckon 75/25), Sochi 11%, the Moscow region 6%, Yekaterinburg (surprisingly; east of the Urals) 3%. Accor, Hilton, InterContinental, Marriott, Radisson have 80%. No breakout, except for largest, with 25% - Radisson (previously named Carlson Rezidor).
-By 2022 forecast 102/20,249 more hotels/rooms under international management). Source shown by HM: EY.
-Domestic travel grew after Russia’s currency fell starting 2012. It was 56.4mn +3% in 2017, +34% on 2014, +75% on 2013. Source shown by HM: EY.

Surprises in UK’s inbound/outbound travel
28 June 2018
Most observers forecast UK outbound travel would fall after the value of the UK currency fell - following the mid-2016 referendum in favour of quitting the European Union. And inbound travel would grow, spurred by that cheaper currency.
  Outbound, the segment that should be at risk. Up +2.1% for all-2017, and slightly faster, +2.7%, to the main (80%) destination region, the rest of Europe. The total fell in six months, including the last three. To the rest of Europe in fewer, just five, months.
  Inbound, the segment that should be doing well. The total did indeed grow, but that +3.4% is hardly special; in fact, it is worse than its closest competitors in Europe. In order of total size, France (allegedly; data release varies between secretive and puzzling) grew +9%, Spain +9%, Italy +10%, Germany +5%.
  There were falls in five months, but including the last four.
  UK from the rest of Europe (a 72% share) was worse than the total, just +0.8%. And prospects do not look so good – there were falls in six months, also including the last four. In December the fall was big, -11%.
  From all this we calculate the UK’s overall travel business grew +3% in 2017, and that related to the rest of Europe, +2%. Although that looks weak, it is better than the UK’s GDP growth in 2017.
Notes: The government usually reveals this type of data on a monthly basis. It has said nothing over the past three months.
*We show only data on occupancy and room rate. HM focuses on revpar (revenue per available room), but we maintain this has little marketing value to those outside the hotel business.

What's working; what's not. Airlines in Europe Q1
13 June 2018
Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over January-March. Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+KLM (from this year, no longer separated) +4%; British +2%; Easyjet +5%; Lufthansa +8%; Ryanair +6%.
  Notes (on notable details; on whole-group for Air France, British (=ICAG), Lufthansa):
-Air France. Group +5%, which looks good, although we believe AF itself is well below that – +2-3%, with KLM possibly around +8%, and Transavia +14%. Transavia has an impressive seat factor – 94% for the month, 92% YTD.
-British (=ICAG). British is still the weak partner; Iberia, the group’s other FSA (full-service-airline), is at +8%. ICAG’s two NFAs (no-frills-airlines) are doing well - our estimates, AerLingus +13%, Vueling +18%.
-Easyjet. Signs of concern? YTD at +5%, but March at +3% - is that the lowest-seen for an NFA in Europe?
-Lufthansa is the region’s star performer; +13% and even +15% in March. But most of that is Eurowings; +41% YTD, +46% March. As we have noted before, EW is already bigger than most of other airlines in the group such as Austrian and Brussels. And now it has overtaken Swiss to become 2nd-largest. Its capacity is now about-20% the size of mighty Lufthansa.
-Ryanair. Slowing growth, but seat factor 94%, squeezed up 1pt.
-Others of note: Wizz, which gets fawning press coverage, is doing well, +24%. And growing faster than that fading-fawnee, Norwegian, +12%. By mid-year Wizz should overtake Norwegian in seats sold.

What's working; what's not. Airlines in Asia Pacific Q1
11 June 2018
Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-March. Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +8%; Cathay +3%; China Eastern +8%; China Southern +10%; Japan +2%; Singapore +5%.
  Notes (on notable details):
-Air China. International still growing faster than domestic, +11%. AC has usually been slower than its two control-freer rivals, China Eastern and Southern. Times are changing?
-Cathay. That’s the two airlines. Which one is doing badly? What needs to change? Why do investors let the company get away with this deception?
  Cathay says it wants to match the no-frills-airlines challenge without creating an NFA - a modernised version of its old phrase “intelligent misuse of our B747s”. That would mean low-low no-options fares and no-frills service in the same cabin. This won't work. One passenger would say “I paid $1000 for this seat, and my neighbour paid $200 just for missing the dinner” - even if not completely true. And then the $200 passenger will demand a wine, because his $1000 neighbour got one. And so on. The Cathay Group has already made a mistake with having two airlines with the same level of service, just different routes. As at the Singapore Airlines Group (Silk folding into SIA) Cathay will eventually fold CDragon into CPacific. But, better, it should convert CDragon what we call a low-cost-airline, and create another airline as an NFA.
-China Eastern. Rarely do CE’s figures match with the period one-year-earlier. Unusual in that international is slower than domestic.
-China Southern. The biggest, and the fastest, of China’s top-3. And international is growing faster.
-Japan. International growing twice as fast.
-Singapore. Parent airline just +1%. Its NFA division, Scoot, +12%, taking it to half the size of SIA itself.

ITB Asia; misleading data
7 June 2018
Messe Berlin (MB) continues its practice of using misleading and/or incorrect data for its events, the latest one for the 11th ITB Asia (ITBA), due in Singapore this October.
  However, most of these appear to be due more to ineptitude than duplicity. MB reports:
-Exhibitor numbers expected to be +21.8%, which would make 1136. ‘Presence’ from Europe (which we presume means exhibitor numbers) +13.8%; previous data not given.
-85% of exhibition space booked. But if there is 22% growth in exhibitors, how can booked space be down – surely exhibitors are not reducing their booth sizes?
-MB describes the 2017 ITBA as an ‘enormous success’ with ‘record-breaking numbers with 113 countries’ at the event. ‘Record-breaking’ has occurred on most measures in most of the nine years. Not many figures were released for the 2017 event but attendance grew only +0.2% and countries +2.7% - although exhibitor growth was good, +11.1%. We interpreted some of these small growths as a relative loss due to the start of ITB China – when China is the biggest single part of growth in Asia’s traffic growth.
-MB reported worldwide outbound trips as growing +3.9% in 2017. In fact*, that was 2016 data, and for only Jan-Aug.
-Likewise the +11% growth given as Asia outbound growth* in 2017 – data was for Jan-Aug 2016 only.
-In addition, those figures MB uses include data for China, yet China should now be excluded from the ITBA prospectus, because China now has its own stand-alone event.
-Blatant misuse continued, with MB forecasting +4-5% growth in worldwide outbound travel ‘over the next year’. In fact*, this was a forecast for 2017!
-MB (mis)-uses its own ITB Berlin World Travel Trends for its data.
-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.
-At press time, MB had not answered our request for clarifications.

Japan Airlines to match TBA strategy?
30 May 2018
Japan Airlines plans to launch an LCA*. This means JAL’s businessplan may match the one Travel Business Analyst has detailed for bigger airline groups – those selling at least 75mn seats/year.
  However, this definition will depend on the structure and operation of the new airline, and whether it fits the TBA definition for LCAs.
  JAL’s LCA will fly medium- to long-haul routes from Tokyo Narita within Asia, and to the Americas and Europe, initially with two B787s.
  However, JAL does not plan to start its LCA flights until summer 2020. This is because some expansion at Tokyo Narita airport is due to be finished then – with Tokyo’s 2020 Summer Olympic Games as the catalyst. Nevertheless, we believe the airline should start start-2019 at the latest, even if on one route.
  JAL’s NFA* is Jetstar although this is a joint-venture with Qantas. It operates domestic and short-haul international flights.
*Notes: Following are our airline-type definitions.
-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.
-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs - cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.
-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.

ITB China +44%
21 May 2018
We calculate that overall growth (of key measures) at the 2nd ITB China last week was 44%.
  Main measures: exhibitors 700 +16.7%, visitors 15,000 +50%, buyers 800 +30.0%, exhibition area 18,000sqm +50%.
  Organisers Messe Berlin (MB) also show 4000 +48.1% conference attendees, but this is a captive audience, as entry is free. Share is a better measure – that 4000 is a 27% share of all visitors, which compares with a 17% share at MB’s much-bigger main event, ITB Berlin.
  Selected other measures:
-The 800 buyers from China came from 300 companies - 24% from Shanghai province, where the event is held, 73% from the rest of China, 3% from Hong Kong, Macau, Taiwan.  
-Exhibitor breakdown Europe 37% share, AsPac 33%, Americas 15%, Mideast 15%. MB does not give comparison with 2017.
-Media registrants 260 +73%.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

We Were Right; Singapore Airlines Group
18 May 2018
With the news that Silk Air is being merged into Singapore Airlines, the businessplan we outlined for SAG (Singapore Airlines Group) is almost complete.
  We synopsised our points in a November 2013 report following a meeting with a senior SAG executive. Some of these points we had noted before, and of course later. The three elements were:
1. Scoot should not have been established. SAG’s first NFA* Tiger should have been expanded instead. SAG did not own a majority in Tiger at that time, and so we suggested SAG should simply buy a bigger share.
  Three years later this all started to happen. SAG increased its shareholding in Tiger. Then the two airlines Scoot and Tiger were put under a single management control, then Tiger was merged into Scoot.
  Essentially then, this is what we suggested – just one (NFA) airline.
2. Similarly there has been no need (for the past 15 years at least) to have two FSAs*. The inanity of this was illustrated in that there were some routes on which both SIA and Silk were flying. Duh!
  There are nuances to our argument, of course, which make this not quite so blatantly stupid, but it was still was poor business management.
  Now, following this announcement, what we proposed is happening – just one (FSA) airline.
3. However, there was an element in our proposed businessplan for SAG that has not been implemented, and which in some ways makes the SIA/Silk merger the wrong move.
  We proposed that Silk become SAG’s LCA*. As an LCA, Silk’s routes could be new ones for SAG – where it is usually better to start with a lower-cost operation until the financial viability for SIA to operate such a route is clearer. Or a Silk LCA could operate additional frequencies on routes operated by SIA – again, which might not be profitable for SIA to expand.
  Perhaps SAG management believes Scoot will fill that market need – develop new routes. But as management knows, and says, Scoot serves a different market segment.
  Under this new arrangement for SIA/Silk, the full-service market segment is not properly served (because any extra demand from the FSA market will be fulfilled by non-SAG FSAs). That, or higher-costs SIA will add flights to fulfil this extra demand, and lose money, at least initially.
  Also, that would mean SAG’s market share would steadily fall – or at least not grow at the rate it could.
  Will SAG management understand this?
  The chances do not look good – back in 2013 they laughed (literally, but at the proposal, not the deliverer) at our three proposals – two of which they have now carried out.
*Notes: Our airline-type definitions:
-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.
-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs - cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.
-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.

Can Icca count? Paris still #1
9 May 2018
ICCA*, publishing results for the association segment of the MICE business in 2017, has done it again.
  It has:
–produced findings which belie market sentiment,
-attempted no clarification,
-interpreted its own data different to the way it advises the industry.
  We explain:
-ICCA reports that Barcelona overtook Paris and Vienna in 2017 to become the #1 city for association meetings in Europe in 2017.
-How can this be when Barcelona was partially shut down for two months in 2017 during its political problems related to an unauthorised vote for independence for Catalonia?
-And when this was the year when Paris recovered from terrorist attacks in the two earlier years?
-Surely the industry deserves an explanation for these results?
-We use an (ICCA)-recommended 5-year composite total – see below – which shows that Barcelona is not top. Paris is still #1, followed by Vienna, and then Barcelona.
-This is not the first time ICCA’s research has thrown up odd results. For example:
  i. How could Budapest get into the top-5 (in 2007) and, say, London could not?
  ii. One year Sandton showed up in the world’s top-5 - prompting us to google it. (It is part of Johannesburg.)
  iii. ICCA did not flag Taiwan’s 52% single-year growth in 2010, even though that took it above Singapore. With Singapore’s stunning new attractions at that time, we found that change hard to believe in marketing terms, even if strictly correct in statistical terms.
-ICCA’s counts are meetings of associations (and follow precise definitions), and thus are just one segment of the big MICE business. We have not seen estimates, but we would be surprised if ICCA’s segment was more than 20% of the total. Why do these counts attract so much interest? (Possibly, we answer ourselves, because no other worldwide trade body tracks the whole MICE business.)
-Until 2009, ICCA gave us additional information for our analysis, but has refused this since. Full data is reserved for ICCA members; a policy with which we agree, even if it causes us some difficulty. As a result, however, our coverage is now limited to meetings numbers, rather than adding commentary on attendance numbers as well.
-Our main analysis is based on multi-year results. We are motivated by those in the MICE segment of the travel business – who tell us that single-year figures can be misleading. As a result, we calculate average-annual totals based on 5-year periods - to balance out distortions caused by unusually-big or -small events in one year.
  Surprisingly, the industry itself still works on annual figures! Even more surprising is that in 2013 ICCA said it was following our lead and tracking results in 5-year averages. Despite that, all its analysis and observations continues to be based on single-year figures!
  In other words, after admitting another way is better, ICCA has continued with the old way. Duh!
-ICCA was initially an abbreviation for the International Congress and Conventions Association. Then it used ICCA as a name, which it described as The International Meetings Association. It has now reverted to almost the same – ICCA, International Congress and Convention Association.
-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

We Were Right
7 May 2018
On April 25, see below, we speculated that this year Rezidor Hotels would vanish into its parent Radisson Hotels. Today, it was announced that Rezidor (formally Swedish-quoted Rezidor Hotel Group AB) is changing its name to Radisson Hospitality AB – essentially the same as we forecast.

Travel business updates
25 April 2018
[] Luxembourg-based Corporacion America Airports, which operates airports mainly in Latin America, reports: 2017 passengers handled 76.6mn +6.7%; Q4 passengers handled 19.5mn +7.6%.
[] Rezidor Hotels Q1 revenue US$254mn (€206.1mn) -7.3%. We expect Rezidor will shut down before end-2018 by merging into its Radisson parent.
[] STR (nee Smith Travel Research) reports for hotels:
-Canada Q1 occupancy 57.3% +2.2%, average room rate US$114 (C$147.14) +5.0%.
-Middle East Q1 occupancy 70.6% +0.9%, average room rate US$163.76 -4.5%.
-US April 15-21 occupancy 70.1% +3.1%, ARR US$131.15 +5.4%.

Scoop! Peach & Vanilla to merge!
5 April 2018
The All Nippon Airways group plans to merge its Peach and Vanilla airline subsidiaries, starting this year and finishing before March 2020. It wants the merged airline to become the leading ‘low-cost airline’ in Asia.
  Our comments:
-Neither Peach nor Vanilla are what we call (and define) no-frills-airlines. They are an attempt to follow the NFA businessplan, but more just lower fares and some lower costs.
-ANA management has shown no clear understanding of the NFA business-model. They thus seem incapable of making Peach-Vanilla bigger than the region’s current biggest, Air Asia, whose various divisions sold about 70mn seats in 2017, according to our counts.
-In 2014 we called ANA’s businessplan for Vanilla ‘soft’.
-One further indication of this incompetence is the extraordinary-long time to merge these two – nearly two years! We believe this should take no longer than three months.
Notes: Peach started flying from its Osaka Kansai base in March 2012 (another mistake; it should have used Osaka Itami airport). ANA’s JV with Air Asia, from Tokyo Narita (it should have been Tokyo Haneda or best Tokyo Ibaraki), started in late 2011 and stopped in late 2013. After that ANA launched Vanilla, also from Tokyo Narita, in December 2013.

Misleading WTTC reports
23 March 2018
WTTC (World Travel & Tourism Council), a lobby group for the travel business, has published a series of comprehensive reports* for selected markets – some measures comparable, some not.
  Unfortunately, the group is so careless in its presentations that the professional observer is sometimes left to guess what WTTC’s research shows. We believe its presentations are in contrast with the professionalism of its research.
  As a result, the following is our (abridged) list of WTTC’s findings, with comments where necessary.
  (Note: WTTC mainly uses the awkward term ‘travel and tourism’*, which we change to the more-practical ‘travel business’*, abbreviated here to TB. Data for 2017, unless noted otherwise.)
[] World.
-TB turnover +4.6%. Visitor spend +4.3%. GDP growth a WTTC-rounded +3%.
[] North Africa.
-TB turnover (overall GDP, TB’s share of GDP): +22.6%; Egypt US$21.1bn +72.9% (+4.1%, 11.0%); Tunisia US$5.7bn +7.6% (WTTC-rounded +2%, 14.2%); Turkey US$98.4bn WTTC-rounded +17% (+7.0%, 11.6%). Note Turkey is part in Europe, part in Asia (Minor), which is sometimes a reason for including it in the Middle East. Including it in North Africa is incorrect.
-‘...well on track to return to pre-crisis levels’. Without a date, this is meaningless commentary; it was on that track the moment the TB stopped falling.
[] Australia.
-TB turnover (overall GDP): US$156bn/A$197.5bn +2.3% (+2.2%).
[] Canada.
-TB turnover (overall GDP): US$108bn/C$138.8bn +4.5% (a WTTC-rounded +3%). In a separate report, WTTC puts growth as +5.5%.
[] China.
-TB turnover +9.8%.
[] France.
-TB 50% faster than world average. Wrong? The same report showed that this was a comparison with the visitor business, not the overall TB.
-Visitors to France spent US$54.7bn (at US$1 to €0.81) +6.4%.
-TB turnover US$252.2bn, an 8.9% share.
[] Germany.
-TB turnover US$429.8bn +1.7%.
[] India.
-Forecast to overtake Germany as #3 by 2028.
[] Indonesia.
-TB turnover US$57bn/Rph787.1tn +6.4%; overall GDP +5.1%.
-Forecast +6.4% annual average growth rate 2018-27.
[] Italy.
-TB turnover (overall GDP): US$275.6bn +2.7%, a WTTC-rounded 13% share (+1.6%).
-Visitor spend US$48.9bn +6.5%.
[] Japan.
-TB turnover (overall GDP): US$350bn/¥37.1tn +3.4% (+1.6%).
-Forecasts 40mn visitors in 2020. Not clear if this is a WTTC forecast or a restatement of Japan’s government’s target.
[] Saudi Arabia.
-TB turnover (overall GDP): US$64bn/R240.9bn +4.6% (a WTTC-rounded +1%), a 9.4% share of GDP.
[] Spain.
-TB turnover a WTTC-rounded +7%.
[] UK.
-TB turnover (overall GDP): US$297bn/a-WTTC-rounded-£214bn +6.2% (+1.5%).
-Visitors +6.7%, outbound travellers +2.5% (+7.8% 2016, +9.9% 2015), domestic travellers +5.8%, spend by visitors to UK +7.9%, spend by domestic travellers +5.8%.
[] US.
-TB turnover (overall GDP): US$1.5tn +2.3% world’s largest (same, +2.3%).
-WTTC has its own methodology for calculating the turnover of the travel business including not just inbound, outbound, and domestic travel, but other industries involved in the business. For instance, if 0.5% of the world’s cars go into the car-rental business, that measure will be calculated into the turnover of the overall travel business.
  Unfortunately, WTTC is not always clear that its data is related to this grand total, and often its commentary appears to be related to just one sector – often, the inbound visitor business. In addition, it sometimes uses the terms ‘travel’ or ‘tourism’ alone; we cannot always determine if these mean something different from ‘travel & tourism’.
  WTTC’s name does not help – the ‘TT’ is ‘travel & tourism’, where we would define ‘travel’ as covering all segments of the travel business, with ‘tourism’ meaning ‘leisure travel’ to most observers - just one segment. This means that most people and bodies the WTTC lobbies may think they are discussing just inbound leisure travel.
-Most US$ figures are our conversions from WTTC figures.
-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

WTTC Research Director Rochelle Turner responds:
The methodology that WTTC uses aligns to the UN a statistical Methodology for accounting for Travel & Tourism (TSA RMF: 2008).  
The definition of the sector from the TSA RMF:2008 is as follows: ‘the activity of persons travelling to and staying in places outside of their usual environment for not more than one consecutive year for leisure, business and other purposes not remunerated from within the place visited’. 
Our approach has been independently audited and is fully available for view on our website, www.wttc.org. All country regions are fully explained on the final pages within each country report. 

