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Labuan Bajo on Indonesia's famed Komodo island is buzzing but overtourism could hurt it
Labuan Bajo on Indonesia's famed Komodo island is buzzing but overtourism could hurt it

Straits Times

time2 days ago

  • Straits Times

Labuan Bajo on Indonesia's famed Komodo island is buzzing but overtourism could hurt it

Experts have warned that allowing visitors to have close encounters with Komodo dragons would reduce reproductive fitness of the ancient lizards. ST PHOTO: WAHYUDI SOERIAATMADJA – A small seaside town known as the gateway to the land of the dragons – specifically the Komodo kind – has roared to life over the past decade, after it was first positioned as one of Indonesia's '10 New Balis' in a 2016 tourism push by the government. Located at the western tip of Flores Island in East Nusa Tenggara, Labuan Bajo is most famous for being the stepping stone to the famed Komodo National Park, a Unesco World Heritage site that is the largest habitat of its namesake reptile, the Komodo dragon. But amid the buzz of a busy airport runway and waters studded with hotel boats and modern vessels, experts warn that it must avoid falling into overtourism, overdevelopment and environmental negligence – issues that affect tourist hot spot Bali. The '10 New Balis' strategy targets specific locations such as Labuan Bajo to receive funding for infrastructure development. The aims are to alleviate overtourism in Bali, and spread tourist revenue and boost regional economies within South-east Asia's most populous country . Other locations include Lake Toba in North Sumatra, Mandalika in Lombok and Likupang in North Sulawesi. The focus on these new areas has led to significant changes, such as the construction of an international motorcycle racing track in Mandalika that has hosted the FIM Superbike World Championship since 2021 and MotoGP Grand Prix motorcycle races since 2022. But Labuan Bajo, which is a three-hour flight from Singapore and 2½ hours from Jakarta, stands out as it booked the largest incremental gains in terms of foreign tourist visits. Its main attraction, Komodo National Park, welcomed 334,206 visitors in 2024, two-thirds of whom were foreign tourists. In 2016, it saw about 100,000 visitors. Almost all tourists going to Labuan Bajo visit Komodo National Park. In the past decade, Labuan Bajo has seen the rise of new roads and amenities such as shopping centres, brand-name hotels and foodcourts, all built by the national government. Its main marina and airport have also been refurbished and revamped in the past four years, with the latter's runway being extended by 100m. Hotel operator Marriott International has built a luxury resort there, and it will soon be joined by another by the InterContinental Hotels Group. In 2024, Labuan Bajo's Komodo Airport was declared an international airport, allowing the operation of direct flights to and from foreign cities. Previously, most overseas visitors would have to fly through Jakarta to get to Labuan Bajo, which is part of the West Manggarai regency. The national focus on developing the small fishing village has propelled Labuan Bajo into a rapid phase of development, Mr Stefanus Jemsifori , the most senior bureaucrat overseeing tourism affairs in the regency, told The Straits Times. 'Investment growth has since been growing tremendously fast, evidenced by the spawning of five-star hotels and 'pinisi' vessels offering luxury rooms on board,' he said , adding that tourism revenue has also contributed to economic growth. A pinisi vessel is a traditional Indonesian watercraft that typically carries seven to eight sails on two masts. Puncak Waringin viewing point offers a picturesque sunset in Labuan Bajo. ST PHOTO: WAHYUDI SOERIAATMADJA According to visitor surveys in 2024, an individual foreign tourist to the town spends an average of 8 million rupiah (S$632) daily, staying an average of four to five days, while a domestic tourist spends about 2.7 million rupiah daily, spending an average of three days there. During a visit to Labuan Bajo in early May, ST spoke to several Chinese and Singaporean tourists there. 