We are a 10 year old brand.
There is a fundamental difference between us and other hotels - we are a hotel owner, operator and developer - we develop hotels and operate them -you can only do that in your home grounds where you know how everything works
One reason we are looking to expand now is that we are more mature after 10 years - the other reason is that there is a lot of demand from international customers - 50% of our customers are European - but they can’t come twice a year - it’s simply too far to travel to the Far East.
We need lots of land - so we can not build in civilised environments where there is no space - (we also have a lot of staff - so need a low cost environment)
Then you look at brand definition - Banyan Tree is a very exotic and romantic so we like to have a remote location.
We took our key markets and decided where to cater to those markets
We are looking to get closer to the European market We are building in Northern Africa - Maracesh and in Greece - where there is more space and flexibility within tourism development.
And middle east - we have a property in Bahrain which will open in March - before the
Formular one race. (Mras al kainah)
And the same model in America - we agreed on Mexico - one in Acapulco - aca pulco and one of cancun.
It is about space and to find countries which are exotic but close to the main market.
In Greece we have a major challenge to tackle which is the fact that we do year round destinations, but in Greece properties tend to open for 6 months - we will be a year offering with golf and spa.
12, 000 spas in the US - Are you looking to expand your spa offering in N America - with such potential in that market.
We have our first spa in the US - with Marriott.
Spa market in the US is still in an early stage in the US market, learning about holistic spas -
Traditionally spas in the US were clinical spas. In a clinical spa the treatment is driven through equipment - In our holistic spas everything is done by a spa therapist who have all been trained in our academy in Thailand.
about the experience is much higher.
This is something we have to bring to the US but it may not be ready for it yet. We are constantly looking at new markets for spa opportunities and new ventures so it is more opportunistic but hotels are strategic.
We do spas for all the large hotel groups who would like our knowledge and we put the spa into their property.
Pioneer of tropical spa - the holistic spa - the tropical spa is very large - private open pavilions - out door open air garden.
What type of clients do you target and have you noticed any interesting trends?
We are too upmarket to tap all the different markets but the trend is that you need a branding in your spa and what you see in the Far East and what you see here is that there are too many spas. The definition of spa is too loose - therefore people don’t know what is actually a spa. Eg. US and Australia - the spa can be an entire hotel - so it’s not only the spa facilities but it is a treatment facility - you don’t call it a resort but you call it a spa. Traditionally in Europe the spa is just a revenue generating area where you get a massage treatment - that also gets mixed up with new trend in Europe for wellness - saunas and swimming pools. Consumers are so confused that they don’t know what they are getting from a spa -sometimes wellness, holistic or clinical - what has become important is brand affiliation. Some spas also focus on selling products.
I think we need better definition so that a consumer really knows what he is going to get.
What does Banyan tree do to define the experience - I think that we bring a very Asian flavour to our spas. All therapists trained in 9 month course - very important because so much can go wrong. We have to trust the therapist and a lot of spas forget this. They have fantastic therapies which are beautiful artwork, beautifully done, but without the consistency on the software. Total consistency throughout all hotels worldwide - that is the most difficult part to control in a spa - how do you control the software component.
How important to have a spa?
Today it is mandatory to have a spa in a resort
Will there be an oversupply in the future? Possibly. I don’t think it is necessary in a city hotel - but in an upmarket resort with disposable income -
I think more operators will try to get into the upmarket segment - your yields are much higher on the spa treatment.
There is a major opportunity to have a good four star spa experience. No-one has tackled it yet in the industry but I think there is a way of doing smart , contemporary spas which are still affordable - there is a way of bringing people in for the first time - There is an opportunity to develop it but you need a critical mass -
I don’t think traditional hyper 6 star business would like to do it because that is not their core business but I think there would be a lot of opportunity and demand.
Spa menus - a la carte menu - or packages which are treatments for half a day inclusive of meals - consistency throughout group.
How are you dealing with the low cost model in Europe?
