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Saigon boosted by Russian invasion

HCM City (Saigon) drew 1.28 million foreign visitors in the first half of the year, a year-on-year increase of 11.3% and 48% of the year's targets, according to the municipal tourism department.

HCM City Department of Tourism director Dong Thi Kim Vui said that foreign visitors from Russia, not traditionally among the city's top tourism markets, surged by more than 81% over the previous year.

The number of visitors from mainland China also grew 49%, followed by Australia (up 37%), South Korea (33%), Japan (15%), Taiwan (8%), and the US (8%).

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Vietnam’s “chaotic” hotel scene under scrutiny

In TravelMole Asia last week, Exotissimo Travel accused hoteliers in Vietnam of a "grab for cash".

An Exotissimo spokesman said, "With the recent room shortage, almost every premium hotel (from 3-5 stars) is operating at close to full capacity throughout the year, and the low-season has all but disappeared.

"Many of the hotels are now taking advantage of this current situation, and are not honouring their prior commitments, including previously negotiated and contracted room rates."

Jon Hewson, General Factotum, of the online site VirtuallyThere.ca, and a frequent contributor to TravelMole discussions, puts the other side of the story.

He writes:

"The hotel scene in Vietnam is chaotic. Many of the large hotels are joint ventures, 49% foreign owned and 51% government / agency owned and a good number are operated by Western companies.

"The market is still developing and exhibits growing pains with unfettered greed taking advantage of the situation. Capping off this volatile mess is the ability of VNAT, through the government dictat, to artificially control (distort) the market.

"If contracts are not honoured it wouldn't take many telephone calls to round up the players, many of whom would be provincial government agencies.

"Destination management companies also play a part in this as they, too, have sought to exploit weaknesses in the Vietnam market and have signed contracts that are distinctly lop-sided. Furthermore they frequently contravene Vietnamese tourism legislation.

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UK Looks Online for Hotel Reviews

Nearly half of UK consumers who use the Internet to research travel decide not to book a hotel because of a negative online review, according to American Express' "Hospitality Monitor 2007" report, conducted by Loudhouse Research. The study was conducted in April 2007, and was based on telephone interviews of senior operations staff at hotels and restaurants in Europe.

Over eight in 10 UK consumers researched online before booking a hotel, and 62% did so before booking a restaurant.

Taking the good reviews with the bad, 77% of UK hotels and 80% of restaurants said the growth in consumer-generated content is a business opportunity.

Kathryn Pretzel Shiels of American Express said, "The industry is clearly taking steps to better understand this channel. In fact, 67% of UK hotels and 77% of UK restaurants say they actively monitor content posted on independent review sites."

The study also asked hotel and restaurant operators about their online marketing efforts, and found that 57% of hotels and half of restaurants used affiliate marketing. Over four in 10 hotels and restaurants used search marketing. While seven in 10 hotels used direct e-mail, only 17% of restaurants did.

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Online Travelers Bargain-Hunt on the Web

The Internet as a trip starting point.

Roughly a quarter of US Internet users traveled on a commercial airline or booked a hotel in both 2005 and 2006, according to PhoCusWright's "Consumer Travel Trends Survey Ninth Edition."

Yet the proportion of people doing these things fell by a percentage point between 2005 and 2006. With the number of Internet-using travelers steady, will competition for their attention increase?

For certain travel products, consumers find the Internet ideal for conducting research but not for booking reservations. Burst Media found that a much higher percentage of survey respondents planned to research online and book offline hotel accommodations (50.1%) than airline flights (39.2%) or car rental reservations (12.2%).

Generally speaking, the more complex the travel product, the more likely it will be researched online but booked offline. Travelers who book offline cite help from live customer service agents as a major incentive.

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Internet Marketing and Distribution Trends Impacting the Hospitality Industry from 2007-2010

Background
In the past several years, we have all watched the remarkable growth of the online travel marketplace. With an increasing number of travel consumers doing travel research online (75% of adults in the US - TIA), gaining broadband Internet access at home and becoming more and more accustomed to doing business and transacting on the web, we will continue to see this growth across market segments at an ever increasing rate.

Here is the online travel adoption rate in 2005 and 2008:
                                       2005           2008
North America                 42%             60%
Europe                            15%             41%
APAC                                9%             20%
                                 (PhoCusWright 2007)

Hospitality:  (USA, % of all bookings):

                               2004    2005   2006  2007  2010
U.S. Hospitality:     20%       25%     29%    33%    45%
      (Merrill Lynch, PhoCusWright, HeBS)

This year, 40% of all leisure and 35% of business travel bookings will be done online. By 2010 over 50% of leisure bookings are expected to be online. The percentage of meeting planners researching and booking online is also growing at a rapid pace. An estimated 89% of planners are researching event locations on the web, and by 2008, 41% of all groups and meetings travel revenues will come from the Internet.