Global Data dump
21 March 2018
Global Data has done it again – misread/misinterpreted/misreported core travel data.
[] China.
  GD reports 136.5mn outbound travellers from China in 2017, and forecasts 191mn in 2021, which it says will be 61.2mn more than from the US.
  We note:
-GD gives no growth for 2017. Our initial estimates (full report next month) indicate +12% to 143mn.
-We calculate +8.8% annual average growth rate over the 4-year 2017-21. Did GD choose the lucky-88, or has it not made that calculation?
-GD gives no actual US arrival count. We estimate 87.9mn +9.6% in 2017, and thus GD appears to be forecasting for 2021 75.3mn – a fall. GD needs to explain the figures it uses.
-Germany is a bigger outbound market than the US. GD does not note this, or explain why it shows US data.
[] UK.
  GD credits the fall in the value of the UK currency for +4.6% growth in UK visitor arrivals in 2017 to a ‘record’ 40.3mn. Yet growth in 2016 (which was also a ‘record’, as was 2015 and so on) was higher - +4.9%!
  New official figures are due on the 23rd, but our counts from current data shows +6.3% YT-October, although the government (which adjusts data later, but does not always publish those new-old figures) reports this as a rounded +5% growth.

US visitors; Trump slump continues
9 March 2018
Normally we would not analyse data for one month so thoroughly. But these are not normal times, thus this analysis – this one primarily on Jan-Sep*.
  There was slight improvement in Q3. Jan-Sep total visitors fell -3.8%, compared with Jan-Jun -3.9%, although September turned worse, -5.0%. The main reason for the worsening was results in the ‘overseas’ markets (all except Canada, Mexico) - -6.3% -5.7% but -8.7%.
  Of the regions we track (calculations from US DMO’s data) indicate worsening for Europe -2.3 -2.6 but -4.0, and for Asia Pacific -1.7 -0.9 but -3.2.
  Overall then, it appears the Trump Slump is worsening.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Outbound travel
8 March 2018
IPKI (IPK International), a Germany-based research company, says 2017 worldwide outbound trips* were +6.5% to 1.2bn.
  Unfortunately, IPKI is often casual in reporting its findings, although we believe it is precise in its research work.
  This baseline figure is an incorrect definition; that 1.2bn is the number of international visitor arrivals, which is not the same thing as outbound trips or travellers – as many travellers visit more than one destination on the same trip.
  Other findings:
[] Europe outbound +7%, North America +6%, Latin America +6%, Asia +5%. The order appears to be in terms of growth percentage. IPKI’s Asia data excludes travel from China to Hong Kong and Macau – technically China domestic travel – which represents about 70% of the most-used total for Outbound China.
[] In destinations, IPKI puts Spain top, then US, Germany, France, Italy. It would be helpful if IPKI could explain why France is No4, whereas our calculations on data from the WTO (World Tourism Organization; whose figures IPKI quotes in most of its reports) indicates France remained top in 2017 with about 89mn visitors, 6mn more than Spain.
[] Outlook 2018. IPKI forecasts outbound trips will grow +5% this year. Europe +4%, North America +4%, Asia +6%, Latin America +7%. (Note that IPKI is not aware that Mexico is geographically part of North America, although it probably is included in IPKI’s non-geographical term, ‘Latin America’. We believe this would make no difference to the LA figure if Mexico was excluded, but if Mexico was included in NA, that could reduce the NA forecast by about 0.5pts. (Because IPKI’s data is rounded, we cannot know if that would change its +4% forecast.)
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Trump Slump
7 March 2018
Forward Keys, a research company, tracks travel based on air bookings*. Some of its findings on travel to the US (see also table):
[] For all-2017 air bookings were -2.0%. This year Jan/Feb was down fractionally, -0.02%.
[] FK says visitors from China flattened in 2017 after substantial growth in 2016. Our database on actual arrivals shows something different - a -6% fall over Jan-Sep 17, but +15% Jan-Dec 16.
[] Outlook is better. FK reports international bookings to the US from within the Americas are +7%, and longhaul bookings from elsewhere are just +0.5% ahead. However, if ‘Americas’ includes the contiguous markets of Canada and Mexico, these two alone swing the total.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

2017 cruise review
5 March 2018
CLIA (Cruise Lines International Association) reports 2017 berth sales* at 6.94mn +2.5%. Some specifics:
-Germany 2.19mn +8.5% berth sales. Biggest market, fastest growth.
-Ireland/UK (still reported as one market) 1.95mn +0.5%. A weakening result for what was Europe’s biggest market. CLIA also reports this total for the UK alone, but we believe that is a mistake.
-Italy 770k +2.5%.
-Spain +6.4%; total not given, but believed to have overtaken France.
-France 503k -9.2%. Weak.
-CLIA reports its data as ‘European’ passengers, but this is misleading because a group of China nationals boarding in Nice are not ‘European’. CLIA should define this as ‘in Europe’ or, if this is sales not boardings, then ‘sales in Europe’.
-The cruise business maintains its anachronistic way of calculating capacity and occupancy. It counts capacity by multiplying the number of cabins by two beds - even though some cabins will have three or four. Yet when it calculates occupancies, it divides people into that incorrect berth total. So even with occupancies above 100%, a ship could still not be doing well! And capacity is often reported in ‘passengers’, despite the fact that a ‘berth’ does not become a ‘passenger’ until the passenger checks-in.
-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

What's working; what's not. Airlines in Asia Pacific in 2017
23 February 2018
Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-December. Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all): Air China +5%; Cathay +1%; China Eastern +6%; China Southern +10%; Japan (intl) +2%; Singapore +7%.
  Notes (on notable details):
-Air China. Having lost its China #1 spot to China Southern a few years ago, now China Eastern has overtaken the Beijing-based airlines. China’s aviation leaders (Beijing-based) will not like that. They may not be able to do much (push for Air China to get selected new routes, for instance), but don’t count on it; politics is still powerful in business in China.
-Cathay. Well if you think +1% is not good, Cathay’s leaders do. The man who has lead the group’s two airlines through the past three years, Ivan Chu, has been rewarded with the top job in Cathay’s main owning company . There is a possibility that the string-pullers in China (Air China and others in the aviation hierarchy in China) may pull the strings tighter – whatever that may mean.
-China Eastern. Over the year, international was soaring - +12%. Getting close to its China Southern rival; on international routes Eastern could become China’s biggest this year.
-China Southern. Another solid performance, even if being caught by China Eastern. If only it could get Air China out of Shenzhen...
-Japan. As we have noted before, that +2% is good for this airline.
-Singapore. +3% for the airline, slowest growth of the group’s 3.5 airlines (Tiger, now merged into Scoot, being the half).
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Air Asia in 2017
22 February 2018
Tracking results at the Air Asia group (AAG) is not simple*. For instance in two Qs in 2017, it combined traffic counts for Indonesia, Malaysia, Philippines. (They were separated in Q1 and Q4.)
-Because of the above-noted and other inconsistencies, measures are not perfect. But we estimate AAG’s 2017 seat sales growth was +11.7%; slower than +13.6% in 2016, but better than 10.5% in 2015.
-Despite adding divisions, Malaysia is still AAG’s dominant airline, taking a 42% share in 2017. In 2010, when there were only three country divisions, Malaysia was 62%. And on closer to the same criteria it was 44% in 2014.
-Growth at AAX still good, at +24.5%, but seat factor, at 81.5%, nearly 3pts up, but still not high enough for the costs of the routes it operates.
-Japan launched in Q4, so no comparative data, but does not seem to have been a good start. In India’s first Q (Q3 2014) for it was 4x bigger than Japan than for Japan in Q4 2017, and India’s seat factor was 76% compared with Japan’s 64%. (On the same Q4 comparison, India in 2014 was 7x bigger than Japan in 2017.)
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

What worked; what didn’t. Airlines in Europe in 2017
8 February 2018
Our summary of traffic results for the leading airlines (not airline groups, where relevant) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over January-December. Seat sales (RPKs for British; our estimates for Ryan): Air France+Hop +3%; British +1%; Easyjet +10%; Lufthansa +6%; Ryanair +10%.
  Notes (on notable details; on whole-group for Air France, British (=ICAG), Lufthansa):
-Air France. KLM’s +8% is about best among Europe’s biggest (above 30k seat sales). We thought Transavia would bring constant good news, but growth has been seriously slowing in recent months. Its all-year +11% is not good, particularly as it is still a small airline; its 15mn seat sales are only half those of, say, Wizz. Is more effort going to launch Joon (yes, that’s its name)? When will the group follow the Singapore Airlines group and merge its two NFAs (no-frills-airlines)? Two years?
-British (=ICAG). All the group’s airlines finished the year strongly – except the biggest, British, just +1%! Barcelona-based Vueling had a bad year, +4%, but blame that on the city’s Catalan crisis; seat sales actually fell in two months, and were flat in two others. AerLingus growth is also slowing. As at AF-KL, is ICAG focussing on its new medium-haul NFA (Level; yes, that’s its name)? As we have long forecast, ICAG’s Open Skies (yes; ICAG is good at giving weird names to some of its airlines) is shutting down. And it lost its bid for Niki, a failing Vienna-based NFA that original owner Niki Lauda will now make his third airline loss (Lauda Air, Niki 1, Niki 2). He was good at running F1 racing cars; no good at running airlines. What’s next for ICAG’s rationalisation? Merger into one groupette (names will not be lost) of AerLingus, Level, Vueling?
-Easyjet. Same growth as Ryan! That’s Ryan’s relative slowdown , not just Easy’s growth; all-2016 was +7% for Easy, +15% Ryan .
-Lufthansa. All-group sales were +18%; stunning yes? Well no, because the group does not compare like with like; not including its new subsidiary Brussels in 2016, for instance. According to our apples-apples calculations, that +18% is actually a mundane +5%. That said, its Eurowings is growing at super speeds - +28%. It was already bigger than Austrian; now it is also bigger than Swiss. And it is steadily becoming what we call a low-cost-airline (not an NFA), and taking-over or taking-on, routes from the FSAs (full-service-airlines) in the group at a lower cost .
-Ryanair. See Easy above. Note also that Easy improved its seat factor from 90% to 92%, and Ryan 95% to 96%. Despite the different numbers, these growths are equally impressive; any growth above about-92% is hard. However, we suspect Ryan finds a way to count everyone so that on some flights the paper seat factor would be above 100%. Indeed, we would not be surprised if it manages to count those from cancelled flights!

2017 visitor counts
26 January 2018
There have been a few reports on early counts for visitor arrivals in 2017. We have worked-on the latest-published comparable data from WTO (World Tourism Organization):
-Total count through October was +6.6%, which would produce an all-2017 count of 1318.6mn. WTO’s forecast made at the start of 2017 was well off, +3-4%; it forecasts +4-5% for 2018.
-There was almost-certainly a change in the top-3 destinations. In 2016 France was 82.6mn -2.2%, US 75.9mn -2.1%, Spain 75.3mn +10.5%. For all-2017, based on YTD through the month shown: France (August) would have been 88.9mn +7.6%, Spain (October) 82.5mn +9.2%, US (June) 72.9mn -3.9%. The US fall may be blamed on a Trump Slump, although as shown above, the total actually fell in 2016 as well. That was BT – Before Trump.

WTO on North Africa, Middle East
22 January 2018
[] WTO reports visitor arrivals in the Middle East grew +4.7% in 2017 and in North Africa +13.3%. We amplify:
-for WTO, Israel is not included (it is counted in Europe), and Egypt is counted in ME, not in Africa.
-2017 counts are not yet available, so these figures are estimates. (Or part-year actuals; they match the latest published data from WTO for Jan-Oct.)
-Part of the reason for what WTO notes as good growth, is weak results in 2016 – ME fell -2.4%, N Africa grew +5.0%.
-WTO forecasts the two regions will count 195mn visitors in 2030. The total was 74.5mn in 2016. To reach that forecast will require a 7.1% annual average growth rate.

Bloomberg vagaries
15 January 2018
A report by Bloomberg (BB), a deservedly-respected business and financial tracker, on airline results of some airlines in Europe in 2017 contained some unclear references.
  Following is our report on BB’s findings, with our comments and/or amplifications where necessary (may be paraphrased):
-‘Lufthansa overtook ICAG [mainly AerLingus, British, Iberia, Vueling] to become Europe’s 2nd-biggest airline following its most significant takeover spree in years.’
  BB is measuring the Lufthansa group (LG, not ‘airline’), which is mainly Austrian, Brussels, Eurowings, Lufthansa, Swiss). LG bought 45% of Brussels in 2009, and the 55% balance January 2017. LG also leased some aircraft from defunct Air Berlin.
-‘Lufthansa’s passenger traffic grew +15% in 2017, passing [ICAG], which grew +4%. The Air France-KLM (AFK) remains Europe’s biggest airline following growth +5%’.
  As earlier, this data is for the three groups, not individual airlines. BB is measuring RPKs for these comments. However, LG does not include Brussels in its 2016 measures – which boost its 2017 count. In addition, Eurowings has taken over some longhaul routes, which boosts an RPK measure.
  Our track of seats sold shows LG +18.3% to 130mn, ICAG +4.1% to 105mn, AFK +5.7% to 99mn. Ryanair (our estimates), which is just one airline, +10.3% to 129mn. Adding Virgin Atlantic to AFK’s account (AFK is reported to be buying 31%) would make the group just 1mn short of ICAG’s total.
-‘ICAG, created with a merger of British and Iberia in 2011, overtook Lufthansa [probably LG] to become Europe’s 2nd-largest in 2015, helped by purchase of AerLingus, British Midland [from LG], Vueling.’
-‘AFK, formed from a merger in 2004, has remained the region’s biggest airline [sic; actually, airline group], although rivals have narrowed the gap.’
  BB makes no mention of Alitalia (AZ), in which AFK bought 25% share for €323mn (now US$393mn) in 2009, out-bidding LG. The intention was for Alitalia with AFK to become a strong trio. As AFK stayed out of refinancing moves, its ownership share fell, and it is now about 5%. And from 2015, AFK no longer had marketing agreements with AZ nor representatives on the AZ board. Not much for nearly US$400mn.
  But perhaps it is coming back – see below.
-‘AFK was Europe’s best-performing airline stock in 2017 with +162% growth. Lufthansa was +150%, ICAG +48%.’
  Our database shows the same growth for these three. For us (last-day-2017 compared with LD-2016) best-performer was Turkish with +213%; worst performer was Norwegian with -39%.
-‘More transactions are due this year: Lufthansa taking over more Air Berlin assets, ICAG buying airport slots from defunct Monarch, while also chasing Air Berlin’s Austrian airline Niki. Italy’s AZ is bankrupt and for sale, with Lufthansa a potential bidder.’
  BB has its analysts. But there have already been changes in that ICAG has bid for Niki, to operate it as a no-frills-airline (as it was planned, but not operated as such under Air Berlin) under ICAG’s Vueling – which is a hybrid operation. And ICAG has shown interest in AZ’s assets
  BB seems not to understand EU airline regulations, in that there is no need to buy AZ, just its assets. Any EU airline can operate from any EU market.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Easy v Ryan v Southwest v Norwegian v Air Asia
22 December 2017
On the occasion of the departure of Easyjet CEO, Carolyn McCall, and prompted by some comments by the airline on her performance over her seven years at the airline, we check the results at Easy and some other competing airlines. These indicate that Easy’s claims for McCall are not justified*.
  According to our database, Easy’s seat sales have shown a +7.0% average annual growth rate since she joined. That looks weak alongside some key competitors – +8.2% AAGR at arch-rival Ryanair, the world’s biggest NFA (no-frills-airline), +14.5% at (relative) newcomer Norwegian, although only +5.9% at US-based Southwest, overtaken two months ago as the world’s biggest NFA, and +15.9% at Air Asia, that region’s biggest NFA. Air Berlin, which has now shut down, was negative, -1.6%.
  The same pattern for Easy’s share price. At current prices, Easy’s share AAGR over end-2010 was +18.3%, Ryan +24.6%, Southwest +24.4%. Only two years for Norwegian, but -25.2%. Also negative for Air Asia, -2.0% over the seven years. Air Berlin was not a quoted airline.
  We calculate Easy’s seat sales have grown +49.7% since 2010, although Ryan has grown +60.6%, Norwegian +124.9%, Air Asia +109.3%, but Southwest +40.9%.
*A report on this topic in our People-in-Travel (PinT) monthly-report contains some important additional information, qualification, and analysis.

Our outlook
21 December 2017
The following extracted from our input for an external report.
Assessment of travel business in the past four months:
-Worse. Sentiments are confused. There are many ‘angry’ areas – the Middle East (including the West and Iran); Trump US; Brexit UK; North Korea. That is bringing, or accompanied by, changes in currency values. There is not much geopolitical good news. Quite how all this affects the travel business is of course, almost impossible to know. But it seems to be more ‘careful’ travel activity – destinations considered safe, for instance.
Assessment of travel business in the next four months
-Worse. As above. Even if there is good news, that would not bring immediate improvement in growth – because of a ‘wait-and-see’ sentiment.
Evaluation of 2017
-Worse. As above. There has been little good news, and much ‘bad’. (As noted above, it is hard to determine how this has changed travel movements, except for an expectation of activity considered ‘safer’.)
Prospects for 2018
-Equal. The reason it could be ‘equal’ is almost the same as saying “surely it could not get any worse”. The hope is that there could be positive developments – in the Middle East in particular, with the end of Daesh. And the European Union economies are growing stronger, and perhaps the UK will move closer to an economic and social exit agreement with the European Union that will be better for the country. The danger is still the US with an unpredictable, aggressive, violent, and protective president. That means of course, we don’t know what is going to happen in the travel business.

