Tag Archives: Abercrombie & Kent

Coronavirus already impacting travel beyond China air routes

Posted on by
Reply
Coronavirus already impacting travel beyond China air routes
Photo Credit: Rangizz/Shutterstock

The travel industry is bracing for a potentially serious downturn of unknown length as the coronavirus continues to spread, forcing cancellations of flights, tours and cruises in China and threatening to create a global tourism slowdown.

While most industry players said it was too early to predict the ultimate impact, investment analysts said the growing number of travel warnings and bans related to the virus, combined with election-year politics in the U.S. and geopolitical tensions, were worrisome in terms of the financial health of the industry in 2020.

“The tourism industry is already facing a number of headwinds, including ongoing uncertainty over the terms of the U.K.’s upcoming Brexit withdrawal and intensifying geopolitical tensions between a number of powerful nations,” said Ben Cordwell, travel and tourism analyst at the U.K. data and analytics company GlobalData. “These factors, combined with the coronavirus outbreak, could mean a tough year lies ahead for the international tourism industry.”

While some outbound tours and China-based cruises were cancelled, U.S. tour operators were mostly taking a wait-and-see approach, noting that this is the off-season for travel to China; group travel and cruises typically pick up in March.

Airlines felt the immediate brunt, with British Airways becoming the first carrier to halt all travel to China and others following suit.

Austin Horowitz, a senior aviation management consultant for ICF, said that even in a best-case scenario, demand for air travel to China would take a severe hit in the near term.

“The duration of how long this goes on until it is contained will have a significant impact on how fast the recovery is,” Horowitz said of travel demand.

A recent IATA analysis showed that pandemic outbreaks can have a major impact on air service demand but that demand also recovers quickly. The World Health Organization has not classified coronavirus as a pandemic, but it is likely to do so.

During the most significant pandemic of this century, the 2003 SARS outbreak in southern China that killed nearly 800 people and afflicted more than 8,000, Asia-Pacific airlines saw the number of monthly miles travelled by passengers bottom out at 35% below pre-pandemic levels.

Over the course of 2003, revenue miles flown were down 8%, causing $6 billion in lost revenue. However, monthly passenger numbers at Asia-Pacific carriers had returned to pre-SARS levels within seven months of the start of the crisis.

Other pandemics, such as the 2015 MERS flu outbreak in South Korea, had a shorter-lived effect. The first month of the outbreak brought a 12% decline in travel to and from South Korea, IATA said. However, volume began to recover after just two months.

“While there are risks that this outbreak could cause a sizeable disruption, history indicates that any effect on air transport would be temporary,” IATA said in a statement.

Cordwell, too, said that while it was hard to predict best- and worst-case scenarios, “I do think the market is quite resilient. People are not going to stop travelling. … I do think the industry will definitely bounce back.”

Travel advisors, meanwhile, were scrambling to deal with the uncertainty.

“It has been a horrible experience with travel plans,” said Craig Hsu, vice president of Travel Design USA, which specializes in travel to Asia. “The mood of our travellers [is] very concerned and worried. We have cancelled multiple trips, including a large group that was supposed to travel to Wuhan in March. Luckily, the airlines and cruise lines worked with us for a full refund to our clients.”

Although acknowledging that his advisors were inundated with calls, he said the impact had been much greater in 2003. But he also pointed out that U.S. consumer demand for travel to China was much higher back then.

“SARS was huge,” he said. “People were more interested in travelling to China during that time versus now,” a shift that he attributed to trade and political tensions between the U.S. and China.

Agents said they also were starting to see apprehension about travel beyond China.

For example, Joan Novack, an independent advisor with a Travel Edge affiliate in New York, said she has two clients, women in their mid-80s, travelling to Southeast Asia with Abercrombie & Kent starting Feb. 24. One of the clients still wants to take the trip, she said, but the other is reluctant after hearing news reports about the spread of coronavirus.

ASTA advised agents against making any recommendations to clients about whether or not to travel to affected areas, instead of encouraging them to direct clients to the Centers for Disease Control and Prevention for the most up-to-date recommendations related to coronavirus.

“Ultimately, it is the traveller who must make that decision, ideally doing so in an informed manner and in light of his or her own individual risk tolerance,” ASTA said in a statement.

Cruise lines with China-based ships last week began cancelling departures through early February. And some lines implemented stricter preboarding health screenings. Likewise, as of last week, more than 20 U.S. airports were screening passengers arriving from China.

As far as the long-term impact of coronavirus on cruise lines, UBS financial analyst Robin Farley said that Royal Caribbean Cruises Ltd. (RCCL) is the most exposed to the China market, where it has about 6% of its deployments in 2020, followed by Carnival Corp. with 5% and Norwegian Cruise Line Holdings with less than 1%. She said that while Chinese passengers are growing rapidly as a source in other parts of the world as well, “Chinese passenger travel to other markets may not be as impacted by these concerns.”

Farley also said that early checks had indicated that the coronavirus had not impacted North American cruise bookings.

