A Visit To The University of Surrey

A visit was made to the University of Surrey, School of Hospitality & Tourism Management, similar in intent to the Emirates Academy previously, to discuss student and staff exchanges with Professor Graham Miller, Head of School of Hospitality & Tourism Management, Dr Li Gang, Director of International Relations, and Ms Rachel Enticknap Bickford-Smith, Regional Manager of International Student Recruitment Office. 

The University of Surrey is rated University of the Year and its School of Hospitality & Tourism Management is ranked #1 in the UK. Read more about the University of Surrey: Singapore meets Surrey blog. 

guildford train station

university of surrey

university of the year

surrey business school

school of hospitality & tourism management

ranked #1

university of surrey, campus accommodation

guildford high street

Three Ideas For Singapore Air Hub

1.       Singapore Inc. Mindset

The Emirates Group adopts a ‘Dubai Inc.’ mindset with its many company brands under the group comprising airline, ground handling & food catering, tour operator & events management, hotels & resorts, retail, F&B etc. This means there is monopoly in the supply chain e.g. all airlines in the airport must go through the only one ground handler and food caterer. 

The Singapore system chose to move away from this model and intentionally have more players to compete for greater efficiency.  For instance, Singapore Airport Terminal Services (SATS) used to be part of the Singapore Airlines Group but was divested from SIA in 2009 and now there are SATS and dnata.  Swissport started in 2005 and left four years later with losses of more than $50 million. ASIG started in October 2014 but has terminated its contract with Jetstar, its first and only airline customer.  Nonetheless, industry players agree there is still room for three ground handlers in this sector.

So, can we follow the Emirates Group and have a ‘Singapore Inc.’ mindset for all companies under a single entity?  We doubt so.  This system of having corporatized and private companies with free market competition has been in place for all sectors of the economy, and it will continue.  It will not change in Singapore, unless there is a crisis, an industry player commented.

In fact, The Straits Times recently reported on 20 May 2016 "Who will pay for and run Changi Airport Terminal 5" that the Government is rethinking how the airport could be owned and run, including alternative models for the ownership of new airport facilities. This is because the development cost is expected to be tens of billions, as the airport prepares to handle 135 million passengers by the time T5 is completely ready. Some options being considered include future terminals being owned and operated jointly by the public and private sectors, noting that there are arguments for and against any model. 

2.       Beyond An Air Hub

The key ingredient to be a hub, is to increase connectivity; the more connections, the more busy the hub. An idea was raised to look beyond an air hub e.g. Hong Kong airport links ferries to Macau and Zhuhai. Similarly the Singapore airport can consider ferry links to Batam, Bintan, Desaru and rail links to Johore.  The ViaMilano The Flight Connection provides a service by Milan airports to help passengers find the best travel solution.

3.       The Changi Experience

Singapore Changi International Airport was recently named the World’s Best Airport for the 4^th consecutive year and has been in the top three for the last fourteen years.  The ‘Changi experience’ is about being able to “anticipate what your needs are when you need them.” So Changi has to continue to enhance passenger convenience and provide services that are beyond expectations.

… to be cont’d

Interviews With Industry Partners (DXB)

1. What are the reasons that have led to the rapid growth of the air hubs in the Middle East?

The rulers gave the team that set up the airline a carte blanche to do whatever it takes to create a successful airline. This non-intervention approach allowed the airline executives the freedom to take risks and leverage on its obvious strategic location. The airline is not public-listed, so there is no pressure of return on investment.  The government does not subsidize the airline, but through an investment arm they are the biggest shareholder. The airline has the advantage of unwavering government support for infrastructure development, zero tax, great location, and because they are a private entity, they can react to the market very quickly.

2. What are your company/organisation/country’s strategies to compete in the aviation/ tourism industry? 

The airline’s strategy is to grow code sharing arrangements, and it takes up equity in many other airlines to break into new markets. As a new airline, it is trying to penetrate the market and they are willing to fly to untested secondary cities which they think will grow in the future. ‘They are like the precocious and audacious boy who has rich and forgiving parents.’ The rulers want to diversify away from oil revenues and will do whatever it takes to build their airlines and airports into world transport hubs. They are everywhere with their sponsorships and advertisements, and they are very supportive to tourism associations and organizations e.g. it’s much easier to get free tickets for familiarization trips from the Middle East airlines then SQ.

3. How do you think Singapore can learn from and respond to this competition?

SQ is still a very good product, very good customer service, food, in-flight entertainment and overall great experience. They are a hub to South-East Asia but these days they are focusing on more direct flights, to beat the Middle-East airlines’ stopover programmes.

