Malaysia Air Wants to Use Its Extra Jumbo Jets for Hajj Pilgrimage Tourism

F. Lancelot  / Airbus

The A380 showed off its flight capabilities on day one of the 2017 Paris Air Show. Malaysia Air now regrets buying so many of the superjumbo. F. Lancelot / Airbus

Skift Take: Don’t mistake Malaysia Airlines’s long-discussed effort as an act of generosity. The company owns a half-dozen unused superjumbos. Haj pilgrim flights could help it recoup some of their total purchase price.

— Sean O’Neill

Malaysia Airlines Bhd. is in talks with potential investors for new charter flights to carry Muslim travelers on the annual Hajj pilgrimage, a service planned to give a new lease of life to surplus A380 superjumbos at the unprofitable carrier.

The carrier will apply for a license with Malaysian authorities this quarter and expects the service — a separate venture from the main airline — to be fully operational in about a year, Chief Executive Officer Peter Bellew said in an interview July 24. Malaysia Airlines has held talks with parties in Asia and the Middle East involved in the tourism and aviation industries, he said.

The airline, taken private by sovereign wealth fund Khazanah Nasional Bhd. following two fatal air crashes in 2014 that sank demand, is looking for additional revenue steams after cutting jobs and unprofitable long-haul routes to keep the business afloat. About 2 million Muslims journey to Islam’s holiest city of Mecca during the Hajj each year and carriers including Saudi Arabian Airlines lease dozens of jets to cater to them.

“We think there is a great sustainable business” which would be profitable and put the A380s to good use, Bellew said in Kuala Lumpur. “It is not just specifically money that we are looking. We are looking for somebody who can bring something to the business.”

Seat Configuration

Bellew had said planes used for the Hajj would accommodate as many as 700 people in a single class — modified from their current 494-seat layout with Malaysia Airlines — the densest configuration of any superjumbo.

Malaysia Airlines also faces additional costs from the ringgit, which has weakened more than the company had expected, the CEO said in the interview. The currency fell 7.8 percent against the dollar in the last quarter of 2016 and earlier this year reached the lowest level since 1998.

The Malaysian currency was trading at about 3.2 to the dollar when Khazanah unveiled a 6 billion-ringgit turnaround plan Malaysia Airlines in 2014. The ringgit currently trades around 4.28 to the U.S. currency.

The strength of the dollar will increase costs by about 300 million ringgit ($70 million), more than what was projected, Bellew said. Still, the ringgit’s weakness won’t derail Malaysia Airlines’ goal to break even in 2018 and list on the local stock exchange the following year.

The company should be cash-positive in the second half of 2018, he said. Forward bookings from the international segment continue to be strong while those for domestic flights are slightly lower from a year ago because of intense competition, said Bellew.

The airline is focusing on business class and premium cabins as well as transporting passengers from other carriers to increase revenue, the executive said. China, India, Japan and Taiwan are its growth markets, and the airline will add more routes to these destinations over the next few years, he said.

The carrier needs six more aircraft next year and a similar number in 2019 to serve its busiest routes across Asia, Bellew said. Malaysia Airlines is studying leasing options and new purchases and will wait for a “good price” since it isn’t in a hurry, he said.

This article was written by Elffie Chew and Chong Pooi Koon from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Rome Enlists New Patrols to Protect the Trevi Fountain and Other Landmarks From Tourists

The Associated Press

Tourists visit Rome’s famed Trevi Fountain. The city is hoping that new fines for misbehavior and new watchdog patrols staffed by retired police will restore some order to the at-times-rowdy tourist area. The Associated Press

Skift Take: By tapping retired cops as a workforce, Rome may have found a cost-effective way to try to help manage the effects of overtourism. Expect other highly visited destinations to watch the experiment closely.

— Sean O’Neill

Retired traffic officers at Rome’s Trevi Fountain are working to keep tourists on good behavior.

The Italian city’s mayor signed an order last month aimed at protecting Trevi and some 40 other historic fountains. The order prescribes stiff fines for climbing, sitting or eating on the monuments.