'We get both the exercise and breathtaking scenery,' said a Singaporean man named Wilson, in his early 20s. He spoke to ST during a short visit to Labuan Bajo with his family, which included a hiking trip. Mrs Shana Fatina, who runs a tour agency in Labuan Bajo, said the town has become popular with foreign tourists in the region. 'Singaporean tourists like to take a weekend getaway trip, staying in resorts or sailing vessels. They like shopping and enjoying food here,' said Mrs Shana, who noted that many foreign tourists in Labuan Bajo also travel to the town through Singapore. While Labuan Bajo has benefited from a push to increase tourist footfall in the past decade, Professor Azril Azhari, a tourism expert from Trisakti University in Jakarta, said that going forward, there must be less emphasis on mass tourism. This is especially because the trend and behaviours among global travellers have now shifted towards ecotourism. Prof Azril said that the '10 New Balis' strategy was developed some time ago based on mass tourism models, and a thorough evaluation of the programme has not been done. Although these models typically draw tourists and investment, there are instances where local communities do not reap these benefits . Bali, often regarded as Indonesia's crown jewel of tourism, saw 6.33 million foreign tourist arrivals in 2024, an increase from 5.27 million in 2023. Before the Covid-19 pandemic, it had 6.28 million visitors in 2019. Although Bali frequently ranks as a top holiday destination, the problems of overtourism have become more apparent in recent times. Large amounts of Bali's groundwater are channelled to hotels, pools and golf courses, leaving local residents struggling for access to clean water. Meanwhile, its iconic padi fields are vanishing as the land is transformed into commercial or residential property. Prof Azril warned about the risks of Labuan Bajo following in Bali's footsteps, especially when it comes to balancing conservation, development and tourism. As Komodo National Park and its ancient lizards gain popularity, Prof Azril emphasised the need to manage both visitor numbers and interactions with the reptiles. Failing to do so could lead to stress for these endangered animals. The Komodo National Park, welcomed 334,206 visitors in 2024, two-thirds of whom were foreign tourists. ST PHOTO: WAHYUDI SOERIAATMADJA Mrs Shana said that perhaps a no-visitor season should be implemented annually to reduce overtourism. 'Good communications with the tour operators to carry out such an endeavour must be done because many sell trip packages a year ahead,' she said. The national government had earlier planned to limit the number of visitors to Komodo National Park to 219,000 a year to conserve the ecosystem and protect the wildlife. It had also planned to raise the price of entrance tickets to the park to 3.75 million rupiah each for international visitors starting on Aug 1, 2022, from as low as 250,000 rupiah now. B ut the plan did not proceed due to opposition from the local residents and tourism businesses, arguing that the move would reduce their income. Labuan Bajo's natural landscapes and waters rich with marine life are precisely what will keep tourists returning. Chinese tourist Yang Guang Li, 25, said that his final stop at Labuan Bajo was the highlight of his seven-day trip through multiple places in Indonesia, as he had the chance to encounter a reef manta ray during a diving tour. 'I was most satisfied with my Komodo National Park trip. Unfortunately, we were brought here for only one night. I still want to go back to Komodo (Labuan Bajo) ,' said Mr Yang. Wahyudi Soeriaatmadja has been Indonesia correspondent at The Straits Times since 2008, and is based in Jakarta. Join ST's WhatsApp Channel and get the latest news and must-reads.

