HVS Monday Musings: Indian Hotels Sector – 2020 in Review

By Mandeep S Lamba and Dipti Mohan
2020 has been an unprecedented year with significant disruptions for the Indian hotels sector. The crisis compelled hotels to think unconventionally. As occupancy and RevPAR reached an all-time low, hotels were forced to implement cost optimization techniques and find innovative ways to utilize their assets. The onset of the festive season brought some much-needed cheer towards the end of the year, as people started travelling again, indicating the first signs of a gradual recovery in the sector.

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Singapore Tourism Board and Studio Dragon Partners Up to Promote Singapore

Singapore Tourism Board (“STB”) signed a three-year Memorandum of Understanding (“MoU”) with Studio Dragon Corporation (“Studio Dragon”), one of South Korea’s leading drama production, marketing, and distribution company, to promote Singapore to South Koreans through the production of Korean dramas in Singapore. The collaboration marks Studio Dragon’s first collaboration with a National Tourism Organisation. STB will play an advisory role for Studio Dragon through determining locations, products, and cultural elements to be featured in dramas. Both parties will also embark on a joint marketing effort to promote activities related to the drama productions filmed in Singapore when travel restrictions ease. Mr Keith Tan, Chief Executive of STB, is confident that the partnership to co-produce Korean dramas in Singapore will boost Singapore’s tourism recovery post-pandemic. The Chief Executive of Studio Dragon Corporation, Mr CK Kang, hoped that the partnership will also act as a platform to explore other IP-related projects focusing on dramas in the future. This partnership aligns with STB’s key marketing strategy in South Korea, one of Singapore’s top source markets that ranked ninth out of the 15 top visitor source markets in 2019. There were approximately 646,000 South Koreans that visited Singapore in 2019, a 3% increase from 2018.

Malaysia Launched 2020 – 2030 National Tourism Policy

The National Tourism Policy (“DPN”) 2020-2030 which was launched virtually by Prime Minister Tan Sri Muhyiddin Yassin on 23 December 2020, aims to strengthen Malaysia’s competitiveness as the preferred tourism destination, encourage sustainable tourism development and plan for disaster preparedness to drive new economic growth. The six-pronged strategy plan includes governance transformation, inclusive investment tourism zones, enhancing digitisation, enriching tourist experience and satisfaction, strengthening commitment to sustainable tourism, and increasing human capital capacity in tourism sub-sectors. Under the policy, Special Tourism Investment Zones will be created to enhance collaboration between the public and private sector and attract more local and foreign investments for tourism developments. Mr Muhyiddin also mentioned the importance of developing a digital technology-based tourism industry as it can strengthen the network between industries and promote new innovative sub-sectors in the tourism industry to create more business and employment opportunities. Additionally, he stressed the Perikatan Nasional government’s commitment to balance the development, preservation and conservation of the environment, culture and heritage while promoting tourism development.

The Delivering Group and Valor Hospitality Partnership to Cater to Growing White-Label Demand in Asia Pacific

Hong Kong-based hospitality and tourism marketing company, The Delivering Group (“DG”), have entered a partnership with US-based white-label hotel management specialist, Valor Hospitality Partners (“VHP”) to jointly leverage their services and client bases to provide white-label operational management services, as well as sales and marketing support to hotels and resorts globally. The partnership will prioritise independent hotels in the Asia-Pacific and Greater China regions, which is expected to gradually rebound from the coronavirus epidemic in 2021. Mr Mark Simmons, the co-founder of DG, stated that independent hotel owners in Asia are looking to expand their brand, and would require support from white-label hotel management specialists. This alliance is part of DG’s strategy in forming a coalition that provides various solutions for travel and hospitality firms. To date, DG has partnered with six other solution providers: Absolute Hotel Services, Jiffy, Cube, Book Tech, Valor Hospitality Partners and Riviera. These firms specialise in a myriad of disciplines, which include sales, marketing, branding, public relations, digital marketing, revenue management, distributions, and operational management. VHP currently owns and operates over 75 hotels worldwide.

New Airline Plans Unveiled as Japan Eases Travel Restrictions

As travel restrictions in Japan ease, Hong Kong Airlines Limited plans to resume flights from Hong Kong to Osaka Kansai twice a week from 1 January 2021 onwards. Flights to Tokyo Narita will also be increased from once to twice a week. Visitors do not have to undergo Covid-19 testing prior to departure and upon arrival. However, visas will still be required, and visitors are subjected to a 14-day quarantine. Ahead of the Tokyo Olympics in 2021, Japan is looking to remove the 14-day quarantine and offer more airline routes with better flight connections. Meanwhile, Qantas Airways Limited and Japan Airlines Co. Limited (“JAL”) have submitted their plans to form a five-year joint business venture to launch new routes between Japan, Australia, and New Zealand. Once approved, the joint venture is expected to commence in July 2021. The venture is an expanded codeshare relationship with benefits including optimised schedules on flights, enhanced frequent flyer benefits, more premium travel opportunities, as well as the coordination of both airline’s pricing, schedules, sales and tourism marketing to deliver new and improved travel products to customers.

Absolute Share Price Performance, as on 1 January 2021