Developed for Aqaba Special Economic Zone Authority Developed

Developed for
Aqaba Special Economic Zone Authority
Developed by
USAID/Jordan Tourism Development Project II
Achievements to date
Key challenges
Marketing vision and approach
Changes of emphasis - old strategy v. new strategy
• Charter traffic up (major scope for growth)
• Cruise liner growth (but most benefit not held
locally, decline in 2009)
• Some broadened awareness of Aqaba as a
holiday base amongst travel trade
• Overnight visitors up from 388,111 to 427,421
Aqaba up +9%, – Jordan up +25%
• Bed nights up from 783k to 869k (+10%)
Aqaba’s share of Jordan bed nights increased from 14% to 15%
• Room occupancy down from 52% to 47.5%, further
decline 2009. Jordan 55.3%
• Length of stay increasing slightly from 1.9 to 2
nights. Jordan 4.3 nights
Source: MOTA
Note: Classified hotels only.
• A reasonable start but falling short of 2005-2010
marketing strategy targets.
• Under-performing relative to rest of the Kingdom
• Falling hotel occupancy a major concern
• Continuing short length of stay a key challenge
• Increase room sales to 1.54 million nights
(currently 664k)
• Increase arrivals at KHIA up to 400,000
(currently 90,000) = 2000 additional flights
• Increase average length of stay to 2.4
nights (currently 2) and visitor expenditure
Aqaba needs to focus on:
i. Quality product (a destination experience)
ii.Clear focussed marketing
iii.Competitiveness
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Improving hotel product
Attractions offer in Aqaba itself are very poor
Shopping offer poor
Aqaba city linkage to the sea poor
Beach product poor
Diving product under severe environmental and
security pressure
• Linkages to Petra and Wadi Rum critical and need
improvement
• Readiness for new products
• More effort, highly experienced staff and funding
needed
• Need for more sales-oriented approach
• Need for stronger private sector lead
• More cooperation with JTB essential
• More cooperation with JITOA members
• Address seasonality (events, diving, special offers)
• Maximising room yield
• Introducing last minute offers portal
• Increasing on-line bookings and web marketing skills
(JTB role)
• Passing on the benefits of being a SEZ
(Aqaba must be better value than the rest of Jordan)
• Training on all levels needed
Aqaba will become a premier Jordanian
holiday and residential tourism destination
with a variety of quality experiences on
the Red Sea, and seamless links to Petra
and Wadi Rum.
Key attractions :
• Nature (Red Sea, mountain and coastal landscape, sunshine,
palms, Wadi Rum, camels, Oryx)
• History (Petra, Arab Revolt)
• People and culture (Arab, Aqabawi and Bedouin,
hospitality and easy mix between tourists and locals)
• Green destination (attractively landscaped urban oasis and
a modern user-friendly city, environmentally conscious).
EXPAND
• Summer sun (charter)
• Winter sun (mostly charter)
• Diving
• Cruise tourism
• Heritage (Petra)
• Desert activities (Wadi Rum)
• Water sports and beach
• Domestic residential tourism
• Jordan + Egypt
NEW
• M.I.C.E. (access critical)
• Up-market residential
tourism (access critical)
• Weekend/short breaks
• Events
• Family tourism
• Sailing
• Greater emphasis on joint marketing with international tour
operators, Jordanian ground handlers, JTB and RJ
• Focussed public relations (PR) campaigns for key products
• Market KHIA airport, target charters and LCCs
• Develop MICE marketing in Aqaba (depends on airport, product)
• MICE and add-ons to MICE business
• Build a quality (added value) reputation, enhancing brand value;
• Strengthen visitor information services, integrate with Jordan
network
• Promote connectivity between Aqaba, Petra and Wadi Rum and
neighbouring countries
• Old strategy was about strategic re-positioning the
destination to attract more up-market West European
visitors
• New strategy is more tactical and sales oriented:
Events, special offers, local and international targets
• Greater emphasis on role of airport
• New strategy requires stronger private sector input to drive
sales-orientated approach.
• Requires more funding and specialist marketing experience.
• Requires faster delegated decision-making processes to
capture tactical sales opportunities.
• Sees introduction of new Aqaba products
• Requires specialist airport marketing to attract more charters
and scheduled flights (both essential).
• Demands action on quality and environmental issues in
order to achieve competitive advantage
2. KHIA Marketing
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KHIA Marketing Department
Background situation
Key challenges
Marketing objectives and approach
recommended
KHIA Marketing Department
• KHIA needs to create a
Marketing Department
• Initially three staff
– Director of Route
Development
Ideally, the Director has airline or
airport experience and is familiar
with tour operators and LCCs,
liaise with all stakeholders
– Research/Analyst
– Executive
• There is an urgent need to
move quickly, while staff are
recruited, trained and fully
active
• Use experienced external
resources for short-term
tactical ‘sales blitz’ of LCCs
and TOs
• Over time, the airport
department will become fully
active
• The airport is not the attraction, Aqaba is!