Cassie Ventura finishes emotional testimony in Sean 'Diddy' Combs's trial
Cassie Ventura finishes emotional testimony in Sean 'Diddy' Combs's trial

Yahoo

time3 days ago

  • Entertainment
  • Yahoo

Cassie Ventura finishes emotional testimony in Sean 'Diddy' Combs's trial

NEW YORK — Casandra 'Cassie' Ventura wrapped up her fourth and final day of testimony in Sean 'Diddy' Combs's federal sex trafficking trial on Friday, as the defense concluded cross-examination of the government's star witness and prosecutors introduced two more: singer Dawn Richard and Homeland Security agent Yasin Binda. The packed day of testimony revisited accounts of Combs's alleged abuse and revealed new details about the scene of his arrest in September. The music mogul is charged with sex trafficking, racketeering conspiracy and transportation to engage in prostitution — offenses that could carry a life sentence if convicted on all counts. He has pleaded not guilty. Ventura, 38, who appeared tired on the stand, spent most of the day under exhaustive questioning from Combs's lawyers, who continued to suggest that she was more sexually mature and enthusiastic about Combs's sex parties than she expressed in her testimony. They also tried to cast doubt about her recollections of her years-long relationship with Combs, 55. In her final moments on the stand, Ventura also revealed that she had reached a $10 million settlement with the InterContinental Hotels Group — whose Los Angeles location was the site of Ventura's beating by Combs in 2016. In an email to The Washington Post, IHG declined to comment. Anna Estevao, one of Combs's defense attorneys, resumed her cross-examination of Ventura on Friday with the 2016 incident at the InterContinental hotel. In text messages between the former couple shortly after the assault, Combs appeared to feel sorry about the incident and proposed having sex with Ventura. 'We need a different vibe,' she wrote back. The couple signed off by texting each other, 'Love you.' When asked what she recalled after the incident, Ventura said she had done press for her 2016 film, 'The Perfect Match,' whose premiere was two days later. 'After that, I don't really remember too much,' she said. Ventura said she also attended a 'spa' in Sedona, Arizona, for a week to detox from heavy drug usage after the beating. The defense questioned Ventura on the events of Sept. 27, 2018, when she and Combs had consensual sex weeks after he allegedly raped her. In previous testimony, Ventura said: 'We'd been together 10 years; you just don't turn feelings off that way.' On that night, Ventura missed a video call from her then-boyfriend and current husband, Alex Fine. Ventura has testified that Fine punched a wall upon learning she had sex with Combs that night. Ventura said that Combs had reached out to her multiple times since she saw him last in 2018. He texted her to congratulate her on a pregnancy and to tell her he missed her, was 'sending her love and light' and had a dream about her. A big moment of Friday's cross-examination was an audio recording in which Ventura threatened to kill a DJ who said he had seen a lurid video of her having sex with Combs. In the audio, Ventura is heard asking politely to see the video before she starts shouting. 'It's my f---ing life, and I will kill you. I will kill you. I will cut you up, and I will hide you,' she is heard saying. 'I have never killed anyone in my life, but I will kill you. … And it's not going to be my hands. There's not going to be blood on my hands. It's going to be someone else.' The defense also questioned Ventura about a 2013 birthday party for her brother, where she allegedly got into a physical altercation with a woman and told Combs she 'tried to kill the b----.' Binda, the Homeland Security agent, testified that she participated in a raid on Combs's hotel room at the Park Hyatt in Manhattan in September. He was arrested in the lobby of the hotel. In the room, agents found large zip-top bags filled with baby oil and lubricant, plus additional bottles stored in a bathtub and on a nightstand. They also found a Louis Vuitton bag with a bottle of medication prescribed to 'Frank Black' and, in separate pill bottles, ketamine and MDMA. Agents also recovered an external hard drive. Binda described finding a black fanny pack with $9,000 in cash. Still at the witness stand, she cut open an evidence bag of cash and fanned the bills so the jury could see. Part of the reason Combs was in New York at that time was to meet with federal agents about his surrender. Late in the day, the prosecution called witness Richard, who performed in two bands managed by Combs. The Danity Kane singer testified that in 2009, she was at Combs's Los Angeles home to record music when Combs attacked Ventura in the kitchen — an incident she recounted in a lawsuit she filed against Combs last year. (Combs denied the 'series of false claims' in Richard's complaint). 'He came downstairs angry and was saying, where the f--- was his eggs and he was telling Cassie she never gets anything right and where the f--- was his food,' Richard told the jury. 'And he came over to the skillet with the eggs in it and tried to hit her over the head and she fell to the ground.' Combs continued to beat Ventura as she was on the floor, Richard testified, then dragged her upstairs. Richard said that the following day, Combs invited her and her bandmate Kalenna Harper, who also saw the alleged attack, to record music in his studio. Richard testified that Combs told the two women that the violence they had witnessed was 'passion.' And she said he threatened that 'where he comes from, people who say something can end up missing.' Richard will return on Monday but it is unclear how much of her testimony from Friday will be admissible. But prosecutors have argued that Combs's alleged abuse created a culture of violence and fear that allowed him to carry out more-serious crimes. Kingsberry reported from Washington.