Several former police officers started shooing tourists off the stone rim of the Trevi Fountain on Tuesday. They reminded people not to eat there and to keep an open path through the crowds.

Earlier this year, a man swam naked in Trevi Fountain. Soccer hooligans damaged a Baroque fountain near the Spanish steps.

The city says the volunteer officers will stand vigil from 9 a.m. until midnight until mid-October. Authorities will decide after the peak tourist season wanes whether to make the fountain patrols permanent.

This article was from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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A Parisian Luxury Institution Gets a Facelift to Compete with Modern Hotels

Rosewood Hotels

A deluxe suite at the renovated Hotel de Crillon in Paris. Rosewood Hotels

Skift Take: Renovating an historic grande dame hotel can be a daunting task. And when you are working with a Parisian building originally commissioned by Louis XV, the stakes are even higher. We learn how a team of French designers re-imagined the historic Hôtel de Crillon into a hotel that appealed to 21st century senses and sensibilities.

— Laura Powell

The long-anticipated reopening of the Hôtel de Crillon in Paris took place earlier this month. The result of the four-year renovation project is a refreshed property balancing historic conservation with 21st century transformation.

The process was painstaking. After all, this is an iconic place. The Neoclassical structure was commissioned by Louis XV in the 1750s, and became the residence of the Count de Crillon and family for years. It first transformed into a hotel in 1909 and it quickly became the place where fashionable Parisians celebrated the French art de vivre.

However, as the 20th century turned into the 21st, it became clear to the owners, members of the Saudi royal family, that this dowager needed a facelift. The owner’s representative and a handpicked project management team initiated the renovation of Hôtel de Crillon. They hired Richard Martinet as the chief architect, and assembled a team of Parisian-based master craftsmen, artisans and designers.

Rosewood Hotels & Resorts was also part of the process. According to the company’s president, Radha Arora, “Rosewood heard about the opportunity to operate the hotel about five years ago. We were driven to ensure that the property became part of our portfolio, because it would be a huge game-changer for us. The decision process took 18 months, but the owners ultimately liked our portfolio of unique hotels that focus on a sense of place.”

Arora notes that the renovation plan was already in action when Rosewood came into the picture in 2013. “We were brought on to guide the process and be a conduit to ensure the team worked together and articulated the vision in a seamless manner.”

That was no easy feat, as Artistic Director Aline Asmar d’Amman worked with three Paris-based designers to inject a modern attitude and a touch of Parisian irreverence into the guest rooms and public spaces, all the while preserving a sense of history. Renowned couturier Karl Lagerfeld was also brought in to design Les Grands Appartements.

Part of the main design team was Chahan Minassian, who normally works on high-end custom residences, chateaus and private yachts. He was responsible for re-envisioning Les Ambassadeurs (once a restaurant, now a bar); Jardin d’Hiver, a public space for a tête-à-tête and tea; L’Ecrin, a fine dining restaurant; Sense, a Rosewood Spa; the swimming pool; and several signature suites.

“French designers were specifically chosen because of our aesthetic and the cultural feeling that only locals understand as everyday life in Paris,” says Minassian. “Everybody did his own signature, but with knowledge of the general layout of the hotel. That being said, there is a continuity and homogeneity to the color scheme, so there is a flow from one space to another.”

“We were challenged by keeping historical obligations and bringing them forward with a new modern version,” says Minassian. In the suites he designed, he “curated various elements of old and new to create a sense of timeliness. I used luxurious, haute couture fabrics, and mixed 1940s furnishing with contemporary elements.”

Through the building, he says, “Timeliness was a key objective, but we didn’t want boring or literal historical recreations. We respected history, but needed to bring novelty and local know-how – that certain je ne sais quoi – to the design.”

Les Ambassadeurs is a perfect illustration of the transformation concept. The former restaurant was turned into a 60-seat cocktail lounge featuring a horseshoe-shaped bar. Minassian says lush carpets were brought in to temper the noise, and the decor “needed to be dressed down a bit” to make the room a bit more cozy.

Entering the Hôtel de Crillon is meant to feel like walking into the home of a sophisticated Parisian. According to Minassian, “Making the hotel feel like a comfortable home was a vital part of the vision. The objective was to make the public space like the French Embassy, a home for visitors and Parisians alike. We wanted visitors and French people intermingling in the public areas so people can understand what Parisians like and how they live.”