Direct vs. Indirect Online Distribution
The direct online channel will continue to be the main focus for hoteliers. The industry as a whole has realized that not only has the Internet become the preferred channel for travel consumers to plan and book lodging, but the direct online channel is the cheapest form of distribution. The shift from indirect to direct online distribution will continue to be a major trend in the next several years:

Overall for the industry (USA): 2003    2005   2007  2008   2010
Hotel Branded Websites:            53%     54%      60%    62%    65%
Intermediary Websites:              47%     46%      40%    38%    35%

In 2006 the major hotel brands enjoyed an above the average direct vs. indirect online ratio of 81.4% vs. 18.6%.

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Online distribution of hotels ‘could be pushed back a decade’

Converging risk factors in the travel market could push online distribution back 10 years, warns the boss of a leading hotel representation company.

Niels Pedersen, managing director of 1,500-member consortium Supranational Hotels, highlighting six danger signs to which the sector must respond, called for regulation of e-commerce suppliers.

He said: "I foresee a buyers market returning within 12-18 months - partly as the cost of travel rises through fuel charges and environmental taxes, and partly because too many new hotels are being built. 

"Before then, however, today's rip-off market – high prices, low efficiency, widespread guest dissatisfaction – is returning the reputation of online bookings to the pioneering days of the mid-1990s.

"The answer is for e-commerce suppliers to become regulated and then establish agreed and accredited standards for bedroom sourcing, payment protection and problem solving, or alternatively risk losing their market to the safer jurisdiction of travel agents."

Pedersen says the six issues to be tackled are:

·         There is currently a sellers market for hotels in many locations and they are fuller and therefore more choosy as to the electronic middlemen with whom they want to work.  In addition, the major hotel brands are trying to cut out intermediaries in favour of attracting bookings direct.

·         This means that commissions to such dot.com suppliers are being halved from recent levels of 25% or more, and consequently their call centre operations are being reduced in size and efficiency and cannot properly handle any booking problems that arise.

·         Disillusion with unreliable email communication is mounting because an estimated 1 in 6 goes astray – whether inadvertently deleted, or diverted by anti-spam security. More guests are arriving to find no knowledge of their booking, and no room in a full hotel.

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The Ups and Downs of European Online Travel

eMarketer estimates that online travel sales in the five major travel markets of Europe — France, Germany, Italy, Spain and the UK — will total nearly $49 billion this year, up 27% over 2006.

That's the good news.

"Over the next four years, as the European online travel market matures, sales growth in the sector will steadily decrease," says Jeffrey Grau, eMarketer Senior Analyst and the author of the new report, European Online Travel. "Conversely, that means competition for online travel dollars is going to increase."

After peaking in 2005, personal travel and tourism spending growth (online and offline) by the 25 European Union member states entered a moderate phase, as evidenced by data published by the World Travel & Tourism Council (WTTC).

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TripAdvisor Adding More Social Features

TripAdvisor, the travel blogging service, is scheduled to roll out more social networking aspects to its service, making it easier to find and share information from others. The new features should launch sometime tomorrow.

The new social components of TripAdvisor will let you register your network of travelers, importing contacts from all the major email services such as GMail, Hotmail, AOL and MSN. Some new search technology is being included in the site revamp, which will make content from your friends network show at the top of your search results.

Moving towards a more social existence is something TripAdvisor is surely interested in. The company released its Facebook application last week, enabling users to display their account map on their Facebook profiles and marking where they’ve traveled. Other travel social networks include TripTie and Matador.

Vietnam hotels accused of “grab for cash”

Hoteliers in Vietnam are proposing a 50% plus rate increase for rooms next season, and Exotissimo Travel has united with other destination management companies to protest.

Exotissimo says key properties in Hanoi and Ho Chi Minh City have failed to honour existing contracts, and are increasing their rates to levels as "a grab for cash."

An Exotissimo spokesman said, "With the recent room shortage, almost every premium hotel (from 3-5 stars) is operating at close to full capacity throughout the year, and the low-season has all but disappeared.

"This problem is most severe in Hanoi and Ho Chi Minh City, where most 4 and 5 star hotels are almost always fully booked.

"Many of the hotels are now taking advantage of this current situation, and are not honoring their prior commitments, including previously negotiated and contracted room rates.

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UK Online Sales Rise, Driven by Travel

High speed to High Street, please.

UK retail e-commerce sales are estimated to reach $51.8 billion (£28.1 billion) in 2011, up from $21.6 billion (£10.9 billion) in 2006, according to Verdict Research.

Online sales tripled from 2002 to 2006, and grew nearly 13 times faster than the overall retail sector in 2006.

Verdict said online shopping has grown because broadband Internet access is now widely available in the UK at low cost. Major retailers have also made large investments in transactional Web sites.

Interactive Media in Retail Group (IMRG), as cited in a May 21, 2007, Financial Times article, also noted the rise in UK online spending. Looking at B2C e-commerce overall, the firm counted travel as the biggest online sector, followed by electronic products and apparel.

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