Weekly wrap – 12th August 2023

BRUCE PIPER wraps up the week that was...

GOOD morning everyone, well I’m back in the chair for the weekly wrap after a couple of weeks in Europe where Jenny and I experienced the unique Crystal Cruises experience aboard Crystal Serenity. And we’ve come back to a whirlwind of activity in travel and cruising – and in aviation, which has been in many mainstream media headlines this week as the Federal Government excruciatingly attempts to justify the blocking of Qatar Airways’ request for additional capacity. We try not to get too political at the Business Publishing Group, but on this occasion it’s hard to ignore what appears to be a blatant move to protect Qantas from competition – and sadly at the same time entrench high fares for consumers.

It would be almost comical if it weren’t so serious, as Federal Transport Minister Catherine King attempts to defend the pretty much indefensible, coming up with a series of explanations including a claim that Australian jobs will be saved, despite estimates of an additional $700 million-odd in economic activity if QR’s request is granted – mainly in the long-suffering tourism and hospitality sector.  “We only sign up to agreements that benefit our national interest, in all of its broad complexity, and that includes ensuring that we have an aviation sector, through the recovery, that employs Australian workers,” she said. Presumably those “Australian workers” are those employed by Qantas, who it now turns out has turned to labour hire firms in Asia to staff its chartered Finnair aircraft. On top of that has come the revelation that the 23-year-old son of Prime Minister Anthony Albanese is one of the select top-tier echelon who get to experience the rarefied air of the Qantas Chairman’s Lounge. I’m sorry, but that really doesn’t pass the sniff test.

However there was some good news from other less constrained foreign carriers on the capacity front, with Singapore Airlines and Cathay Pacific both announcing expanded Australian flights. SIA in particular flagged 4,700 weekly additional seats, and there are also many other carriers hoping to boost their market share here so let’s hope that flows through to lower fares in the near future. Also in aviation this week we saw Alliance Airlines become the first ASX-listed stock in the sector to release its annual results – a stellar figure of more than $50 million as its Embraer E190 wet lease strategy continues to go from strength to strength. It’s no wonder Qantas wanted to buy the business so badly.

On the inbound tourism side we saw the momentous announcement that Australia had been returned to cherished Approved Destination Status (ADS) by the Chinese Government. This approval has been a long time coming after the reopening of borders, with recalcitrance on behalf of Chinese authorities seen as part of ongoing diplomatic and trade stoushes. Fortunately Australia remains a highly aspirational destination for the Chinese middle class, and ADS means group tours can now restart operations here. That’s brilliant news – but the next thing I’m sure we will see is an exacerbation of the supply chain and workforce issues already impacting our tourism operators. Another one million plus visitors from China are sure to generate lots of great activity but will also definitely put pressure on the local sector.

Corporate travel was also in the news this week, with a concerted effort by Qantas to own the SME market via its Qantas Business Rewards (QBR) program. QF announced a major agreement with travel technology firm Spotnana to power a comprehensive new booking system as part of the platform, allowing member companies and their staff to book all elements of their trips including flights, hotels and car hire. The system, which is being trialled with a select cohort of customers before a wider rollout later in the year, promises full reporting and management capabilities as well as the ability for companies to implement travel policies. All pretty much what most smaller TMCs offer, and an indication of the ongoing challenges that these corporate travel agencies continue to have to deal with. On top of that a report from respected Ord Minett travel and tourism analyst, John O’Shea, predicted ongoing strong demand for leisure travel in Australia – but at the same time noted major structural headwinds for the corporate sector, due to ongoing pushes for sustainability and the “COVID-induced death of the road warrior”. O’Shea is one of the keynote speakers at next week’s BTTB Corporate Travel Conference and Awards in Sydney and I can’t wait to see the reaction from the audience to his prognostications.

On the cruise side this week we saw the global passenger fleet continue to expand with the debut of NCL’s Norwegian Viva, Silversea’s Silver Nova and Scenic’s Emerald Sakara, while Australia’s Aurora Expeditions topped the bidders for the distressed assets of thje collapsed Boston, Massachusetts-based Vantage Travel with a bold US$2 million up-front cash offer for the brand name and customer database, as well as a 5% revenue share of all bookings from Vantage customers through until 2028. Vantage clients holding credits can also redeem them for up to 50% of future cruise reservations. CLIA announced the details of this year’s Cruise Month promotion – and speaking of promotions, the well-respected Jason Worth became Oceania Cruises VP of International Sales, while his local role in Australia and New Zealand will be filled by James Sitters.

In other news, the horrific wildfire situation in Maui has also shocked the industry, with Hawaiian tourism stakeholders evacuating a massive 14,000 tourists from the beautiful island destination. AFTA opened ticket sales for the 2023 National Travel Industry Awards, and also confirmed that Viking will be the sponsor for this year’s NTIA After Party. The administrators of Livn Group sold the business to Cairns-based booking software specialists Respax, signalling the bittersweet departure of Livn’s visionary founder Steve Martinez, and while the business will continue operating it’s cold comfort for trade creditors who won’t be paid.

And finally, we announced the appointment of Damian Francis as our new Editorial Director. Damian joins the Business Publishing Group from Mumbrella, and I’m sure it won’t be long before he’s on the roster for our weekly wrap as well. Welcome to the team, Damian, we are so looking forward to you starting the week after next!

I’d better sign off now, because next week is also going to be huge, with AFTA flagging a major announcement on Tuesday, followed by the aforementioned BTTB conference and then I’m heading to Singapore for the first Express Travel Group conference under its very freshly minted new ownership by Helloworld. I can’t wait.


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