According to Rosewood’s Arora, the challenge was greater than first expected. “These types of building projects have to take into account strict laws and heritage regulations. The French rules are very particular regarding historic buildings, and we had to work closely with local authorities. We expected the project to take three years, maximum. But as you dig into a property such as this, you find new crevices and areas that have to be protected. The process was painstakingly slow, but the results speak for themselves.”

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JetBlue Exceeds Second Quarter Expectations After Tweaking Growth Strategy

Brian Snyder  / Reuters

JetBlue has slowed down its capacity growth while improving its product. A passenger walks past a JetBlue advertisement at Logan International Airport in Boston, Massachusetts January 6, 2014. Brian Snyder / Reuters

Skift Take: JetBlue pulled back on its growth plans earlier this year, focusing instead on rolling out its improved Mint product. It seems to have paid off and the airline will be opportunistic about growing its fleet going forward.

— Andrew Sheivachman

After slowing its capacity growth and mulling a decision on buying new Airbus A321LR planes, JetBlue posted strong results in the second quarter of 2017.

The airline exceeded its revenue expectations, with total operational revenue up 12.1 percent compared to Q2 2016, and plans to the continue the expansion of its new premium Mint seats to up to 20 routes.

“Our strategy of targeted growth continues,” said Marty St. George, JetBlue’s executive vice president of commercial and planning, on the company’s earnings call this morning. “…. the core underlying demand is strong right now.”

JetBlue pulled back on its planned capacity growth earlier this year in an attempt to drive revenue. It appears to have worked, but the airline will remain cautious into the third quarter of 2017. Meanwhile, it expects its Mint product to be available on 31 aircraft by the end of the year.

If JetBlue does pull the trigger on buying Airbus A321LR planes, it’s seen as an indication the airline will finally move into the trans-Atlantic market. For now, the company has made no decision.

“We have a lot of flexibility; we ended up deferring aircraft and retained significant flexibility,” said Steve Priest, Jetblue’s chief financial officer. “At the early start of the year to shore up revenue weakness we pulled down capacity… as we face these air traffic control challenges, we’ve actually puled down some capacity in Q3. That really shows discipline and our focus… we will react when we need to.”

JetBlue has also worked to renegotiate its distribution deals, in an attempt to earn more favorable terms than when the previous deals were negotiated and the airline was a smaller industry player.

“We are currently under a full content agreement with our [global distribution system] partners,” said St. George. “It’s important to say we continue to work through the distribution goal we [described] on investors day last year and we’re happy with the progress we’ve made.”

JetBlue executives also detailed the airline’s focus on developing its presence at New York’s JFK Airport, which for now represents operating flights out of additional slots before work begins in earnest on the redevelopment of Terminal 6.

JFK represents a key pillar of JetBlue’s planned growth into the next decade.

“The key reason we’re going forward with this is we have exclusive rights to develop the T6 space,” said Priest. “It’s valuable real estate in an incredibly congested airport… this is really about securing our long-term future.”

Check out JetBlue’s presentation below.

Download (PDF, 821KB)

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Where Millennials and Baby Boomers Agree on Luxury Travel

Skift

Multi-generational travelers at the Acropolis in Athens, Greece. Skift

Skift Take: Demographics always defy preconceived notions, but the mindsets of consumer segments are where the focus should be.

— Laura Powell

Baby boomers or millennials? This is a question is oft-posed by luxury travel marketers. But it’s not simply an either/or question, according to aging expert Ken Dychtwald and his millennial son Zak. Father and son agree that the travel industry should be considering both, albeit with varying emphases.

During a recent Virtuoso conference, the Dychtwalds presented The New Language of Leisure: A Boomer Millennial Smackdown. Why were travel agents paying attention to the father-son duo? Well, for more than 35 years, Ken Dychtwald has focused on lifestyle issues among the baby boom generation. In 1986, he founded Age Wave, a firm that guides companies in product and service development for boomers and mature adults. Meanwhile, his 27-year-old Zak recently returned to the United States after a four-year stint in China. He now heads up China initiatives for the Dilenschneider Group. He also is the author of a forthcoming book from St. Martin’s Press in which he writes about Chinese millennials.