US outbound
20 December 2017
US nationals outbound travel* September 6.84mn +9.0%, YTD 66.7mn +9.5%. Normally we would not comment further, but in the US these are not normal times, and thus we look for trend indicators.
  Travel to overseas destinations (all except Canada, Mexico) September 2.95mn +6.8%, YTD 29.6mn +9.6%.
  September: Europe 1.68mn +16.6%, Caribbean 357k -14.5%, Asia 420k +3.7%, Middle East 158k +1.7%, Oceania 48k +0.2%. Within North America 3.89mn +10.7%, of which Canada 1.46mn +3.2%. Mexico, perhaps the most watched, was up - 2.4mn +15.8%. That must be the biggest surprise given the negative rhetoric on Mexico from the US president.
  YTD: overseas +9.6% (Europe +16.9%, Caribbean +6.5%, Asia +8.2%, Middle East +5.7%, Oceania +6.3%. Within North America Mexico +12.6%, Canada +2.7%.
  For more http://travel.trade.gov/view/m-2017-O-001/index.html
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Europe cities ahead?
15 December 2017
A new report by ECM (European Cities Marketing) on total bednights in ECM cities shows +14.2% growth over 2012-16.
  We presume that ECM has not compared 2016 results with the single-year 2015 because our calculations indicate that there was a fall of -0.4%.
  ECM causes more confusion by comparing those city arrivals, not with arrivals in the countries of those cities, but with the 28 countries in the EU (European Union); ECM reports that those grew +8.8%. But that is comparing apples with oranges.
  We have calculated growth in the destinations of those cities (using Eurostat and WTO data) and for the single year 2016. This shows that ECM cities are in a worse position than their country-totals, perhaps surprisingly - as most country arrivals enter through cities.
  Compared with that -0.4% fall for the cities, growth in those destinations for total arrivals (not bednights) in 2016 was +3.5%.
  This results in a trend opposite to what ECM claims – that cities are performing better than destinations (=countries).
  Perhaps because the data was published later, ECM has not conducted the same exercise with international bednights. Our counts of earlier-published data shows international bednights grew +9.7% in 2016. We have calculated growth in the destinations of those cities (using WTO data). This shows the same trend as for total bednights, and indeed the same (rounded) growth - +3.5%.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

US outbound
14 December 2017
NTTO (the DMO for the US) has just published the totals for outbound travel from the US in 2016.
  Total 80.2mn +8.2%. The NTTO says that was the 5th year of growth; our contemporary data from the NTTO shows 10 years of growth, although only +1% in 2013. The NTTO sometimes adjusts earlier data, but does not always publish this.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Ryanair tops
8 December 2017
It happened in September and was confirmed in October. According to our counts, Ryanair has overtaken Southwest to become the world's biggest no-frills-airline.
  Seat sales Jan-Oct were 11.0mn on Ryan compared with 10.8mn on Southwest.

Trump slumpish
30 November 2017
First-half visitor arrivals in the US*; bad, but not so bad.

A fall in visitor arrivals in the US in the first-half would seem to confirm that this is indeed a Trump Slump – in other words, a fall caused primarily by the anti-foreigner actions and statements of the US president, Donald Trump.
  That said, the fall was less in Q2 than in Q1, thus less for the first half.
  The overall figures may not look so bad. There were 1.4mn fewer visitors in H1 out of a total of 33.9mn (and 1.0mn fewer from overseas out of 16.4mn). That is only 4% of the total (and 6% of the overseas total).
  The following are our observations on the data:
-Overseas visitors fell -8% in Q1, -4% Q2, -6% H1 – which is a sizeable fall.
-In the top-10 sources, only Korea and France grew in Q1, but in Q2 they were joined by a few – in order of size, UK, Japan, Germany, Australia, Italy. But for H1 there were only those two plus Germany and Italy.
-Perhaps a big shock is that the top-5 overseas markets hardly fell (-0.1%). They fell -4% in Q1 but grew +4% in Q2. The main cause was Germany, switching from -12% in Q1 to +10% in Q2, for +0.3% in H1.
-In conclusion, all nine regions into which the US breaks its arrivals fell in H1. Disregarding their size for a moment, little surprise was that the Middle East (the main target of Trump’s ‘travel ban’) fell the most - -30% in H1, and Africa, the 2nd-target next, with -27%. Lowest fall was Asia Pacific with -1%. But even the Caribbean, almost the closest but possibly less affected in the anti-foreigner positioning of Trump, also fell heavily, by -15%.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

ITB Asia results
30 October 2017
ITB Asia, which ran last week (in Singapore), does not appear to have been much damaged by the launch of ITB China this May. Basic data:
-Visitor count, damaged. 11,000 visitors +0.2%, compared with +7.6% average annual growth rate since 2010.
-Exhibitor count, not damaged. 940 +11.1% +3.9%. But watch that figure in 2018.
-Others. ITB Asia does not reveal all the same measures each year, so ongoing analysis is not easy. No longer revealed – usually because of falls – are buyer counts, exhibition area, and country-counts of visitors. Appearing to do well are the number of conference minutes (yes, ITBA counts this), and country-counts of exhibitors.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Ctrip’s misleading data
26 October 2017
China’s OTA Ctrip reports the following*. Neither source nor base of data given; we also show other shortcomings.
-During this month’s Golden Week holiday in China, 46% of the 6mn outbound travellers from China “chose Southeast Asia as their holiday destination”.
  This appears to assume all outbound travellers are holidaymakers, which is of course incorrect. Also unclear is whether this is a count of arrivals in those destinations, or departures from China. Ctrip may not bother to differentiate these measures for a broad, general, audience.
-Ctrip expects passport ownership in China, now at 7%, “to rise in the near future”.
  This is almost a given, but Ctrip offers no indication of growth rate. We believe it will have reached 10% in 2020.
-Ctrip says average traveller spend for key cities is “well over” US$1400.
  Does ‘well over’ mean US$1500, US$2000, or something else? Ctrip is not clear whether this is a domestic- or international-travel spend, or total. A more important measure would be per-traveller-per-day spend.
-China’s outbound traveller total forecast at 200mn in 2020; it was 122mn in 2016. That would mean a +13.1% average annual growth rate. That looks optimistic; we estimate +11.4% so far this year – better than the past three years, which have been in single-digits.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Travel business updates
25 October 2017
[] Basic data from new IATA long-term forecast*:
-2036 (sic) seat sales 7.8bn; 4bn estimated this year. That appears to be a +3.8% average annual growth rate, although IATA calculates +3.6%.
-China forecast to overtake US as biggest in 2022, India to overtake the UK as 5th in 2025, with Indonesia also overtaking the UK in 2030.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.
 [] ITB Berlin and IPK International report:
-That worldwide luxury travel* was 54mn in 2016, +18% over 2014, for a 7% market share.
  Periods unclear, but this appears to be a +6.8% average annual growth rate.
-Largest source markets: US 13.7mn, China 10mn (presumed 10.0mn).
-Largest destination US 8.1mn.
*Trips up to 3-nights with a spend of above US$882/night (at US$1 to €0.85), and long trips of 4-nights-plus and more and a spend of above US$588/night.
[] STR (nee Smith Travel Research) reports Middle East Q3 hotels occupancy 60.9% -2.8%, average room rate US$145.50 -8.1%.
[] Just published: US nationals 2016 outbound travel 80.2mn +8%, overseas 35.1mn +7%.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

IATA’s annual stats report
12 October 2017
IATA has published its WATS (World Air Transport Statistics), on 2016 data. Information includes*:
-Airlines sold 3.8bn +7% seats.
-Asia Pacific sold the most seats, 1.3bn +11.3%, a 35% share; Europe 992.4mn +6.1% 26%; North America 911.5mn +3% (probably 3.0%) 24%; Middle East 206.1mn +9.1% 5%.
-Top-3 airlines by seats sold: Southwest 151.8mn (we count 124.7mn); American 144.2mn; Delta 143.3mn.
-Top-3 international city-pairs: Hong Kong-Taipei 5.2mn +2.1%; Jakarta-Singapore 3.4mn +0.9%; Bangkok-Hong Kong 3mn -3.1.
-Top-3 domestic city-pairs: Jeju-Seoul Gimpo 11.6mn +4.6%; Sapporo-Tokyo Haneda 7.7mn -1.2%; Fukuoka-Tokyo Haneda 7.3mn -4% (probably 4.0.
-Nationality, a new measure. Biggest systemwide were US nationals, 810mn seats sold to them, a 21% share; no comparison with 2015. US also top internationally*, and domestically.
-New Model Airlines, an IATA definition that would combine what we call no-frills-airlines, low-cost-airlines, charter airlines, but not some others – see below. NMAs had a 28.3% share of all seats sold, up from 27.1%.
-Alliances. Star 38% share of RPKs (no comparison).
*High positions of the UK and US are partly explained by a large number of nationals living in other countries. For instance, Americans in Hong Kong, Japan, Singapore, UK. And British in Australia, Canada, New Zealand, Singapore, US. All these would be counted under their nationality, UK or US.
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

Monarch stops; no surprise
3 October 2017
UK-based Monarch, which stopped operating yesterday, operated almost one year longer than we expected.
  In 2014, following a change of ownership, financial restructure, and a new businessplan, we said that profitability would be hard because the new businessplan seemed to be moving the airline into the same market as those super-efficient airlines Easyjet and Ryanair.
  Until then it had been a hybrid airline - part charter (a business-model that hardly works in today’s liberalised airline market in the European Union (EU)), part-schedule, part no-frills-airline (NFA)
  Although there is no reason why a hybrid cannot be profitable, it requires superlative operational and marketing efficiency. That is hard.
  Moving to NFA operations can also be profitable, and relatively easy in operational terms. But in that sector, the problem is Easyjet and Ryanair. They are hard to beat or even equal on routes they already cover, and hard to find other routes than can be profitable in a reasonable time – 12 months?).
  Worse, the NFA sector in the EU is a crowded market, in which full-service-airlines are also entering – even if they cannot afford to offer low NFA fares.
  At the time of Monarch’s rebirth at end-2014, we said:
  “...there is a [great] chance that the airline will shut down in the next two years – being unable to match or better those strong competitors.”

Trump bumps and slumps
15 September 2017
Some weird stuff is happening with visitor traffic into the US.
We have run Q1 analysis in the August issues of our newsletter, but just-released April data throws some of that analysis. Again, full analysis in our newsletter. But briefly:
-Canada growing at remarkable rates (+15%) considering its already-big size.
-Mexico growing (we thought it was growling), even if only slightly.
-ROW also growing – comfortably, +5%.
-The UK, biggest overseas market, fast +15%, although still -7% YTD. Why the big growth? Well, it was down -11% in the same 2016 month, so that could be just a Dead Cat Bounce.
-No2, Japan, consistent – up a little, down a little.
-No3 Germany, like the UK, up big (+26%). Partly explained by a -15% in the same 2016 month, but not entirely. Down YTD.
-The biggest loss to the US from Trump’s America-first program is probably China; about No 5. The fall might look small (-2% and -1% YTD), but this is a market that is booming into most destinations. It was +15% for all-2016.

Norwegian Air Shuttle
14 July 2017
The Economist gets it wrong; Norwegian would if it could. See http://wp.me/pTv9-l1

Meetings* 2016
13 June 2017
ICCA* compares ranking by participants with ranking by meetings of association meetings in 2016 – but not with 2015 rankings. And there is other information not available to non-ICCA members – which prevents full analysis.
  Be-that-as-it-may, ICCA reports top-5 participants:
-Vienna, 2nd in meeting numbers, 1st in participants.
-Seoul 10th 2nd.
-Barcelona 3rd 3rd.
-Copenhagen 14th 4th.
-London 5th 5th.
-Paris, 1st in meetings, 7th in participants.
-US 1st 1st.
-Germany 2nd 2nd.
-UK 3rd 3rd.
-Italy 6th 4th.
-Spain 5th 5th.
-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.
-ICCA was initially an abbreviation for the International Congress and Conventions Association. Then it used ICCA as a name, which it described as The International Meetings Association. It has now reverted to almost the same – ICCA, International Congress and Convention Association.

Other posts
24 March 2017
-How to save Air Malta. https://medium.com/@tbaoffice/knites-to-save-air-malta-c981a52d986c

WTM miscounts; business falls
3 February 2017
WTM London has released data showing its 2016 event will generate £2.8bn in ‘travel industry deals’. That is +12.0% on WTM 2015.
  WTM’s practice of quoting in UK pounds is an imprecise measure without an exchange rate, and particularly so when that currency has been falling since the UK’s June 2016 vote to leave the European Union.
  We presume researchers for the UK-centric WTM (despite its international event) would ask for the figures in UK pounds, and so they would not know what exchange rate respondees were using.
  For the record, Oanda rates show that the US$ exchange rate at the time of its 2015 event would have meant business worth US$3.76bn, but only US$3.48bn for its 2016 event.
  In other words, business at WTM 2016 fell about 7%.
  There is also confusion over its attendance counts. WTM first reported 49,275 participants, which our data indicated was a 1.5% fall. Publicly at the time, it presented that as an “impressive” 50,000, despite the fall. Now it says there were 51,406 participants – which would mean 2.8% growth.
  Unfortunately for WTM, that makes its business-done measure worse. We calculate:
-Averaging business done per-participant results in US$68. That’s a fall of 9.9% over WTM 2015.
-Generally, WTM refers more to its WTM Buyers’ Club (WBC), whose membership grew 8.9% over 2015-6.
-But averaging business done per-WBC member results in US$351, a sizeable 15.0% fall.
  If WTM is hiding the bad news (as it has done before), this might be better than not knowing its business is falling.

Asean@50; unhappy birthday?
23 January 2017
The reclusive Asean travel secretariat (ATS) has reiterated its 2017 visitor target for the 10 Asean destinations at 121mn. Yet the figures it has published indicate that it expects slower growth in this celebratory year than in the ‘normal’ year 2016.
  We’ll explain:
  The forecast is related to what is named ‘Asean@50’ (A50). This is a so-called (non-funded) promotional campaign this year to encourage greater visitation into the 10 Asean destinations – to celebrate the 50th anniversary of the formation of the Asean political association.
  We believe few travellers are motivated by political birthdays. In 2015, the visitor element of Singapore’s 50th-year independence/foundation celebrations was a flop. Arrivals growth that year was just 1%; something which no-one now mentions. Ironically, A50 was officially launched in Singapore, indicating that nothing has been learned from Singapore’s birthday failure.
  One year ago, ATS released data that would mean visitor totals for the 10 destinations in 2015 totalled 92.3mn. Since then, ATS has changed that total to 109mn and now to 108mn.
  We estimate that there was strong growth in visitors in 2016 – probably 8.5%, even though that was below the 12.8% forecast that we calculated after adding up DMO forecasts at the start of 2016.
  That +8.5% would put the 2016 Asean visitor total at 117mn – based on ATS’s restated 2015 total of 108mn. From there to the targetted 121mn this year would mean 3.2% growth this year. We have seen no commentary that this means, in effect, that ATS forecasts slower growth this A50 year than in 2016, a ‘normal’ year.
A report on this topic in our Travel Business Analyst newsletter contains some important additional information and analysis.

Brussels’ recovery
13 January 2017
Brussels’ CTO says the visitor business is “visibly starting to recover” following the terrorist attacks last March . However, the only data the CTO provides to support its statement is that hotels in the city reported 85% occupancy New Year’s Eve.
  It puts this 20% higher than 2015. An increase of this size is generally unlikely (statistically) unless there are special circumstances – positive or negative.
  Indeed, our own data shows whole-month December 2015 hotel occupancy was -19pts on the previous year, mostly due to serious terrorist attacks in November 2015. Although those attacks were in Paris, many of the perpetrators came from Brussels.
  However, airport traffic counts – which the CTO did not show - are more encouraging. Our review of data (from ANNA) shows passenger throughput at the city’s 2nd airport, Charleroi, was +8% in 2016. At the main airport , at Zaventem, where one of the two March attacks took place, was about -7%, but growing in the last two months of the year.

Qantas v EEQ (Emirates Etihad Qatar)
12 December 2016
Qantas changes the Gulf’s game. See http://wp.me/pTv9-k4

Scoot = Tiger
8 December 2016
We thought of it first. See http://wp.me/pTv9-k0

We Were Right!
11 November 2016
We have had a good couple-of-months - in vindication.
1. Frequently, since 2007, we have been saying that the Air Berlin businessmodel was wrong, suggesting simplification. In September 2016, the airline announced it was downsizing (about 40%), moving some of its leisure operations into a new company, and more, to change what it called its “complicated business model”. (There is still more to do, however.)
2. In 2015 we formalised our 7-year-old strategy for bigger airline groups. One section proposed expanding Hop, an Air France subsidiary, into a low-cost subsidiary to operate certain flights (short medium long) instead of AF and its associate KLM. In November 2016, the AF-KLM group said it planned to establish a low-cost subsidiary in 2017 to operate certain Asia and Atlantic flights instead of the two.
3. In April 2016 we said the reported plan by Alitalia to buy 49% of Air Malta would not happen. In October 2016, it was announced that the sale would not take place.
4. When Scoot was established in 2011 we said it should not have been, and Tiger expanded instead. This plan was dismissed by the owner of both, the Singapore Airlines group (SAG), end-2013. In November 2016, SAG said Tiger would operate under Scoot’s name starting 2017.
  For those interested in more:
-What full-service-airlines need to do to survive. See 
-We’ve been reporting Air Berlin’s problems since 2006. See http://wp.me/pTv9-jJ
-AirFrance-KLM new subsidiary; we thought of it first. See http://wp.me/pTv9-jW
-Scoot = Tiger. We thought of it first. See http://wp.me/pTv9-k0
-How to save Air Malta and others. See http://wp.me/pTv9-jB 
-Alitalia to buy into Air Malta? See http://wp.me/pTv9-it
-Analysing Alitalia’s 2015 results. See http://wp.me/pTv9-in

Other posts
4 November 2016
-AirFrance-KLM new subsidiary; we thought of it first. See http://wp.me/pTv9-jW
-What full-service-airlines need to do to survive. See
-Tracking UK inbound/outbound travel; in the fog. See http://wp.me/pTv9-jU

Air Berlin surprise
5 October 2016
Why did it take so long to see the problems? We’ve been reporting them since 2006. PAGPFT. On http://wp.me/pTv9-jJ

Visitors – France v Spain v US, EuroTunnel miscounts
30 August 2016
Visitors – France v Spain v US
In our ongoing tracking of visitor trends, we expect changes this year – in 2015 in order was France, US, Spain. That’s visitors; in spend top-3 were US, China, Spain – Spain half China’s total, China half US’s total.
  This year France on track to count 84mn, US 77mn, Spain 75mn. However, we think these statistical trends will change, and all-2016 will show around 77mn for all three.
  (We’re working primarily on WTO data, with other indicators from DMOs.)
EuroTunnel miscounts
EuroTunnel has (re)started* some monthly counts. From July – a tough month to analyse because of the UK’s Brexit vote the month before, and a shocking terrorist attack in Nice that month.
  Nevertheless, ET does not try very hard:
-It notes +6.6% in cars-transported that month, describing this the highest since July 1998. Our records indicate July 1996 was higher than 1998.
-It does not note the -7.9% in buses-transported. We, and we presume investors in ET, would appreciate some comment on this. For instance, we guess 65-70% of ET’s bus traffic is UK-originating. That would make this segment more susceptible to the fall that month in the value of the UK currency. But it could be more related to the Nice attacks, as around half of UK-originating tour-bus traffic includes the south of France.
-Train traffic is weak, falling in both Q1 and Q2 – so hardly related to Brexit or the Nice attacks – albeit Q1 would have been damaged by the terrorist attacks in Paris in November 2015.
*The company appears to have forgotten it reported monthly until 1998. However, it has not restarted this for Eurostar; they are still provided quarterly.