SQ has proven its astuteness but it needs to respond to the market more quickly. A good step taken is the equity ventures they are forming in India and other countries but they’re still slow and too cautious. ‘SQ cannot be run by scholarly technocrats focusing on cost management rather than revenue growth.’ They need to be able to build personal relationships, take risks, challenge the old paradigms etc. The Middle East airlines hire people from all around the world to do its bidding, take risks to beat the odds. This is full throttle globalization.

*The industry partners from airlines, attractions and NTOs preferred to remain anonymous. 

The Case For Culture

At the Arabian Travel Market 2016 session on ‘The Future of the UAE as a global tourism hub’, it was shared that the seven emirates do not compete but instead complement one another’s tourism offerings.  They sell themselves as seven emirates, one destination.

So while Dubai is the city of superlatives – the tallest tower, highest dancing fountain, biggest shopping mall, man-made islands etc., Abu Dhabi is going down the culture route.  Similarly Sharjah has the Heart of Sharjah, a heritage site that offers a different authentic experience.

Dubai

Dubai received 14.2 million tourists last year, and they hope to target 20 million visitors by 2020, which they would as Dubai is also hosting the World Expo in 2020 expecting 25 million visitors there.

Tapping on its rich heritage, Dubai started the Sheikh Mohammed Centre for Cultural Understanding (SMCCU) with the theme ‘Open Doors, Open Minds’ to increase awareness and establish understanding between the various cultures that live in Dubai. Activities include a Heritage Tour at the Al Fahidi Historic District through its unique narrow sikkas and beautiful wind towers (olden days natural air-con), a Cultural Meal which allows you to eat and chat with a local Emirati host about its culture, customs and religion, and a guided tour of the Jumeirah Mosque, the only mosque in Dubai open to the public. It also conducts Cultural Awareness Programmes for companies in the public and private sectors. This is especially useful as the increase in investments and job opportunities in Dubai has led to a large proportion of expatriate community with the local UAE community comprising only 12% of the population.

Abu Dhabi

In comparison, Abu Dhabi received 4.1 million tourists (counted as tourists who stayed in the hotels).  It is ramping up its efforts to build itself as a tourism destination.  Abu Dhabi’s tourism development and investment company (TDIC) has developed the Saadiyat Cultural District on Saadiyat Island that will have the world famous Lourve and Guggenheim museums targeted to be ready in 2016 and 2017 respectively, as well as its own Zayed National Museum.  It already has one themepark – the Ferrari World in Yas Island and hosts the Formula 1 Etihad Airways Abu Dhabi Grand Prix at the Yasmarina Circuit.

Sharjah

Sharjah, just beside Dubai is also building up its heritage with the Heart of Sharjah, the largest historical preservation and restoration project in the region planned over 15 years to be completed by 2025, by restoring historical buildings, constructing new structures following the Sharjah architecture and transforming them into hotels, restaurants, cafes, art galleries and markets.

Singapore

Singapore too, is promoting its brand as a narrative that draws from history, from pre-colonial and colonial times, leading to its independence and present times; a mix of nostalgia and modernism. This was shared at the recent Tourism Industry Conference 2016, “Tourists come to countries not to imagine what has been erased but to experience what has been retained.”

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Without a doubt, the case for culture makes sense in any tourism destination, and especially so for today’s well-travelled visitors. People travel to see the world, and buildings are only one aspect of the hardware. In most cases, it is the software - the interaction with its community that travellers look for to enrich their experiences.  So a destination would look to increasingly create opportunities to enhance these authentic interactions for its tourists with the local community.

At the SMCCU Cultural Meal experience, visitors were greeted by very enthusiastic and hospitable volunteer hosts, who assured visitors to “feel free to take any photos and videos, and ask any questions you want”, to clarify misconceptions that visitors may have of UAE, so they walk away with a better understanding and could better appreciate the rationale behind the things they see but don’t understand in the country.

It is a right step towards the ‘Open Doors Open Minds’ mindset.

Al Fahidi historical neighbourbood

Sheikh Mohammed Centre for Cultural Understanding

guided tour through the Al Bastakiya neighbourhood

chat with local hosts

meal with local hosts

photo with local hosts

A Visit To The Emirates Academy of Hospitality Management

The Emirates Academy of Hospitality Management opened in 2001, in academic association with Ecole hoteliere de Lausanne (EHL).  It is owned by the Jumeirah Group and offers a Bachelor of Business Administration in International Hospitality Management (BBA), Master of Business Administration (MBA) in International Hospitality Management, Study Abroad in Dubai and Professional Training & Development programmes.

