Business travel booming in Asia Pacific

Business travel booming in Asia Pacific

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Business travel in Asia Pacific has grown by 8% annually since 2000 according to a report by the Global Business Travel Association (GBTA). Spurred by strong growth in China and India in particular, the report predicts that the Chinese business travel market will increase to USD 375 billion from USD 196 billion in 2012. Unsurprisingly, emerging markets are showing stronger growth than developed markets. As this article on the TTG Asia website reports, China will also overtake the US as the world’s biggest business travel market in 2016 and India entered the world’s top ten markets in 2012, overtaking Canada. The report tracks business travel spending and growth across 75 countries and 48 industries. More information can be found in this press release on the GBTA website.

A “new force” in Asia’s airline industry

A “new force” in Asia’s airline industry

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Asia Atlantic Airlines, a new regional carrier, was launched on August 7 at Bangkok’s Suvarnabhumi International Airport. A joint venture between Japanese travel giant H.I.S Group and prominent Thai hotelier, the Baiyoke Group, the airline will commence operations in August with two Boeing aircraft to Tokyo and Osaka. The airline will operate out of two hubs: Bangkok Suvarnabhumi and Tokyo Narita International Airport. Asia Atlantic Airline, so called because of its ambition to develop routes beyond Asia, plans to expand its network in the next 12-24 months to China, South Korea, Guam and Hawaii, as further aircraft are delivered.

According to one report, the airline aims to become “a dynamic new force in the region’s airline industry led by a passionate vision and a deep commitment to pan-Asian hospitality” with plans to focus strongly on social media to raise awareness of the airline in the region primarily through its facebook page: https://www.facebook.com/AsiaAtlanticAirlines

Asia to remain centre-stage for luxury

Asia to remain centre-stage for luxury

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Despite fears by major luxury brand owners due to the recent slowdown in the luxury market in Asia, experts predict that the region will account for between 50 and 60% of the global luxury market with the next ten years. According to the Economist Intelligence Unit (EIU), the growth will evidently be driven by China, but India will also be an important growth driver, as reported in this article on the Telegraph’s website.

The EIU claims that there are prospects of a long-term recovery despite recent events which have impacted the market such as the Japanese exchange rate fluctuation and the clampdown by Chinese authorities on displays of luxury by government officials.

Strong potential still with Chinese travellers

Strong potential still with Chinese travellers

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Over 83 million Chinese tourists spent more than USD 100 billion dollars in 2012 according to the “2013 Report on China’s Spending of Duty Free Goods” – an increase of nearly 100% on 2010. The report released by the Research Centre for Luxury Goods and Services with Beijing’s University of International Business and Economics (UIBE) and the Fortune Character Institute states that 26% of Chinese travellers headed to Hong Kong and Macau in 2012, making these the top non-mainland destinations. While Chinese travellers are now the world’s biggest travelling spenders as reported on the China.org website, there is still huge potential for growth from the Chinese traveller market. According to another report on the International Business Times website, Chinese tourists account for almost one quarter of tax-free consumption worldwide. As explained in the article, there is still huge growth potential as 60% of wealthy Chinese have yet to spend on luxury goods and services.

In the spotlight: Steffen Brandt

Steffen Brandt, CEO Heinemann Asia Pacific & Board member of APTRA

Meet Steffen

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This month’s profile is with Heinemann Asia Pacific CEO, Steffen Brandt. Steffen is based in Singapore, where the group’s regional headquarters is based. He is married with three boys and when not running Heinemann’s Asia Pacific business he spends his free time playing soccer, mountain biking and biking on his Harley Davidson.

Career

Steffen has been in the duty free & travel retail industry for around 10 years; 6 years of which have been with Heinemann. When asked about his previous professional experience, Steffen says “I have had some interesting career moves in my life, all of which contribute to my current profession right now. From air to water, chocolates to alcohol, and then to duty free & travel retail.”

Steffen trained to become a professional helicopter pilot when he was younger but his career in retail started around 1990, initially in sales. He became part of Masterfoods South Africa in 2000 for a 2-year assignment before joining German liquor company Underberg in 2002. He joined Heinemann in 2006 as Area Manager for Eastern Europe, stepping out for 2 years to to run his own water business in South Africa before rejoining Heinemann in the latter part of 2008. “It is both fun and challenging to be in this industry”, Steffen adds.

The company, in brief

Heinemann Asia Pacific is a subsidiary of Gebr. Heinemann, one of the leading global retailers and distributors. Gebr. Heinemann started as a ship chandler in 1879. To date, the company has a strong presence in 70 countries, generating US$3.1 Billion in revenue in 2012. Today, the company provides the international market with professional service solutions in retail, distribution and logistics. When asked about the company’s ambitions for Asia, Steffen explains “Heinemann Asia Pacific, like its parent company is committed to becoming one of the leading companies within the Asia Pacific region to offer comprehensive solutions in the travel retail business. We started operating in 2010 and we have seen substantial growth both in retail and distribution.” Steffen goes on to explain that Heinemann Asia Pacific has been able to establish itself as an independent company in a relatively short time, despite this being Gebr. Heinemann’s first such venture in the company’s history. “It has been quite challenging to get support from some key players in Asia, though.”