Skift recently spoke with both Dychtwalds to get their views on the generation gap in luxury travel. While the conversation, based on their presentation, focuses on boomer vs. millennial, it is, as the elder Dychtwald notes, “a profound mistake” to forget about Generation X.

Ken Dychtwald is “fascinated by how many in the luxury travel area are gearing an overwhelming amount of attention on millennials.” He believes this strategy is “misguided” and urges luxury marketers to re-set their focus back to the 50-plus set. He cites statistics to back up his argument. “People who are 50-plus have 70 percent of the country’s disposable income and own 76 percent of the total net worth.” The combination of this concentration of wealth, plus a surfeit of time affluence makes boomers “the ideal candidates for luxury travel.”

That said, it’s not a waste of time to consider the millennial market. A report from The Shullman Research Center finds that five million millennials are millionaires. Yes, that’s only half as many as boomers (at 10 million), but it’s an impressive number. As for those forgotten X’ers, there are merely four million millionaires among their ranks.

So, wealth exists among the younger set. And even when it doesn’t, according to Zak Dychtwald, the desire to travel is so keen that millennials are willing to forego other creature comforts in order to hit the road. While their financial resources may not allow them to travel in luxury all the time, they may be able to accumulate enough cash for one upscale trip a year… for now. As Dychtwald the Younger notes, “The drive to live peak experience-filled lives while young pushes us to spend outside our means.”

Millennials are known for valuing experiences over material goods. While some say they no longer feel the need to keep up with the Joneses, the fact is, it’s still about keeping up with the Joneses, but in a different way. “Our mindset,” says Zak, “is that we prioritize experiential affluence. Our generation is no longer craving (houses in the suburbs with) white picket fences. Instead, we want white sand beaches.”

That said, there are plenty of boomers seeking peak experiences, too. “Yesterday’s expectations of what people can be at this stage of life is out the window,” says Ken Dychtwald. “They [boomers] want to keep growing, and they want adventure-filled experiences.”

When it comes back to the basics, it seems that perhaps the two generations are not so different after all, at least when it comes to travel. Even Zak Dychtwald admits that “the millennial mindset was actually invented by enlightened baby boomers.” The bottom line–according to both Dychtwalds–is that luxury marketers need to avoid stereotypes and to rethink ways to market travel in order to appeal to dreams that resonate across generations.

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Former Wyndham Vacation Rentals President Bob Milne Joins Vacasa as COO

With 1,400 employees, Vacasa has been making headlines as the fastest-growing full-service property management company in the vacation rental industry. Currently the second-largest vacation rental management company behind Wyndham Vacation Rentals, Vacasa has raised $40 million, manages 5,300 vacation rental units across 150 markets in ten countries, and is projected to have an inventory of […]

The post Former Wyndham Vacation Rentals President Bob Milne Joins Vacasa as COO appeared first on VRM Intel.

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San Antonio Unites Its Local Innovation Economy 
To Share a New Story with Conference Planners

Skift Take: San Antonio is building on its past as a city of pioneers who once led the country’s expansion into the American Southwest. Today, the new frontier is digital. San Antonians are again moving the nation forward in technology, medicine, energy and other advanced industries, which conference planners can leverage to drive innovation in their organizations.

— Dawn Rzeznikiewicz

Today, cities across the U.S. are evolving as global innovation platforms, supporting the commercialization of new developments in academic and scientific research taking place in both the private and public sectors. To fuel that growth, they need constant infusions of new capital and talent.

One proven way to do that, cities are working together more than ever before to attract conferences in priority industries, and connect their local knowledge base with international thought leaders. In effect, conferences are evolving as global innovation distribution channels that drive progress worldwide, and cities are competing aggressively to host that knowledge exchange.

In San Antonio, for example, the World Stem Cell Summit, the Geospatial Intelligence Symposium, InnoTech, Inc. 5000 and many others are like a direct conduit to the future. They’re innovation incubators and accelerators, drawing on local talent to help change the world.

