According to Vientiane Times, a Japanese company has proposed a sustainable development of the marsh through to 2030, but critics would differ on what constitutes sustainable and possibly claiming the  natural marsh area is a natural barrier against flooding.

The government must approve the plan, which breaks down into five zones, covering an area of 2,200 hectares, of which 660 hectares would be dry land and the rest wetlands.

A commercial zone is planned in the vicinity of the That Luang stupa and the Lao Stock Exchange. A second zone is located near a planned railway station and includes a residential area and trading centres.

The third zone is close to the marsh itself and includes cultural attractions and residential areas, as well as green zones. The fourth zone is designed to be a recreational area with a mix of residential houses, commercial and government offices.

The fifth zone is an industrial zone that will be located near the Lao-Thai Friendship Bridge and also includes an amusement park and residential area.

Officials told the local press the plan also incorporates 27 roads, of which three will be six-lane highways.

One of these six-lane roads will link the Phonthan T-junction through the marsh to the villages of Nonvay and Nakhuay and then join the 450 Year Road. Construction work should start soon on the roads.

Vientiane authorities estimate the project will cost US$125 million. The project will ultimately house 55,000 residents.

That Luang marsh is the largest remaining wetland located on the eastern edge of Vientiane Municipality covering the area of 20 sq km and is part of the That Luang Basin collecting water that drains from Vientiane City and surrounding areas. It prevents flooding in Vientiane through natural channels and drainage and the environmental lobby is likely to campaign against the proposal claiming it will further damage Vientiane’s environment.

According to Vientiane Times, Lao Central Airlines, formerly called Phongsavanh Airlines, organised an inaugural flight on the Vientiane and Luang Prabang route, 30 December, after it took delivery of its second Boeing737-400 aircraft.

The airline will organise a similar inaugural flight to Pakse later this month to introduce the southern domestic route.

The airline’s board member, Thonsay Inthisane, told the local press that Lao Central hopes to introduce its first regional commercial service, on the Vientiane- Bangkok route  by the end of this month following on from the Pakse launch.

TTR Weekly talked to a high ranking official at Thailand’s Department of Civil Aviation, who confirmed the airline had requested time slots at Suvarnabhumi Airport, but had not yet confirmed a flight schedule.

Seat capacity allotments on the route are not an issue, but available time slots at Suvarnabhumi Airport are limited.

The Vientiane-Bangkok route is served by both national carriers – Lao Airlines and Thai Airways International. Thai AirAsia also wants to operate flights to the Lao capital, but has not been granted permission by the Lao government possibly in a move to protect its national carrier.

However, if two Lao airlines are allowed to fly the route, Thai AirAsia may believe its chances of gaining a review have improved.

The new Lao airline is also considering flights to Cambodia, China, Vietnam and Singapore.

Beside B737s, the airline has two 19-seat aircraft for domestic services.

In May 2010, Lao Central Airlines also placed an order for three Russian-made Sukhoi Superjet-100s for delivery in second half of this year.

Lanith (Lao National Institute of Tourism and Hospitality) chief technical advisor Peter Semone opened the event “Hotel and Tourism Development in Vientiane: Current Trends and Future Prospects” warning, “Vientiane is making a big mistake in its haphazard hotel development and assuming customers will come. They need a plan.”

Singapore-based, Horwath HTL assistant director, marketing and special projects for Asia Pacific Ho-Strangas, then presented, “ASEAN Hotel Sector: Key Market Trends”.

Shyn Yee Ho-Strangas

She noted Vientiane hotels’ average occupancy rate climbed 2% to 65% in 2010, placing the Lao capital in the middle of the ASEAN pack. She expects the rate to rise 3% in 2011.

Average daily rates for Vientiane’s upper-tier hotels remained a constant US$62 last year, but Mrs Ho-Strangas predicts this number will jump US$10 in 2011 as “new hotels enter the market with higher ADRs.” She said this places Vientiane’s ADR near Jakarta’s USD70.

She stressed ADR growth is being stifled by a market dominated by corporate clients, MICE, and leisure groups (87%), which sign multiple contracts with hotels, and do not fulfil them.

“You should charge them more next time. Do not let corporations and tour operators decide the price. Hotels must work together, agree on a way forward, and enforce it.”

International aid organizations with fixed per diems also keep rates low, but Mrs Ho-Strangas remained firm. “Make them pay the price you want…They’ll have to raise their per diems.”

Other issues affecting Vientiane’s hotels are their low-cost perception, and the lack of quality products. “There are no real high-end hotels in Vientiane,” she said.

