Skift Breaking News Blog

Short stories and posts about the daily news happenings around the travel industry.

Hotels

Indian Hotels Company Had The Best Quarter in Its History: Here’s Why

9 hours ago

Tata Group-backed Indian Hotels Company (IHCL) reported what Puneet Chhatwal, its managing director and CEO, called the best first quarter in the company’s history.

The hotel brand reported strong free cash flows of almost $25 million and net cash positive of $33 million in its consolidated and standalone financials for the first quarter ending June 30, 2022.

A surge in demand across markets and segments, with occupancy and rates exceeding pre-Covid levels and backed by an asset-light model, Indian Hotels Company achieved a milestone earnings before interest, taxes, depreciation, and amortization of $51 million, compared to a loss of $15.5 million in the same quarter last year, said Chhatwal.

The company reported a profit after tax of $21 million against only $750,000 in 2019-20.

“The trend is very positive in India and we have outperformed in almost every market on the domestic front, except for a marginal lag in Rajasthan,” Chhatwal said.

With revenue per available room levels exceeding that of the first quarter of 2019-20 in Indian metropolitan cities, Chhatwal, said, “The cities of Mumbai, Bengaluru and New Delhi are back.”

Mumbai Bengaluru and Delhi are also important for the hotel brand as it has owned or licensed assets in these cities. “We account for those revenues and a change in the revenue numbers has a significant impact on our portfolio and our performance,” Chhatwal said.

The company has signed 10 new hotels in the first quarter, with three hotels each under the Taj and Ginger brands, and two hotels each under the SeleQtions and Vivanta brands, and expects to sign 15 more for the rest of the year.

With its presence in over 100 locations in India, Indian Hotels Company has further strengthened its pan-India footprint with the opening of four new hotels in the current fiscal.

“So our pan India footprint is stronger and is getting even further stronger as each month and each quarter goes by through our aggressive asset-light growth strategy that has been in place,” Chhatwal said, adding that the asset-light model is not only driving growth, but is also helping the brand find the right balance which is in line with its Ahvaan 2025 strategy.

Even as IHCL is getting ready to launch a new website and a new mobile app, the hospitality brand is clear that the backbone of the company was, is and in the foreseeable future remains the Taj.

“We are very clear that all brands associated directly or indirectly with the Taj are perceived as premium brands in their respective segment,” Chhatwal said during the first quarter earnings call.

“One thing which we have been very careful about in the last few years is the premiumization of our portfolio. Any business that we enter in we want our offering to be in the premium level in their relative positioning.”

The company’s long-term growth will also focus significantly on digital enablers such as the super app — Tata Neu. “The Tat Neu integration has enabled us to get one million new members in four months and a 50 percent growth in our loyalty base,” Chhatwal said.

Hotels

Oyo Buys Nordic-Based Vacation Rental Operator Bornholmske Feriehuse

1 day ago

In its endeavor to expand as a preferred full-stack vacation homes provider, Oyo has acquired Denmark-based vacation rental operator — Bornholmske Feriehuse.

Oyo has made the acquisition through its subsidiary DanCenter. Bornholmske Feriehuse has over 700 homes on its platform and according to an Oyo release the company is expected to clock more than 250,000 guest nights in 2022.

The acquisition underlines Oyo’s commitment to invest in Denmark towards accelerating the growth of travel and tourism in the market.

An initiative by Denmark’s Ministry of Foreign Affairs — Invest in Denmark — helps attract and retain foreign investments in the country by providing a customized one-stop service for foreign companies, looking to set up or expand business in Denmark.

The demand from foreign guests in holiday homes has been particularly high, said Rasmus Lund, director of Bornholmske Feriehuse. Lund hoped that the collaboration with Oyo would give Bornholmske Feriehuse the opportunity to keep up with demand, while allowing homeowners to benefit from the many online portals that DanCenter collaborates with.

“The agreement would help our many holiday home owners achieve a higher rental percentage, while also contributing income and jobs to Bornholm,” said Lund, who will continue as the director of the vacation rental company.

The acquisition in Bornholm will strengthen Oyo’s presence in Europe. In May, Oyo acquired Croatia-headquartered Direct Booker, which has more than 3,200 homes.

Oyo already owns vacation rental brands in Europe such as Belvilla (Belvilla by Oyo), DanCenter, Danland and Traum Ferienwohnungen offering fully-managed private homes across the Netherlands, Belgium, Germany, Austria and Croatia.