The currently 300 students come from 60 different nationalities.  It is located directly opposite the Burj Al Arab, in the heart of the Jumeirah Beach Resort and Medinat Souk area. There are opportunities for its students to spend up to one full year studying at EHL in Switzerland or one semester at Cornell University in the USA.  Its close relationship with the Jumeirah Group allows its students internship opportunities and interactions with people in the hospitality industry.

A meeting was connected with Dr Sanjay Nadkarni, Director of Research, who was a panellist at the Arabian Travel Market 2016 seminar on ‘The role of big data, predictive and immersive technologies in the future travel booking experience’.  The meeting also introduced Dr Stuart Jauncey, Dean and Dr Michael Newnham, Associate Dean of the Academy.

The discussion explored opportunities for:

- Student programmes e.g. 2 weeks CDS on Global Citizenship at Emirates Academy’s campus;

- Student internships with the Jumeirah Group e.g. Burj Al Arab (30-40% Chinese tourists and they are looking for staff with bilingual capabilities);

- Articulation arrangements for graduates into its third final year of the BBA;

- Graduates with many years’ working experience into its MBA.

Why Emirates Academy, in Dubai? 

- Close association with EHL, Cornell, Jumeirah Group;

- Located in the heart of Jumeirah Beach Resort, Burj Al Arab and Medinat Souk area;

- Dubai is in the heart of the Middle East hub between Europe and Asia, and has a wide expatriate community comprising many different nationalities for cross culture exchange;

- Dubai is gearing itself up for World Expo 2020 with its many new tourism developments.

entrance

view of burj al arab

reception area

training kitchen

seminar room

cafe

student dorm with pool or burj al arab view

cafeteria

student dorm - bed

student dorm - kitchen

A Meal With A Local Emirati Mr Farhan Al Bastaki

Local emeriti Farhan hosted us to a local emerati meal at Al Fanar at Dubai Festival City.  It was an enriching experience chatting with him, and he gave some insights into the UAE culture.

Everybody Loves the Ruler

Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai and the Vice President and Prime Minister of the UAE, is much loved by his people.  His people see him as their father, they listen to him, trust in him, and will die for him if necessary. He is a visionary leader, who has created Dubai to be what it is today.  He is a people person, and tells everyone, that it is not the buildings or malls that he is proud of, but his people. He interacts with his people freely and regularly, and even hosts a live local radio station to answer questions from his listeners. Apparently, he also writes poems, and has published a book Flashes of Thought: Lessons in Life and Leadership from the Man behind Dubai.

On aspiring to be ‘number one’ and his ten best quotes:

“We, in the UAE, have no such word as “impossible”; it does not exist in our lexicon. Such a word is used by the lazy and the weak, who fear challenges and progress. When one doubts his potential and capabilities as well as his confidence, he will lose the compass that leads him to success and excellence, thus failing to achieve his goal. I require you, youth, to insist on number one.”

This love and respect for their ruler, is not just by the local emeritis, but also by the expatriate community at  large.

The Ruler Trusts the Young

There was a case story of how when Dubai first started out its plan to be a financial centre, it recruited the top talents from Britain to help it get started.  Then Qatar, also with the same vision, poached the same talents with three times their pay.  Dubai, in the next moment, recruited a 36 year-old for the job. The guy got people to work for him, they stayed in the office, slept in the hotel in the next building owned by the government, no one went home, their families got them their clothes. The only time they left the office was when they made appointments and flew to various countries to make sales calls to the top banks across the globe.  In a month, the financial centre hub was set up. Qatar took five years.  

Just look at its 22 year-old Minister for Happiness.  How many countries are willing to invest in a 22 year-old as a minister?

Sheikh Mohammed bin Rashid Al Maktoum says:

“We are proud that the UAE is a young country. And we are proud of our youth. We invest in them and empower them precisely because they are our future. We believe that they are faster than us in acquiring and processing knowledge, because they have grown up with the tools and techniques that we lacked at their age. We entrust them with driving our country to new levels of growth and development, which is why we have now appointed a cabinet minister of their age and created a special council of youth.”

Left Pocket, Right Pocket

Dubai has deep pockets for it to realise its lofty dreams.  The Emirates Group, wholly owned by the government, has among its brands an airline, ground handler, hotel, travel agent, retail, food & beverage etc.  So its executives fly its national airline, stay in its hotels, booked through its agencies, host at its F&B restaurants.  Money flows, from the left pocket, to the right pocket. 

