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The future of travel:How the travel industry will cater to the next generation

By Peter L. Allen
THERE is no question that the growth of the sharing economy and new traveler expectations are disrupting existing norms. Travelers are increasingly looking for accommodations, travel services, and activities that are customized to their needs — it’s a worldwide phenomenon that the Philippines is fast adapting to.
But for the Philippine travel industry to keep up with this global change, it must understand the behavior of the modern traveler. Currently, the local travel sector can learn from two key strategies to ensure that it caters to the global market demands.
WINNING OVER ‘BLEISURE’ TRAVELERS
According to the Global Business Travel Association’s forecast, total business travel spend will grow between 6 and 7 percent annually, reaching US $1.7 trillion in 2021. This accelerated growth may partly be attributed to the blurring lines between business and leisure travel as more travelers are combining their business trips with weekend stays — also known as ‘bleisure’ traveler.
Businesses that aim to cater to this growing travel segment would do well to incorporate flexible spaces and services that can work equally well for business and leisure travel purposes — from working and living spaces, to amenities, apps, and services.
Resorts that have dedicated communal working spaces, extra ‘home-comfort’ facilities, or host networking activities specifically for business travelers will have an edge over competitors. Convenient tagging of expenses that can differentiate personal versus business transactions is another peripheral service catering to ‘bleisure’ travelers that hotels should look into.
PERSONALIZED TRAVEL EXPERIENCE
While travelers’ expectations of comfort, convenience, and reliability have not changed, travelers are increasingly discerning when it comes to customized and authentic local experiences. Many of them are also looking for alternative accommodation in both local and foreign destinations.
Local home rentals are an increasingly popular choice, as the growth of this sector clearly shows. Travelers look for features like kitchens, shared spaces, and laundry amenities — essentials that allow for a much longer stay. Interestingly, we see hotels responding to the growth of this new sector by stepping up to provide these features as well.
Customization of the travel experience is also taken up a notch as a lot of travel businesses have gone digital and use big data analytics and machine learning algorithms to create personalized services. Traveler profiles that include information such as the type of travel, which airlines the traveler is taking, itinerary, dietary preferences and restrictions, and disability requirements provide valuable insights. This data will pave the way for the emergence of highly personalized services and recommendations such as automated door-to-door pick-up from the airport, custom dining menus, reservations, and itineraries.
Data of this kind will also foster smarter and more effective collaborations between travel companies and local businesses. For example, a hotel may link up with nearby restaurants that cater to specific dietary needs to expand its room-service dining options. The extent of these partnerships can make a huge impact on the industry as the need for hotels and other travel businesses to offer more personalized services is increasing.
There is certainly a bright future ahead for travel companies around the globe. But in order to benefit from this growing market sector, it’s important that businesses take into account the changing profile of travelers and offer customizable options in terms of amenities to best cater to consumers. The more the travel experience can be personalized, the better the returns can be for the Philippine travel sector.
 
About the author:
Peter L. Allen is the Managing Director of Agoda Outside, the outreach and public affairs department of Agoda.com, where he works extensively on travel and tourism issues across Asia and is an advisor to the World Travel & Tourism Council (WTTC). He has taught at Princeton University, Pomona College, the University of Chicago, and Nanyang Business School in Singapore.

Gov’t makes partial T-bills award

THE GOVERNMENT made a partial award of the Treasury bills as rates rose. — KARL ANGELO N. VIDAL