• Airlines need first to be convinced that Aqaba is a
desirable destination and that there are sufficient
passengers to support a viable commercial
operation
• Only once that requirement is satisfied, would the airline
consider the operational cost of flying to Aqaba and
related issues
• Competition for air service is intense – airlines compare
and rank opportunities. Airports compete against each other
• Airports are best placed to lead efforts to attract air service –
they understand airlines!
Can and cannot do
• Airports can control the cost of doing business there
• Airports can control the passenger experience
• Airports cannot deliver a desirable destination, but that is
what passengers are purchasing
• Proactive efforts to influence Airline/Tour Operator
decision-maker, to secure new or increased service
• Need detailed market research:
• Understand your own market
• Understand who your competitors are know which tour
operators and airlines fly there
• Communicate the strengths of your airport and
destination and dispel negative misconceptions
• Present a positive business case to persuade –
decision-maker to use aircraft resources to your
market rather than alternative markets
• Maintain existing services
• Monitor service performance – frequency, regularity, passenger
numbers, integrity
• Maintain regular contact with airlines/tour operators and be
ready to assist with problems
• Promote growth by improving existing services
• More frequencies, larger aircraft – more seats, better timed
flights, increased cargo capacity
• Secure new services
• New markets with existing airlines
• New airlines, new source markets
• Air service plays a critical role in economic and tourism
growth and therefore competition for air service is intense
• Airlines and tour operators have sophisticated systems that
they use to compare and rank destinations competitively
• Airports and destination partners are becoming increasingly
proactive in seeking to attract airline business
Must be done in collaboration with ASEZA and JTB to
ensure consistency of message
• Increased airport revenues
• User fees
• Increased concession revenues
• Regional economic benefits
• Higher hotel occupancy
• Increased spend – hotels, restaurants, beaches, other
city / regional attractions
• Increased local employment
• Growth of tourism-related and other SMEs
• Additional direct and induced financial benefit
• 2006 equaled 2008
• But 2007 was very weak
• Many former charter
airline Customers
• Also new source markets
• Netherlands, Czech
Republic, Kyrgystan,
UAE, Monarch UK,
Scandinavia
• Egypt was main source
market
• Not major economic
contributors
• Up to May 13th there were a total of 37,386 arriving
and departing passengers
• Year-end optimistic forecast, 102,000 passengers, a
decrease of 16%
• Interviews confirm business is down
• The Summer months are going to be worse!
• Main source market is still Egypt
• Some markets OK, but no
traffic from France, Russia,
UAE, CIS countries and
former eastern bloc countries
• Scandinavia already twice last
year – Average o/n 10.2 days!
• Maintain current Tour Operator/
Airline customers
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Main source markets, Italy, UK,
Belgium, France, Germany,
Scandinavia, Russia, Netherlands
• Extend reach through new Tour
Operator/Airlines and LCC
airlines
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Target new TO/Airlines and LCC
airlines in existing source markets
and in new markets
Identify the major players, research
and develop initial proposition
Phone, email initial contact then sales
calls in person to most responsive
• Ensure KHIA can handle increased
operation and passengers
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MUST be able to handle not fewer than
two arrivals or two departures
concurrently
• Ensure all aspects of touristic
product are in place and meet
tourists’ expectations
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Five Star Properties
Other accommodations
Beaches and other touristic facilities
for all
• Main source markets
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Italy, UK, Belgium, France, Germany, Scandinavia, Russia, Netherlands
Must identify the TO decision-makers and stay in contact with them
Their local DMCs will be able to help and must not feel their position is threatened
It is absolutely vital that current business is maintained
• The current marketing Incentive needs to be revised to make it more
appealing to both charter airlines and LCC airlines - 2009/2010
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Make current Incentive for existing airline customers seasonal, not annual – this will
include more flights for the airlines and encourage Summer service
ASEZA pays all Airport and RJ Handling charges for any flights in 2009 that are not
already planned, for all existing airline customers
ASEZA pays all Airport and RJ Handling charges for all flights operate by new airlines
Minimum three nights stay in Aqaba, minimum 1,000 passenger winter, 1,500 summer
Will discuss additional incentives on case-by-case basis
Airlines are free to try to negotiate landing fees with the airport and handling fees
with RJ
• Target new Tour Operator/Airlines and LCC airlines in existing source
markets
• Identify the major players, research and develop initial proposition
• Phone, email initial contact, then sales calls in person to decisionmakers in most responsive of these
• Wealthy resident of Saudi Arabia, Kuwait, Bahrain, UAE, Qatar for
example might all be targets for the excellent SARAYA facilities,
together with the traditional Arabic charm of Aqaba city
• Existing TOs might operate from additional cities in source countries
• e.g. Manchester in north England, Birmingham in Midlands
• Frankfurt, Berlin, Munich, Stuttgart, Dortmund in Germany
• Lyons in France
• Barcelona as well as Madrid in Spain
• Rome, Milan, Turin in Italy
• Ensure KHIA can handle increased operations and passenger numbers
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MUST be able to handle not fewer than two arrivals or two departures concurrently
There is no doubt that the arrivals hall is simply too small to accommodate two aircraft
arriving within 30-60 minutes of each other – many anecdotes from the local TOs and
travel agents of passengers waiting on the tarmac
• Quickly build a temporary structure that can accommodate arrivals or departures
Reports also, of issues with immigration officers and security officers not always being
available at arrival/departure time
Must become more customer-driven, not operations-driven
• Must have destination collateral available, especially in arrivals hall
• Need car-rental and hotel booking facilities for independent travelers, especially
LCC passengers
It is recommended that the immigration ‘booth’ be relocated to the end of the arrival hall
from the side – this would be easier to see and to access
Rather than add an additional CIP lounge, it is recommended that any/all available space
be dedicate to passenger-oriented facilities
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Five Star Properties – excellent standard, private beaches – SARAYA development early
2011 will provide a big leap forward for its guests and others in the community
• Important to be finished on time – safe, secure, clean pedestrian area with souk,
shopping, restaurants/cafes/bistros, Arabic environment, Beach Club, aqua park
Other accommodations need to be developed and increased
• Not all tourists want or can afford Five Star; Four and Three especially must be
available – 1,2,3 Star hotels can apply for grant to upgrade facilities (ACED, USAID)
Beaches and other touristic facilities for all
• Non-beach front hotel guests must have access to clean, comfortable beaches with
full facilities.