“Concerns about viruses tend to be regional to the occurrence, and it is still early to know what regions may ultimately be impacted,” Farley wrote in an investors note.

The outbreak was top of mind at the Americas Lodging Investment Summit in Los Angeles last week, as hoteliers braced for a significant drop in one of their biggest growth markets as well as the potential fallout from a decline in outbound travel from China.

STR president Amanda Hite said, “I do expect there to be a pretty big demand drop [for hotels] in China. When I look at the initial impact on the U.S., there will be some key markets that feel it, especially in gateway cities that depend on Chinese travellers, like New York, Los Angeles. Those are markets where if this is a prolonged issue, that could be very impactful.”

Hite said a look back at the impact from SARS, which began around February of 2003, showed the peak drop in room demand for China came a few months later.

“We saw room demand drop 50% in April, 75% in May and then another 50% drop in room demand in June,” she said. “And then it started to pick back up.”
___

Jamie Biesiada, Johanna Jainchill, Christina Jelski and Robert Silk contributed to this report.

Preview 2015: River Cruise

Posted on by
Reply

In recent years, the river cruise market has been one of if not the hottest growth sectors in the industry, but heading into 2015, it finds itself on the cusp of a market-changing development in the form of greater diversification among river cruise players.

As they seek to better differentiate themselves, river cruise lines are gradually creating stronger brand identities.

For example, the Uniworld Boutique River Cruise Collection is going after the uber-luxury river cruise space with its six-star brand promise and over-the-top hardware that will extend to its 2015 launch of the 155-passenger Danube cruiser S.S. Maria Theresa.

AmaWaterways has made a name for itself among foodies and oenophiles for its extensive wine-themed cruises and impressive food-and-beverage program. In 2015, Ama will launch two sister ships in Europe, the 164-passenger AmaSerena and the 164-passenger AmaVista, which will bring the company’s European fleet to 16 vessels, all featuring multiple dining venues and a well-curated wine selection.

Meanwhile, Avalon Waterways is going after the choice generation, travelers who want to customize their experience. With its Avalon Choice Cruising program, the company has worked to build multiple dining and excursion options into its river cruises. The line will introduce two newbuilds in Europe for 2015: the 128-passenger Avalon Tranquility II and the 166-passenger Avalon Tapestry II, bringing its European fleet to 15.

Tauck has made its strength as a land operator a standout trademark in its river cruise operation, which is dotted by onshore experiences designed to surprise and thrill passengers (think dinner and entertainment in a remote castle setting). And as it starts to see more success in the river cruise niche it has carved out for itself, Tauck is gradually expanding its fleet, as well. In 2015, it will launch the 118-passenger Esprit, bringing the company’s European fleet size to seven.

For travelers who like brand uniformity, it’s hard to compete with the strength of the Viking Cruises brand. Viking has ordered an additional 12 river cruise ships for 2015: 10 Viking Longships and two smaller vessels for the Elbe River. The additions will bring the company’s European river fleet total to a staggering 64. Of those, 40 will be Longships, which are all virtually identical vessels, creating a truly uniform experience across rivers and destinations for the passenger who craves the comfort of consistency.

Scenic Cruises, meanwhile, is looking to court boutique hotel lovers with forward-thinking amenities like a new pool concept. Its two 2015 Europe vessels will feature a relaxation pool adjacent to a jet-stream pool for lap-style swimming. And its sister company, newcomer Emerald Waterways, is having fun with public areas like a roof-deck pool that converts into a cinema at night. Emerald is doubling its fleet size to four vessels next year.

Clearly, there’s no resting on their laurels for river cruise lines. With stiffer competition, they are getting increasingly innovative, and it’s making things interesting. Take French river cruise company CroisiEurope, which is launching a paddlewheeler — yes, a paddlewheeler — though not the kind you’re familiar with. This will be a smaller European version that will navigate the Loire River in April. The 96-passenger Loire Princesse, the first overnight passenger vessel on the Loire, promises to be a unique offering.

Exotic river rush

Rivers in Asia and South America will continue to see investment into 2015, with a greater emphasis being placed on luxury services and amenities.

AmaWaterways is introducing the 124-passenger AmaDara on the Mekong River in August, featuring a salon and spa services, a swimming pool and an onboard fitness center. One month later, Haimark Travel will launch its Southeast Asia spa-concept vessel. The 24-passenger Mekong Princess will place a strong emphasis on spa treatments and services.

Avalon is also introducing two 36-passenger Suite Ships in Asia next year, one on the Mekong and another on the Irrawaddy River in Myanmar.

With any luck and a reprieve from political unrest, 2015 promises to be the year cruising returns to Egypt’s Nile River, as the country begins to see some semblance of stability after years of turmoil.

Abercrombie & Kent’s Nile fleet is already up and running, while Uniworld’s luxury Nile vessel, the River Tosca, is gearing up to begin sailing once again in September.

Another paddlewheeler here at home

In March, American Cruise Lines will launch its second built-from-the-ground-up paddlewheeler on the Mississippi, the 150-passenger American Eagle.