Famed for Komodo dragons, Labuan Bajo rises as holiday hot spot, but overtourism remains a risk
Famed for Komodo dragons, Labuan Bajo rises as holiday hot spot, but overtourism remains a risk

The Star

time6 days ago

  • The Star

Famed for Komodo dragons, Labuan Bajo rises as holiday hot spot, but overtourism remains a risk

LABUAN BAJO: A small seaside town known as the gateway to the land of the dragons – specifically the Komodo kind – has roared to life over the past decade, after it was first positioned as one of Indonesia's '10 New Balis' in a 2016 tourism push by the government. Located at the western tip of Flores Island in East Nusa Tenggara, Labuan Bajo is most famous for being the stepping stone to the famed Komodo National Park, a Unesco World Heritage Site that is the largest habitat of its namesake reptile, the Komodo dragon. But amid the buzz of a busy airport runway and waters studded with hotel boats and modern vessels, experts warn that it must avoid falling into overtourism, overdevelopment and environmental negligence – issues that affect tourist hot spot Bali. The '10 New Balis' strategy targets specific locations such as Labuan Bajo to receive funding for infrastructure development. The aims are to alleviate overtourism in Bali and spread tourist revenue and boost regional economies within South-east Asia's most populous country. Other locations include Lake Toba in North Sumatra, Mandalika in Lombok and Likupang in North Sulawesi. The focus on these new areas has led to significant changes, such as the construction of an international motorcycle racing track in Mandalika that has hosted the FIM Superbike World Championship since 2021 and MotoGP Grand Prix motorcycle races since 2022. But Labuan Bajo, which is a three-hour flight from Singapore and 2½ hours from Jakarta, stands out as it booked the largest incremental gains in terms of foreign tourist visits. Its main attraction, the Komodo National Park, welcomed 334,206 visitors in 2024, two-thirds of whom were foreign tourists. In 2016, it saw about 100,000 visitors. Almost all tourists going to Labuan Bajo visit the Komodo National Park. In the past decade, Labuan Bajo has seen the rise of new roads and amenities such as shopping centres, brand-name hotels and food courts, all built by the national government. Its main marina and airport have also been refurbished and revamped in the past four years, with the latter's runway being extended by 100m. Hotel operator Marriott International has built a luxury resort there and will soon be joined by another by the InterContinental Hotels Group. In 2024, Labuan Bajo's Komodo Airport was declared an international airport, allowing the operation of direct flights to and from foreign cities. Previously, most overseas visitors would have to fly through Jakarta to get to Labuan Bajo, which is part of the West Manggarai Regency. The national focus on developing the small fishing village has propelled Labuan Bajo on a rapid phase of development, Stefanus Jemsifori, the most senior bureaucrat overseeing tourism affairs in the regency, told The Straits Times. 'Investment growth has since been growing tremendously fast, evidenced by the spawning of five-star hotels and 'pinisi' vessels offering luxury rooms on board,' he said, adding that tourism revenue has also contributed to economic growth. A pinisi vessel is a traditional Indonesian watercraft that typically carries seven to eight sails on two masts. According to visitor surveys in 2024, an individual foreign tourist to the town spends an average of 8 million rupiah (S$632) daily, staying an average of four to five days, while a domestic tourist spends about 2.7 million rupiah daily, spending an average of three days there. During a visit to Labuan Bajo in early May, ST spoke to several Chinese and Singaporean tourists there. 'We get both the exercise and breathtaking scenery,' said a Singaporean man named Wilson, in his early 20s. He spoke to ST during a short visit to Labuan Bajo with his family, which included a hiking trip. Shana Fatina, who runs a tour agency in Labuan Bajo, said the town has become popular with foreign tourists in the region. 'Singaporean tourists like to take a weekend getaway trip, staying in resorts or sailing vessels. They like shopping and enjoying food here,' said Shana, who noted that many foreign tourists in Labuan Bajo also travel there through Singapore. While Labuan Bajo has benefited from a push to increase tourist footfall in the past decade, Professor Azril Azhari, a tourism expert from the Trisakti University in Jakarta, said that going forward there must be less emphasis on mass tourism. This is especially because the trend and behaviours for global travellers have now shifted towards ecotourism. Prof Azril said that the '10 New Balis' strategy was developed some time ago, based on mass tourism models and a thorough evaluation of the programme has not been done. Although these models typically draw tourists and investment, there are instances where local communities do not reap these benefits. Bali, often regarded as Indonesia's crown jewel of tourism, saw 6.33 million foreign tourist arrivals in 2024, an increase from 5.27 million in 2023. Before the Covid-19 pandemic, it had 6.28 million visitors in 2019. Although Bali frequently ranks as a top holiday destination, the problems of overtourism have become more apparent in recent times. Large amounts of Bali's groundwater are channelled to hotels, pools and golf courses, leaving local residents to struggle for access to clean water. Meanwhile, its iconic padi fields are vanishing as the land is transformed into commercial or residential property. Prof Azril warned about the risks of Labuan Bajo following in Bali's footsteps, especially when it comes to balancing conservation, development and tourism. As Komodo National Park and its ancient lizards gain popularity, Prof Azril emphasised the need to manage both visitor numbers and interactions with the reptiles. Failing to do so could lead to stress for these endangered animals. Shana said that perhaps a no-visitor season should be implemented annually to reduce overtourism. 'Good communications with the tour operators to carry out such an endeavour must be done because many sell trip packages a year ahead,' she said. The national government had earlier planned to limit the number of visitors to Komodo National Park to 219,000 a year to conserve the ecosystem and protect the wildlife. It also planned to raise the price of entrance tickets to the park to 3.75 million rupiah each for international visitors starting on Aug 1, 2022, from as low as 250,000 rupiah now. But the plan did not proceed due to opposition by the local residents and tourism businesses, arguing that the move would reduce their income. Labuan Bajo's natural landscapes and waters rich with marine life are precisely what will keep tourists returning. Chinese tourist Yang Guang Li, 25, said that his final stop at Labuan Bajo was the highlight of his seven-day trip through multiple places in Indonesia, as he had the chance to encounter a reef manta ray during a diving tour. 'I was most satisfied with my Komodo National Park trip. Unfortunately, we were only brought here for one night. I still want to go back to Komodo (Labuan Bajo),' said Yang. - The Straits Times/ANN