• During 2010 at least one such beach will open – National company for Tourism
Development
• Development of Great Arab Revolution Square area into another focal point for the
city - pedestrian area including beaches, shops, food and beverage, arts, crafts,
shows
• Mature and responsible night life - clubs, shows, restaurant late-night bars etc.
• More family-oriented facilities – swimming pools, play-parks, etc.
3. ASEZA Airport Incentive Scheme
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Current Scheme
Tour Operator/Charter Airline Views
Charter flights incentive options
Scheduled air services incentive options
• ASEZA contribution to costs of marketing and
promoting new tourism markets and supporting
existing market:
–Only for charter airlines, not scheduled airlines
–5,000 for maximum 10 flights in 12 month period
–Passengers must stay minimum 3 nights in Aqaba
hotels
–Minimum 100 passengers per flight
–Incentive paid retrospectively on production of evidence
of operation, and copies of marketing material in source
market
• Local TOs representing the foreign TO/charter airlines
–Grateful to ASEZA for their support so far
–Compared to support at competitive airports, it is low
–Unfair to year-round operators - inequitable
–At least one series from Spain in 2008 has reverted to
AMM this year, even though AQJ was cheaper – “it’s
just easier to structure Jordan tours from Amman”.
–Several TOs said they have pulled series because they
can get better deals elsewhere, and have stopped
featuring Aqaba/Jordan
• At least one local TO has regular winter business from
Scandinavia and, soon, Russia – could do year-round
if incentive covered all flights
• “it is insufficient to motivate the TOs to come here, and
to stay”
• “it can be argued that we’d get no less business if
there was no incentive at all”
• So, it seems the current scheme is not entirely
successful
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Airlines already enjoy 50% off these prices
World recession has suppressed worldwide demand
Short-term tactics must include financial inducements
Incentivize all airlines and urgently approach LCC airlines,
and begin search for new Tour Operators
• Make current Incentive for existing airline customers
seasonal, not annual – this will include more flights for the
airlines and encourage Summer service
• ASEZA pays all Airport and RJ Handling charges for any
flights in 2009 that are not already planned, for all existing
airline customers
• ASEZA pays all Airport and RJ Handling charges for all flights
operated by new airlines
• Minimum three night’s stay in Aqaba
• Minimum 1,000 passenger winter, 1,500 passengers summer
• Will discuss additional incentives on case-by-case basis
• Airlines are free to try to negotiate landing fees with the
airport and handling fees with RJ
• Only available to charter airlines operating to KHIA from
European airports (approved list to be available, and can be
amended as appropriate)
• Must carry a minimum of 1,000 passengers in a winter
season and a minimum of 1,500 passengers in a summer
season
• The new incentive is 25 Euro per passenger
• Incentive is also seasonal, not annual
• LCCs will most likely operate more than once per week so there needs be
no minimum number of flights
• And it is extremely unlikely they would entertain minimum passenger
numbers
• The incentive therefore is paid based on number of flights per season,
with additional increments for flights above once weekly
• ASEZA needs to consider LCC risk sharing -
LCCs are likely to suggest
that ASEZA guarantee the difference between their revenue per flight and their operating cost,
plus a margin. In this way, both parties equally share the risk until flights become profitable
KHIA and Aqaba have a great future, the opportunity
to make it happen is RIGHT NOW
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Revise the incentive program to be more compelling
Ensure the airport is passenger-friendly
Research-based marketing
Focused and aggressive marketing campaign
Embrace and motivate all stakeholders
Ensure all touristic facilities in place to meet expectations
ACT NOW, BEFORE YOUR COMPETITORS DO