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January 2014 Newsletter

Editorial

New Sources

Bulgaria is amongst the countries of the European Union in which overnight stays in tourist accommodation has increased the most. The country recorded an increase of 6.2% in 2013 placing it in 5th place of the countries that had seen the most growth. Greece, Malta, Latvia and the UK came ahead of it. The highest number of overnight stays was recorded in France with 405 million nights followed by Spain 387 million and Italy 363 million.

Whilst the aforementioned figures can be classified as being yet another worthless production of ‘Eurostat’, there is perhaps some substance behind these figures and the Bulgarian tourism sector might finally have some solid foundations under its feet.

Bulgaria has a tradition of offering sun and snow; each with about 15 weeks potential output per annum. Over the past few years, much work has been done in establishing the other sectors of the tourism sector such as spa tourism, weekend breaks (for Greek visitors for example) as a MICE (Meetings and Events) destination. As an example of this, earlier this month the Sofia Kempinski paid host to 400 Global Senior Coca Cola Employees who spent a working week in the hotel: that’s 2000 nights and a lot of spend!

During last summer it was noticeable on the Black Sea that the source markets for their visitors was undergoing fundamental change. Yes there were still the Germans and the Brits but possibly fewer in number. The Russians had come back in droves but what was interesting were the different languages heard on the streets. The Middle and Near East has perhaps never been seen as being of high strategic importance but the evidence seems to show that visitors from these areas are growing from almost zero to a significant percentage.

Not too long ago the world ignored the potential numbers that tourists from Russia and China could bring; as their inhabitants could not travel for either political or financial reasons. How the world has changed and whilst China might not be in the Bulgarian equation, there are a lot of countries that lie to the east of here whose populations now have the buying power and the ability to travel to places that were once off limits. Bulgaria is doing well to attract its share of the cake from these new source markets, in the short and medium term it maybe that marketing resources are spread to the east rather than the west.

 

Mark Thomas

Managing Director

HRG Bulgaria

 

Brush with the unknown

The media are picking up on a story that an airline pilot reported a ‘near miss’ last summer with a ‘cigar/rugby ball shaped UFO”. The pilot was operating a Thomas Cook aircraft and was North West of London.

The pilot reported that he saw the UFO to his left hand side and thought it was going to crash into his machine. As soon as it had passed he reported the sighting to controllers. Later examinations of the data recordings could not trace any other aircraft in the area.

One suspects the men in white coats should be called unless the pilot had been suffering from too many sangria’s (he was on a flight from Ibiza). Equally being only ten minutes away from Heathrow Airport one would have thought other pilots might also have also seen something in one of the world’s busiest flight corridors.

 

Right on Track

China doesn’t know when to stop with its trains! Since 2008, it has built 6000 miles/ 9650 kms of track and invested in 1000 high speed trains. The country’s high speed rail network is almost double that of the combined length of Europe and Japans high speed networks – the only two regions to have anything similar in rail travel. One hundred cities in China now have a high speed rail connection and each of these cities usually has a huge new railway terminal.

Not only is the speed of this evolution amazing, its also interesting to know how they got started with building their own high speed trains: they bought trains from Canada’s Bombardier, Japan’s Kawasaki, Germany’s Siemens and France’s Alstrom, they then took the best parts of each train and molded then into the ‘CRH38OA’, which is the Chinese trains name. Oh yes, it’s also capable of travelling at 302 mph / 486 kph.

 

Driving from BRIC’s

International Tourism rose 5% between January – September 2013 according to the UN World Tourism Organisation. This translates to 845 million tourists worldwide, an increase of 41 million.

What is interesting about this is that the growth is coming from travellers from the likes of Russia and China whose numbers increased by 29% and 22% respectively. By comparison, Travellers from the UK and France increased by a mere 2% and from Germany there was zero growth. Smart tourism bodies will be spending much of their budgets on targeting the BRIC countries (Brazil, India, China and Russia) as not only have these places a rapidly growing middle class eager to see new things, they each also have a huge base population.

If international tourism is driven forward, this in turn supports job creation and economic growth in the receiver countries.

 

 

The story never ends

Another China story; this time news that a project to build the worlds first full scale replica of the titanic is planned as part of a theme park development. The park will be situated in the South Western province of Daying which is famous for its saltwater lake with the replica ship being permanently docked on the Qi River. The project is planned to cost some 1.2 billion Euro (only).