July; airlines in Europe
29 August 2016
July was a tumultuous month for the travel business – coup attempt in Turkey, serious terrorist attack in Nice, France. And the month following the UK decision to leave the European Union, within two years in theory.
  Some WYSKs then (What You Should Know), in alphabetical order:
-Air France seat sales -4%, slower than its -1% YTD. But its Transavia no-frills-airline +23%, +20% YTD.
-British does not publish its seat sales. We estimate +4%, +3% YTD.
-Easyjet +7%, faster than its +6% YTD. Note around 50% of EJ’s traffic does not touch the UK (as an aside, that’s the half that is at risk when UK leaves EU).
-Norwegian, maybe 25-30% of its traffic UK related, +9%, slower than its +13% YTD.
-Ryanair, 12 bases in UK (at risk after Brexit), but probably similar to EJ – about 50% of its traffic outside UK. +11%, slower than its +16% YTD.
-Turkish -1%, slower than its +4% YTD. This is a substantial turndown; same month in 2015 was +23%, +11% YTD.
Some of these percentage-change figures are calculations by Travel Business Analyst on airline-supplied base data.

Travel and terror
12 August 2016
France’s fall
Reports in France talk of ‘official’ figures saying August visitor arrivals have fallen 10% as a result of the recent terrorist attacks in the destination. Our comments:
1. Although the source of those ‘official’ figures is not specified, these are probably not official figures – simply because they are not available this quickly, in most destinations and certainly in France. (France’s DMO has given only Q1 data to WTO.)
  Thus they must be either ‘initial estimates’ or forecasts for August.
2. A 10% fall would not be bad as could have been expected.
  The most-reported recent attack was Nice, on July 14, just four weeks ago. Given the seriousness of that attack – over 80 killed – and the shocking method (a truck driving through crowds), we believe a fall in visitation of 25% could be expected in the four weeks following the attack.
3. However, visual observations indicate the fall is greater than either 10% or 25%.
  Yet perhaps something else is happening:
-Certainly, some travellers are changing destinations, but are those that do not change destination changing their intra-destination activity?
-Ie, not the Tour Eiffel but the (excellent) Musee de Quai Branly?
–Or continuing to visit the Tour but staying for a shorter time, and not drinking coffee in a nearby pavement cafe? That would change the number of visitors ‘seen’, even if the actual number was unchanged.
IPK/ITB report
Research company IPK International has completed a report for the ITB Berlin exhibition on travel and terror. (IPKI + ITBB = II.)
 Some findings*:
-Forecast 2016 outbound travel +3%, from Europe +2%.
-‘Nearly-half’ of travellers are ‘changing their travel behaviour’.
-‘The threat of terrorism influences the travel behaviour of 40%’ of travellers.
-15% will avoid travelling internationally this year and spend their holidays in their own country.
-25% plan to continue travelling abroad, but only to places they perceive safe.
-Destinations rated least safe were those where there have already been ‘attacks or unrest in the past’ – II put Egypt, Israel, Turkey worst (least safe).
-II say some destinations can expect ‘massive losses’. II add other destinations, in order given (worst first) - Turkey, Tunisia, Morocco, Egypt, Jordan, Israel.
-II name other destinations that have ‘good growth prospects’, but do not enumerate the potential – in order, Canada, Australia, Scandinavia, Switzerland.
*There are some extraordinary contradictions in II’s report. A report in the Asia Pacific and Europe editions of the Travel Business Analyst newsletter contains critical comment on this report.

No Hope Malaysia Airlines?
4 August 2016
Malaysia Airlines now looks unsaveable. As we said a year ago, one rehabilitating move should have been to change its name. Although we are aware that this was not the only solution, it would have been an important one.
  In fact, the airline’s government owners made a worthless similar move. They changed the airline’s name to MAB from MAS - Malaysian Airlines Berhad from Malaysian Airline System. That prompted us to ask if this was no more than ‘BS’.
  We estimate that the airline’s YTD international seat sales are down almost 30% - two years after the airline’s twin tragedies. This is not getting better - all-2015 was -24%. The airline is now half the size it was in 2014!
  And we don’t think this is something the new new CEO – whose expertise is engineering – can fix. The first step, for something drastic, must be that name change.
  This month the airline should change its name to ‘Air Malaysia’. And starting September make a big marketing splash (new colours, new uniforms, etc; yes, next month). The content is less important than the ‘new’ and the flash splash.
  Air Malaysia should take off its tie (personified with the new CEO; who does not know that the CEOs of bright airlines are forbidden to wear ties). And become the bright new airline of Southeast Asia.
  Can Malaysia Airlines save itself?

UK +30%?!
29 July 2016
US-based Tourico Holidays* forecasts 30% growth in UK hotel roomnights this second-half. Other findings:
-TH has sold 250,000 roomnights in the UK this year – led by 12% growth from the US. Overall growth not given, devaluing relevance of 250k total.
-From China (4% of TH’s UK market) daily reservations doubled since the UK referendum on leaving the EU (‘Brexit’) in late-June. Same from Germany (6%). No totals given, devaluing relevance of ‘doubled’ comment.
-Manchester forward bookings have grown 60% since the Brexit vote. No totals given, devaluing relevance of 60% growth.
A report in our newsletter on this topic includes so many critical comments that Tourico’s statements could be labelled “rubbish” at worst, or “dangerously misleading” at best.

*A tour wholesaler that sells more to other (smaller or local or regional) tour wholesalers rather than retailers (travel agencies) as the past definition of ‘tour wholesaler’. TH has 4900 customers.

France, Turkey, UK
26 July 2016
STR (nee Smith Travel Research) reports Q2 hotel results in three destinations in the news:
-France occupancy 68.2% -5.5%, average room rate US$153.81 (€138.43) -7.5%. (June, Euro-2016 football competition, 75.1% -5.5%, US$174.59 (€157.13) -5.3%.)
-Turkey 51.0% -23.9%, US$89.42 (L271.85) -17.2%.
-UK 78.9% -0.7%, US$140.17 (£89.71) +1.7%.

Terror in France
25 July 2016
Visitor trends following terrorist attacks in France
Figures appear to indicate that the terrorist attacks in France (Nov 15, Jul 16) caused a hotel occupancy fall of 18-22%, see table. But we estimate this fall went closer to 25% in the week post-attacks.
  We also believe these results are representative of the overall fall in visitation to the two destinations – with related falls in other locations.
  From a business viewpoint, Nice was worse in that the attack came during the city’s peak period – July, August. The Paris attack came in one of the three slowest months for the city - November, January, February.
  Damage does not seem to be longterm. Paris airport passengers fell 2% in November, -3% December, but was back to growth in January. Brussels - which suffered attacks in March, one of which was at the airport, which was then closed a few days – airport passengers were -29% March, -46% April, but only -8% in May, -6% June.
Notes: Source shows Paris results in day of attack, Nov 13, but we believe results would be unaffected by the attacks that evening. Source does not show results for third day after attacks, as it does for Nice; thus our ‘NA’.

Hotel results following terrorist attacks in France





Jul 15


Jul 16


Jul 17

















Nov 14


Nov 15


Nov 16















Notes: See text. Rates are before tax. ARR = average room rate, Occ = occupancy. *Converted at US$1 to €0.90. ┼Nice (Promenade des Anglais; Thu Jul 14) 68 hotels/8400 rooms; Paris (Bataclan and others; Fri Nov 13) 250/32,000. ╪Over same weekday, year earlier. Source: MKG, Hospitality On.

First-half at two more Airline Groups
13 July 2016
Monday, first-half for LAG, the Lufthansa airline group. Tuesday, some ‘challengers’ (Aer Lingus, Air Berlin, Easyjet, Eurowings, Norwegian, Ryanair, Transavia, Vueling, Wizz). Today, Europe’s two other big AGs (airline groups) - AKAG (Air France, KLM, plus) and IAG (British, Iberia, plus).
-KL is doing well - first-half seat sales +7%.
-AF -1%. As this includes its regional airline Hop, that -1% is worse than it might look. That said, analysis is twisted by terrorist attacks in Paris last November and in Brussels this March. Whereas Paris damaged results, Brussels may have improved them (diversion from Brussels airport).
-But events at AF and in France makes AF business prospects harder – with an AF strike and two air traffic control strikes this year.
-Asia Pacific is bad for AF-KL, pulling the total down.
-Paris is a big leisure attraction for many AsPac travellers, particularly the two biggest markets – China and Korea – as well as Japan. And the continual bad news from France – terrorism, strikes, street riots – will damage potential.
-AKAG’s no-frills-airline Transavia is doing well. See report yesterday.
IAG (International Consolidated Airlines Group, sic).
-Looking good. Now not much smaller than LAG, Lufthansa airline group – 10%. And a better mix. LAG has three full-service-airlines and one unworkable mixup (Eurowings). IAG has two FSAs, one no-frills-airline (Vueling). Plus a hybrid (Aer Lingus), not quite unworkable as Eurowings, but not yet clear what IAG will do with it. Something must be done with AL although it is currently doing well - see report yesterday.
-IAG is around +10% intraEurope (when many others find the region slow), and perhaps +12% on Asia Pacific.
-Iberia is performing better than British, as Spain pulls out of its economic slowdown.
-Danger ahead, of course, following UK voters’ bad EU-exit decision. At best, we believe IAG’s growth will vanish with all-2016 counts. If there is growth, it will be thanks to Iberia and Vueling.

Europe’s ‘other’ airlines: first-half winners and losers
12 July 2016
Yesterday, first-half for LAG, the Lufthansa airline group. Today, some ‘challengers’. Tomorrow Europe’s two other big AGs (airline groups), AKAG (Air France, KLM, plus) IAG (British, Iberia, plus).
Be impressed.
-Those seat factors of the two leading NFAs (no-frills-airlines) – 93% first-half at Ryanair, 92% at Easyjet.
-Growth at Ryanair - +17% at Ryan H1, albeit slowing (ok, but still +12% in June).
-Norwegian good +14% growth, seat factor at a sustainable 88%. But its future growth threatened by Brexit; complicated, but see earlier posts.
-Wizz. Close to entering the big league – which we put at 25mn seats sold annually. But perhaps not this year; 23-24mn all-2016?
Be worried.
-Air Berlin still down, at -6% H1. May be easing but seat factor, at 82%, is bleedingly low for the hybrid operation. Owner Etihad has shown no capability of turning this around (apart from saying it is); not a good sign for its other big charge, the lossmaking Alitalia.
Happy children.
-IAG does not publish all the measures we track. But we believe its Aer Lingus is growing at around twice the pace it was pre-IAG. About +10% H1.
-But AL is still small; less than half the size of IAG’s Vueling. And V is still growing fast – probably +18% H1.
-But seat factors of both need to be improved – 79% and 81% H1.
-Sshh! Are AF-KLM doing with Transavia which AF unions said they could not – grow T into a Vueling-type airline? And pulling AF out of trouble (KL is ok)? T is still small – under half the size of V – but its +19% H1 is unheard of at AF, whose calculators we thought stopped at +5%. T already represents 13% of the AF-KL group total.
-We find it hard to categorise LAG’s Eurowings – hybrid, ie part-NFA, low-cost-airline, full-service-airline. For that reason, we think its businessplan will need to be rewritten (although this hybrid-EW is already a rewrite!). In the meantime, EW traffic looks good! +7% H1, but some traffic measures up 25% (because it is expanding on some longer-haul routes). Careful though, its seat factor is an unsustainable 77%. We are not sure what it should be, given EW’s hybrid status; 85%?

LAGging behind; the Lufthansa group
11 July 2016
Does LAG (the Lufthansa airline group) recognise its problems? In the first half, growth was weak for each of its full-service-airlines – Austrian +2% in seat sales, Lufthansa -1%, Swiss flat.
  Worse is that for each airline the latest month was even worse.
  And Eurowings, another LAG subsidiary, is not yet clearly pulling LAG out of slow growth. True, seat sales were +7% YTD, but also slower in the latest month.
  And if EW’s 7% looks good, it is mainly just when compared with LAG’s FSAs. Yet as a hybrid – part FSA, low-cost-airline, no-frills-airline – and recently-strengthened with new routes, missions, EW should be growing faster. We think at least +10% YTD.

Malaysia Airlines. Thoughtless statements from new CEO.
8 July 2016
We expect company leaders to say anodyne things when they are appointed. But we look for indicators nevertheless – somewhat like reading-between-the-lines/China-watching.
  But we are disappointed with statements from Peter Bellew*, new CEO of Malaysia Airlines (MA). We found few indicators, and not anodyne comments but almost puerile.
  Here are some (may be paraphrased):
PB soundbite: “I am sure it will be a road to recovery with many interesting turns.”
Comment: Means he does not know what will happen. Although that might be true, that is not what he should be saying.
PB soundbite: “...great progress in the last 10 months with many turnaround initiatives working.”
Comment: Means some turnaround initiatives are not working.
PB soundbite: “We will stop doing things that lose money.”
Comment: Ah, if only life were that simple. So no more new routes (which, generally, lose money initially)? No more free food on board, say, because free food loses money?
PB soundbite: “We will start new routes to new unserved Asean destinations.”
Comment: First, verbosity: ‘start’ or ‘new’ is superfluous; so is 2nd ‘new’; so is ‘unserved’ (the airline cannot operate a new route to a destination already served).
  But wait a minute. Doesn’t PB say (above) that nothing would be done that loses money? Are we to believe then, that all these destinations (no number, so this could just be two destinations) will make profits from Day 1?
PB soundbite: “We will operate some leisure flights from KLIA2 [KL’s budget-airlines terminal] in 2017.”
Comment: Same as above about doing nothing that loses money. The other comment is that leisure routes (if that’s what PB means) are more risky financially than multi-traffic ones, and usually seasonal. That said, PB gave no numbers, and as he said ‘flights’, this could mean just one leisure route from KLIA2, and more than once-weekly frequency. All cost savings will be passed on to passengers in lower fares; good news for passengers, but also means that it will not help MA’s profitability.
PB soundbite: “Profit seen in the last quarter shows that the financial gap between revenue and cost has significantly closed.”
Comment: PB may have ‘seen’ the profit, but we haven’t; MA keeps this information confidential. A ‘gap’ between revenue and cost, depending on what the figures are, is what we would call a ‘profit’ or ‘loss’. In addition, the gap cannot be ‘significantly closed’; it is either closed (ie breakeven or profit) or not (loss).
  Earlier, MA said it was ‘marginally profitable’ in Q1 but added some unclear caveats, and so that profitability could be no more than creative book-keeping. See also WYSKs below.
*What You Should Know:
-MA’s Q1 revenue fell a jaw-dropping 22% (to what we don’t know), but the fact that capacity (ASKs) fell further, -30%, is relatively good news. But reflect; the airline is almost one-third smaller than it was in 2015, when it also downsized.
-MA’s previous CEO Christoph Mueller, who resigned after less than a year in the job, is now leaving this month, rather than in September as he said when announcing his resignation. Important only in that it shows MA company statements have reduced credibility.
-We understand Mueller is moving to the Gulf to either Emirates or Etihad (or one of its seven associate airlines). He is known at Etihad, which at one time owned part of Aer Lingus (then CEO, Mueller) before being bought by IAG (mainly British and Iberia). This would threaten credibility on the official ‘personal-reasons’ for leaving MA. In fact, we understood he left for professional reasons – not being able to do at MA what he wanted to do.
-Much is made of PB’s time at Ryanair (nine years; 4 jobs), the world’s 2nd-largest no-frills-airline. But:
   -Most of his time there was in flight operations, as was his first job (from end-2015) at MA.
   -He had an unexplained one year as head of S&M (albeit under the current head of marketing, Kenny Jacobs, for most of that time) – which seemed well outside his professional competence.
   -Two months after he left S&M, Ryanair’s extraordinary traffic pickup started - two years of monthly 20-30% growths. The airline is now 25% bigger than it was when PB moved out of S&M. He might want to claim credit for starting that (this is a CV after all), but there are no indications that he was responsible in any way. We would credit Jacobs more than anyone else, and Michael O'Leary, head of the airline. Jacobs joined from a supermarket retailer strong in marketing, Tesco.

IATA on Brexit
4 July 2016
IATA has issued a report on the implications for UK air traffic following the UK’s decision to leave the EU. (This summary contains only the topics that we generally track, and thus might not reflect IATA’s complete report.)
  Findings include:
-Air passengers UK 2015: overseas trips by UK residents 53.9mn; arrivals in the UK by non-residents 26.2mn.
-UK government estimates Brexit impact on UK outbound -5.6%, on UK inbound +2.8% to +4.0%. Net -1.7% to -2.9%.
-Air passenger growth reduced by 1.0-1.5pts yearly over the “near term” – probably to 2020.
-The EU accounts for 49% of passengers from the UK and 54% of scheduled commercial flights.
-Capacity (in ASKs) of selected EU airlines, UK-EU as a share of their total (and thus at risk of losing) – Ryanair 36%, Norwegian 10% (excludes its UK to non-EU points, all at risk).
-Capacity (in ASKs) of Easyjet, intra-EU capacity as a share of its total (and thus at risk of losing) – 24%. Excludes those such as Switzerland - where EJ has a base – which is outside the EU but which pays to access the EU market (including aviation).

Travel stocks – Europe special review, all-world standard review
1 July 2016
This report is divided into two – Europe special review, and our standard monthly review.

1. Europe special review
An immediate reaction to the UK’s vote to leave the EU – so-called Brexit – has been stock prices, and the value of the UK currency. We are not qualified to comment, or track, currency movements.
  And our special review of stock prices here is entirely within the travel business. And not our usual full coverage of Asia Pacific, Europe, US.

A. End-June prices over end-May.
-Airlines were hit much harder – -23%, compared with -9% for hotels and -10% for Others.
-Although we think the no-frills-airlines Easyjet, Norwegian, Ryanair are most under threat, the market thinks otherwise – or thinks differently. IAG (Aer Lingus, British, Iberia, Vueling) was -31% in London and -37% in Madrid!
  A separate report in the Travel Business Analyst newsletter shows 36% of Ryanair’s capacity is UK-EU (and which could be lost), and 10% of Norwegian’s capacity (excludes its UK to non-EU points, also at risk). Plus Easyjet’s intra-EU capacity (also at risk) is 24% (excludes Switzerland - where EJ has a base – which is outside the EU but which pays to access the EU market).
-Least hit airline was Turkish, -8%, although that is a sad irony given the terrorist attack on Istanbul’s main airport two days ago.
-Among hotels, biggest fall was at NH -17%, although most of this is probably a result of that company’s disarray - following the move of some shareholders last month to fire its chairman and CEO.
-Among others, Eurotunnel – whose routes London-Brussels/Paris look vulnerable – was -18%. That looks slight when compared with the hit for airlines.
-But the biggest ‘Others’ fall was -24% for Frankfurt-quoted TUI – because one of the company’s subsidiaries is a big UK tour operator, Thomson. Perhaps TUI now regrets its move in 2014 to absorb its UK-quoted TUI Travel into the parent TUI AG.