THE GOVERNMENT made a partial award of the Treasury bills (T-bill) on offer yesterday amid lukewarm demand as market players sought higher returns ahead of the policy meetings of the local and US central banks.
The Bureau of the Treasury (BTr) raised just P13.4 billion out of the programmed P20 billion at its auction on Monday.
The BTr opted to partially award the instruments as bids received totalled P24.9 billion, lower than the P31.8 billion in offers fetched during the previous T-bills auction.
Broken down, the Treasury borrowed only P3.386 billion out of the programmed P6 billion via the 91-day tenor yesterday even as tenders reached P6.686 billion.
This, as the average rate for the papers went up seven basis points (bp) to 5.786% from the 5.716% fetched during the previous auction.
For the 182-day bills, the Treasury borrowed P4.96 billion out of the P6 billion the Treasury wanted to raise, with bids totalling P9.48 billion. Its average yield also picked up 5.1 bps to 5.987% from the 5.936% fetched last week.
The government likewise made a partial award of the 364-day papers, accepting just P5.096 billion out of the P8-billion program and total offers amounting to P8.766 billion. The average yield likewise climbed 3.3 bps to 6.052% from the 6.018% quoted in the previous offer.
At the secondary market, the three-month, six-month, and one-year papers were quoted at 5.687%, 5.911% and 6.046% yesterday, based on the PHP Bloomberg Valuation Service Reference Rates.
Following the auction, National Treasurer Rosalia V. De Leon said the BTr made a partial award of the T-bills as they do not see the need for any significant increase in rates.
“But we see that the banks are charging higher rates particularly on the short end of the curve given the funding cost right now is higher because of…the tight liquidity,” Ms. De Leon told reporters yesterday.
“But…the yield curve is relatively flat because of expectations that inflation will be trekking back to the 2-4% [target] of the BSP (Bangko Sentral ng Pilipinas). So the appetite is on the long end of the curve.”
Traders interviewed last Friday also expected demand for the short-term securities to be tepid following the recent retail Treasury bond sale, which siphoned off liquidity.
Meanwhile, Ms. De Leon also noted the policy meeting of the central bank on Thursday, where the monetary authority is expected to keep interest rates steady even as inflation is seen to decelerate.
In a BusinessWorld poll, 10 out of 13 analysts said the central bank will likely keep its benchmark rates unchanged on March 21, its second policy meeting for the year, as they would need more inflation data to trim borrowing costs.
Headline inflation clocked in at 3.8% in February, marking the slowest pace in 12 months, although still just below the ceiling of the BSP’s 2-4% target band for this year.
“Also for the US Fed[eral Reserve], they are going to have their own policy meeting coming Wednesday, so with the soft week of US economic data, we see also see that they will continue with its ‘patient’ mantra,” Ms. De Leon added.
Sought for comment, a trader said the auction results were in line with market expectations that rates will pick up by 10 bps from the previous auction.
For this quarter, the government is planning to borrow P360 billion from the domestic market. Some P240 billion will be borrowed this quarter through 12 weekly T-bill auctions. On the other hand, P120 billion worth of Treasury bonds will also be issued through six fortnightly auctions. — Karl Angelo N. Vidal

Potato Corner eyes more stores in PHL, abroad

By Vincent Mariel P. Galang, Reporter
POTATO CORNER is looking to open more stores in the Philippines and internationally this year.
“For international, we are opening 60 stores for outside the Philippines… all around. We have more than a hundred stores in Indonesia, already. We have 40 stores in the US… 30 plus stores in Thailand, already, so we’re growing internationally,” Jose P. Magsaysay, Jr. , president and chief executive officer of Potato Corner told BusinessWorld in an interview March 5.
For the Philippines, Mr. Magsaysay said the company is targeting to open a “maybe, hundred more stores.”

POTATO CORNER is one of the most popular food cart franchises in the country. — WWW.FACEBOOK.COM/POTATO-CORNER