The vessel will feature 84 staterooms, 78 of which will have private balconies with sliding glass doors. There will be multiple drinking and dining areas and an outdoor exercise area with a putting green. Elevators will provide access to all five decks.

The American Eagle, which will sail mostly eight-day cruises along the Mississippi, will bring to three the number of paddlewheelers plying the Mississippi in 2015.

Luxury on the rise on Southeast Asia’s rivers

Posted on by
Reply

By Michelle Baran

The temples of Bagan, Myanmar.After Europe’s busy ship-christening season this spring, the river cruise spotlight is shifting to Southeast Asia for the fall, where the latest lineup of river ship launches is showcasing an ever-escalating level of luxury, service and amenities. So much so that it begs the question of whether this new crop of vessels could actually surpass the standards that have been set by Europe’s river vessels.

“It’s a very fair question to ask if [the ships currently launching in Southeast Asia] are in fact more luxurious that what is on offer in Europe. I wouldn’t say that they are more luxurious, but it’s a different definition of luxury,” said Tom Markwell, managing partner, sales and marketing, at Haimark Travel, which this month launched the first two vessels to set sail for the exotic river and small-ship cruise company.

In September, Haimark launched the 68-passenger Mekong Navigator in Vietnam and Cambodia, and the 16-passenger Irrawaddy Explorer in Myanmar (the country formerly known as Burma), vessels that are helping to usher in a new generation of luxury service and amenities on river cruises in this part of the world.

Others are raising the bar higher, too, such as Sanctuary Retreats’ 42-passenger all-suite luxury vessel the Sanctuary Ananda, debuting next month in Myanmar, and AmaWaterways’ 56-passenger AmaPura, which sets sail in Myanmar in November.

Those will be followed by more impressive river cruise launches in Southeast Asia in 2015 (see related story, “The latest batch of Southeast Asia ships”).

Vietnam vs. Vienna

What these new vessels represent is not just continued growth in demand for river cruising in Southeast Asia — where new ship launches on Myanmar’s Irrawaddy River are shadowing an initial boom on the Mekong River that began several years ago — but an elevation of product in those destinations that is bringing it closer to what river cruisers have come to expect in Europe.

Life on the Mekong.Not long after introducing the Mekong in 2009, AmaWaterways created a separate business division for its non-European product called AmaVoyages. The idea was to manage expectations a bit — a subtle way to let passengers know that river cruising in destinations such as Southeast Asia and Botswana, where the company has exotic river itineraries, does not mimic the product in Europe.

It’s not that the product is inferior; it’s just different. In fact, river cruise operators have noted that while some things are harder to deliver in Southeast Asia, such as decent docking facilities (a challenge that is mostly out of their hands), other things can be easier, such as high service levels. And then there is the biggest difference: the destinations themselves.

“The Mekong, Tonle River and Tonle Lake are a much more important lifeline for the locals than European rivers,” said Rudi Schreiner, president of AmaWaterways, about the major waterways of Vietnam and Cambodia on which the company sails.

“In Vietnam and Cambodia most of the daily life happens on the water. There are floating markets, floating villages, and fishing is a main source of local nutrition. Many sightseeing excursions are by boat, whereas in Europe, the ships are used as luxurious floating hotels to take you from city to city. On the Mekong more happens on the river than in the towns.”

River cruising in Vietnam vs. Vienna is not surprisingly a vastly difference experience. And despite the economic and infrastructure disparity between Europe and Southeast Asia, river cruise passengers “should not expect anything subpar” in Southeast Asia, Schreiner said.

Bigger staterooms, better service

Angkor Wat, CambodiaIndeed, as river cruise operators such as AmaWaterways continue to improve the product in Southeast Asia, the results mark a consummate change from the region’s earlier generation of ships and the sophisticated vessels being rolled out today.

Schreiner noted that the company’s 124-passenger AmaDara, debuting on the Mekong next year with twin-balcony staterooms and two restaurants instead of just one, “is a testament to how AmaVoyages is able to continuously improve in exotic destinations.”

Another prime example is the Sanctuary Ananda, which Sanctuary Resorts, a company owned by Abercrombie & Kent, is launching next month in Myanmar. The Ananda marks Sanctuary’s first project in Myanmar, and the company is giving ample attention to the hardware.

For one, the suites will range from 291 square feet to a 721-square-foot suite, a marked increase in space compared with many European river vessels. That added spaciousness is possible in Southeast Asia because there are no locks on the waterways and thus fewer restrictions on ship dimensions.

River lines with product in Southeast Asia are also putting a much bigger emphasis on service than they have in the past, providing private butler service for some of the highest category suite guests, for instance.

The spa element is becoming an increasingly important part of the Southeast Asia river cruising experience, as well, and river cruise operators have been steadily amping up their spa service offerings.

“It’s the hospitality factor that will allow us to surpass European river cruise product along the rivers of Asia,” said Haimark’s Markwell.

“It’s the gentle, kind and most of all sincere willingness to serve the guests that blows veteran cruisers among the European waterways out of the water.”