Although, not everyone is familiar with that scenario taking place here in the heart of San Antonio.

Many conference planners in North America know about the Alamo and River Walk in San Antonio. They’re also probably familiar with the recent $325 million expansion of the Henry B. González Convention Center. Fewer planners, however, appreciate the scope of San Antonio’s booming innovation economy, at the forefront of so much new science and technology discoveries, which they can integrate into their meetings and conventions.

Most people don’t know that San Antonio has the most complete solar energy research and development ecosystem in the country, and the second highest concentration of cybersecurity and intelligence experts after Washington, D.C. The city is headquarters for the U.S. military’s medical research facilities, and one in every six San Antonians is employed in biosciences and healthcare. There are also 18 universities and scientific institutions driving innovation in everything from advanced manufacturing to aerospace.

That infrastructure and talent pool are a big reason why San Antonio is a leader in fields ranging from stem cell research to clean energy, globally.

During the last decade, the City of San Antonio has steered the growth of the innovation economy as outlined in the SA Tomorrow Comprehensive Plan. But as all of the industries scaled independently in their respective communities, there wasn’t a cohesive story to position the city as a collective hub of innovation, as well as an attractive place to network with international colleagues.

Now the local government is working more closely with Visit San Antonio and the San Antonio Economic Development Foundation (SAEDF) to promote the city’s intellectual capital to outside companies that attend, host and/or invest in conferences in advanced industries.

“We are looking at every opportunity on the convention side, and the economic development side, to leverage each other’s capacities to make as big of an impact as we can for San Antonio across all fronts,” says Rene Dominguez, director of the City of San Antonio’s economic development department.

“New organizations like Tech Bloc, Geekdom, LaunchSA and CyberSecurity San Antonio are becoming way more sophisticated in how they go about connecting with the private industry, which includes conferences and events. Because of this, we need to continually up our game in order to be a globally competitive community,” added Dominguez.

SAN ANTONIO TECH DISTRICT: A HOME FOR YOUNG PROFESSIONALS AND DIGITAL PIONEERS

To help elevate San Antonio’s growing innovation economy on a national stage, the many different stakeholders in the city’s public and private sectors needed a new unified story to tell. There needed to be a common vision for everyone in the city to rally around.

To answer that call, Jenna Saucedo-Herrera, president & CEO of SAEDF, has been collaborating with Casandra Matej, president & CEO of Visit San Antonio, to develop new messaging that speaks to all of their audiences.

Primarily, they wanted to marry the region’s strengths as a convention destination for visiting delegates and a hub of high-tech innovation for local residents. They also wanted to connect the growing San Antonio Tech District in the downtown core, the iconic elements of San Antonio’s cultural heritage, and the diversity and livability of the neighborhoods.

In the end, Saucedo-Herrera and Matej both gravitated toward the word “pioneers” to characterize what’s happening throughout San Antonio right now.

As expressed in the above video, the new narrative is a fresh take on San Antonio’s legacy for opening new frontiers. America’s early pioneers built the Alamo and other UNESCO World Heritage missions in the city, operating as bases for westward expansion. Today, San Antonio’s knowledge sectors are building the technologies and advancing the science to connect communities better and empower more people around the world.

The pioneer theme does more than just align the past and future of San Antonio to engage conference planners. It also speaks to the continual innovation driving progress inside companies of all sizes. That especially resonates with young professionals who envision themselves as pioneers striving to change the world in their respective fields.

“San Antonio has always been a pioneering city, and from that, we realized that the common denominator for all of us is, really, young professionals who are looking for an ecosystem where they can thrive,” says Saucedo-Herrera. “If we’re going to be that city of the future in a knowledge-based economy, and if we want folks to think of us across the board as an innovative city, that is really our target demographic. So whatever our messaging is, it has to resonate with young professionals.”

The emerging San Antonio Tech District is evolving as an ecosystem to welcome and support young startups and young professionals. Packaged together and positioned as the front door to San Antonio’s innovation economy in the heart of the city, the Tech District is a knowledge-collision environment for people to share ideas with each other in close proximity to the Henry B. González Convention Center and the city’s most forward-thinking companies.

