The Tourist Echo: Most Asian destinations are now reopened. How is Asia’s business taking off again?

William Linton: We are on a very good dynamic, especially on certain destinations. Japan, for example, is the undeniable success of the start of 2023. Since the suspension of compulsory visas in the fall of 2022, customers have been returning to branches en masse. And we take advantage of it. In 2023, we are even going to achieve the same performance as in 2019 in Japan. It was a driving destination for Asia before the health crisis, and it is becoming so again. Especially since inflation has less impact on this destination than others in Asia, simply because the yen has been very low for a few months. The price of ground services therefore makes it possible to compensate for the increase in air fares, which concerns all of Asia. Finally, the increase in the average basket remains limited, around 7-8%.

Isn’t this inflation the grain of sand that could halt Asia’s recovery?

William Linton: So far, inflation hasn’t been a drag. The strong comeback of Asian destinations is very noticeable, after the restarts in the Middle East and the Pacific, which began a few months ago. Indonesia is another big hit, but we also have requests for Thailand, Vietnam, Cambodia. On each of these axes, we do not yet find the volume of customers before the health crisis. But the average baskets are up sharply, around 20 to 30% depending on the destination. This allows us to compensate for the decline in the number of customers while maintaining good financial performance.

But with ever fewer customers…

William Linton: Our customers traveling in 2023 are demanding customers looking for high value-added trips. Building these trips requires a lot of casework. So getting fewer customers for the same number doesn’t bother us. Above all, this testifies to a real recovery, throughout Asia but also further afield, such as the Pacific. In some destinations, we are even faced with problems with hotel stocks or vehicles available for hire. This forces us to re-adopt the same behaviors as before the health crisis, namely to anticipate market demand in order to be able, a few months later, to provide it with the necessary supply.

Is the market also resuming its old habits? Or is the last minute still law?

William Linton: In very long-haul Asia and the Pacific, the market has reintegrated this need to anticipate. We are already registering requests for 2024, both in B2B and B2C. It is now up to us to find the best solutions with the airlines to contain this price spike and ensure our stocks.

Beyond the rise in fuel prices, how can this soaring price of air travel to Asia be explained?

William Linton: The global offer has not yet been put back in place compared to before the health crisis. Quite simply because all the companies, whether they come from Europe, the Gulf or Asia, are waiting for the reopening of the Chinese market. Until it returns to its pre-crisis level, the capabilities will not be restored. So the demand is stronger than the supply, and, inevitably, the price pressure increases. It is for this reason that in the short term, the prices for trips to Asia should not fall. But we have to turn this constraint into an opportunity and take advantage of it to visit Asia without the crowds, particularly from China, which is the leading international market in Southeast Asia.

In a sustainable way, I think that Asia will be 20 to 30% higher from a tariff point of view before the health crisis.

Will the return of Chinese tourists lead to lower prices?

William Linton: Unfortunately, that probably won’t be the case. When the return of strong demand from the Chinese market will be real, it is hotel rates and ground services that will suffer from this price pressure. In a sustainable way, I think that Asia will be 20 to 30% higher from a tariff point of view before the health crisis. But, as I said, there are positive sides, because this price increase will be at the expense of more massive tourism. The clientele will be more informed and less numerous, but will travel in better conditions.

Will this resumption of activity towards Asia be enough to relaunch Asia? At the height of the crisis, you diversified your production a lot, even selling trips to France.

William Linton: France and Europe was a tactical maneuver intended to allow our B2C customers to sell their assets. It is not our vocation to produce trips to these regions. With this takeover, we are refocusing on our core business, Asia. While continuing to expand our presence in the destinations we have invested in in recent years. Jordan, for example, is a safe bet. We must also promote our offer in Polynesia or even southern Africa, via the Equatoriales brand, which will welcome new destinations in 2024: Namibia and Botswana. There is also work to bring out a real French-speaking offer in Saudi Arabia. Finally, and this concerns all destinations, we are increasing our offer of private tours. We have 120 scripted and customizable programs live on our B2B site.

We had kind of a long Covid. (…) But the company has never been at financial risk.

Did the Covid storm not weaken Asia too much?

William Linton: The most complicated period for us was last year. We watched all our colleagues restart while Asia remained closed. We had kind of a long Covid. We haven’t had any concerns for the past two years, so now is not the time to have any. We subscribed to a PGE, but, above all, our shareholders have remained loyal to us. This is what allows us, today, to leave so quickly. And that was our strategic will. We wanted to preserve the lifeblood of the company, and this solid support enabled us to do so.

You had to cut costs…

William Linton: This is a real subject, because the workforce in Asia has decreased by 25% compared to before the crisis. But the company has never been at financial risk, and that’s the most important thing. This is what allowed us to preserve our production tool and reservation services. Expertise is a key factor for a company like ours. Forming a team takes us one to two years. Starting from scratch, we could not have been operational so quickly. I also take my hat off to our teams still in place, who believed in the restart of Asia. And they were right: apart from three missing destinations – China, Burma, Iran – we are planning around forty destinations that are now reopened.

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