It has had a very positive impact on the travel industry in that they have opened up travel to a huge number of new passengers, however it has also set an expectation about what people are willing to pay. We have to strike the right balance between having the volume passengers but also offer a product and a service which appeals to business travellers who need more with their service - flexibility - - ability to book last minute.
How we are dealing with it is that we have to have prices that are comparable with the low cost carriers and they need to know the services are available much further out. So booking early is the best way to get the best value fare and we do have very good advance bookings and passengers are used to that way of planning their travel now of course a lot of peopke book last minute and the business traveller books later and later - there are good deals around - but there is no guarentee
If people want to be guaranteed of the very best fares - people need to book early - our fares start from £85 return incl taxes.
We open up our inventory a year in advance so people can book very early but of course the problem with lower fare tickets is they tend to have more restrictions. People booking a couple of months in advance are still getting great deals.
What else do you have in place strategically to accommodate those who want to travel on a low fare?
We have a lot of special offers but we can not guarantee a destination. promotional fares to help sell seats but our seat load factors are very high at the moment -
We have a newsletter on Swiss.com that informs people of lastminute offers - we also make those available to the agency community who are by far our greatest distribution channel. Direct sales is important for every distribution channel these days.
Do you know how many online bookers?
The majority of our traffic sold out of the UK is point to point - so we are very lucky - 25% of passengers UK - Switzerland.
But - for anything more complicated - people still go through the agencies. We are encouraging direct sales but not over anything else - the number one partner is and will be agents full stop.
Zurich Airport has just won an award for being Switzerland’s Leading Airport Authority - it’s light and open and a space where people can relax - it doesn’t have the frantic feel that a lot of big European airports have because of size and volume of people going through them- it’s really helped us in terms of the credibility and it’s a modern airport that people are willing to transit through.
Those destinations we have opened up are codeshare with Canada and we are also codesharing with and we are also code shar8ing wih Qatar into Doha - we are not looking to expand our route network through our own operations. We are not in a large period of expansion. Swiss is still in a restructuring program. We are very happy to set up codeshare operations with our partner airlines because they give the customer more choice. Moving towards Star Alliance - we will have a lot more opportunities to codeshare with our partner carriers which is in the customers best interest.
How far along are you along integrating
#We will join fully in April 2006. This membership together with our partnership with Lufthansa opens up the world to our customers.
Can you comment on the importance of being a member of an alliance in today’s industry. Do you foresee a time when there will be alliance of low cost carriers?
Almost too big to say - its what the customer expects - they expect to be able to transit from one carrier to another with synchronised carriers.
We feel like we fit very well into Star Alliance
It’s hard to say whether the low cost carriers will fit because they aren’t network carriers = so the connections aren’t so gteat - on the cost side it would fit - there are a lot of cost synergies which we are also interested in. But it’s very hard to say if they will go into full alliances
Being a member of Lufthansa Group
From a customer pont of view - very positive because Lufthanser has a very large route network - we offer a lot of benefits into that group as well - we have been very warmly welcomed into that group - so far it has been a very positive experience for everyone who has been involved in the integration - They clearly think we bring something to the party which is very positive for us. It’s still early days -we had approval in July - but we are still moving quickly - in the UK we launched out first combined fare offer - we will go further with that in the new year and really work together. Out of Switzerland and Germany we have harmonised our schedule. There are so many different fronts on which we are working - we are still Swiss so a stand alone airline but with the backing of a very large parent.
We are very far along with it - in the UK a very high percentage of people utilising. Whether the whole industry can achieve paperless travel by 2007.
People are nervous before they have tried it but then they love paperless travel and don’t want to go back.
75% of destinations - e-ticket
UK - v. high uptake - 80% of passengers
Europe’s Leading Airline and Business Airline - absolutely delighted about.
It’s a relatively young airline so our product is quite new and is always being innovated.
We make sure we keep the product fresh.
I really believe our business class product is one of the best - looking after passengers in the way that they want to be looked after.