Industry representation…

On the topic of industry issues, his role with APTRA and his views on some of the challenges to the industry today, Steffen acknowledges that some of the major challenges to the industry today are certain national laws posing restrictions on tobacco and alcohol retail, as well as the erroneous claims which undermine the integrity of duty free and travel retail in general citing the illicit trade of tobacco as an example. “Most importantly,” Steffen says, “I believe that the current concession model is not sustainable in the long run and this does not offer a win-win situation anymore.”

“How can retailers help address these challenges?” we asked. “Everyone involved in the industry should join the various travel retail associations, as together they would be able to leverage the power of ‘more’. If you think that the chocolate or P&C categories are not be affected given that the attention is more on alchohol and tobacco, at the moment, you never know what might happen in the future. It is a must for all companies to join recognized travel retail associations to uphold your rights and interests in this industry.”

What other services to the industry could APTRA and the other associations provide to further develop and protect the interests of the industry, beyond current activities such as advocacy, training, research and conferences?

“APTRA is doing its best to address the common issues that affect us all. Although we can benefit more on coordinating efforts across regions or other travel retail associations in the world.”

Finally, we asked Steffen how he sees his role as a board member of APTRA and what his ambitions for the association. “I see myself being part of a body which helps and supports the industry; plays an active role in developing the collective business further for the benefit of the industry and the travellers in general.”

30 Second Survey…

30 Second Survey…

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We care about your views… To assess your opinion on the association’s activities and seek your input on any other areas of work you might like us to consider, we would like to invite you to answer a brief survey. This will also help us evaluate the importance you place on various aspects of the work we do. To answer this 30 second survey, please click here. (http://fr.surveymonkey.com/s/52N8JF3)

APTRA KPMG Roadshow dates announced

APTRA KPMG Roadshow dates announced

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As announced earlier in the year, APTRA will be hosting a seminar road show together with consultancy firm KPMG in key markets around Asia Pacific later in the year. The dates and venues of the first road show locations have now been confirmed. The seminar tour will kick off in Australia and New Zealand, from 12 – 15 November in Sydney, Melbourne and Aukland. The following week, it will reach Hong Kong, Shanghai, Singapore and Bangkok between 19 and 22 November. The objective of the road show is to bring learning from APTRA’s advocacy and research work around the region to help industry stakeholders understand the issues and gain insights from the in-depth consumer research work that has been carried out on members’ behalf. Research partner m1nd-set will explain the findings of the recent consumer research undertaken on Asian consumers and KPMG will reveal the latest findings from its Chinese luxury traveller research and discuss some key customs and taxation issues around the region. More information will be released soon and members will be invited to subscribe to the seminars in the coming weeks.

First Asia Pacific consumer insights report online

First Asia Pacific consumer insights report online

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As reported in last month’s newsletter, we are delighted to bring you a new research insights service for the association members. m1nd-setThe first Asia Pacific consumer insights report, compiled by APTRA research partner m1nd-set looks at non visitors to duty free shops, comparing Chinese travellers with Asian travellers in general. In this first edition, m1nd-set reports that nearly one-third of Asian international travellers don’t visit duty-free shops when travelling, however two-third of them are willing to pay a visit. When asked what would motivate travellers to enter the shops and do different nationalities prefer different incentives, the responses received from Chinese travellers were different to those of other Asian nationalities. One of the most efficient incentives for Asian travellers would be a guarantee that the prices in duty-free are lower than those downtown. However, Chinese travellers would not necessarily be attracted by low price levels but more by a wide variety of items for self-indulgence. Detailed charts illustrating these findings can be found in the members’ only section of the APTRA website. In the next edition, the report will look at non buyer behaviour in duty free among Chinese and other Asian travellers.

Together for Taiwan

Together for Taiwan

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An early morning call in the middle of the summer vacation period from one of APTRA’s members, a global liquor company and active supporter of APTRA’s advocacy work, prompted a flurry of calls and email exchanges between the APTRA executive team and advocacy committee members on the APTRA board. The objective of that call, which was followed by a number of mails from other concerned members including supplier companies and retailers alike, was to seek APTRA’s support and engagement with the Taiwanese government to question the proposed legislation imposing strict customer data controls on travellers purchasing at Taiwan’s duty free shops.

As the details of the proposed tighter customer data controls were not known, APTRA proceeded to lobby the Taiwanese government to seek more information and commence a dialogue to understand the reasons and discuss how this might best be implemented, without harming the suppliers’ and retailers’ business. The challenge was all the more testing given the short consultation period of only seven days. As it has been reported in the trade media, the government decided to drop the initial plans but is still planning on introducing tight measures on data exchange practices with the customs department. Since then APTRA has been actively benchmarking data exchange practices between retailers and customs authorities around the region to ascertain the common practices and assist with dialogue between industry stakeholders and governments on such issues in the future.