At present, the food cart giant has 1,100 stores across the Philippines, while there are 200 stores outside the country.
Potato Corner’s expansion has been mostly due to franchising. Around 70% of its stores are franchised, while 30% are owned by the company.
Mr. Magsaysay said that the company maintained its franchising fee for Potato Corner, especially now that most of their new franchisees were the customers before.
“Not too far. Alam mo [You know what], that’s one thing we did. We’re always protecting our franchisees in terms of their payback, their return on investment, so we never increased the franchise fee. Kung ano ’yung franchise fee namin [Whatever is our franchise fee] 15 years ago, ’yun pa rin ang [that is still the] franchise fee ng [of] Potato Corner until today,” he said.
“A lot of our new franchisees now were our customers when they were, bata pa sila [still young]… Sila na ngayon ang mga partners namin [They are now are our partners]… Ngayon, may edad na sila, pwede na silang mag-invest [Now that they are in the right age to invest], Potato Corner ’yung choice nila kasi [is their choice because] it’s something they love,” he noted.
Mr. Magsaysay noted that for Potato Corner, the company does not require the interested franchisee to have the capital immediately. As long as the chosen site for the franchise can earn and return the investment, then the company is very much open to franchising it.
“Kunwari sinabi, may site dito, pero wala akong kapital, pero pag tinignan ko yung site mo, it’s something that I cannot say no to, mag-partner tayo… bigyan kita ng franchise, tsaka mo na ako bayaran. [For example, someone says I have a site but I don’t have capital. But when I check the site, it’s something that I cannot say no to. We can partner. I can give you the franchise and you can pay me afterwards],” he said.
Potato Corner started in 1992 with the concept formulated by Mr. Magsaysay and his three other partners, namely Jorge Wineke, Danny Bernejo, and Ricky Montelibano. The concept is selling flavored french fries the way popcorn is sold.
With their investment of P35,000 each, the single kiosk in SM Megamall grew to what is known to be the “World’s Best Flavored Fries.” Not only is it only in the Philippines, but also in more than 100 countries including Indonesia, United States, Thailand, and Panama.

Filinvest City and Davao Oriental to hold music festivals in April

FILINVEST CITY will host its community fair, Festival of Possibilities, on April 26 at the Filinvest City Event Grounds.
Set to perform are Brisom, Chiquerella, Lunar Lights, Wicked Adobo, Written by the Stars, I Belong to the Zoo, This Band, Itchyworms, Rivermaya, and Spongecola.
Now on its second year, Festival of Possibilities 2019 will also have arcade games and inflatables and a food bazaar.
Admission to the Festival of Possibilities is free so long as festival goers present proof of residence or employment in Filinvest City at the venue gates.
For more information on the festival, visit www.facebook.com/FilivestCityOFFICIAL.
DAVAO ORIENTAL MUSIC FESTIVAL
The Davao Oriental provincial government and the City of Mati, along with Orca Promotions, are organizing what will be the biggest music festival in the province set for April 6-7.
Dubbed the Bonfire Music Festival, the two-day music festival will be held at the Provincial Sports Complex at Bgy Dahican, Mati in Davao Oriental.
Lined up to perform on April 6 are December Avenue, Nairud, Harmoniax, Broken Chords of May, OrientRocks, Muzza Band and Mark & Sid; April 7 will feature top rave DJs Tom Taus, Stefan Lan, Ron Poe, Jet Boado, Cathy Frey, Cassie D and Jack Ripper.
A two-day pass will grant access to all these performances and discounts for activities such as a paintball challenge, freebies from sponsors, raffle entries, and many more.
For tickets and inquiries, call 087-306-0573
e-mail gcarmelotes.orca@gmail.com or visit the Bonfire Facebook page https://www.facebook.com/bonfiremusicfest/.

DMCI’s Ivory Wood development completed

THE property unit of DMCI Holdings, Inc. said it has completed all seven buildings of the Ivory Wood development within the 150-hectare Acacia Estates township in Taguig City.
In a statement, DMCI Homes said construction of Abaca, the seventh building at Ivory Wood, was finished ahead of its November 2019 target. Turnover of units started this month.
The Ivory Wood development includes Anahaw, which was turned over to homeowners in January 2018. Turnover of Palmira was in April 2018; Lauan in July 2018; Kamia in October 2018; Flores in November 2018; and Adelfa in February 2019.
The seven buildings, which feature a Filipino-Spanish design, have a combined 965 units. Each building has six floors, plus one to two basement parking floors. Units range from two-bedroom or three-bedrooms.
Launched in 2015, Ivory Wood mainly targets young families and professionals by providing them a home near work. It also targets overseas Filipino workers (OFWs) and investors who are looking for space to live in or a space to rent out or sell the unit to profit.
“With the completion of the 3.3-hectare development, residents can now enjoy a chic and classic metropolitan retreat with Ivory Wood’s wide array of resort-inspired amenities that include lush gardens, a grand clubhouse, picnic area, children’s playground, kiddie pool, lap pool, fitness gym, audio-visual room, jogging path and a basketball court,” the company said in a statement.
Acacia Estates Township is located near business districts namely Makati City and Bonifacio Global City.
DMCI Homes is the property unit of diversified engineering and construction conglomerate DMCI Holdings, Inc., which also has interests in general construction, coal and nickel mining, power generation, water concession, and manufacturing. — Vincent Mariel P. Galang