In effect, the San Antonio Tech District is the new platform for sharing stories with conference planners about San Antonio’s rise as a global innovation accelerator. It is a platform for pioneers.

“We want to make sure that people understand the significance of what meetings bring to our city, and the San Antonio Tech District is where we can easily connect our people and visitors to have that conversation,” says Matej. “At the same time, the District give us exposure in different sector—whether it’s aerospace, clean tech, manufacturing, IT, bioscience, cyber security or military—for meetings and convention planners to see and understand how those industries are growing locally.”

DELIVERING THE PIONEER MESSAGE TO THE WORLD

Three years ago, Visit San Antonio launched the Connect San Antonio liaison program, bringing together local organizations in the tech and science sectors, university and research institutions, and outside conference planners to explore aligned interests. By pooling their resources better, planners could create more enriching conferences, and the city could attract more innovative companies and talent.

Matej says that network building at the community level serves visiting companies in many ways.

“To engage conference planners today, it’s no longer about dates, rates and space,” she explains. “You have to go beyond and show how the destination has the necessary local intelligence to help planners enhance their program. It’s our responsibility to dive deeper into how they can engage the brain power within our community in order to enhance their success for a particular program.”

However, as other cities also adopt the knowledge ambassador strategy, more outreach is needed to continually share the value of San Antonio’s intellectual capital with more potential partners, including conference planners.

Toward that end, a local non-profit accepted the challenge to try and “develop wider national and global recognition of San Antonio’s strengths and quality of life, and to secure San Antonio’s reputation on the global map of leading cities. To try and achieve this goal, one of the tactics used was a San Antonio-themed pop-up space with dedicated event programming at South by Southwest in 2016 and 2017. Dubbed “Casa San Antonio,” the venue provided a stage for mayors, startup founders, entrepreneurs and other leaders across the country to share new developments around the theme of smart cities.

By incorporating government and business leaders from other destinations, the Casa San Antonio experience wasn’t solely about promoting San Antonio’s innovation economy. Rather, it positioned San Antonio as a knowledge forum for discussing new ideas in emerging and existing industries by bringing together a diverse spectrum of innovative people from all over.

That’s how Matej want planners to envision San Antonio—a platform for co-creation and collaborative growth across all sectors.

“There is this passion among our people who see what San Antonio can be in 20 to 40 years,” she says. “When you look at the hundreds of millions of dollars of investment in downtown recently, you can see that there’s a movement to make our destination better. Our organization’s goal is to be more strategic and aligned with what everyone is doing, instead of everyone being in their own silos.”

Saucedo-Herrera emphasizes that planners gravitate toward San Antonio because they can get things done, and everyone’s voice will be heard.

“We pride ourselves on a collaborative environment where you have access to key decision-makers within a 20-minute time frame,” she says. “If you need to get something to happen, we’re a big city but we have a small-town feel, right? In San Antonio, you can get to the right people, and they will listen.”

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Airbnb to Debut Exclusive Travel Experiences in Japan

Airbnb

A current Airbnb Trips experience in Tokyo, Japan. Airbnb is working with a venture-backed financial-tech company to develop exclusive travel experiences for visitors to Japan. Airbnb

Skift Take: A smart move by Airbnb to grow its presence in Asia, especially in Japan, where tourism has been at record highs in the past few years, with few signs of slowing down.

— Deanna Ting

Airbnb Inc. is looking to deliver experiences in Japan that they can’t get anywhere else, by offering customers the opportunity to stay in temples, train stations and other unusual settings.

The San Francisco-based home-sharing startup will work on the initiative with Blue Lab Co., a financial-technology venture backed by Mizuho Financial Group Inc., the companies said in a statement Tuesday.

Japan is Airbnb’s fastest-growing market, now with more than 53,000 listings. More than 24 million tourists visited Japan in 2016, topping the record for a fourth straight year, according to the National Tourism Organization. After years of regulatory hurdles, Japan’s government passed a law earlier this year setting out rules for home-sharing. That’s spurring an effort to expand the number and variety of lodgings available to visitors.