Mrs Ho-Strangas emphasised due diligence in hotel development, as most Vientiane hotels are privately owned and operated, thus lacking management experience.

She said more supply is coming on line, and though occupancy rates may drop in 2015 to 2016, the situation looks bright.

During the panel discussion, “Hotels and Tourism in Vientiane – Where do we stand now and where are we heading?”, UNDP’s deputy representative of operations, Javier Barrantes, said he was unaware aid organisations affected hotel rates.

He said UNDP annually canvasses hotels for their rates to determine per diems, and the survey “didn’t trigger any change,” but he would review the exercise.

Hotel Khamvongsa’s Souriyo Arounsavath, which caters to aid organisations, said, “We need good, competent, committed staff,” adding that Lanith could be the answer. “Workers need to understand what they are doing.” He said they require both education and skills.

Exotissimo Travel’s Duangmala Phommavong said only a few Vientiane hotels appeal to her customers. “Sometimes, we can’t find rooms.” She said owner-managed hotels tend not to negotiate, but rates are a small factor. “We sell packages.”

Lao Tourism Marketing Board’s Kirsten Focken said the country needs a unique selling point and discover if it is competitive. “Laos has come a long way without promotional investments. This will not continue.” She said Lao tourism needed to rise to the next level.

Ms Focken stressed a “coordinated approach…such as package deals during low season.” Tour operators, hotels, and airlines need to work together and be more innovative, she said.

When asked what tourism products Laos lacked, Ms Phommavong said Exotissimo’s standard Vientiane, Luang Prabang, Champasak packages satisfy most of their needs, “But to do other activities, we must do them by ourselves as no one offers them.”

Ms Focken noted that several aid organisations have developed tourist attractions and community-based tourism projects, adding that development projects should work more with the private sector.

Mr Barrantes noted “ A noticeable lack of development agencies at the symposium.”

On the symposium sidelines, Ms Phommavong said she offers a few options that visit easily-accessed publicly-developed attractions such as Konglor Cave. “If they have other attractions and soft activities, they should better market them.”

Website: www.LANITH.com

During the nine-month period, January to September, Laos tallied 2,185,350 international tourists, a significantly increase of 22.17% from 1,788,798.

In September, Laos received 236,267 international tourists, up 20.97% from 195,318 last year.

ASEAN was the top contributor with an 82.36% market share (1,799,801). Neighbouring Thailand and Vietnam, the top and the second source markets represented 80.75% or 1,764,633 of the visits.

Arrivals from Thailand rose 17.84% (1,269,804) over arrivals recorded in January to September in 2010.

Tourists from Vietnam skyrocketed, January to September, by 64.23% to 494,829 trips.

Other countries in ASEAN showed significant growth such as Malaysia and Indonesia. Malaysia ranked 11th and supplied 12,781 tourists, a substantial improvement of 22.69%. Indonesia, though still supplying small numbers, showed a jump of 52% from 1,588 tourists to 2,417.

There were declines from China a key market for Lao tourism. It was down by 8.92%. Tourist arrivals from Korea were up 25.73% (25,830), Japan increased 15.95% (28,502) and Taiwan  64.63% (4,063).

In Europe, several key source markets reported slight declines: France (31,514, -1.23%), United Kingdom (26,598, -7.38%) and Germany (14,971, -6.55%).

Tourist arrivals from Russia surged (4,796, +58.39%).

Arrivals from the Americas, mainly from the US and Canada increased 2.2% to 48,165.

Top 10 Tourist Arrivals to Laos January to September 2011

The government has targeted USD1 billion in annual revenue from tourism by 2020 which will require improvements in competitiveness and service quality, Mr Chon, a dean and chair professor at the prestigious Hong Kong Polytechnic University’s School of Hotel & Tourism Management, told the audience mainly travel executives and tourism related students.

Kaye Chon

Lanith’s (Lao National Institute of Tourism and Hospitality) organises symposiums to highlight key issues facing Laos as it attempts to build a sustainable tourism industry.

“Tourism in Laos has advantages in its strong culture, friendly people, and unique attractions,” he said, but cautioned, “Service quality at all visitor contact points needs to be continuously enhanced to ensure Lao tourism’s competitiveness.”

Prof Chon emphasised the importance of tourism “moments of truth”, or memorable experiences which heavily rely on the service quality and personable interactions with travel-related staff, from immigration officers saying, “Welcome to Laos,” to a waiter, who remembers your favourite drink.

“Tourists often remember their visits based on memorable experiences,” Prof Chon said. “Tourists may forget the places they visited, the hotels, or the meals, but they remember those moments of truth when service quality exceeds their expectations.”