B. End-June over end-2015.
Much worse:
-Airlines -27% against hotels -14%, Others -13%.
-Biggest falls -39% at IAG, -38% at Easyjet. (IAG Madrid was -47%!)
-InterContinental is the only one of the hotel groups we track that was ahead, +4%.
-Among Others, Thomas Cook was down 48%. Perhaps investors do not know TC is German-owned, and has most (65%?) of its business outside the UK.
-But also hit was TUI, -39%, for the reasons given above.
-A winner was Kuoni, +31%. It must be extra pleased it sold off its UK (and other) tour operations in 2015.
-Tech companies (see our Net Value Travel Tech index, below) also were relatively untouched (-4%, and -6% end-Jun over end-May).


2. World standard review
The following is our standard monthly report.
  Note that changes in this section are, as usual, based on a comparison with previous-month prices, not end-2015. And that this is a worldwide report, not just Europe.
  Travel stocks (US, AsPac, Eur) in June. Airlines: biggest growth, Thai AW +34%; biggest fall, IAG -31%. Hotels: Dusit +41%, NH Hoteles -17%. Others: Hertz +14%, TUI -26%.
  Previous month: Airlines: biggest growth, Thai AW +24%; biggest fall, Air China -13%. Hotels: NH Hoteles +9%, Wynn R -24%. Others: Avis +15%, T Cook -13%.
  TBA Travel Stocks Index: World 155, AsPac 86, Eur 107, US 274. Index previous month: WW 165, AsPac 87, Eur 126, US 281.
  NVTT (Net Value Travel Tech) Stocks Index: 104; previous month 109.
  Stockmarkets. Biggest growth, London +4%; biggest fall, Dublin -13%. Previous month: India +4%; Istanbul -9%.
  Info via Travel Business Analyst. Details in next month’s newsletters.

End-June closing prices of travel company stocks, Europe







Air France-KLM






IAG London



IAG Madrid



































Mill & Cop
































Thomas Cook






Notes: *May not be full formal name. ┼Over end-May. ╪Over end-2015. Source: stockmarkets, Net Value, Travel Business Analyst.


SAG in May - Singapore Airlines Group
30 June 2016
Middling Month of May. Seat sales at parent airline SIA grew 4% over Jan-May. That may not look impressive, but it is better than earlier years - -1% for the same period in 2015, flat 2014, +3% 2013.
  However, there are a number of items that should be on SAG’s ‘To Fix’ list:
-Tiger seat sales flat in the month although +3% YTD (our estimate). This is bad for an NFA*. But the reason is known – SAG is growing Scoot at the expense of Tiger.
-Seat factors; not easy to read these, but here goes:
   -At SAG it is 76% +1pt YTD (our estimate).
   -For an FSA* that would be fair, although it should be on 80%.
   -But that 76% incorporates SFs of two NFAs……which would make 76% bad……but with Silk, operating hard-to-fill routes as a regional FSA, it makes the SAG total, once again, ‘fair’.
   -One day, SAG will accept market realities and either make Silk an LCA*, or shut the airline down and operate its flights under the SIA brand, and/or with one of its NFAs.
   -Scoot’s fast growth (see below) hides its low seat factor – 82% YTD. It needs at least 85% and aiming for 90%.
   -Tiger is also at 82%. Same comments as for Scoot, but given Tiger’s business circumstances (an artificially-restricted operation) these results are fair. As an established NFA they should be higher, but those operational limitations change the situation.
  The good news:
-Silk +12%; good for a mature airline.
-Scoot +50%. Good, even for an NFA, but to be interpreted against Tiger’s emasculation to give Scoot its growth, see above.
*Notes: FSA = full-service-airline. LCA = low-cost-airline. NFA = no-frills-airline. See earlier posts for our definitions for these three types of airline.

Russia inbound loss
21 June 2016
Not only is outbound travel from Russia falling. The same is happening for inbound travel, including of course, the all-important visitor spend.
  Based on Q1 indicators, visitors to Russia will spend only US$6.3bn over all-2016. That would put Russia on a level with, say, Norway, or below Hungary.
  In addition, that figure would be about half Russia’s peak, in 2013.
  (We have worked on data from the World Tourism Organization for these findings.)

Emirates, Etihad WYSKs.
15 June 2016
Some surprises, almost shocks, in their latest financial years, some of which you may not have noted:
-Its revenue fell! By 4%.
-But it sold more seats – so we calculate its RASK (revenue per available seat kilometre) fell a jaw-dropping 15%.
-Also sold more seats, many more - +19%.
-But its capacity grew faster, so its RASK also fell, albeit only -1%.
-So is Etihad close to Emirates’ size! No way! Only 31%, so just a small airline despite its motley collection of seven associate/subsidiary airlines around the world.

Shortcomings at Trip Advisor, AirBnB.
14 June 2016
Trottings = Trip Jottings from The Fox.
Trip Advisor would allow me to change my phone number only if I accessed my listing. And they would send the keycode to access my listing to my phone number. Yes, to the number that was no longer working.
  I explained this Catch-22 to TA. They suggested I call them. I replied they should call me, as they had caused the problem.
  I then received a reply saying that they had tried to call me, but could not reach me, so the number I gave them must be wrong. They suggested again that I call them, and gave me a number to do this.
  I replied my phone number I gave them was not wrong, and asked when did they call, and please give me a time when they could call again. Also, I queried their number for me to call them – was the first number ‘1’ the local area code (in this case, Paris), or a country-code, Canada or the US. And could they give numbers instead of letters for the rest of the number because my phone had numbers only; no letters.
  They replied. No response on explanations for the phone number (apart from repeating it), and nothing at all on recalling me. Just an “understanding of” my concern, and to assuage that concern, they suspended my account with them!
  The moral of this message is that TA needs to look seriously at its call-centre operation. This one (judging from the names) is in India.
  Meanwhile, for those who followed earlier my AirBnB fraud, still no response from ABB.
  To recap, ABB took a commission on a booking where the host advertised something he did not have and which I needed (in this case, off-street car parking).
  When I discovered the problem, I cancelled my booking. My would-be ABB host refunded my payment. But ABB not only kept its commission money, it has never responded to my messages, and continues to allow this false advertising to continue.
  I accept that neither of these are big issues for these two big companies. But both show a shortcoming in their service, which they should not be too big to resolve.

Asean’s Faultlines, Asia Pacific inbound/outbound, Singapore’s Good News.
13 June 2016
Asean’s Faultlines, by Murray Bailey
3500-word critique entitled Asean’s Faultlines – includes a section What To Do. On https://tbaoffice.wordpress.com/2016/06/12/aseans-faultlines-by-murray-bailey/
Asia Pacific inbound
Our calculation of AsPac visitor arrivals for latest-month February, in the current editions of the Travel Business Analyst newsletter, shows +11.3%. Unusually, many destinations reported growth at around that rate – even not too bad for Hong Kong, Macau (where we exclude travel from China residents).
Asia Pacific outbound
Our calculation of AsPac resident departures for latest-month March, in the current editions of the Travel Business Analyst newsletter, shows +10.0%. Boosted by return to growth from China (our estimates) +5%, Japan’s return to growth +3%, Korea +18%.
Singapore: Good News!
It seems we have written just bad news about Singapore for the last few times. (Although we excuse ourselves as the DMO itself and many others did not seem to see the problems.)
  Now, finally, some good news.
  Government data we have (not from the DMO; its figures are a little later and a little different) indicate that Q1 visitors grew at 14%. That warrants a word we (over)use often – stunning.
  Although this needs some contextual observation (Q1 was flat in 2014 and -6% in 2015), it is good nevertheless, and above the Q1 totals in those two years.
  Our other comments revert to type – negative.
  We remarked at the start of this year - when the DMO forecast 0-3% growth for the year - that that seemed unduly pessimistic. That would have put the 2016 visitor total at 15.2-15.7mn. The total is now on track to reach 17.3mn. If the DMO were a private body, its CEO would have to explain how its forecast now looks so wrong weeks after its pessimistic forecast. And in a private company, he (for the CEO is a man) might even be fired.
  However, we presume that everyone will keep their jobs at the DMO, and will even boast how well things are going, and isn’t the DMO clever? When you hear this, remember another comment we made at the time.
  The DMO said when 2015 arrivals grew 2%, that “attested to Singapore's on-going appeal as a vibrant leisure destination”. We remarked, “A 2% growth does that?”. How will it describe a 14% growth?

Little Japan, Giant Korea
10 June 2016
Outbound travel from Japan has shown monthly growths this year, after two years of slowing. This has led many observers to assume that the market is solidly back as Asia’s second-largest outbound market after China.
  Many missed the change in early-2015 when Korea (with a population less than half Japan’s – 50mn, 127mn) overtook Japan in terms of outbound market size. We signalled it (plus the fact that it came three months before we expected) but many missed it altogether.
  Well, catch this.
  On current trends, Korea’s outbound market will become 50% bigger than Japan’s over the next 12 months! That would be 24mn compared with 16mn.
  A caveat, however - as usual. Although we think Korea will continue to grow strongly, growth will probably slow a little, and Japan will probably continue to pick up. So that could mean 22-23mn for Korea against as much as 19mn for Japan.
  But that 50% difference looks likely to be achieved with all-year 2017 totals.

Visitors: Spain overtakes France
6 June 2016
On current trends, Spain is on track to count 77.7mn visitors this year, and France also 77.7mn. A fractional difference would keep France just ahead.
  In fact, we believe current trends will not be maintained, with Spain’s growth strong but not as strong as now, and France gradually reversing its downward trend. That would indicate Spain possibly touching 75mn, and France about 80-85mn.
  Still, these trendings should be something of a shock – so long has France languidly claimed to be the world’s No1 visitor destination.
  And it still looks likely that in 2017 our heading will be correct.

TravelZoo’s bizarre research on Brexit
3 June 2016
Should we call it TravelZoology - a new obscure-extreme discipline with travellers as the animals? That’s the word we have created for bizarre research findings by Travelzoo, a sort-of travel-deals platform.
Travelzoo’s heading: ‘European Tourists to the UK Could Drop by a Third Following Brexit’
Ours: ‘Visitors in the UK from Europe likely to grow 5% faster if UK leaves EU’
Travelzoo (TZ) says 33% of travellers from Italy and Spain, 30% from Germany, and 24% from France, would be “less inclined to travel to the UK” if the UK votes Out.
  This finding is simply not believable. After November’s terrorist attacks in Paris, arrivals fell around 20%. Does TZ believe an Out vote would cause a bigger fall over a longer period?
  Also, what’s the problem? The UK is not in Schengen’s passport-free zone, so an Out vote would not change those travel logistics. Visas for the UK are not required by any EU market, and that is not likely to change after Out.
  But what is already happening, and which could get worse, is a fall in the UK’s currency. However, that would make the UK a lower-cost destination! Thus our guess is that arrivals in the UK could increase 5% above existing growth rates if the pound fell 10-15% - some forecast a 20% fall over a year after Out.
  TZ’s findings:
-£4.1bn a year in “international tourist spending” would be lost. We convert that to US$6.0bn and apply that to WTO’s US$42.4bn in 2015 – meaning a 14% share.
-40% of TZ’s clients in EU markets outside the UK “worry that Brexit could make UK holidays more expensive”. We think the opposite, as noted above.
-“Respondents from some nations – notably France – believe that leaving the EU could make the UK a safer destination for holidays.” Eh? How many respondents, and from which markets? Why do those people think holidays would be safer? (An answer to that could be valuable market information on how would-be travellers are misguided.)
-10% of travellers from Canada and 12% from the US would be less likely to go to a non-EU UK. Why? As an aside, some Outers believe a non-EU UK would become closer to non-EU nations (not a given, but some think that), so why would those North American travellers be avoiding the UK and embracing their new non-EU friend?
-Meanwhile, holidays for British tourists in “Europe” - TZ has forgotten that the UK is in Europe, but we presume it means continental Europe - could become more costly “if the sentiment expressed by some of our neighbours in France and Spain becomes more widespread”. 40% of clients from those markets “feel it would be fair to impose higher fees, such as a hiked city tax, on British visitors, if the UK votes Out”.
  We know of few ‘city taxes’, although there are hotel taxes. Despite that crushingly-high 40%, we believe this is another farcical finding, and would have almost zero chance of being passed by the relevant administrations.
-28% of UK travellers are concerned that an Out could lead to more costly holidays for them, while 56% are worried that Out would reduce the ease and flexibility with which British nationals can currently travel inside the EU.
  That is another serious misunderstanding – there are no controls in those 26 European (not all EU) destinations that are part of Schengen, including some that pay for special links with the EU, such as Norway and Switzerland.
  Other UK traveller concerns:
-25% believe that the price of holiday insurance would go up, and 20% worry that their holiday protection cover would be impacted if they were no longer entitled to a European Health Insurance Card. Finally something that is likely to be true. But surely Outers realise that they would no longer have the benefits that EU membership brings?
-24% believe that mobile roaming charges will increase if Britain is no longer governed by EU roaming “regulations”. We believe a better noun would be “liberalisation”, but as above, no EU and therefore all EU rules, the good and bad, can go.
-22% worry that UK beaches could become more polluted without strict regulations enforced by the EU. We don’t know whether to laugh or cry. We guess 10% of visitors have visited a UK beach, and probably fewer stayed on it in what could be considered beach apparel. So that 22% would have yet another reason to stay away from a UK beach, and be forced to wait until their next Mediterranean holiday.
-“10% of British people admit they have taken the impact of Brexit into consideration when planning their holiday.” We have no idea what this means.
-Of those wanting Out, 61% would be willing to pay more for their holidays. That’s what many people say. Of course it depends on how much more, and if those travellers knew what the extra cost was. If 10% higher, we reckon that 61% would fall to 1%.
  As noted, we don’t know whether to laugh or cry. Although those surveyed were just Travelzoo clients/customers/members, many findings are still laughable. Worse, a university (Bournemouth) extrapolated some of TZ’s findings, but instead of making them more believable, took them further from reality.
  Back to the Zoo.

Hotel Properties hides data
31 May 2016
Pity the poor investor in Singapore’s Hotel Properties Ltd. Its latest financial report still gives zero information on results at its hotels and resorts.
  For instance, are its Maldives resorts suffering? One of its Bali hotels is being refurbished; how will that reflect on earnings?
  Perhaps a bigger surprise is that its local stock exchange - Singapore Exchange - lets HPL get away with this. Is SE not worried about its own reputation, or is HPL’s institutional backing too powerful?
  In one phrase, HPL wrote of a resort’s results being “affected” by certain specific events. We are surprised investors and SE accept such nonsense.
  We are quite categorical. HPL is hoodwinking the investor by hiding key operating information (minimum needed are occupancy, average room rate, and revpar by hotel/resort). And SE is allowing this obfuscation.
  (For the record, its revenue fell 10% to US$106mn in Q1. Your guess is as good as ours as to what losses were registered ours. Its stock price is down 8% so far this year, so perhaps investors have got the message.)

Destination Singapore; what’s wrong?
27 May 2016
An excerpt from our monthly Travel Business Analyst newsletter.
Singapore’s DMO, the Singapore Tourism Board, appears to be like those politicians in power – denying what is obvious to almost everyone else. The danger is that until there is recognition that something is wrong, less will be done to try to correct it.
  That visitor arrivals in 2015 grew only 0.9% is bad enough, but visitor spend fell more, 6.8%. We extrapolate those, to find that spend-per-visitor fell 7.6% to US$1072 (at US$1 to S$1.35), but because length-of-stay fell 2.4%, spend PVPD (per-visitor-per-day) fell less, by 5.3% to US$297.
  The DMO notes that leisure arrivals grew 2%, “attesting to Singapore's on-going appeal as a vibrant leisure destination”. A 2% growth does that? We estimate AsPac’s total outbound travel grew 9% in 2015, so Singapore’s +2% might indicate to us that ‘Singapore’s appeal as a leisure destination fades’.
  Also like politicians, the DMO ignores what it does not like, or cannot explain. For instance, the DMO was proud of the US$15mn it spent on promoting Singapore’s celebration of 50 years as an independent country in 2015.
  As we noted at the time: ‘National pride has resulted in marketers thinking there is a sizeable number of non-Singaporeans that want to celebrate Singapore’s birthday by visiting it.’ Judging by the 2015 visitor numbers, we were right. And the fact that the DMO says nothing supports that sentiment.
  (Unfortunately, we need to add that our comments are related to the travel business implications of Singapore’s birthday, and not to the actual celebration, which, of course, was wholly justified.)
  The question, then, is what is not working?
  For us, Singapore has: a big recent growth in (good) new visitor products (including one, the Marina Bay Sands, that we put in the motivational-iconic category alongside Angkor Wat, Shwedagon Pagoda, etc); acceptable stability in exchange rates; no serious visitor-threatening negative incidents; sizeable government support for destination promotion and for those companies involved in visitor promotion; a near-world-No1 local airline; a surfeit of no-frills-airlines based in town; the world’s best airport; and reasonable visitor product prices.
  We see a number of problems to solve, and we hope the DMO does as well. Most obvious, and shocking, is that three of the top-5 market sources fell in 2015 - Indonesia, Malaysia, Australia. Interestingly, the DMO does not break out market differences in visitor spend, and so it is not easy to determine if there are some markets that need more attention than others do.
  Other comments:
[] AAGR (annual average growth rate). This decade, AAGR has been almost 5%, well above 2015 growth. And thus for most of our selected markets, AAGR is above 2015 results – not a good sign. Above in 2015 compared with AAGR were China, Germany, India, Korea, UK, US.
[] Share. China has doubled its share since 2000, which is the reason AsPac’s share has grown, thus pushing Americas down from 6% to 4%, and Europe from 15% to 11%. But before dismissing those non-AsPac markets, note that all four in our list grew faster in 2015 than their AAGR.
[] Singapore-v-Total Market. Japan still bad, and that fall was slightly worse than the overall Japan outbound total, -4.1%. But the 22% growth for China was better – we estimate total China outbound was around +18%. For Korea, the STB needs to work harder – total outbound Korea was +20%. Likewise for India – we estimate total India outbound was +13% - and for the US +7%. (We do not have outbound travel data or estimates for all markets shown.)