 

Fueling the anger

We all nowadays accept that airlines make their profit from the extras they now charge as ancillary costs e.g. checking in hold luggage, excess weight of bags, seat allocations etc., and that their fuel surcharges are a great place to disguise profit. In an extract from an American Travel Trade article a perfect example of why passengers should never trust an airline is made with the following calculation; on a return ticket from JFK to Germany the airline advertised the fare at 172 USD with taxes adding on another 518 USD. The total journey distance was 8350 flight miles (13438 kms). The industry average cost of a passenger jet is 4c per passenger mile and with fuel costing 3 USD per gallon, that makes the real fuel cost 334 USD. The rest is profit!

 

Please explain!

Have you ever asked the question why a one way air fare sometimes is more expensive than a return fare? For example a flight from say Vienna to Paris might be 180 Euro return, but 190 Euro for a one way ticket. Yet no –one has ever satisfactorily ever explained why this is so. A good many half hearted justifications occasionally appear from flustered airline executives but these explanations are about as believable as a Bulgarian politician.

In these days when jumping on a plane is like jumping on a bus, we would hardly expect to buy a return ticket cheaper than a one way would we? The issue is not one of life’s great mysteries yet its like many things such as the bank not accepting a torn banknote – just why it’s like this no-one can actually nor accurately explain the real reasons why.

 

Weed Tours

An American company has started offering Cannabis Tours to Colorado now that smoking the weed has been declared legal in the American state. The company who runs them is describing their format as being similar to the tours of the Napa Valley Vineyards.

Guests will be able to see how cannabis is produced and then given the chance to try samples.

 

Ryanair Surrender

It’s unusual that Ryanair gets chased off a route but the Irish Airline has surrended in one battle it was clearly losing. The airline has announced it is stopping flights between Milan and Rome due to the increased competition from not one but two high speed rail operators.

The two train operators are Trenitalia and Italo who both offer reasonably priced journeys taking just over three hours and on schedules that operate throughout the day.

One nil to the railways then.

 

The start of bigger things

Etihad Regional, operated its first flight this month from its new hub in Geneva, to Rome. There might be nothing of the ‘’wow’’ factor in that but this fact alone is likely to increase the heart beat of management at Lufthansa in particular.

Etihad have slowly but surely been acquiring shares in European carriers and establishing alliances with them in order to feed European based long haul travellers into its own network. Having its own branded airline operating within Europe may just be the start of a trend and one that will threaten not only Lufthansa but Air France and the European mega carriers that are still remaining. For travellers, in some respects having a prestige brand like Etihad may be viewed as a welcome alternative to the ‘same old, same old’ flight options that have been in place since time began.

By the middle of this year, Etihad regional will operate to 34 destinations from Geneva and in addition will have at least 7 gateway airports to feed their long haul traffic into: Geneva, Amsterdam, Paris, Dusseldorf, Belgrade, Zurich and Rome.

 

It’s connections that count

As we all know, running an airline is a pretty good way to lose money. Yet another perfect example of this has appeared from South Africa where the national airline, South African Airways, which is also Africa’s biggest carrier, reported a financial loss last year of almost 90 million USD. Making a loss is one thing but when the CEO says that all its long haul flights are loss making, one then starts to appreciate that there is no real hope that the airline will ever be profitable again.

The catch 22 for the state owned airline is that despite losing money, the geographical location of South Africa means that its airline is the life blood of the nation and it provides the connectivity the country needs so vitally with the outside world.

Profit may not be everything after all.

 

 

Green again

Until around 2009, those concerned with”green interests’’ i.e. environmentalists, had forced their voice to be heard across all sectors of industry. They were no more vocal than in their anger at the polluting airlines of the world. When the economic downturn appeared around 2009 corporations pushed their green concerns to one side in favour of their own economic survival. Now that the global economy is starting to show signs of improvement, the green voice is starting to arouse itself again.

There is absolutely nothing wrong with controlling pollution but might the focus be more on those areas that actually pollute the most?  For example of all transport modes, road transport produces 74% of the overall total against air travel’s 12%. It is however harder to tax road users as it might lose votes.

Last week, a cow shed in Germany was blown apart by gasses produced by its four legged inhabitants; indeed cows pollute the atmosphere as much of not more than air travel. Taxing cows might also be unpopular but this has probably not yet been thought of. Anyhow how would the cows submit their tax returns?