Experts says Komodo island against eco-based tourism
Experts says Komodo island against eco-based tourism

Straits Times

time6 days ago

  • Straits Times

Experts says Komodo island against eco-based tourism

Experts have warned that allowing visitors to have close encounters with Komodo dragons would reduce reproductive fitness of the ancient lizards. ST PHOTO: WAHYUDI SOERIAATMADJA LABUAN BAJO – A small seaside town known as the gateway to the land of the dragons – specifically the Komodo kind – has roared to life over the past decade, after it was first positioned as one of Indonesia's '10 New Balis' in a 2016 tourism push by the government. Located at the western tip of Flores Island in East Nusa Tenggara, Labuan Bajo is most famous for being the stepping stone to the famed Komodo National Park, a Unesco World Heritage Site that is the largest habitat of its namesake reptile, the Komodo dragon. But amid the buzz of a busy airport runway and waters studded with hotel boats and modern vessels, experts warn that it must avoid falling into overtourism, overdevelopment and environmental negligence – issues that affect tourist hot spot Bali. The '10 New Balis' strategy targets specific locations such as Labuan Bajo to receive funding for infrastructure development. The aims are to alleviate overtourism in Bali and spread tourist revenue and boost regional economies within South-east Asia's most populous country . Other locations include Lake Toba in North Sumatra, Mandalika in Lombok and Likupang in North Sulawesi. The focus on these new areas has led to significant changes, such as the construction of an international motorcycle racing track in Mandalika that has hosted the FIM Superbike World Championship since 2021 and MotoGP Grand Prix motorcycle races since 2022. But Labuan Bajo, which is a three-hour flight from Singapore and 2½ hours from Jakarta, stands out as it booked the largest incremental gains in terms of foreign tourist visits. Its main attraction, the Komodo National Park, welcomed 334,206 visitors in 2024, two-thirds of whom were foreign tourists. In 2016, it saw about 100,000 visitors. Almost all tourists going to Labuan Bajo visit the Komodo National Park. In the past decade, Labuan Bajo has seen the rise of new roads and amenities such as shopping centres, brand-name hotels and food courts, all built by the national government. Its main marina and airport have also been refurbished and revamped in the past four years, with the latter's runway being extended by 100m. Hotel operator Marriott International has built a luxury resort there and will soon be joined by another by the InterContinental Hotels Group. In 2024, Labuan Bajo's Komodo Airport was declared an international airport, allowing the operation of direct flights to and from foreign cities. Previously, most overseas visitors would have to fly through Jakarta to get to Labuan Bajo, which is part of the West Manggarai Regency. The national focus on developing the small fishing village has propelled Labuan Bajo on a rapid phase of development, Mr Stefanus Jemsifori , the most senior bureaucrat overseeing tourism affairs in the regency, told The Straits Times. 'Investment growth has since been growing tremendously fast, evidenced by the spawning of five-star hotels and 'pinisi' vessels offering luxury rooms on board,' he said , adding that tourism revenue has also contributed to economic growth. A pinisi vessel is a traditional Indonesian watercraft that typically carries seven to eight sails on two masts. Puncak Waringin viewing point offers a picturesque sunset in Labuan Bajo. ST PHOTO: WAHYUDI SOERIAATMADJA According to visitor surveys in 2024, an individual foreign tourist to the town spends an average of 8 million rupiah (S$632) daily, staying an average of four to five days, while a domestic tourist spends about 2.7 million rupiah daily, spending an average of three days there. During a visit to Labuan Bajo in early May, ST spoke to several Chinese and Singaporean tourists there. 