PNB books higher net income in 2018

PHILIPPINE National Bank (PNB) posted a higher net income in 2018 driven by its core businesses.
In a regulatory filing on Monday, the Lucio C. Tan-owned lender said it booked a net profit of P9.6 billion last year, up 17% from the P8.2 billion tallied in 2017.
The lender attributed the growth in its bottom line to “sustained efforts in strengthening the bank’s core business.”
Net interest income stood at P27 billion, up 23% year-on-year, driven by a 19% expansion in gross loans and the widening of its net interest margin to 3.3%.
Despite seeing “robust” loan growth, asset quality remained strong with a gross non-performing loan (NPL) ratio of 1.76% with NPL coverage of 156.87%.
“Funding efficiencies were achieved behind a 22% increase in low-cost demand deposits which fuelled growth in deposit liabilities,” the statement from the bank read.
Net service fees and commissions grew 9% in 2018 driven by improvements in deposit, trade, credit card-related fees as well as bancassurance income, partially offsetting a decline in underwriting fees.
Meanwhile, net gains from sold assets grew to P5.9 billion from last year’s P3.9 billion.
Total operating income of the bank stood at P38.9 billion, up 20% from the P32.3 billion in the previous year.
On the other hand, operating expenses excluding provisions for impairment and credit losses grew 13% year-on-year due to higher business taxes and other business-related expenses.
Overall, PNB’s assets grew 18% to P983.6 billion last year from P836.3 billion in 2017 driven by current and savings account deposits as it continued to focus on generating low-cost funds and other stable sources of funding.
Capital adequacy ratio was at 14.35% while common equity Tier 1 ratio was at 13.55% at end-2018.
In April 2018, the bank issued $300 million of five-year fixed rate senior notes out of its $1-billion medium term note program in Singapore and Hong Kong.
The bank recently raised P8.22 billion worth of 5.5-year long-term negotiable certificates of deposit, which will be used to help extend its maturity profile.
PNB shares stood at P60.25 apiece, up 0.65 centavos or 1.09%. — KANV

CLC optimistic on growth, expansion for 2019

CHELSEA Logistics Holdings Corp. (CLC) is optimistic on its growth prospects and expansion plans this year, with focus on its logistics infrastructure and telecommunications businesses.
In a statement on Friday, Davao-based businessman Dennis A. Uy’s company said its shareholders had approved to change its corporate name to “Chelsea Logistics and Infrastructure Holdings Corp.” and its Philippine Stock Exchange (PSE) trading symbol to “C” from “CLC” during its stockholders’ meeting last Friday.
“Our expansion plans complement our current business operations… This year, we continue with our business expansion plans and expect that our shipping and logistics commitments and infrastructure undertakings will enable us to be more competitive and bolster our market position,” CLC President and Chief Executive Officer Chryss Alfonsus V. Damuy said in the statement.
Last year, CLC ventured into the telecommunications business when it joined the Mislatel consortium, formed by its parent company Udenna Corp.; China Telecommunications Corp. and Mindanao Islamic Telephone Company, Inc. (Mislatel).
CLC also has projects in the pipeline for its logistics infrastructure business, such as its unsolicited proposal to modernize the Sasa port in Davao City. Mr. Damuy said should it gain approval for the project, it is expected to “translate to value creation for our stakeholders and promote further synergy within the Group.”
Outside seaports, CLC also received in October original proponent status for its proposal to operate and expand the Davao International Airport. The project is currently being reviewed by the National Economic and Development Authority (NEDA).
“As the government pushes its ‘Build, Build, Build’ program forward, we are actively looking for opportunities to participate in the development of infrastructure facilities and systems in the country, including ports and airport development and operations and other related facilities,” Mr. Damuy was quoted as saying.
The company said it is bullish that 2019 will show “substantial improvement” in its performance, backed by projects that are geared to expand its business operations. — Denise A. Valdez

