Wednesday, August 12, 2009

AirAsia backs ASEAN branding

While US consultants have convinced ASEAN tourism decision makers to drop the ASEAN brand for what they call a more recognisable term “Southeast Asia,” AirAsia CEO, Tony Fernandes, rolled out an aircraft boldly painted with “Truly ASEAN” on its fuselage.

The airline’s A320 with the “ASEAN livery” was on view at Kuala Lumpur International Airport, over the weekend. Other aircraft will follow, also bearing the “Truly ASEAN” livery.

The 180-seat aircraft was used to fly ASEAN secretary general, Surin Pitsuwan, diplomats, the airline’s management, executives and news media on a “three-cities-in-a-day” celebration to mark the 42nd ASEAN Day according to today’s Bangkok Post.

No.1 (Inside)

AirAsia’s CEO believes the potential to expand the airline business in Asean is substantial

Mr Fernandes told Bangkok Post’s reporter at the event: “I think we just scratched the surface. I think there are 100 (more) places (in ASEAN) where we can grow.”

The chartered flight (AK9959), with more than 100 guests, left Jakarta with a stopover in Kuala Lumpur and ended the trip in Bangkok. The airline was promoting its “association and commitment to ASEAN.”

AirAsia and its sister carriers in Thailand and Indonesia connect all the capital cities of ASEAN and provide flights to various heritage and beach destinations in the region.

“With our extensive network, millions of people fly with us each year. By waving the ASEAN flag in all the places we go, AirAsia will be doing its part to promote the region,” Mr Fernandes told the Bangkok Post.

Thai AirAsia’s 18th aircraft, a brand-new A320 due to join the fleet in December, will also come with the ASEAN brand livery.

Meanwhile, US consultants, during a recent meeting in Phnom Penh, gained the green light from ASEANTA, the travel trade association covering Asean, to rebrand “ASEAN” by adopting Southeast Asia as the community’s travel branding.

They based the core of their research on Google searches and the fact that Lonely Planet does not call its guidebook “ASEAN on a Shoestring.” The project will ultimately be funded by USAID, under a competitive enhancement programme that assists 10 industry segments in ASEAN.

They have already registered a domain under a US company, Nathan Associates. The company lists USAID as one of its clients. A team of Bangkok-based consultants appear to have convinced ASEANTA that they can develop a web portal capable of generating bookings at no cost to the association. ASEANTA will earn no revenue from the venture.

Details are still sketchy, but as the funding is coming from USAID, strict rules on public information and disclosure will ultimately bring the fine points to light.

ASEANTA officials and consultants appear to be reluctant to discuss proposed operations, funding, or the business model. A technology expert in the search engine business said the project had all the trappings of a commercial venture, but it would need massive funding to market it to consumers.

Association of Thai Travel Agents vice president and ASEANTA board member, Nino Jotikasthira, did confirm that ASEANTA was not entering into any financial obligations with reference to the ACE project.

“There is no revenue stream for ASEANTA, but our members will benefit from the setting up of a destination marketing office that is part of the package.”

He confirmed that both ASEANTA and the 10 national tourist offices of the region made no commitment to provide joint funding.

“We believe it will bring more foreigners to travel in ASEAN countries through the setting up of the website, which is a name well known, worldwide. The committee believes the benefits outweigh any perceived negatives.”

Asked if the project had officially been endorsed by the ASEAN national tourism organisations, he said: “The NTOs witnessed the proposal and have already signed as witnesses of the MOU between ASEANTA and the ACE project, during the meeting in Hanoi, last January.”

At a subsequent meeting held in Phnom Penh, last July, ASEANTA endorsed the ACE project’s recommendations that appear to give the US agency the right to develop a generic campaign branding “Southeast Asia,” while closing the book on a 30-year effort to promote an ASEAN tourism branding, for good.

It is not clear if the national tourist offices signed off on the financial details and business model, at that meeting, or were happy to pass the buck entirely to ASEANTA?

Unfortunately, ASEANTA and even the tourism promotions section at the ASEAN Secretariat are flat broke, making the US proposal to pump approximately Bt12 to 15 million in the initial branding campaign, set up of a DMO and the website a very attractive proposition.

It could be described as an offer too good to refuse, but it will come with baggage and it still leaves ASEANTA without a revenue stream.

Also the core arguments presented by the consultants could be challenged by tourism leaders once they recognise other factors. One of them might be the fact that a high profile airline, like AirAsia, can align its product with the brand “ASEAN” without any political strings attached and believes it can gain marketing leverage.

ASEANTA and the national tourist offices may need to review their decision. Or, alternatively, justify their decisions to go with “Southeast Asia” as the core brand as well as outsource the strategy and execution to US funded consultants.

If not it could backfire by further confusing consumers and the market at large.

Source : TRWeekly
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