'We get both the exercise and breathtaking scenery,' said a Singaporean man named Wilson, in his early 20s. He spoke to ST during a short visit to Labuan Bajo with his family, which included a hiking trip. Mrs Shana Fatina, who runs a tour agency in Labuan Bajo, said the town has become popular with foreign tourists in the region. 'Singaporean tourists like to take a weekend getaway trip, staying in resorts or sailing vessels. They like shopping and enjoying food here,' said Mrs Shana, who noted that many foreign tourists in Labuan Bajo also travel there through Singapore. While Labuan Bajo has benefited from a push to increase tourist footfall in the past decade, Professor Azril Azhari, a tourism expert from the Trisakti University in Jakarta, said that going forward there must be less emphasis on mass tourism. This is especially because the trend and behaviours for global travellers have now shifted towards ecotourism. Prof Azril said that the '10 New Balis' strategy was developed some time ago, based on mass tourism models and a thorough evaluation of the programme has not been done. Although these models typically draw tourists and investment, there are instances where local communities do not reap these benefits . Bali, often regarded as Indonesia's crown jewel of tourism, saw 6.33 million foreign tourist arrivals in 2024, an increase from 5.27 million in 2023. Before the Covid-19 pandemic, it had 6.28 million visitors in 2019. Although Bali frequently ranks as a top holiday destination, the problems of overtourism have become more apparent in recent times. Large amounts of Bali's groundwater are channelled to hotels, pools and golf courses, leaving local residents to struggle for access to clean water. Meanwhile, its iconic padi fields are vanishing as the land is transformed into commercial or residential property. Prof Azril warned about the risks of Labuan Bajo following in Bali's footsteps, especially when it comes to balancing conservation, development and tourism. As Komodo National Park and its ancient lizards gain popularity, Prof Azril emphasised the need to manage both visitor numbers and interactions with the reptiles. Failing to do so could lead to stress for these endangered animals. The Komodo National Park, welcomed 334,206 visitors in 2024, two-thirds of whom were foreign tourists. ST PHOTO: WAHYUDI SOERIAATMADJA Mrs Shana said that perhaps a no-visitor season should be implemented annually to reduce overtourism. 'Good communications with the tour operators to carry out such an endeavour must be done because many sell trip packages a year ahead,' she said. The national government had earlier planned to limit the number of visitors to Komodo National Park to 219,000 a year to conserve the ecosystem and protect the wildlife. It also planned to raise the price of entrance tickets to the park to 3.75 million rupiah each for international visitors starting on Aug 1, 2022, from as low as 250,000 rupiah now. B ut the plan did not proceed due to opposition by the local residents and tourism businesses, arguing that the move would reduce their income. Labuan Bajo's natural landscapes and waters rich with marine life are precisely what will keep tourists returning. Chinese tourist Yang Guang Li, 25, said that his final stop at Labuan Bajo was the highlight of his seven-day trip through multiple places in Indonesia, as he had the chance to encounter a reef manta ray during a diving tour. 'I was most satisfied with my Komodo National Park trip. Unfortunately, we were only brought here for one night. I still want to go back to Komodo (Labuan Bajo) ,' said Mr Yang. Wahyudi Soeriaatmadja has been Indonesia correspondent at The Straits Times since 2008, and is based in Jakarta. Join ST's WhatsApp Channel and get the latest news and must-reads.