Airlines

Majority Owner of India’s SpiceJet Looks to Sell Part of His Stake

5 days ago

Ajay Singh, Chairman and Managing Director of Indian carrier SpiceJet, is said to be in talks with a Middle Eastern carrier and an Indian conglomerate to partially sell a portion of his stake in the budget airline.

Singh holds around 60 percent stake in the airline.

“The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations,” a SpiceJet spokesperson said.

A major Middle Eastern airline has expressed interest to pick a 24 percent stake and a board seat in SpiceJet. An Indian business conglomerate has also approached Singh for a stake in the airline, IANS reported while quoting a source.

With two carriers — Akasa and Jet 2.0 — set to debut in India this year, the stake sale would help bring much-needed equity infusion into SpiceJet, India’s third largest airline by market share.

The airline posted a net loss of $158 million in the April-December period of 2021, and is yet to declare financial results for the January-March period of 2022.

Last year, Indian aviation watchdog Directorate General of Civil Aviation (DGCA) noted that SpiceJet had been operating on “cash and carry” method and approved vendors were not being paid on regular basis.

On August 2, SpiceJet stated that it had entered into a full and final settlement with the Airports Authority of India and has cleared all outstanding principal dues of the airport operator. “With this, SpiceJet will no longer remain on “cash and carry” at AAI run airports across the country and will revert to advance payment mechanism for daily flight operations,” a statement from the airline read.

Last year, SpiceJet had also announced its plan to transfer its cargo and logistics services on a slump sale basis to its subsidiary SpiceXpress to help the company raise funds independently. “The proposed hiving off of SpiceXpress is proceeding as per plan,” the airline spokesperson said.

Last month, DGCA issued a show-cause notice to Spicejet after its aircraft were hit by at least eight incidents of technical malfunction since June 19. The incidents included crack in the aircraft’s windshield, engine catching fire, weather radar malfunction and fuselage door warning.

On July 27, the airline was asked to operate only 50 percent of its approved flights for summer schedule for eight weeks.

Online Travel

Thai Energy Giant PTT Will Invest in Traveloka

2 weeks ago

Thailand-based public firm PTT Oil and Retail Business (PTTOR) is set to invest in Indonesian travel superapp Traveloka, through its subsidiary, PTTOR International Holdings Singapore.

While the value of the investment has not yet been disclosed, the retail arm of Thailand’s state-owned energy giant PTT, through its collaboration with Traveloka, aims to provide additional lifestyle solutions to its customers in line with its strategy to become a one-stop solution for all lifestyle needs.

Having so far raised a total of $1.2 billion in funding, Traveloka was said to be in talks for another funding round of more than $200 million, after its plans to go public through a special acquisition company failed to take off.

Last valued at $3 billion, there had been speculations that the online travel and lifestyle company could go public via a traditional initial public offering in the U.S. instead.

The Indonesia-based online travel unicorn that has its presence in Singapore, Malaysia, Vietnam, Thailand and Philippines has since been seeking new investment opportunities.

Besides offering travel, tourism and accommodation options, Traveloka has now developed into a superapp allowing users to book healthcare, financial services products and food delivery.

With PTT Oil and Retail Business’ expertise, Traveloka aims to capture the demand and provide enhanced solutions to its customers, while also creating new opportunities for its merchant-partners in Thailand and the region.

“We see immense value from the collaboration as we see the region growing at a rapid pace, leading to greater opportunities in the industry,” Ferry Unardi, co-founder and CEO of Traveloka, said.

As tourism is one of the major economic contributors to the Thai economy, PTTOR aims to strengthen its focus on the sector through this initiative while providing growth opportunities for small and medium enterprises in the travel sector.

“Given Traveloka’s position as a leading online platform for travel and lifestyle services in Southeast Asia, as well as its strong technology capabilities, I believe there is a range of areas we can explore together with Traveloka, to further enhance our tech capabilities,” Jiraphon Kawswat, president and CEO of PTTOR, said. 

Tourism

Nepal Bars TikTokers From Some Tourist Sites

3 weeks ago

Nepal’s would-be social media influencers would now have to scout for new locations as the country has barred shooting of TikTok videos at some heritage sites.

Popular tourist sites in the Nepalese capital of Kathmandu, including Boudhanath Stupa, the Ram Janaki temple and Gadhimai temple as well as the Buddhist pilgrimage site of Lumbini now display signs reading “No TikTok.”

Owned by the China-based tech giant ByteDance, TikTok is one of the most popular social media apps in Nepal. According to a 2022 survey, more than 55 percent of respondent in Nepal said they had been using the app.

“Don’t make ads, make TikToks,” says a new campaign launched by TikTok for Business. The app is one of fastest growing social media platforms with over a billion users. Users spend an average of 52 minutes on the app every day.