An Analysis Of The Three Options

Following a quick analysis of the strategies, an analysis of the three options: 

1.       Government Involvement

Government Corporatization

In the article ‘Public administration and public governance in Singapore’ by M. Shamsul Haque in 2009, he analysed the organizational structure and management of the Singapore organizations and noted that the government has corporatized various departments and statutory boards into autonomous agencies, to ensure greater managerial autonomy and operational flexibility, including those of Changi International Airport Services and Civil Aviation Authority of Singapore.  It was highlighted that the minister of finance in his 1997 budget speech had mentioned that the government had converted 102 ministry headquarters, departments, and statutory boards into autonomous agencies in 1997.  These autonomous agencies were based on a framework of autonomy and flexibility which had hoped to encourage greater efficiency and performance.

Has It Worked?

As a testament to how this model has worked out, The Straits Times shared on 1 July 2015 ‘Corporatized airport still soaring high’ that since 1 July 2009 when the Changi Airport Group (CAG) was created after the Civil Aviation Authority of Singapore was split into two, Changi Airport has won about 150 best airport awards, most recently World’s Best Airport 2016 for the fourth year in a row, disproving the fears that it would lead to a focus on profits at the expense of service standards. 

Government Co-Funding

However, the Government is mindful that Changi Airport must remain competitive in an increasingly challenging environment.  To this, Senior Minister of State for Transport Ms Josephine Teo said in The Straits Times ‘Government to co-fund Changi's big expansion’ on 5 August 2015 that the Government will co-fund Changi Airport's expansion, including the construction of the future Terminal 5, although the final cost-sharing has not been decided.  Mr Liew Mun Leong, chairman of CAG had earlier commented that the project was expected to cost tens of billions of dollars and is an investment that is beyond the means of the CAG.  He had in fact suggested for the Government to foot the entire bill, and his team to run the airport.

2.       Private Sector Leads

Efficient Use of Resources

In making his case for private sector involvement, Associate Professor Terence Fan, a transport specialist from the Singapore Management University, said in The Straits Times ‘Government to co-fund Changi's big expansion’ on 5 August 2015 that the Government should consider some private sector involvement in the Changi East project.  He added that "When the private sector is involved, whoever pays is keen to ensure that resources are used efficiently. This helps the Government get the best bang for its buck."

Senior Minister of State for Finance and Law Ms Indranee Rajah in The Business Times on 11 March 2016 'Singapore pushes for private investments in infrastructure’ said that "Private sector players need to be activated, and governments need to be proactive in undertaking reforms to facilitate infrastructure and urban development."

Nationalisation Versus Privatisation

Similarly, SIM University economist Mr Walter Theseira said in Channel News Asia on 30 October 2015 ‘Government should run public transport system’ that the key issue is ensuring the appropriate incentives are in place to yield the desired quality of service.  He was responding to the dean of Lee Kuan Yew School of Public Policy Mr Kishore Mahbubani who had said that Singapore’s public transport system should be run by the Government, as private corporations lack the incentive to invest in the long-term maintenance of a public good.  Mr Walter Theseira argued that “It is tempting to suggest that nationalisation would fix the problem, but it is not nationalisation itself that would fix the issue, but rather, ensuring that the incentives and resources are in place to address maintenance shortfalls and make decision-makers accountable for those problems. Likewise, privatisation without appropriate regulation may not generate efficiency gains.”

3.       Government-Linked Companies Investments

Private Sector Investment

The Straits Times article on 1 July 2015 ‘Corporatized airport still soaring high’ highlighted the case of the Changi Airport's ownership, which was to have been transferred from the Ministry of Finance to investment firm Temasek Holdings.  This has not happened yet due to uncertainty over how future airport expansion and other projects would be funded. This point was mentioned by Mr Liew Mun Leong, chairman of CAG when he shared “My personal view is that it's always better to have a commercial body manage a commercial body... The Government's role is to govern."

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In reality, the three options are in place.  While Changi Airport and CAG are corporatized, their immediate and ultimate holding entity is the Minister for Finance (MOF), the Singapore government.  The ownership was to have been transferred from MOF to investment firm Temasek Holdings, but has not happened yet.  The government is also aggressively pushing for private sector investments in its aerospace hub strategy.

To compare the strategies with the Middle East air hubs, the three Gulf carriers Emirates, Etihad and Qatar are all wholly owned by their governments.  The countries are rich in oil reserves, and industry sources have suggested that their strategies are really about putting their airlines and airports on the world map as quickly as possible. They are expanding their capacities very quickly by investing aggressively in aircraft and other airlines. Their decision-making process is also fast and efficient without the need for bureaucratic red tape. Their strategy is not about making immediate return on investments, but about its long-term branding of their airlines and airports, their countries’ pride.