IHG: U.S. ‘Broadly Flat', China a Drag – But Keeps Profit Target
IHG: U.S. ‘Broadly Flat', China a Drag – But Keeps Profit Target

Yahoo

time09-05-2025

  • Business
  • Yahoo

IHG: U.S. ‘Broadly Flat', China a Drag – But Keeps Profit Target

InterContinental Hotels Group (IHG) reported mixed first-quarter results Thursday, with global room revenue up over 3% but signs of weakening demand in some key markets. U.S. bookings flattened in recent weeks while those in China fell for the second straight quarter. London bookings were flat year-over-year. Marriott and Hilton recently trimmed their forecasts, but IHG said it still expected to meet its $1.25 billion profit target – it cited cost discipline and new revenue streams from credit card partnerships. Here's everything we learned from IHG's earnings report: 1) Momentum is fading in the U.S.: Revenue per available room (RevPAR) rose 3.5% in the Americas, but performance weakened as the quarter progressed. 'When we take the last 8 weeks in aggregate, RevPAR has been broadly flat,' said CFO Michael Glover. 2) Reduced government travel was a factor: CEO Elie Maalouf said this line of business represents less than 5% of revenues and dropped to 3.5% in the quarter. He added that this impact is expected to persist. 3) Summer travel could lift results: 'We already see on-the-books revenue ahead of last year for July and August,' Glover said. 4) China drag continues: Greater China's RevPAR declined 3.5% for the second consecutive quarter. 'Travel has been occurring in the same volumes as the prior year, which is reflected in the occupancy holding up, though the rate is down year-on-year,' Glover said. Performance in Tier 2-4 cities dropped 5.7%. 5) Maalouf's upbeat take: 'Things are steadying up in China.' 'The latest results we got for the May holiday, Labor Day holiday, were record travel, over 6% increase in travel from last year, over 8% increase in travel spending.' 6) EMEAA up: RevPAR rose 5% in the EMEAA [Europe, Middle East, Africa, and Asia] region. East Asia and the Pacific led at 6.8%, followed by the Middle East (6.2%) and Continental Europe (5.6%). 7) Maalouf linked part of that growth to Chinese travelers: 'The higher-end traveler mostly left China, and so that took some rate off, but demand was good.' He added, 'China to Asia Pacific is again up double-digit from last year, and inbound into Europe from Asia is up again." 8) Performance in the U.K. lagged: 'London within that was a small negative,' Glover said. 'Outside of London, we were slightly positive.' He noted that London's decline was primarily driven by a difference in the number of major events held in the first quarter compared to the previous year. 9) Development surges, led by conversions and Ruby Hotels: IHG opened 14,600 rooms globally in Q1, more than double the same period last year, and signed 25,800 rooms across 158 hotels, including over 5,000 from its Ruby Hotels acquisition in February. 'This level of signings was also well ahead of last year and led to a closing pipeline of 334,000 rooms [2,265 hotels], which is 9% more than a year ago,' Maalouf said. 10) Nearly 40% of signings were conversions: 'It was 30% higher in the U.S., in the Americas. It was double China... we're optimistic about good growth signings and openings in the Middle East for the rest of the year,' Maalouf said. The expansion of conversion-friendly brands like Voco, Vignette, and Garner continues to be a key part of IHG's development strategy, as Maalouf outlined earlier this year. 11) A new U.S. co-branded credit card and increased loyalty point sales are key to that outlook: 'The incremental profit on the loyalty point sales and from the new U.S. co-brand credit card agreements should add around 130 basis points to our fee margin expansion,' Glover said. He also noted cost discipline: 'We grew fee revenue by 6% last year with overhead costs only growing at 1%.' Maalouf said pricing remained steady and that IHG hadn't seen a shift in consumer behavior. 'We're not seeing any price resistance. Occupancy continues to be good.' He said IHG's portfolio mix makes it resilient in a choppy economy: "The upper luxury segment is pretty resilient due to the insensitivity or lack of sensitivity of people to that wealth bracket, and our mid-scale segment is resilient because of essential travel." IHG CEO Elie Maalouf will appear onstage at Skift Global Forum in September in New York City. Get breaking travel news and exclusive hotel, airline, and tourism research and insights at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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