He suggested Lao tourism is now at its own moment of truth – that opportune time to make its move in the fast-growing Asia Pacific – but stressed the country must raise the quality of skills training for the current workforce and education for tourism and hospitality students.

Korean-born Prof Chon cited his similar moment of truth, when he moved to Hong Kong. “I knew the 21st century was Asia’s century, and I wanted to be a part of it.”

He noted, “Service standards have historically been Western-focussed, but over the past 10 years, an Asian standard has emerged, the so-called Asian Wave.”

Prof Chon pointed out that Lanith is perfectly positioned to deliver high-quality training and education for successfully hopping on the Asian Wave. Lanith’s innovative “Passport to Success” skills-training programme and cutting-edge curriculum for its four, two-year diploma degrees combine to meet the needs of Laos’ tourism and hospitality industry, and are taught by highly qualified Lao instructors.

Lanith Chief Technical Advisor Peter Semone said, “One of Lanith’s main challenges is to provide programmes that balance the grooming of human resources’ behaviour with providing knowledge, in order to build a tourism industry in Laos that is at the forefront of the Asian hospitality wave.”

He stressed that Lanith is following Prof Chon’s “Four-legged Chair Approach to Establish Quality”, an organisational structure change that adds industry support to the traditional three legs: quality of faculty, students, and university resources.

“Lanith has already implemented the Passport to Success skills-training programme in cooperation with an enthusiastic private sector in Vientiane Capital and Luang Prabang, Xiengkhouang, and Khammouane Provinces, and is currently seeking a private sector partner to invest in constructing and operating a four-star hotel on Lanith’s Mekong Riverfront campus,” Mr Semone said.

Prof Chon concluded by challenging Laos and Lanith to grasp its tourism moment of truth, and he outlined the industry’s needs for embracing the Asian Wave: raise service quality, create a relationship between academia and businesses, establish separate education and skills-training segments, and forge public-private partnerships.

Mr Semone wrapped up the symposium by noting, “Laos is in the middle of the shift to the Asian Wave in hospitality, and can become a centre of excellence for creating a strong hospitality service culture…We have arrived at Laos’ tourism and hospitality moment of truth, and it is time to move ahead.”

After the presentation, representatives from Laos’ Ministry of Education and Sport and Ministry of Information, Culture, and Tourism presented a Certificate of Appreciation to Prof Chon, who recently co-ordinated a donation of US$50,000 in kitchen equipment from Hong Kong Polytechnic to Lanith.

Lanith is part of the EUR9.35-million bilateral development assistance Project LAO/020, which is supported by the Government of Luxembourg in cooperation with the Lao National Tourism Administration and the Lao Ministry of Education. The project aims to strengthen Laos’ human resources in hospitality and tourism.

Lao News Agency quoted Luang Prabang Airport’s project manager, Sackda Soulisack, saying construction was 63% complete, but work on a flight control upgrade and a perimeter fence had fallen behind schedule.

Work started in April 2010 and should now be ready by 20 October, just before the main tourist season kicks in. A new passenger terminal will be finished by mid 2013.

The new runway is 2,900 metres long and 45 metres wide and cost US$86 million to build.

There are two phases starting with runway construction and installation of a new aviation control system and the second involves construction of an entirely new passenger terminal building.

At the moment only three airlines are serving Luang Prabang — Lao Airlines, Vietnam Airlines and Bangkok Airways with seven flights daily to and from Bangkok, Hanoi, Vientiane, Pakse and Siem Reap.

The Civil Aviation Department is also conducting a study to improve airports, or build new ones, in the northern region in Xiengkhouang, Houaphanh and Bokeo provinces.

Abacus CEO Robert Bailey confirmed, last Friday, during a business visit to Bangkok that Abacus and the airline would both hold a financial stake in the new company.

Lao Airline’s top officials and Mr Bailey will sign a Memorandum of Understanding this Wednesday that will put Lao Airline’s domestic and international flight  inventory into the Abacus system worldwide.

“We are happy to work with Lao Airlines,” said Mr Bailey, “Our services will help them expand as they take delivery of new aircraft. The airline is ready for this move because the sales channels are in place this time.”

For Abacus the move will be viewed as a challenge to Amadeus in the growing aviation markets of the Mekong Region. Amadeus has an exclusive on THAI’s domestic ticketing market and also controls a major slice of Cambodia’s airline ticketing with the BSP set up there as an offshoot of the Thailand BSP system.

But Abacus has a strong foothold in Vietnam through a local joint venture and will expand into Laos using the same business model.

Lao Airline is taking delivery of two Airbus A320s that were originally ordered by airline based in Libya that suspended operations late last year.