Amaia Land launches Imus town house project

AMAIA LAND Corp. said it recently launched its first town house project in Imus, Cavite.
In a statement, the company said Amaia Series Vermosa is a 6.9-hectare development along Patindig Araw road in the vicinity of Ayala Land, Inc.’s 700-hectare master planned development Vermosa Estate.
“Located near Ayala Land’s fourth largest estate project, Amaia Series Vermosa brings Amaia’s trademark of superior quality, affordable homes to Caviteños,” Kristel T. Manalo, project development head for South Luzon of Amaia Land said in the statement.
There are two town house types available, both with three bedrooms, toilet and bath on the second floor and available provisions of toilet and bath on the ground floor, a kitchen, and a dining and living area. All units will have car ports.
Amaia Series Vermosa can be accessed from Makati City, Manila, Muntinlupa City, and Tagaytay City through roads such as Daang Hari, South Luzon Expressway (SLEx) through Muntinlupa-Cavite Expressway, Cavite Expressway (CAVITEx), and the soon-to-be-completed Cavite-Laguna Expressway (CALAx). — Vincent Mariel P. Galang

Lazada’s Super Party concert to be livestreamed

E-COMMERCE site Lazada will livestream its inaugural Super Party music concert on its app simultaneously across all six of its markets in the region, as a way to mark its 7th anniversary.
Headlining the concert will be Grammy and Brit Awards winner Dua Lipa, known for songs like “New Rules,” “IDGAF,” and “One Kiss.” Also performing are Filipino stars Nadine Lustre and Sam Concepcion; Miss Universe 2015 Pia Wurtzbach; Indonesian singer-actress Agnez Mo; winner of The Remix Contest 2015 and coach on The Voice Vietnam 2017, Dong Nhi; Indonesian-Australian model and actress Nadya Hutagalung; Vietnamese comedian and TV presenter Tran Thanh; host Allan Wu; and rappers Urboy TJ, Hael Husaini, Saykoji, Ismail Izzani, THELIONCITYBOY, Angger Dimas, and Dipha Barus.
The concert itself will take place in Jakarta, Indonesia, on March 26, 8 p.m. (Philippine time) at the Indonesia Convention Exhibition. Lazada consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam can catch all the action streamed live on their Lazada app.
“Through this first-of-its-kind concert experience across Southeast Asia, Lazada is blending shopping and entertainment, ushering in a new era of ‘shoppertainment,’” the company said in a press release.
“We want to go beyond shopping and offer our consumers and fans, through our in-app live streaming capabilities, moments to cherish and remember. What better way to celebrate our 7th birthday than with our fans, Dua Lipa, and the region’s most talented artistes who will be partying together at the concert and through our app,” said Mary Zhou, Chief Marketing Officer at Lazada Group, was quoted as saying.
Lazada’s 7th birthday celebration culminates with a one-day sale on March 27. The one-day sale promises a new online shopping experience that includes a new selection of arcade games for redeeming vouchers and deals for consumers in the region.