Many in Nepal blame TikTokers for creating a nuisance by playing loud music at sites frequented by pilgrims from all over the world, according to a Rest of World report. The same tourists, who some believe frequent these places after watching such TikTok videos.

Studies have revealed that travelers are increasingly relying on social media to make their travel choices. However, reports also state the impact of sudden destination popularity through social media.

The local community at in Hainan Island’s Tropical Rainforest National Park have had to deal with a massive tourist flow after various TikTok videos went viral.

Airlines

India’s Newest Carrier Akasa Air to Begin Commercial Operations From August 7

3 weeks ago

Akasa Air, India’s newest airline, will be taking to the skies on August 7 with its first flight connecting the country’s financial center — Mumbai with Ahmedabad in western India.

Akasa will operate 28 weekly flights between Mumbai and Ahmedabad. From August 13 onwards, the airline will start operating 28 weekly flights between Bengaluru, more popularly known as India’s Silicon Valley, and Kochi — a city in the coastal state of Kerala.

The bookings for flights are now open. The airline that claims to have India’s youngest and greenest fleet, will be operating the brand-new Boeing 737 Max aircraft on both routes. Akasa plans to add two aircraft to its fleet each month, in its first year.

In an interview with Skift, Vinay Dube, the airline’s founder and CEO, had highlighted that the airline’s network strategy would focus on establishing a strong pan-India presence linking metropolitan cities to Tier 2 and Tier 3 cities across the country.

“We will adopt a phased approach to support our network expansion plans, progressively connecting more cities, as we add two aircraft to our fleet each month, in our first year,” said Praveen Iyer, co-founder and chief commercial officer of Akasa Air.

Calling the airline unlike anything experienced in the category thus far, Dube reiterated the importance of providing an efficient customer service, a reliable and dependable network, and affordable fares.

The airline will be offering buy-on-board meal service through Cafe Akasa.

Airlines

Saudi Arabia to Slash Airport Fees to Compete With Rival Hubs

3 weeks ago

After offering financial incentives to carriers to fly “unprofitable” routes, Saudi Arabia is now luring airlines by cutting airport charges by as much as 35 percent in its bid to compete with the world’s biggest airline hubs, most of which happen to be in the Middle East region.

Airport charges at three major airports — Riyadh, Jeddah and Dammam — would be reduced by anywhere between 10 percent and 35 percent, Saudi Arabia’s General Authority of Civil Aviation said. The decreased airport charges would be coming into force later this year.

To maximize growth, airports in the kingdom would be further allowed to reduce charges below the announced caps, the civil aviation authority announced at the Farnborough Air Show. 

In its pivot from oil to diversify into other sectors, Saudi Arabia is looking at tourism in a big way to bolster the country’s economy and then there’s the ambitious goal to attract 100 million tourists by 2030.

This development comes days after Saudi’s civil aviation authority also announced the decision to open the nation’s airspace to all commercial carriers that meet the country’s civil aviation authority’s overflying requirements.

Under the decision, Saudi airspace is now open to flights operated through Israel and by Israeli carriers, a decision which complements Saudi’s efforts to consolidate its position as a global hub. 

US President Joe Biden called the decision “the first tangible step in the path of what I hope will eventually be a broader normalization of relations.” 

Tourism

China Vows to Relax International Travel Curbs

3 weeks ago

In a marked change of sentiment, China has vowed to strengthen efforts to open international travel, by resuming and increasing passenger flights in an orderly way and by steadily improving visa and Covid testing policies.

China will make Covid control measures more targeted and well-calibrated under the premise of ensuring safety against Covid infections, Chinese premier Li Keqiang said. This is the first time an official from the top Chinese leadership has commented on relaxation of international travel.

He said the country would also look to facilitate cross-border travel for labor services in a prudent and orderly manner. “All international students may return to China to continue their studies should they wish so,” Keqiang added.

According to China’s education ministry, until the end of 2018, at least 492,185 international students from 196 countries and regions were studying in China. International students have repeatedly petitioned the Chinese government to lift the nearly two-year ban on their return. From June onwards, China has been gradually allowing students from some Asian nations to return.

Amid anger over the fallout from China’s commitment to zero-Covid policy, Keqiang, a trained economist, had recently urged local government officials to immediately take action to stabilise the situation.

Promoting stable growth of the world economy is a common and urgent task for all, the Chinese premier said while speaking at the World Economic Forum’s special virtual dialogue.

