Asia's Bargains

By Leah Kohlenberg/Hong Kong

Individual E-mail accounts, personal exercise equipment--even vibrating massage chairs. It may sound like a business traveler's Xanadu, but it's business service as usual at Hotel Phoenix in Singapore after its recent $7.6 million renovation. Not only did the makeover boost the business hotel's ranking from 3 1/2 to four stars last year, but for the additional comforts, guests are now paying a mere $87, about $20 less than they were paying a year ago. "It's a matter of repositioning and offering true value for money," says Margaret Low, the hotel's marketing director.

To no one's surprise, business travel is faltering beneath the weight of the economic turmoil in Asia--though often to the benefit of those who still travel there. More of them are likely to be from the West, since preliminary data indicate that, overall, Asians are staying home more these days--most dramatically in battered nations like South Korea, where it's considered unpatriotic to spend money outside the country. Last December, Korean airline companies, at the urging of the national tourism association, staged a demonstration at Seoul's Kimpo International Airport asking passengers not to fly abroad. Even in Singapore, where the number of inbound business visitors increased nearly 9% in 1997, business-oriented hotel-occupancy rates have dropped, and the city-state's premier Suntec convention center is experiencing 15% to 18% fewer visitors and exhibitors than previously. "People are coming to troubleshoot," says Renton de Alwis, head of the National Association of Travel Agents Singapore. But clearly, they aren't staying long enough to help the ailing tourism industry.

Not only are fewer Asian execs hitting the road, but also when they do travel, the purse strings are much tighter. From Japan's Nissan Motor to South Korea's Shinsegi Telecom, employees are being told to walk through business class to economy on airplanes and to downgrade from five-star hotels to four- or even three-star establishments when they land. "People used to buy normal tickets so they could change schedules a million times, but nowadays people fix their business meetings according to the schedule of their air tickets," says Yuko Sugihara, a Tokyo travel agent who specializes in planning executive travel.

Ahn Suk Hee, 31, a South Korean fabric salesman, knows this all too well. Ahn bemoans the fact that he can't cut back his traveling, because cloth must be "felt and seen." He skips meals, crams more meetings into an already tight schedule and grabs public buses instead of hailing cabs. "When I jokingly told some of my business contacts to pay for meals, they took it seriously," says Ahn, whose belt tightening has worked perhaps too effectively--he claims he lost 8 lbs. with all the extra running around on his last business trip. Other pleasurable business habits are also taking a pounding. Says Ryu Dae Hee, a Shinsegi Telecom manager: "It is no longer affordable to go drinking with leftovers from the travel budgets, and our business counterparts don't seem to expect treats anymore."

As business travelers tighten their belts, the hospitality industry feels the pain. Hotel-occupancy rates declined across almost all of Asia last year, according to a report by hotel-industry analyst PKF Consulting in Hong Kong. Asian airlines are struggling through their first serious slump since the industry took off in the 1970s. They are laying off staff members, canceling routes and airplane orders, and cutting back on in-flight food and beverage services. Even in economically buoyant China, the going is no longer as good as it was. The Middle Kingdom relies heavily on Southeast Asian foreign investment, and industry insiders fear losing business to countries with plummeting currencies and better bargains. Frets Dominic Wong, general manager of the Holiday Inn Downtown in Beijing: "This year will be very tough."

What's bad for the industry, of course, is good for those on the other side of the reception desk. Asian hotel rates and economy air fares are sinking fast. In Hong Kong, for example, the estimated average room rate at an international four- or five-star hotel in February dropped to $108 a night, down from $147 the previous year, while in Seoul the price cutting was even more dramatic: to $70 from $143, according to analysts at PKF Consulting. And although business-class seat prices are holding steady, economy fares are 20% lower than last year's, says Jacko C.F. Yeung, a Hong Kong travel agent. A standard flight from Hong Kong to Singapore costs about $300; last year it was $550. "The trend I see is that more business people are traveling economy class," he says. "It's too expensive otherwise."

Business travelers may grumble about moving to the back of the Airbus, but in the air and on the ground, special deals abound for those who are willing to lower their sights. Even though the base rate at Singapore's Hotel Phoenix is about $160 a night, marketing director Low admits that she "is happy to let you stay for $87 a night." Many hotels are spicing up the discount deal with a slew of extras, from free clothes pressing to complimentary limousine transport and free breakfast. Hong Kong's Conrad Hotel, for instance, is offering a standard room, with all those freebies and more, starting at about $315 a night (that's down from nearly $900 in January). Both Hong Kong's Cathay Pacific Airways and Singapore Airlines are offering one free night in a hotel in their respective hub cities to lure passengers transiting to other destinations. Until May 31, Cathay Pacific is offering travelers an All Asia Pass, which includes a round-trip ticket from either New York City or Los Angeles to Hong Kong, for $999, with as many as 17 round-trip tickets in 30 days from Hong Kong to any other Asian city where Cathay flies.

Some tips: When hunting for business-travel bargains, remember that all Asian countries are not suffering equally. In Japan, where inbound business travel went up 7.6% last year between January and November, air fares and hotel rates won't show the dramatic declines seen in, say, Malaysia and Indonesia. And no matter how savvy, individual travelers or companies aren't always equipped to negotiate the best deals. "I was attending a conference in Bangkok, and when we called this hotel, we were charged $85 a night," says Helen Peterson, spokeswoman for the Asia division of the Pacific Asia Travel Association, a travel-industry advisory group. "But a good travel agent got us into the same hotel for $54. We asked the hotel why, and it said that the travel agent gave it the bulk of its business, so the agent got the special rate."

But for the most part, hotels and airlines alike are scrambling to impress customers. "I saw this coming a long time ago and told my staff to prepare for it," says Steve Halliday, general manager of Singapore's 800-room Pan Pacific Hotel, which is located next to the convention center and caters mainly to business clients. Halliday recently outfitted the place with 200 computers to better serve his clients. "You've got to kill the customer with kindness," says Halliday. "In a word: service. Do things differently this year." In the current economic climate, the hospitality industry is finding that it takes more than a mint on the pillow to keep customers coming back. Smart travelers will learn that the way to find out the best deals is, above all, to ask.

--With reporting by Stella Kim/Seoul, Sachiko Sakamaki/Tokyo, Mia Turner/Beijing and Ravi Velloor/Singapore

With reporting by Stella Kim/Seoul, Sachiko Sakamaki/Tokyo, Mia Turner/Beijing and Ravi Velloor/Singapore