Questions on Alitalia buying into Air Malta
23 May 2016
Alitalia to buy into Air Malta?
-Alitalia (AL) and Air Malta (AM) have signed an agreement where AL may buy 49% of AM. (Apparently; no photos, no date, no place, no announced signatories.)
-51% of AL is owned by CAI. Biggest shareholders in CAI-ergo-AL are Intesa Sanpaolo, a bank, 21%; Poste Italiane 19%; Uni Credit, a (troubled) bank 13%. Other notables: Benetton 7%; Pirelli (now China owned) 3%. Air France-KLM bought 25% but after staying out of various capital injections for AL, their share is now down to 7%. The other 49% is owned by Abu Dhabi’s state-owned airline, Etihad. Almost 100% of AM is owned by the Malta state.
  Some comments:
-Usually, when an announcement is made about one company buying another, if friendly, all involved are full of praise for everything. New head of AL, Cramer Ball, seemed a bit churlish saying, in effect, ‘we will look at the books and then decide if we will go ahead’. Does this mean that the buying announcement came sooner than expected (was it about to be leaked?), or does AL need to think about the reaction of the European Commission, or something else?
-AM’s statement, via the state’s minister (of ‘tourism’) responsible for AM was similarly downbeat. Both AL and AM have been losing money for a long time, but both say they will make profits in 2017; there are no clear indications that this will happen.
Malta said there would be no job losses at AM. Ok, he didn’t put a time on it (so they could fire people in 2017), but that is one of the major problems at AM – too many staff and too many on easy terms/too-high pay. The same problem, ironically, as at AL. As we once said about AL, if the CEO cannot fire half the staff, and re-motivate those left (or maybe fire 100% and rehire 50%?), then it will be hard to ever make consistent profits. (To make short-term profits in most companies is easy.)
European Commission.
We see no problem with this. However, Italy has run rings around the EC on state bailouts for AL, so the EC may be awkward. There is a precedent of the EC being awkward. It once stopped Ryanair buying Aer Lingus because it said Ireland needs competing airlines. It ignored the fact that in the European Union, there is competition everywhere.
-How can AL help AM? And/or what does AL bring? We are lost. We can see no advantage to AM. Malta’s minister talks of linking into the networks of AL and Etihad. That is good for whom – Malta residents travelling out? Visitors? There are already so many options for travellers at good prices. And particularly as far as Etihad is concerned; it has a vibrant local (Gulf) competitor in Emirates, which is 3-times its size.
-What does AM bring to AL? Not much. AM is not a profitable airline (and its business prospects are threatened-maybe-destroyed by no-frills-airlines such as Easyjet, Ryanair, Vueling moving onto AM’s routes, and more). Traffic feed? Surely AM’s home market is too small? Connections? But to where – AM does not have an extensive network, and nothing on Malta’s geographical position as a point on the way to North Africa , although at present this is a moribund area for air traffic development.
-Buying price; we believe AM might be worth US$500mn, so US$250mn for 50%. Coincidentally, that is close to the amount that AL lost in 2015.
-Where would the money coming from? AL and AM are both losing money. Alitalia says it will return to profitability in 2017. Good luck; not only is a target and therefore not a certainty, but it will not be easy in any case.
-Okay, this is where the actual cash will come from* (ie from the gullible ruler of Abu Dhabi, Etihad’s owner). But why does it want AM? Again, we can see no strong positive, although the same could be said about Etihad’s other investments in Europe, in Air Serbia, Darwin (from Switzerland, despite that name) and, before, Aer Lingus.
-Would AM be turned into an Etihad Regional airline? If that is the case , will AM turn into a feeder airline for EU routes with bases outside Malta? That cannot be done with Air Serbia, which is non-EU. It could with Darwin, but Switzerland has proposed some law changes that could end unrestricted flights Switzerland-EU.
*Etihad owns 49% of AL (a share limited to under-50% to ensure that it does not run into problems with the European Commission; 50% and more would mean Alitalia is not a European Union airline). And AL would own 49% of AM. It could take a bigger share , near 100%, and AM would still not lose its EU status.

Shouting some shocks: Virgin, Fly Be, Wizz.
20 May 2016
Virgin on trouble
It wasn’t supposed to be like this.
  Figures we have seen on Virgin Atlantic (the airline does not publish them) indicate all is not going well. OK, they are bad.
  For all-year 2015 we have a 3% fall in seat sales to 5.8mn following a particularly-bad December - -14%.
  But this year has started worse. We have Q1 seat sales at -7%. The 1.1mn total that represents compares with 1.2mn sold in 2015, and the peak of 1.3mn in 2014 - which was a 4% growth on 2013.
  We are not saying VA is not long for this world. (That’s an improvement as we said they would collapse within two years after they were established - 30 years ago.)
  But will owners Branson and Delta clash? Branson was able to deal easily with his previous supporter, Singapore Airlines, but Delta may be harder to fool.
Fly Be, or not-to-be?
But if you are looking for doom in the UK, then look at Fly Be. True, its seat sales were +1% in Q1 (ie better than VA’s -7%), but its seat factor was a disastrous 66%. We reckon the airline needs at least 14pts more than that.
  We propose that FB management (that’s Fly Be, not Mr Zuckerberg) campaign strongly for Brexit. If the UK makes the wrong decision and quits the EU, FB can take over some of the many UK-EU routes that Ryanair will likely be forced to abandon.
Wizzing ahead
Ready for another? Wizz - Hungary-based but think East Europe - is on track to overtake (sorry, wiz past) Air Berlin in 2017.
  Poor Air Berlin. It is tumbling faster - -7% YTD, -8% latest month. And that change would follow on from the ignominy of being overtaken this Q1 by Nano-Norway’s Norwegian.

Analysing Alitalia’s 2015 results
6 May 2016
Alitalia’s heading: ‘On track for profitability by 2017; reports strong 2015 performance.’
Ours: ‘Alitalia revenue and traffic fall again; can it make 2017 profits target?’
2015 seemed to be another year of operational weakening at Alitalia. ‘Seemed’ because the company does not publish all the data every year.
  We normally look at seat sales, and when we look at finance, at revenue and operating profit (not net, which can be more easily manipulated). So:
-Alitalia’s peak year for seat sales (including Air One) seems to have been 2007, with 31.5mn.
-The company does not reveal growth in 2015 (and did not report 2014 data) – just the figure. That was 22.1mn, thus a shocking 29.9% fall against 2007 – an average annual 4.3% fall.
-Revenue. We have US$3.99bn (at US$1 to €0.90) for 2012 – no full-year since then. In 2015 US$3.68bn -7.8%, an average annual 2.7% fall.
-Operating profit. No data.
-From our file data, Alitalia’s revenue in 2012 calculates to US$165 per seat sold. In 2015 it was better, US$167, a 1.2% growth, so 0.4% average annual growth.
-Other. It provides other data, but without comparative information, most are essentially worthless. Such as US$262mn from ‘codeshare revenue’. Of course Alitalia indicates that this is good, but with no comparative or other data, how can we know? Its load factor (not further defined, but we have assumed RTK over ATK, not RPK over ASK) looks worryingly low, at 76.2%. We would have thought it needs at least 10-points higher. That said, it is actually an improvement on the latest data we have, for 2006, of 65.7%!

Asean’s Faultlines
29 April 2016
We have nitpicked Asean’s ‘travel management’ over a few years, but now feel that there is a need for a more-thorough critique.
  We have reverted to the base – that the Asean travel secretariat exists to promote visitation into the 10 Asean destinations. In other words, a business function, not a political one.
  We have compiled a 3500-word critique, which is due to be loaded on this website and other internet outlets. We list here the ‘Table of Contents’.
-Asean’s Faultlines
-Asean Tourism Strategic Plan
-Single Destination; ‘Mutual Recognition’
-Human Resources
-Quality Tourism
-Promoting Asean Tourism
-Developing Asean Tourism Product
-Asean Tourism Forum
-What Asean Needs To Do
-Asean’s Special Friends
-Asean plus China Japan Korea
-Asean plus India

Brexit; what will change for the travel business?
8 April 2016
Flying out of the window. What will happen in the travel business if the referendum on the UK staying in the European Union goes the wrong way, and the UK leaves?
  We make some observations on what that might mean - on access UK-EU/EU-UK for travellers; on Easyjet, Ryanair, other airlines; and others.
  (We add that although there are some laws/rules – such as flights within the EU, flights from EU markets to the US, etc – that does not mean that everything will automatically follow those rules. There is always room for negotiation, and room for horse-trading – “I’ll do this if you do that”. There is also a lot that is not ‘written’ – because no country has ever exited from the EU.)
  (We also note that the UK-leavers assume, almost promise, that they will get a better deal with the EU than they have now. We think they will be wrong, almost entirely, and some of our points are shown below. We also think that the EU will not do the UK any favours – if only because it does not want other countries to decide they would be better outside the EU.)
  (Also, whatever those in the UK think, the UK is a small country/market when compared to a giant EU. National pride is not enough to ensure economic well-being.)
Access to-and-from the UK
We think that for travellers this would be easier, because ironically, the UK-outside-EU will probably have to follow Schengen free-movement rules. We base this on the belief that if the UK wants a trade pact with the EU - which is likely - it will have to accept certain rules in exchange.
  Non-EU Norway and Switzerland (plus Iceland, Liechtenstein) already do this – accept Schengen immigration rules in part-exchange for trade access to the EU.
  (Ironically, the UK-leavers are using unwanted immigration from the EU into the UK as one of their reasons to exit. Unless the post-exit government is ready to lose a big part of the UK’s export market, thus damage the economy, it will have to accept Schengen or a Schengen-fudge.)
  A Schengen-like deal on immigration would likely mean many more visitors for the UK from the world’s biggest (or 2nd-biggest, depending on how you count) outbound market – China. At present, travellers from China need one visa to visit 26 countries in Europe (plus three microstates) and a 2nd visa to visit just the UK. Unsurprisingly, many do not bother with a UK visa, and so the UK loses out. We estimate that with Schengen, the UK’s visitor count from China would double in 15 months, treble in 24 months.
As a UK airline, there is a fair chance it will lose its rights to fly within the EU, or at least some of them, and from EU markets to non-EU. That could mean shut down for its Geneva base, for instance. Switzerland could allow Easyjet to continue operate there (according to EU laws), but the EU might not let EJ – as a non-EU airline – fly into EU airports from Geneva.
  Likewise, those EJ routes such as France-Germany, Italy-Malta, France-Morocco might be stopped.
  If that is bad, the possible outcome for Ryanair could be good for EJ – see next.
As an EU-based airline, Ireland’s Ryanair would seem to be in a strong position. It could even take up many of those routes and bases – such as Geneva – that EJ might be forced to stop.
  However, Ryan has a big operation in the UK, flying to many EU areas from its 16 UK bases. If the EU stops these, Ryan could lose 20% of its traffic overnight – and travellers would lose access to the airline’s low fares. (It has a 16% share in the UK - between the top-3, Ryan, EJ, British.)
  But just as Ryan might be able to take over EJ’s EU routes and hubs, then EJ might be able to take over Ryan’s UK-based routes into the EU – a giant boost for EJ.
Other airlines
-IAG (comprising Aer Lingus, British, Iberia, Vueling) might need to make some adjustments, but with a UK-based airline, British, as well as EU-based Aer Lingus, Iberia, Vueling, it should not have difficulty. For instance, ownership of its Open Skies (an airline, despite that strange name) operation Paris-US could be switched to one of its EU-based airlines.
-Norwegian. Trouble. Even though a non-EU airline, as noted above, it is included in some EU agreements. One is aviation. Norway, as a member of the European Economic Area, participates in many EU agreements, including free movement (although it pays a fee for that free movement!) of labour and goods. The US/EU aviation agreement specifically included Norway. This sometimes has surprising results – for instance, Norwegian flies US to the France’s Caribbean colonies of Guadeloupe and Martinique.
  But almost certainly, the US would take this opportunity to try again to stop Norwegian’s operations from the UK to the US.
We do not think operations such as Eurostar would be affected, although given the attitude of France’s anti-world unions, this is possible. But some less-prominent operations (such as France’s state-owned rail company SNCF’s intra-UK operations) might be threatened.

Europe's top-3 airlines same size?
31 March 2016
Europe’s top-3 FSA* groups are getting closer together – in size, that is. Part of the reason is changed consolidation – such as Transavia into Air France-KLM, Aer Lingus into IAG*, Eurowings into Lufthansa Group.
  In the first two months, AFK sold 12mn seats, IAG 13mn, LG 14mn. Changes? IAG on track to overtake LG in 2017. Possibly this year if LG continues to have pilot problems protesting at expansion of the fast-growing Eurowings – growing +12% compared with Lufthansa’s +3%.
*Full-service-airlines. *International Consolidated Airlines Group (sic) – Aer Lingus, British, Iberia, Vueling.

TinT rides again! Truth-in-Travel: ITB Berlin mis-counts
28 March 2016
Back in November we rewrote the headline the organisers wrote to review their World Travel Market travel exhibition in London. It said “WTM London Again Attracts 50,000 Participants”. We gave data to show our point, and rewrote the headline to “WTM London attendance falls 2%”.
  Sadly, we have had to do the same for ITB Berlin travel exhibition, staged earlier this month. The organisers wrote “Fully-booked exhibition halls, more trade visitors than ever before, and record sales”. Our heading would read “Flat exhibitor count, business, and public attendance, and sizeable fall in media attendance”.
  The biggest positive was for the ITB Convention segment of ITBB. Not only did attendance grow 13% but we calculate that the share of trade visitors also did – from 20% in 2015 to 22% in 2016. This achievement is partially devalued, however, by the fact that ITBC attendance for ITBB attendants is free.
  Our reasons for the headline rewrite:
[] The ITBB exhibitor count fell this year, even if only 1%.
[] We augment ITBB’s financial data (on business conducted at ITBB), even if we never quite believe that total figure (the question to attendees is something similar to “how much business did you conduct at the exhibition?”). Business-conducted-per-trade-visitor was flat (+0.1%), although business-conducted-per-exhibitor grew 5.5% - partly because the exhibitor count fell.
[] Public attendance appears to have reached a ceiling – 60,000 (precisely) has been reported for the past four years.
[] ITBB’s media count has fallen substantially. We do not have annual data, but this year it is 33% below what we have as its peak – 8000 in 2008. Is this related to a general fall in the number of media outlets (and/or their profitability), or a fall in the importance of attending ITBB, or ITBB’s ending of its support for many journalists?
  Our other TinTs:
[] ITBB has always claimed that visitor arrivals increase for ‘partner countries’ after their year. Latest data: Indonesia grew 6.8% in the year it was partner country, +3.3% after. Maldives, which finished its year with the March ITBB, +7.1% in 2014, +2.4% in 2015.
[] When Messe Berlin launched its second attempt at staging an ITB in Asia (in Singapore in 2008; the first, in Hong Kong, was stopped in 1999), an MB senior director told us that China had wanted ITBA to be based in Beijing, not Singapore. But MB chose Singapore because of all advantages - such as no-visa access for most attendees, absence of interference (accepting Taiwan etc), freedom in choosing names on conference badges (yes, China sets rules on this!). we presume MB’s decision to launch ITB China* in Shanghai from 2017 means that it believes the revenue potential is now more important that those other concerns – which are still there.
*In partnership with Travel Daily China, a publisher. ITB’s first venture in Asia was also with a publisher partner.

France’s failing, Japan rising
25 March 2016
France’s failing
If you want proof that France’s visitor business is not doing as well as all those administering the industry think, take the top-5 visitor destinations:
-Since 2000 France has added 9mn visitors, US 27mn, Spain 22mn, China 26mn, Italy 20mn.
-Since 2010, France +7mn, US +18mn, Spain +16mn, China +1mn (sic), Italy +7mn.
  (We’ve based this on WTO data.)
Japan rising
Outbound travel from Japan grew 3% in January. If that does not seem impressive, note that it is only the third month in 25 that it has not fallen. And in those other months it was +0.3% and +1.2% - and so +3.3% feels boomy.
  And then there are arrivals - +52%! But that’s not the fastest in recent times; that was +64%. The lowest monthly growth in the past 25 has been +17%.

China outbound travel shock
11 March 2016
Our estimates indicate that outbound travel from China grew only 5.55% in 2015. That is one of the weakest years since we started tracking China’s outbound market in 1990.
  There was a fractional fall in 1994, and possibly growth of just 3% in 1998. (The uncertainty is caused by a restatement of figures by China’s DMO.) Since 2000, growth has been in double-digits.
  But, like Houston, we have a problem.
  Our tracking includes the quasi-domestic travel into Hong Kong and Macau. Because these numbers are so big (nearing 50mn into HK), a change there can cause sizeable change to the overall totals.
  And there have been sizeable changes. Hong Kong residents have expressed in some ways their unhappiness with visitors from the mainland. And Macau has been hit by China’s now-lengthy campaign against corruption. Even if the gambling money being spent in Macau was not corruptly earned, many travellers and would-be travellers are simply ‘laying-low’ – to reduce the risk of attracting attention.
  As a result, Hong Kong counted 1.4mn fewer visitors from China in 2015 and Macau 0.8mn fewer. That almost equals the additional 2.5mn visitors from China that Japan counted. Overall, then, growth in three of the top-5 destinations-from-China was neutralised. (Of the others, Thailand was +70%, Taiwan +5%.)
  Because of all this, we are now reviewing our policy of including Hong Kong and Macau in our totals – as much of this travel is even ‘less’ than excursion travel. For many it is the same as travelling from one city to another in the same country.

wow – ow – ouch – oh
9 March 2016
China’s airlines – wow
Although it was a Lunar New Year month (compared with non-LNY in 2015), growth in seat sales for China’s big-3 is impressive nevertheless.
  In January on international routes (by size), China Southern was +29%, Air China +43% (!), China Eastern +30%.
  (Numbers: 1.14mn 1.10mn 0.88mn.)
Macau - ow
We follow Macau’s RCT (Rolling Chip Turnover; can be considered as money spent on gambling).
  We have just seen the 2015 results for IKGH, a company operating certain high-rollers rooms in four casinos in Macau.
  Its RCT in 2015 fell an enormous 61%, and it is not getting much better – Q4 RCT was down 57% and Jan-Feb this year -44%. (Dollar amounts are not relevant in this report – but for those interested, the figures were US$6.4bn in 2015, and US$1.2bn in Q4.)
  If those results are an indicator for all-Macau, will Las Vegas take back its title as the world’s biggest gambling centre?
Malaysia Airlines – ouch
I estimate that Malaysia Airlines’ international seat sales fell even further in 2015, possibly to under 10mn. Was it only two years earlier in 2013 that its count soared passed that 10mn with 30% growth?
  Unsurprisingly, traffic fell in 2014 after it lost two aircraft, but it is surprising that monthly traffic is still falling.
  We thought there would be a Dead Cat Bounce for the last three months of 2015. Not only did that not happen, by a long way, but also the fall seems to have been greater – down around 25% in Q4.
  Of course, these falls are not entirely the result of those two 2014 tragedies. There is still hard competition from the Air Asia group (although AA is not doing as well as it was). And Malaysia’s current governmental turmoil and currency fall may be slowing traffic in and out of the country – possibly more business- than leisure-travel.
  Also, we think MA should have changed its name last year (it did, but from its formal abbreviation MAS to MAB; most did not notice). At least to Air Malaysia.
  Those aforementioned political spats may be reducing the pressure on MA to explain and reverse its continued fall. But expect political demands for a return to better times to happen soon – however unrealistic. In the next 4-6 months?
Virgin Australia – oh
It was not supposed to be like this.
  When Virgin Australia launched, it started fortuitously - its big would-be rival, Ansett, shut down the following year, in 2001. It continued to go well until, encouraged by an adoring crowd, it started international flights. Some are still there, but international expansion was not as easy as it seemed to think.
  Then Qantas launched Jetstar in Australia, and VA felt the competition heat more warmly. Worse, Singapore Airlines (which actually got burned badly in the Ansett collapse – but let’s not bring that up again) cheekily started a Tiger Air division in Australia.
  That went sort-of reasonably, until the authorities shut it down temporarily in 2011 for safety reasons. 18 months later Singapore Airlines – which left the impression it did not know what it was doing with Tiger, in Australia and Asia – sold the Australia company to VA.
  VA smugly said it was pleased to get back into the no-frills-airline business. Smug because its original businessplan was for a no-frills-airline (even though that did not fit the overall Virgin strategy). When Ansett collapsed, Virgin steadily ditched the NFA model.
  So here we are with 2015 results – our counts from Virgin data, because it has a different financial year.
  Seat sales down for Virgin international and down for Virgin domestic Australia. Ironically, only Tiger grew, and that because it can be considered a newish airline that had lost its direction, and is now under more-determined direction.
  VA’s total count is down. If this continues, watch for another change in direction soon – from CEO change to change in strategy on domestic, international and Tiger. Will Tiger’s name go?
  (Numbers: domestic -3%, international -2%, Tiger +9%; overall -1%.)