“This is a great way to bring together different businesses with different ideas to provide better services for customers to enjoy and experience the real Japan,” Daisuke Yamada, president of Blue Lab, said at a news conference in Tokyo. “With our connections and financial knowledge, and Airbnb’s international platform, we hope to promote the excellence of Japanese service.”

Airbnb and Blue Lab are aiming to introduce more hotel-like extras, such as room cleaning and personalized services for older visitors. Other tourists may want to participate in local events, such as praying at a temple or joining a festival, they said. Globally, Airbnb has been looking at new ways to provide hotel-like services to higher-paying customers.

Additionally, Mizuho Bank said it would help property owners and enterprises by extending financing and other services. Blue Lab, backed by between Mizuho and venture firm WiL LLC, is seeking to offer payments services, blockchain-based products and other financial technology services.

There’s also local competition. Rakuten Inc. and real estate listing operator Lifull Co. announced plans last month to enter the home-sharing business. HomeAway, part of Expedia Inc., also offers home-sharing lodgings in Japan.

Airbnb, which is valued at $29 billion [Skift Editor’s Note: The most recent valuation pegs the company’s worth at $31 billion], accommodated 3.7 million visitors in Japan last year. With Tokyo set to host the Rugby World Cup and the Olympic Games, the government expects 40 million visitors by 2020.

©2017 Bloomberg L.P. This article was written by Naomi Schanen from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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New Research Report: A Deep Dive Into Ctrip and the China Online Travel Market 2017

Skift Take: This report represents the launch of our coverage of Asia, offering insights into both Ctrip and the online travel market more broadly.

— Dave Montali

Today we are launching the latest report for our Skift Research subscribers, A Deep Dive into Ctrip and the China Online Travel Market 2017.

For this report, we traveled to Shanghai and interviewed the CEO, CFO, and COO of Ctrip, the CFO and head of China for Ctrip’s Skyscanner, attended ITB China, met with hotel executives, spoke with top private equity investors focused on the China travel market, and stopped by Shanghai Disneyland to gauge how a Western brand can successfully penetrate the market via partnership and respect for local culture.

This resulting analysis is as much a deep dive into Ctrip’s operational and strategic outlook, as it is an assessment of the Chinese travel market overall. Strong economic growth in China over the past decade has led to a rise in the middle class, a boom in domestic leisure travel, and more recently, a robust outbound market that has become the largest in the world.

Preview and Purchase

In the first section of the report, we dig into Ctrip’s strategic initiatives, provide our expectations for its financial results, offer a valuation framework, and discuss Ctrip’s M&A strategy and key investments. To get a better sense of trends beyond what is provided in public financial statements, we partnered with both YipitData and ForwardKeys.

The former provides hotel data on reservations, rooms, and properties broken down by country or region. The latter gives outbound and inbound airline booking data to and from: Japan, South Korea, Taiwan, Hong Kong, Macau, Thailand, Australia, U.S., Canada, UK, France, Spain, Germany, and Italy. We provide both datasets in the report.

In the second half of the report, we focus on the industry as a whole, looking at the dynamics at play in the domestic, outbound, and inbound markets. There is immense opportunity for companies and destinations in China, but the market has unique risks. We discuss these using the rapid rise and fall of outbound travel to South Korea as a case study. We also spoke with management at Hyatt in Seoul to get a better sense of the dynamics playing out.

Ctrip has gobbled up its pure OTA competitors while Baidu, Alibaba, and Tencent are potential partners and threats. These three companies, known as the “BAT” group in China, have their tentacles touching varied parts of the travel ecosystem. We discuss each of these key players in the report.

Preview and Purchase

Meituan-Dianping was created in 2015 after the merger of Meituan (a “Groupon-like” business backed by Alibaba) and Dianping (a restaurant review app backed by Tencent). The business model is online-to-offline where price conscious consumers purchase discounted “coupons” to things like restaurants, hotels, and movies and then contact the entity directly to book it themselves if there is availability. Meituan could move upscale to compete with Ctrip while its lower-end price-point already fights for the Qunar consumer. We also look at LY.com, in which Ctrip and Tencent are co-investors. The company is the largest OTA in China outside of the Ctrip owned brands.