The aircraft will used to grow an international network in ASEAN to serve traffic to both Vientiane the capital and Luang Prabang a world heritage site and the country’s top tourist destination.

APG already represents Lao Airlines in Italy, UK, Germany and France.

According to an APG statement, the airline will also join the local BSPs in these markets via IBCS, the pay-as-you-go system for BSP access, which APG created in partnership with IATA in 2000.

“We are delighted that Lao Airlines has decided to extend our cooperation across more key markets where we can offer support for new routes which will develop off the back of the new A320s joining the fleet,” APG executive product director for GSSA services, Richard Burgess said.

Apart from the partnership with APG in European countries, Lao Airlines currently has an office in Sweden, while in Spain it uses Barcelona Airlines to open up the Spanish market.

APG Global Associates is the network of air services business offering mainly outsourced services in passenger/cargo marketing, sales, reservations, ground handling and consulting.

In the past, Lao National Tourism Administration was supervised by the Prime Minister’s Office and received its operating budget directly from that office.

But in late July the country’s Prime Minister’s Office merged with the Ministry of Information and Culture to form a new Ministry of Information, Culture and Tourism and that in turn shifted the line of command and funding for LNTA.

Kirsten Focken

“This step obviously has a large impact on the funding of the new marketing board as the board president is the vice chairman of LNTA and a large part of the budget was to come from the government to set up and run the board,” LMTB advisor, Kirsten Focken told TTR Weekly.

“As part of these changes there will be new responsibilities and budget allocations. The revisions are expected to be confirmed probably beginning of October,” Ms Focken added.

The LTMB is a the first official body in Laos that draws membership from all tourism sectors including government in a move to harness private and public resources to promote the country’s tourism. It was established a year ago and appointed its first committee last January.

While awaiting for the funding issue to be resolved to start LTMB promotional activities, Ms Focken said work was still progressing on a marketing strategy, a review of tourism statistics and studies on the threats of increasing prices, global recession and competition.

The major issue for the LTMB is funding for promotions and marketing. While some support will come from government the main funding would be secured by a tax on tourists.

Seed funding to establish the board came from the former Lao National Tourism Administration, but to drive tourism through an international marketing programme the board still needs to implement a tourism tax.

LTMB is recommending a US$2 levy on all tourists entering the country at airports and US$1 at overland checkpoints.

But collection is also a problem as it involves various governments departments in the provinces and the proposal also faced criticism from travel industry delegates attending the Mekong Tourism Forum held in Pakse last May.

Critics said it would be wiser to use current taxes that are paid by travel agencies and hotels rather than introducing a tax directly on consumers.

Neighbours, Thailand and Vietnam, provided 80% of the 1,485,462 foreign visitors, with other ASEAN countries showing an above average growth of 29.53%.

LNTA projects tourist arrivals at 2,662,556 by the end of the year, representing a 6% increase over 2010 and generating a revenue increase  of 4.6% to US$399,122,419.

Thailand and Vietnam, the top and the second suppliers, had a market share of 58.25% and 22.11% of all arrivals respectively.

During the six-month period tourists from Thailand reached 865,308 up 19.13% from 726,346.

Vietnamese tourists totalled 328,490, skyrocketing 70.59% from 192,565 during the first six months of last year.

Although ASEAN visitors generate much lower spending per day than long-haul visitors, they travel all year round and inject a steady flow of revenue to Lao tourism industry.

Apart from ASEAN that reported healthy growth, other regions increased only minimally or even dipped. Arrivals from Asia and Pacific, excluding ASEAN, dropped – 4.65%; Europe, +4.33%; the Americas, +3.17% and Africa and Middle East, +14.41%.

By country markets, performance varied. Tourists from Russia drastically rose 74.63% from 2,006 to 3,503, an indicator that the market will improve further this year as Russians explore new destinations close to Thailand.

Cambodia also reported a118% growth from the Russian market for January to June. Thailand and Vietnam have seen a healthy growth of around 70%.

Other source countries reporting strong growth rates included: Brunei (+138%, 202); Taiwan (+81%, 3,076); Austria (+72%, 2,094); Israel (+42%, 2,015) and Indonesia (+37%, 1,394).

Countries with declines included: Cambodia (-12%, 3,369); China (-17%, 76,271); India (-1%, 1,510); Denmark (-6%, 2,779); Germany (-3.5%, 11,584); Greece (-32%, 218); Italy (-1%, 3,370); Netherland (-5%, 4,494); United Kingdom (-5%, 18,217) and USA (-0.4%, 25,403)

Chart: Top 10 source markets January to June