Traders push yields close to RBA cash rate ahead of employment data

INVESTORS CAN’T SEEM to get enough of Australian bonds amid worries about an economic slowdown. This week’s employment data may just whet their appetite for more.
Australia’s 3-year bond yields have dropped almost 50 basis points since early December to within a whisker of the central bank’s 1.5% policy rate. Short-dated bonds have proved popular as markets dialed up expectations the Reserve Bank of Australia (RBA) will have to reduce interest rates.
While consumer sentiment and growth have worsened amid a property slump, the unemployment rate has been one consistent bright spot for the economy. Hovering at just 5%, close to the lowest levels since 2012, the release on March 21 may set the tone for the RBA’s next policy meeting in April.
The key for rate-cut expectations will be the labor market, according to Skye Masters, head of interest-rate strategy at National Australia Bank Ltd. “Our bias is the cut will come earlier rather than later” as the central bank’s positive outlook for the labor market is unlikely to be fulfilled, she added.
Money markets are now pricing in a 25 basis point rate cut in August, with another in the second quarter of 2020. The aggregate open interest — a measure of total outstanding positions — for Australia’s 3-year bond futures have surged to a record high of 2.3 million contracts.
Susan Buckley, managing director of global liquid strategies in Brisbane at QIC Ltd., which oversees the equivalent of $60 billion, is one fan of 3-year debt.
“We don’t need to fear higher rates now, so it’s a good strategy to park your duration in the front end,” said Buckley. “We’re back into this low interest rate world.”
While “a fair bit is starting to get priced in” to short-dated debt, QIC remains comfortable building a long position in 3-year paper to hedge risks its taking elsewhere, including corporate bonds, she said.
However, there are things which could limit the continuing drop in yields. One may be election-driven spending as the Liberal coalition government seeks to reverse sinking ratings with its April 2 budget.
Another factor would be rising costs to borrow bonds and tighter bank balance sheets, said Tamar Hamlyn, Sydney-based principal at Ardea Investment Management. That “makes buying and holding physical bonds more expensive for unfunded investors.” — Bloomberg

Ortigas tops off The Imperium

ORTIGAS & Co. said it recently topped off its second residential tower in Capitol Commons estate in Pasig City.
In a statement, the property developer said it has completed the 62-floor The Imperium. Each floor will only have four units, ranging from two-bedroom units to suites. Prices range from about P16 million to P37 million. Turnover of The Imperium units is set for 2020.
“We are excited in bringing to market The Imperium, our most exclusive residential tower. This is another proud achievement for Ortigas & Company, especially as we fulfill our mission to build great places for life that allow for elevated, excellent living grounded on best-in-class structure, amenities, and design,” Jaime E. Ysmael, chief executive officer and president of Ortigas & Co., was quoted saying in a statement.
The tower’s structure has 57% glass-to-concrete ratio which enables efficient use of energy. It also has trapezoidal, double-glazed windows that lessen the need for artificial lighting, and reduce noise and control heat. It also has buckling-restrained brace technology which enables it to withstand strong typhoons or earthquakes. — Vincent Mariel P. Galang

Aboitiz group teams up with Australian firm

ABOITIZ Equity Ventures, Inc. (AEV) has partnered with Australia’s Arowana International (AWN) for the establishment of a training center that will offer information and communications technology (ICT) seminars within the year.
In a letter addressed to the Australian Securities Exchange Monday, AWN said its wholly owned subsidiary DDLS Australia Pty Ltd. has entered into an agreement with a unit of AEV for the conduct of ICT seminars.
The first training center will be launched in Manila by the middle of the year, with more to be unveiled in other areas depending on demand. The centers will offer technology-focused short courses.
The courses will be administered by AWN’s wholly owned unit EdventureCo, a professional and vocational education and trading group in the Asia-Pacific region.
“The ICT needs across the Philippines are immense and will continue to grow strongly given this demographic backdrop. The opportunity and vision of building a Philippines leader in ICT knowledge is shared with the Aboitiz group,” AWN Executive Chairman and Chief Executive Officer Kevin Chin said in a statement.
For his part, AEV Chief Operating Officer Miguel Aboitiz said education has always been the advocacy of the Aboitiz group.
“This initiative provides technology-focused short courses that will produce better-trained and more competent Filipinos in the growing digital economy,” he was quoted as saying.
DDLS is said to be the only ICT training provider in Australia to offer training in leading cloud providers, Amazon Web Services, Google Cloud and Microsoft Azure. — Arra B. Francia

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