What You Will Learn From This Report

  • Overview of Ctrip’s products and strategy
  • In partnership with YipitData, reservation, property, and room data for China, Africa, Asia ex-China, Canada, Caribbean, Europe, Mexico and Central America, the Middle East, Oceania, South America, and the U.S.
  • How Ctrip uses two types of agency models – guaranteed allotment and on-request
  • Air travel trends in China
    In partnership with ForwardKeys, inbound and outbound booking data for Japan, South Korea, Taiwan, Hong Kong, Macau, Thailand, Australia, U.S., Canada, U.K., France, Spain, Germany, and Italy
  • What caused the Qunar airline boycott and how it was resolved
  • Why Ctrip strategically invested in bus operators in the U.S.
  • Mobile and online booking trends in China
  • Takeaways from our trip to Asia
  • Ctrip’s financial trajectory and our valuation framework
  • Rationale and impact of key M&A transactions both through public financial filings and management interviews
  • The story of how the Skyscanner deal came about and closed via a lengthy interview with Skyscanner’s CFO
  • Why we expect margin to ramp as Ctrip integrates Qunar and eLong and mitigates aggressive price competition
  • Behind the scenes look at the Qunar and eLong investments from two of the leading private equity investors in China
  • Trends across domestic, inbound, and outbound travel
  • Ctrip market share estimates
  • WeChat and broader outbound data, analysis, and strategy via our partnership with Dragon Trail Interactive
  • The rapid rise and fall of outbound travel to South Korea as a case study on the risk and rewards of outbound Chinese travel
  • What the “BAT” (Baidu, Alibaba, Tencent) companies are doing in travel directly and through investments
  • A look at two key competitors in LY.com and Meituan-Dianping
  • The current value of the financial stake by Priceline and our expectations for the partnership
  • Expedia’s divestment of eLong and what that means for its China strategy
  • How TripAdvisor is focusing almost exclusively on the higher-end outbound travel market
  • Broad China travel insights from leading hotels including Marriott, Peninsula Hotels, Hyatt, Hilton, and Wyndham

Preview and Purchase

Executives Interviewed

Jane Jie Sun, CEO, Ctrip
Cindy Xiaofan Wang, CFO, Ctrip
Maria Sun, COO, Ctrip
Colin McLellan, CFO, Skyscanner
Steven Pang, General Manager, China, Skyscanner
Daniel Pan, Chief of Staff, China, TripAdvisor
Jixun Foo, Managing Partner, GGV Capital
Tony Jiang, Co-Founder & Partner, Ocean Link
Lawrence Ng, Vice President, Sales & Marketing for Greater China, Marriott International
Frank Sanders, General Manager, Shanghai Marriott Hotel City Centre
Jin Qian, Area President, Greater China and Mongolia, Hilton
William Zhao, VP, Development & Strategic Alliances, Wyndham Hotel Group
Rieko Kibe, Director of Marketing, East China, Peninsula Hotels
Cecilia Lui, Regional Director of Communications, China, Peninsula Hotels
Gloria Lu, Area Director of Sales and Marketing, Korea, Hyatt
George Cao, Co-Founder & CEO, Dragon Trail Interactive
Michaela Mentasi, Marketing Director, Dragon Trail Interactive
Roy Graff, Managing Director, EMEA, Dragon Trail Interactive
Dylan Zhang, CEO, Varitrip
Thomas Griffiths, Director of Distribution, Varitrip
Nicola Farronato, CEO and Founder, B-Sm@rk

Data Partners

ForwardKeys
YipitData

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Ryan Wolkov

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Beyond Pricing Acquires Smart Host

Vacation rental revenue management software provider, Beyond Pricing, today announced the acquisition of Smart Host, a Techstars alum which provides vacation rental owners and managers with pricing intelligence and recommendations based on competitive sets. As the industry grows in both size and sophistication, revenue management and dynamic pricing that was once only available to large […]

The post Beyond Pricing Acquires Smart Host appeared first on VRM Intel.

Ryan Wolkov

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Author: Ryan Wolkov

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