Air Asia - not so good as it says
19 February 2016
*A report on this topic in our Travel Business Analyst newsletter contains some important additional information and analysis.
AAG (the Air Asia Group) has managed to report Q4 and all-2015 operating results for Air Asia X giving only seat factors and percentage change in capacity. In addition, it describes the 83% seat factor for AAX as “healthy”. That level would worry us sick; we believe AAX needs high-80s if not above-90%.
  AAG gives no data for Thai AAX, and traffic for Indonesia AAX is added to the AA total – because it lists IAAX as operating flights for IAA! However, that does not stop AAG from commenting on IAAX, in AAX reports, as though it were separate from IAA.
  Selected counts, seat sales only.
-Total +9.0%.
-Falls for Indonesia division (-16.9%, and -21.6% if IAAX not included) and AAX (-14.6%; for Malaysia division only; no data released for Thailand AAX).
-India good (+324%) because new operation and 4Qs in 2015 compared with 3Qs in 2014.
-Original Malaysia division still doing well - +9.6%.
-Thai also doing well. It is now 61% the size of the Malaysia division. It was 66% in 2010 but then fell to as low as 48% with some bad years for Thailand over 2010-14.

Phocuswright wrong on Spain
15 February 2016
US-based Phocuswright now researches not just online – where it became the world’s best – but all travel. Here, it is running into common problems of mis-interpretation and mis-definitions.
  For instance, it says Spain is “now the third-most visited...destination”, then amplifies that “its total travel market is projected to climb 7% to reach [US$26bn, at US$1 to €0.90] by 2017”.
  Our comments:
-Amplifying “visits” into a destination with a dollar figure makes little sense to travel professionals.
-“Total travel market” sounds like that – the total travel market, which would include outbound and domestic travel, and perhaps indirect revenues as well. But “visits” sounds like just the inbound market.
-We do not have our own data, but based on WTO data, inbound and outbound ‘revenue’ in Spain in 2015 was around US$72bn – almost three-times PCW’s total, excluding domestic travel and indirect revenue. Even inbound alone would be about US$56bn. Should PCW give some guidance when its figure is so different?
-“Now” indicates there has been a change. Yet Spain has been No3 in visitor counts after France (top) and US for the past 20 years.
-‘By 2017’ actually means 2016, this year, but we believe PCW means ‘in 2017’.
-PCW should know that revenue-per-traveller is probably a better measurement – one visitor staying one day and spending US$100 is less valuable that one staying 30 days and spending US$2500. On that measure, for those ‘top-3’ destinations, we calculate that each visitor in France spends US$685, in the US US$2363, in Spain US$1001. Look wider, and there are quirks – Macau, thanks to gambling (a legitimate visitor spend), gets US$3479 per visitor.
  If PCW wants to match its reputation in online research in overall travel research, it needs to learn more, fast.

Singapore Airlines Group - SAGging
10 February 2016
2015 was not a stellar year for the Singapore Airlines Group. Are results bad enough that changes will be made?
  The obvious change is to merge Tiger and Scoot (Toot-toot!?); there is no need for SAG to have two no-frills-airlines. Less obvious is to make Silk a low-cost-airline, in effect a lower-cost clone of the parent airline, which includes operating medium- and long-haul routes.
  Seat sales in 2015 on the parent airline were flat. At Silk they were better; +7%, although we think growth should be better. Scoot is the star performer, with about +21%. But that’s illusory because SAG has taken routes from Tiger to give to Scoot – with the result that Tiger was -4%.

New accounts - Air France, Alitalia, Eurowings, KLM, Lufthansa
9 February 2016
Two big airline groups in Europe have changed the operational data they publish, starting January. Perhaps surprisingly, the result is an improvement for transparency. A third, Alitalia, remains obscure.
Air France and KLM split!
Sorry, we mean split their figures; they are still (an unhappy?) one.
For some time we have complained that the two produced only combined data. Using other data, it appeared that KL was growing faster and that AF was in more trouble that those combined totals indicated.
  Today we have only January figures, and given the terrorist attacks in Paris last November, not too much should be read into the counts. For the record, though, seat sales on AF were -0.6% and those on KL +8.2%.
  Perhaps more interesting is relative size. KL is 57% the size of AF (including Hop, excluding Transavia). The last year for which we have separated data – 2011 – KL was 49% the size of AF.
The Lufthansa group reveals Eurowings.
We are not sure how to interpret Eurowings data. The airline is such a jumble of types (FSA/LCA/NFA [full-service/low-cost/no-frills airline], charter, summer-sun, full-year, etc).
  Perhaps a key figure is its (big) size. In seat sales it is 25% the size of Lufthansa, 90% the size of Swiss, and 50% bigger than Austrian!
  In ASKs and RPKs it is not so impressive comparatively, but its growth is - +35% and +49%. That is because EW is now operating longhaul as well. We doubt profits will show such growth.
Alitalia hides.
Despite being partly state-owned*, Alitalia still publishes no operational data. The latest information on its website is from 2013.
  Its secrecy will be supported by 49%-owner Etihad, and the other 51% owners probably also prefer that weak results are not made public. We expect data will start to be published when traffic starts to grow.
-Actually owned by nominally private interests under the CAI umbrella, but all close to the state.
-See 8 February 2016 for definitions for different types of airlines – FSA, LCA, NFA.

Etihad to take over Air Malta? Joining the debate.
8 February 2016
In June 2014, we gave our advice on what state-owned Air Malta needed to do to survive. With speculation that Etihad┼ is about to buy 49%, our comments are relevant again.
  These are Air Malta’s choices, in no particular order:
1. No change.
  We are reminded of that well-known phrase in The Leopard – “for things to remain the same, things will have to change”. Slightly different for AM in that most things that affect the airline are changing.
  AM is a small airline surrounded by NFAs* in the (real) open-skies of the European Union. In this business environment it is hard for AM to make profits as an FSA*; in fact, it is probably not possible.
  Ryanair, Europe’s biggest airline (of all types), in particular, is entering AM’s only space – Malta. Not only will this continue, but Ryan will open more routes to/from Malta, and be joined by at least Easyjet. And possibly also by Vueling, which is becoming more like a Europe-wide NFA, and not just a Spain-based part of the IAG group (Aer Lingus, British, Iberia).
  In the past one option would have been for AM to get government support - subsidies. Broadly, this is no longer possible in the EU, although some airlines – such as Alitalia – seem to get around the rules. But Italy is a big country, Malta is not, and so the EU can more easily force Malta to follow the rules. As it did with Cyprus Airways, now shut down.
2. Transform into an LCA*.
  As the definitions at the end of this report indicate, an LCA can work best (perhaps only) when the airline has an FSA parent. But even if AM can lower its costs, so lower its fares, those fares will still likely be higher than those of NFAs. And travellers – despite what they might say to researchers about wanting ‘comfort’, will buy a no-frills fare to save even $20.
  So, transform into an NFA? See next.
3. NFA. Another route is for Air Malta to become an NFA, such as Ireland’s Aer Lingus. Not the hybrid way – such as Air Berlin, which operates as FSA, NFA, and charter airline - and interestingly is 29% owned by Etihad.
  AL has had the toughest task – the same homebase as the strongest NFA in Europe, Ryanair. In profits, AL has not done well (losing US$106mn in 2014, but now part of the IAG Group). In traffic, AL’s 2014 seat sales grew 2% compared with Ryan’s 6%, and in 2015 about +4% compared with Ryan’s +17%.
  But if AM does try to become a NFA, it will still face competition from at least Ryan on many of its routes (Ryan avoids NFA competition when it can). In which case, AM will lose because Ryan has a more powerful sales machine.
4. Link up with a bigger airline. The disadvantage is that the bigger partner would likely decide many of the operational patterns.
  If that bigger airline is Etihad, we are not sure 1, what is the advantage for AM, and 2, what advantage will Etihad get for its 49%? There is a presumption that Etihad brings operational efficiency-ergo-profits to its new associates. So far, however, this is not the case. Air Berlin is still losing traffic, India’s Jet Airways is up and down, Australia’s Virgin Australia is finding business tough.
  Perhaps the closest to AM to follow is Air Seychelles - also based on a small island group and driven by leisure traffic - and owned 40% by Etihad since 2012. AS has been profitable for three years 2012-4 - US$3.2mn +6.7% in 2014. It sold 412k seats in 2014 and about 20% more in 2015.
  AM cannot feed much traffic into Etihad, because its main market (Malta) is too small. But given the AS example, AM would certainly start a route to Abu Dhabi; AM stopped its own Dubai route in 2001, in September, although the 9/11 attacks in the US were not the reason.
5. Another option is for AM to become something-like a mini-Emirates. Just as Dubai is an inter-regional hub, so then Malta could become an intra-regional hub. This way, it would operate flights Lyon-Cairo, Manchester-Tripoli, Barcelona-Amman, Prague-Marrakech, Madrid-Cyprus. All via Malta on Air Malta. Start slowly and build up.
  We have some track record on this. During a long-ago conversation with the late Maurice Flanagan, founding CEO of Emirates, we suggested that he should make the airline a one-stop-shop between secondary points in Europe into Asia. We have no idea if that was already the plan for his airline, or whether he more-or-less implemented my idea.

Etihad calls itself the airline of the UAE. It is not; it is the airline of Abu Dhabi, one (albeit the richest) emirate in the 7-emirate UAE. In the same way, and despite its name, Emirates is not UAE’s airline, but Dubai’s.

-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.
-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs - cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for instance), fewer fare types, which may have first and business cabins, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.
-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: market freedom in terms of routes and aircraft choice; single aircraft type; where relevant, competition against parent airline allowed; fares that are extremely low when booked at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no service frills; single economy-class cabin; no seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.

ATF-2016 review
25 January 2016
Reports on the 10 destinations of Asean, collected from the ATF-2016 last week in Manila, Philippines.
1. Asean = Association of Southeast Asian Nations, BR = Brunei, BU = Myanmar, CN = China, ID = Indonesia, IN = India, KH = Cambodia, KR = Korea, LA = Laos, MY = Malaysia, PH = Philippines, SG = Singapore, TH = Thailand, VN = Vietnam.
2. Different reports on these are published in the Europe edition of the travel Business Analyst newsletter, the Net Value and People-in-Travel monthly-reports, and on the Foxtrots blog, Trottings blog. The reports here are more product-related.
-Visitor arrivals. The DMO (destination marketing organisation) puts 2015 total at “just over” 10mn, of which 45% were from Asean. This looks incorrect.
-Now said to be visa-free for 15 countries; although some sources give 90 countries. Target is 120 countries this year.
-The DMO says its marketing budget is 3-times higher this year; actual not given.
-Marketing theme to stay as Wonderful Indonesia. The DMO says this was No47 in one travel branding rating; below IN, JP, SG, but above Hong Kong, KR, MY, TH. There are a number of surprises in that unsourced list.
-Revoked a requirement for yachts to get approval to enter the destination. Expects US$500m from 5000 yachts in 2019. No comparative data given.
-Revoked regulation that prevented cruisers from travelling between some different ports in ID. These include ports for Bali, Jakarta, Medan, Surabaya.
-Plans to build airports in 15 cities, improve/extend runways in 27 airports, renovate 13 passenger terminals, build marinas.
-After terrorist attack in January in Jakarta, DMO has listed phased response. But as it asserts there were ‘zero’ cancellations, its statements lack credibility.
-PATA due to hold its travel mart in Jakarta this September. ID’s DMO may try to merge the Travel Indonesia mart into PATA’s mart.
-An Asean tourism strategic plan introduced for 2016-25. We plan to publish our review in our March newsletter next month but the strategy reads like a restatement of what is presumed to have been existing – and not something new.
-By 2025 GDP contribution of Asean’s visitor business “could” grow from 12% to 15%.
-Visitor spend “could” grow from US$877 to US$1500. That would be an AAGR (annual average growth rate) of 6.1% over the nine years.
-Grow length-of-stay from 6.3 nights to 8 – that would be an AAGR of 3.1%, and would thus help that planned growth in spend.
-Politics. There is an Asean+3 (CN, JP, KR) cooperation agreement, but a separate one for IN. It has never been clear why IN is not part of the three. Also the travel part of Asean will not even discuss the possibility of other markets or destinations (such as Hong Kong, Macau, Sri Lanka, Taiwan, Timor) joining its association under ‘Asean-plus’.
-Estimates 2015 visitor arrivals at 98.8mn +7.3%. Says intraAsean represented a 42% share. It notes this share unchanged, not apparently realising that this infers failure for its earlier strategy to grow intraAsean’s share. Earlier in the conference, Asean representatives put the share at 46-48%.
-Plans to launch a program, Visit Asean 50, at the ITB Berlin exhibition in March.

ATF-2016 review
22 January 2016
Reports on the 10 destinations of Asean, collected from the ATF-2016 in Manila, Philippines.
1. Asean = Association of Southeast Asian Nations, BR = Brunei, BU = Myanmar, CN = China, ID = Indonesia, IN = India, KH = Cambodia, KR = Korea, LA = Laos, MY = Malaysia, PH = Philippines, SG = Singapore, TH = Thailand, VN = Vietnam.
2. Different reports on these are published in the Europe edition of the travel Business Analyst newsletter, the Net Value and People-in-Travel monthly-reports, and on the Foxtrots blog, Trottings blog. The reports here are more product-related.
-Visitor arrivals. By air: 200,989 all-2014; 105,789 Jan-Jun 2015; growth not given.
-The Asma hotel changed its name to Parkview in 2015.
-Where it cannot grow non-islamic visitors, it has tried to adjust the packages for other markets.
-Building a 30km Temburong bridge, linking Temburong and Brunei-Muarua. Should cut to 20mins, a journey which currently takes 90mins by land or 30mins by boat; should be ready in 2019.
-The 607m first phase of the Sungai Brunei bridge due to open mid-2016.
-Some border times open longer, from 2200 now to 0000, easing links to/from Sarawak.
-‘Asean for Asean’:
  -Introduced A4A to promote intraAsean tourism – although this has actually been a longterm strategy. There is no separate budget for this activity. IntraAsean share of arrivals in the 10 destinations put at 46-48%.
  -Each destination to choose its theme to promote in Asean markets – for instance, ID has chosen health and wellness, SG cruise. Choices seem arbitrary, although it is clearly not easy to promote one theme for nine markets, of which many have great differences.
  -Have already been joint fam trips – ID/MY/SG/TH, TH/VN. And SG is producing a monthly Asean cruise e-newsletter. Some websites also include something on other destinations – on ID PH in the case of MY’s website.
  -There is a stunning lack of clarity in this program. Nominally to promote intra-Asean travel, the authorities also show plans for promotional activity in Europe and the US.
-13% AAGR over 2013-15 in cruise passengers.
-Visas. Most still claim to be visa-free for all Asean nationals, but this is incorrect. MY, for instance, requires visas from BU nationals; it hopes to change this in “about one year”.
-Visitor arrivals. 2015 29.9mn +20%. Counts 10,000 cruise passengers/year, which is small; improved facilities in Phuket should be ready this year.
-2015 visitor revenue US$45bn (at US$1 to B32) +23%. Forecasts US$48.8bn for this year. That would be +8.3%. When we noted that, given the push on luxury, that looked low, the DMO said it could be 10%. This, unfortunately, makes the forecasting look like a game.
-New design for its ‘Amazing Thailand’ logo.
-New video, promoting luxury travel, with a puzzling title – ‘Life is Luck, Make It’. And also ‘Where Life Rules Everything’. In 2015 it was ‘Discover Thainess’, which was more of a cultural emphasis.
-The DMO’s promotion focus from this year will be to make TH a “Quality Leisure Destination” - measured by visitor spend, length of stay. It says it will need to provide a “quality” tourism product, and will do this by “[upgrading its] tourism management efforts systemwide”. We do not see how ‘product’ and ‘management’ can be connected to provide the desired result.
-The government is currently highly politicised, and the DMO matches this, leading it to emphasise that “tourism is good for rural areas and SMEs”, but omitting to say it is also good for cities and big companies.
-As well as luxury, other targets are medical tourism, anti-ageing, female travellers with shopping, spa, etc. As with many DMOs, its ‘focus’ includes nearly everything, and thus are no longer a ‘focus’.
-The DMO wants to boost domestic tourism (by Thais, not the substantial and good-spend foreign residents). Details are vague – “we plan to launch various measures and promotional campaigns through cooperation with related organisations, the private sector, and airlines”. Until this is clarified we cannot judge if the program will achieve its objectives.
-The DMO is also doing more to encourage visitors in Thailand to visit BU LA KH VN. It has started with a 5-day road-tour for TH and KH, including using new cross-border highways.
-This year, TTM (the travel trade exhibition for TH) will be opened for other Asean destinations to promote their products. Also, it will be held outside Bangkok for the first time, in Chiangmai.