On the state of the Chinese economy, he noted that in the second quarter this year, under the impacts from a new round of Covid flare-ups and other factors beyond expectation, downward economic pressure rose steeply, and major indicators tumbled in April. In May, the decline in major economic indicators slowed. In June, the economy stabilized and rebounded.

“That said, we are keenly aware that recovery of the economy is not yet firmly established, and painstaking efforts are required to keep overall economic performance stable,” he added.

Highlighting China’s development potential, he said, the country would effectively coordinate Covid-19 response and economic and social development.

“We will continue to take development as the basis of and key to overcoming all challenges China faces, and work hard to bring the economy back to a normal track as soon as possible,” he added.

Mergers and Acquisitions

MGM in Talks With Genting for Potential Purchase of Resorts World Sentosa

4 weeks ago

Casino-resort Genting Singapore is in talks with bidders for the purchase of Resorts World Sentosa and US-based MGM Resorts International is one of the top contenders, according to Bloomberg reports.

While MGM’s recent talks with Malaysia’s Lim family, that owns 53 percent stake in Genting Singapore, failed to yield an agreement, the Singapore-based casino operator is said to be in early-stage discussions with other potential buyers, as per Bloomberg.

As Covid outbreaks have led to a full closure of casinos in Macau — the Las Vegas of Asia, Singapore’s eased entry restrictions make it more open to international tourists.

A prospective buyer of Genting would also have to worry less about competition as Genting and Sands have an agreement with the Singapore government that limits the amount of gaming properties to the two entities, leaving Marina Bay Sands as its only competitor.

The Singapore Tourism Board had also reached an agreement in 2019 with Las Vegas Sands and Genting Singapore allowing them to significantly expand their respective integrated resorts.

Looking to decrease its dependence on Macau, where all casinos are closed and Japan very cautiously reopening to international tourists, MGM may be keen to explore other Asian destinations for its casino business.

Last year, speaking at the Skift Hospitality and Marketing Summit, William Hornbuckle, CEO and president of MGM Resorts International, had spoken about plans to expand in Asia.

Genting Singapore operates Resorts World Sentosa, an integrated resort on the Sentosa island, off the southern coast of Singapore. The key attractions at Resorts World Sentosa include a casino, the Universal Studios Singapore theme park, the Adventure Cove Waterpark, as well as the Singapore Oceanarium, which is the world’s second largest oceanarium. 

Hotels

Asia-Pacific Hotel Investment Volumes Rose to $7 Billion in First Half of 2022

4 weeks ago

Investment in the hotel sector in Asia Pacific continued to recover as investment volumes totaled $6.8 billion in the first six months of 2022, according to real estate brokerage firm JLL’s report.

Capital deployment into the region’s hotels sector showed a return to pre-pandemic levels, registering a 12 percent increase compared to 2019.

Countries in the Asia-Pacific region are expected to experience a fast pace of recovery in the second half of 2022, Skift Research noted recently in its Asia Pacific Accommodation Sector Market Estimates 2022.

In terms of investment volume Japan received the maximum capital —  $1.8 billion, followed by Korea’s $1.7 billion, and Greater China, including Hong Kong ($1.6 billion).

A strong domestic and international tourism demand and the recent devaluation of the Japanese Yen would drive investors to acquire hotel assets in Japan, JLL noted.

JLL also expected further price reductions of hotel assets and forecasts China’s hotel transaction volume to total approximately $2 billion in 2022.

Strong recovery was witnessed in countries like Singapore ($899.7 million), Maldives ($205.5 million), and Indonesia ($159.6 million).

The activity was more subdued in Australia ($145.5 million) and Thailand ($37.7 million), however, JLL noted that these countries would witness greater investment in the second half as numerous marque deals would be closing.

More hotels are entering the Thai market as sellers are under pressure to sell, noted JLL and forecast that transaction volumes would reach close to $300 million this year.

While the 75 transactions in the first half of 2022, were down 33 percent compared to the first half of 2019, the 19,822 rooms transacted during the first half of 2022 was 30 percent higher compared to the first half of 2021 and 9.4 percent compared to 2019.

“The increase in deal activity was influenced by a spike in portfolio transactions as institutional investors sitting on dry powder seek to deploy their capital more efficiently,” the report noted.

However, according to JLL, ongoing momentum will likely be challenged by growing macroeconomic and geopolitical headwinds in the second half of 2022.

“We remain steadfast in our conviction that total Asia Pacific hotel investment volume will cross the $10 billion mark despite the scarcity of assets coupled with macro and geopolitical headwinds that will continue to influence capital activity,” said Mike Batchelor, CEO, Asia Pacific, JLL Hotels and Hospitality Group. 

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