ATF-2016 review
21 January 2016
Reports on the 10 destinations of Asean, collected from the ATF-2016 in Manila, Philippines.
1. Asean = Association of Southeast Asian Nations, BR = Brunei, BU = Myanmar, CN = China, ID = Indonesia, IN = India, KH = Cambodia, KR = Korea, LA = Laos, MY = Malaysia, PH = Philippines, SG = Singapore, TH = Thailand, VN = Vietnam.
2. Different reports on these are published in the Europe edition of the travel Business Analyst newsletter, the Net Value and People-in-Travel monthly-reports, and on the Foxtrots blog, Trottings blog. The reports here are more product-related.
-Visitor arrivals. 2015 4.8mn +6%. Now has 100,000 hotel rooms.
-Infrastructure is improving; has liberal aviation policy, visa-on-arrival, and eVisa. All border-crossing points now provide VoA.
-Aviation. Cambodian Airlines plans flights to the US. Phnom Penh airport being expanded to reach 2mn passenger capacity with a 3000m runaway; details and dates not given.
-Promotes key sales points as stability, harmony, lack of social conflicts. That might be challenged, but it shows how far the destination has moved since the Killing Fields of the 1970s.
-June’s Mekong Tourism Forum is due to be staged in Sihanoukville, Cambodia.
-Visitor arrivals. 3.43mn Jan-Sep 2015, +13%; estimate 5mn for all-2015, which would be +20%.
-Has visa-on-arrival at 24 borders, even land borders. Also, visa validity extended from 15 days to one month.
-Now concentrating on ecotourism.
-Because of new direct flights Seoul-Vientiane, visitor arrivals from KR grew 93%. But the DMO has also said +39%; period not known.
-Visitor arrivals. Jan-Sep 2015: 19.1mn -7.6%. Top-5 markets were falling – SG -8%, ID -5%, CN -1%, TH -1%, BR -6%.
-Visitor arrivals in 2015 “not very good”, said DMO spokesperson. But this is a result of its longtime politically-charged policy to boost its visitor count above SG’s – by counting land arrivals from SG (SG does not do the same in the opposite direction). No longer is SG’s market is a boost; the fall from SG was 8.9%.
-Visitor spend. US$11.6bn (at US$1 to MR4.41) -1.3%.
-Has 4070 hotels and 262,000 rooms. Hotels due: in Kuala Lumpur St Regis this April, W 2017, Four Seasons 2017, Jumeirah in 2021, and St Regis Langkawi April.
-Has a few Asean-specific programs, such as Go Asean, Asean Tourism Packages, Asean Adventure Travel Booklet.
-Homestay accommodation, introduced in 1995, won WTO’s Ulysses prize for innovation in 2012.
-Theme parks. Nickelodeon opened in 2015 near Kuala Lumpur. Movie Animation Park Studios in Ipoh due this year. 20th Century Fox in Genting Highlands due 2017.
-Sports Tourism. F1 car race switched from April to October, to run two weeks after Singapore’s F1.
-Shopping. Special sales events in Mar, Jul-Aug, Nov-Jan. Spending on shopping grew 9%. New shopping centres include: Mitsui Outlet Park 6km from Kuala Lumpur airport, but no opening date yet; another, but 10km from airport, KL International Outlet, due July; Shore Shopping Gallery in Melaka, now open; Genting Premium Outlet due late-2016.
-Ground transport. 140kph high-speed rail KL-SG; construction due to start 2017 and finish in 2022. This is too far in the future to assume it will not be delayed.
-New flights in 2015. Air China, All Nippon, British Airways (restart), Rayani Air (to Langkawi), all into KL. Air France stopped, and even Emirates reduced.
-The DMO also has a problem with its budget because of the fall in the value of Malaysia’s currency. However, it will maintain its visitor-revenue forecast – even though it is based on the old exchange rate. It also says it is keeping its promotional plan. However, both these things must change given the size of the exchange-rate change (from around MR3.05 in 2014 to US$1, to around MR4.40 now); it is a futile to keep them unchanged.
-Visitor arrivals. 2015 4.68mn +52%; by air 1.31mn +15%. Opening for leisure tourism started in 2011.
-Now 1267 hotels with 49,584 rooms, of which about 5000 are in the capital Naypyidaw.
-Projects based on Tourism Master Plan, launched in 2013, funded by Norway and ADB.
-Program in relation to an application for Bagan’s 2000 pagodas to get on Unesco’s ‘world heritage’ list.
-It has 21 protected destinations for ecotourism. Visitor themes are heritage trails, cave tourism, eco/marine tourism.
-Naypyidaw, presently short of tourist attractions, will be the best destination in BU, says the DMO. It says some attractions will be added – those listed so far are minor, and it will be hard if not impossible for the capital to overtake Bagan, Mandalay, Yangon in the next 20 years.]
-DMO says it wants “value tourism, not mass tourism”. It also says that it has become more aware of the importance of the environment, and so it is looking at how to incorporate that into its plans.
-Now nationals of 100 countries can apply for eVisas. Also, the visa fee has been reduced from about US$40 to about US$25.
-A new government is due to take over this month, so almost certainly there will be some changes to the plans announced.
-Visitor arrivals. 2015 7.94mn visitors; only +0.2%, although AAGR over 10 years is a good 9.3%.
-Visa exemption now for 22 countries. The DMO wants no-visa to expand to other countries, such as CN IN Australia New Zealand.
-This year designated Visit Vietnam Year.
-Although VN already has two travel exhibitions* - one too many – a third has been started. *The privately-operation event in Ho Chi Minh City focuses on inbound tourism; the government-funded Hanoi event focuses on inbound and outbound; and the new event, in Danang in June, on beach tourism, and MICE.
-Vietnam Airlines.
  -In 2015 became privatised, with ANA its strategy partner. This may be a poor choice of partner – because ANA’s own strategy has changed a few times, including that for no-frills-airlines (it was a partner for Air Asia Japan).
  -Still state-influenced it seems, as it has ordered 14 A350s and 19 B787s. A private company is unlikely to buy two competitor aircraft types – with attendant additional costs for pilot training, spare parts, etc.
-The room count in Danang has grown from 8000 to 18,000 over five years. It counted 4.7mn visitors +23% (domestic and international, registered in hotels) in 2015.

ATF-2016 review
20 January 2016
Reports on the 10 destinations of Asean, collected from the ATF-2016 in Manila, Philippines.
1. Asean = Association of Southeast Asian Nations, BR = Brunei, BU = Myanmar, CN = China, ID = Indonesia, IN = India, KH = Cambodia, KR = Korea, LA = Laos, MY = Malaysia, PH = Philippines, SG = Singapore, TH = Thailand, VN = Vietnam.
2. Different reports on these are published in the Europe edition of the travel Business Analyst newsletter, the Net Value and People-in-Travel monthly-reports, and on the Foxtrots blog, Trottings blog. The reports here are more product-related.
-Visitor arrivals. 2015 5.36mn +10.9%. Cruise arrivals 69,802 +16.0% in 2015.
-New markets - looking at IN and Middle East. Looking at designating more outlets as halal-friendly.
-Visitor spend US$5.00bn, a disappointing +3.3%.
-10% of jobs are in the visitor business; we believe this is actually all-travel, not just inbound.
-Bohol. New Hennan and Be resorts opened in 2015. Panglao airport due 2017. Heritage walk.
-Palawan. Improved Puerto Princesa airport due 2018. Cebu airport has been privatised, and there are plans for a new terminal. Cebu Pacific plans Cebu-Los Angeles route, and Emirates Dubai-Cebu.
-Making comprehensive efforts to building and improving roads to destinations, expanding airports. For its four cruise terminals, it is now studying new requirements.
-Continues to work on congestion in Metro Manila, and although there have been improvements, it remains bad. Both the national government and MM provide funding for Manila.
-Visitor arrivals. With just one month to count, SG’s cautious DMO still estimated full-year 2015 total with a wide range - 15.1-15.5mn, which means a 0-3% growth (Jan-Nov was +0.4%). We venture 15.2mn +0.8%.
-Visitor spend estimate for 2015 US$18.5-18.9bn (at US$1 to S$1.27) +0-2%.
-Over next five years, 10,000 more hotel rooms are expected to open. New hotels in 2015: Aqueen Paya Lebar, Genting Jurong, Park Alexandra, South Beach, Vagabond. Due this year: Four Points, Holiday Inn Express Katong, Ibis Styles, Indigo, M Social, Patina.
-Campaigns etc:
  -Singapore Inside Out – on culture. Travelling showcase of contemporary creative talents and their works, to Beijing, London, New York, Singapore.
  -Golden Jubilee. US$15.7mn based on SG’s celebration of 50 years as an independent country*. National pride has resulted in marketers thinking there is a sizeable number of non-Singaporeans that want to celebrate SG’s birthday by visiting it. *Details are complicated but 50-years is not quite historically correct. Singapore became effectively independent in 1959, then part of Malaysia 1963-65, and then fully independent in 1965.
  -Others in 2015 for different markets: Australia (“Get lost and find the real Singapore”); CN (“New discoveries”; 3.8mn views); IN (“Memories that bind”); music campaign for PH (“See where the world is heading”; 1.2mn views); TH (“Experience many worlds in one place”); VN (“New fun is Singapore-Made”); worldwide (“Singapore Invites”; 700,000 website visits, 14,000 entries). No data on views where none shown.
  -A few trade groups have teamed up with the DMO for campaigns. US$27.6mn with Singapore’s airport group, two years. US$15.7mn with Singapore Airlines and the airport group, two years. With Trip Advisor; value and period not given. With the Royal Caribbean cruise company and the airport group; value and period not given, but expected to attract 170,000 visitors over 2015-8 spending US$78.7mn. A to-be-expected ‘partnership’ with the local convention management association and the exhibition and convention bureau.
  -DMO has signed multi-year partnership with some internet groups in CN - Alitrip, Tunio, Dianping, Mafengwo.
  -Two which the DMO lists, but which are more for local than overseas visitors. Hotel Productivity Centre; resource centre for hotels. ‘Keepers’, a ‘pop-up’ store on Orchard Road selling goods from 113 designers and artisans. 220,000 shoppers visited over 16 months. This count looks low and, of course, most were probably residents not visitors.
-New training and development programs for tourist guides.
-Also US$7.87mn ‘Step Up’ fund – to encourage companies to improve or increase their tourism offer for SG.
-TUI Cruises, the cruise division of Germany’s big tour operator, has made SG its cruise base.
  -The F1 car race brings in about US$118mn annually* in visitor revenue from the event. *Bizarrely the DMO excludes 2009 data because the figures were low! As it has not excluded the highest, we have recalculated the annual average to US$100mn, based on the overall visitor fall in 2009. On our data, this indicates around 100,000 visitors annually – which looks good.
  -A world tennis final ran in October.
  -Due this year: HSBC women golf tournament; HSBC rugby sevens.
-Culture: In 2015 it opened the Indian Heritage Centre, the renovated National Museum, the renovated Asian Civilisation Museum (phase two due next month), the renovated National Gallery. Due this year: Chinatown Heritage Centre.
-The Asia version of a surprisingly-popular TV program, MasterChef, is operating from SG.
-Airport. T4 is due to open in 2017 (16mn passenger capacity), and T5 planned for the mid-2020s – for 50mn passengers, almost as much as the current total. In 2015, we calculate the airport counted 55mn +2% passengers.
  -DMO says that 40% of visitors to Christmas Wonderland fair were from overseas.
  -Changi Jewel, big complex (including a hotel) in front of T1 at the airport. Due 2018.
-Mandai – what we call a city jungle, and what the DMO calls a conservation hub, educational and research attraction - expected to be ready in in phases from 2020.
-Plans for a Jurong Lake development, a new Central Business District, towards the southwest of the island. This obviously is more of interest to local residents but also business visitors.
  -DMO says SG is trying to do something about the haze – which must be damaging the visitor potential, ironically including from the market that is causing the problem, ID.
  -Strangely, SG has not copied many cities, including many in Asia, to encourage the use of bicycles. As a largely flat territory, this could be good for tourists. The DMO shows little interest in doing anything.

ATF 2016 in Manila
19 January 2016
ATF 2016 in Manila
The ATF Travex travel-exhibition-part of ATF 2016 is due to open tomorrow.
Registered are 2620 delegates – including 1000 exhibitors , 457 buyers , 175 media; 500 of buyers and media are paid-for by revenue from the exhibitors and some suppliers in Manila. The Philippines has 175 exhibitors.
  The 3-day Travex, due to end on January 22, has scheduled 70 official sessions. There are also 10 post-event tours (usually, ATFs have fewer than three) over 23-26th. Cost is US$150.
  The destination, which had a Visit Philippines Year for 2015, is repeating that this year with what it calls VPA (Visit the Philippines Again). It says VPY was a “huge success”; we estimate visitor growth in 2015 was 12%.

PAGPFT; France’s Cote D’Azur.
28 December 2015
PAGPFT (pronounced PAG-puffed); People Are Getting Paid For This.
  All the important people from the inbound travel business in France’s Cote D’Azur, and Air France-KLM, have just finished their get-together to relaunch promotion for the region. They told us they are focusing on four longhaul outbound markets: in alphabetical order, Brazil, China, Russia, US.
  Those clever people said they got the market data from their 2013/4 report on the inbound business into the region. We think that report shows figures for 2012.
  Is it really that hard to think that maybe business trends have changed since then? We don’t have all the data, but we think Brazil total outbound grew 13% in 2013, falling to +2% in 2014, but perhaps -28% this year. And Russia grew 25% in 2013, but then fell 6% in 2014, and as much as -30% this year. Singapore might now be a bigger market than Brazil!

Shouting for Ryanair, Travel outlook 2016
10 December 2015
Shouting for Ryanair
Surprisingly, Ryanair is not shouting out about its new achievement. The no-frills-airline’s seat sales grew 21% in November. Nothing greatly unusual in that – except that its growth-spurt started a year earlier. So that 21% is on top of its 22% growth in November 2014!
  That means it has grown almost 50% (actually 48%) over the past two years. Even more impressive is that this is from an airline that is already Europe’s largest.
  It is still smaller though than Southwest, the leading NFA in the US. All-2015 will be about 101mn seat sales for Ryanair, 118mn Southwest.
Travel outlook 2016
There has started to be more than a few negative tugs: economic slowdowns or worse (Brazil, China, Russia); islamic terrorism (Europe, Middle East, Africa); functional disarray in the Middle East (Egypt, Libya, Syria, Tunisia, Turkey); overwhelming immigration (into Europe); political dysfunction (fiercely partisan politics in the US, plus Carson, Trump).
  Some strong positive turns are needed: return of China to strong economic growth; India's promised boom to actually happen; Russia to reduce perceived belligerence; Brazil to overcome its economic (and now political also) negatives; US politics to become (relatively) sane again; at least one country in the Middle East to start clearly on the road to tolerance; into-Europe immigration numbers to become manageable (10s of 1000s instead of millions?).

Euromonitor Puerilities
7 December 2015
A report on this topic in our Travel Business Analyst newsletter contains some important additional information and analysis on the data shown here.
Research company Euromonitor (EM) has listed what it calls “top emerging travel trends” (a misnomer) in the WTM Global Trends Report. We have criticised some EM reports and statements before, including its now-14-years of work for the GTR. But this latest list of blathers we find an insult to travel industry professionals in that most have little or no meaning:
  EM’s TETTs are:
The new American dream: work less, play hard.
“A growing number of American companies offer unlimited vacation time to create a happier, loyal and motivated staff, which will have an effect on travel bookings.”
We know of no company (in the US or anywhere) that pays staff and allows them not to do any work. But we do accept that such employees would likely spend some of their money and great amount of free time on travel.
Smart technology drives travel to UK’s secondary cities.
“Digitalisation and hi-tech solutions are redefining the tourist offerings of UK urban centres to boost travel outside of London, currently the jewel in the crown of UK tourism.”
Smart technology is also driving travel to London, and everywhere. But what, we wonder, does ‘digitalisation and hi-tech’ do, in this case, for such travel that it does not do for others?
‘Hipster Holidays’ revolutionise European city break.
“Young and hip travellers’ interest in alternative city areas opens new business opportunities and helps diversifying urban attractions in European cities struggling with excessive tourism.”
We tried to understand this, but failed. And we wonder which cities are struggling, and what, indeed, is ‘excessive tourism’.
Travel 3.0: the advent of smart travel.
“Smart technology is transforming the tourism industry with personalised services to create enjoyable experiences suited to a traveller’s individual preferences.”
Well, yes, but is this an ‘emerging trend’? We would think personalisation has been around for at least five if not 10 years. And in some cases, much longer; such as Thomas Cooks’ trips from the UK to the French Riviera in the 1850s.
Iran: the next travel hotspot.
“The recent sanction lift sparked a scramble to open Iran to international visitors, attracted by its ancient Persian history, 17 World Heritage Sites, as well as natural attractions.”
Well, visitor growth was 4% in 2014, but that was before an agreement on sanctions (and, EM, should know, they have not been lifted, but some may be lifted.) On a 5mn total, small numerical increases could produce big percentage growth – but all this hardly deserves such puerile descriptions as ‘hotspot’ and ‘scramble’. We would be surprised if the 2015 total reaches as much as 6mn.
We also wonder if EM wants us to note that there is a difference for potential travellers between Iran’s ‘ancient Persian history’ and its ‘Persian history’. We are not qualified to make any comment on any difference.
Technology start-ups changing the face of Africa.
“With technology start-ups flourishing across the continent, Africa is entering a new era of innovation, which will help change the perception to international tourists.”
Although this ‘changing the face’ is a super-exaggeration, does the creation of start-ups – anywhere - motivate travellers?
Luxury hotels keeping in with the crowd.
“Luxury hotels are turning to crowdsourcing and crowdfunding to get their properties financed, rather than relying on traditional sources of investment.”
Please EM, put this into perspective. Under-1% of funding of the under-5% of hotels in the luxury category?
The sharing economy heads to China.
“After a shaky start, the sharing economy is taking off in China, with the rise of new local players in 2014, a trend boosted by the number of Chinese millennials.”
Finally, something we can agree with! But hardly news. And, of course, the sharing economy is taking off in most places, with or without the help from millennials.
Travel for the Indian unbanked.
“Travel firms are adopting ‘cash-on-delivery’ payments to cater to the half a billion Indians without a bank account.”
Yes again, but this is not a new phenomenon.




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Current Issues...

Main contents in current issues of our newsletters and reports:

Travel Business Analyst, Asia Pacific: AsPac travel stocks review. Travel stocks in Europe, US, and travel-tech. Asean’s unhappy birthday? Plus: Market Monitor; World Travel Industry Index; ZERO; Market Headlines; Market Outlook; and 20 regular tables of market data.

Travel Business Analyst, Europe: Europe travel stocks review. Travel stocks in AsPac, US, and travel-tech. France hotels in 2016. Plus: Market Monitor; World Travel Industry Index; ZERO; Extracts from Net Value or People-in-Travel; Market Headlines; and 16 regular tables of market data.

Net Value: Travel-tech stocks; Phocuswright reports; US agency online transactions; ‘Things’; others.

People-in-Travel: Natarajan Chandrasekaran; Jane Jie Sun; David Berg; others.


ZERO (occasional): US airport grants; Solar Impulse Foundation; bio fuel incentives.

Foxtrots/Trottings (recent): Brussels’ recovery; Top-3 airlines in 4 categories; Singapore Airlines Group heads.


Market Data