In fact, first-quarter growth for Cathay's three main competitors - Japan Airlines, Qantas Airways, and Singapore Airlines - was not only slower than at Cathay, but it was weak, with growth rates of just zero to 2 per cent.

Of the smaller airlines, Air Macau's 29 per cent looks impressive. However, most of its growth came in February, and that rate may not be sustained through the year.

At Hong Kong Dragon Airlines, we have become accustomed to faster growth than its 10 per cent in the first quarter - it has, after all, almost doubled in size since 2000.

However, the pace was quickening in March so, unlike at Air Macau, faster growth is expected over the rest of the year.

five-star celebration

Revenue from rooms at five-star hotels rose 30 per cent in the first quarter of this year, compared with last year. This is based on revenue per available room - revpar - the industry's most-watched barometer.

The hotels also managed to get a few more guests into their rooms, with the average daily occupancy in the first quarter gaining three points to 77 per cent.

In general, industry theory has assumed that once room occupancy levels reach about 70 per cent to 75 per cent. This means some customers are being turned away.

However, with improving management control, this ceiling has probably increased to 80 per cent, and possibly higher.

We recently suggested it was time for hoteliers to open a bottle of champagne. In the five-star hotels they should be quaffing their second bottle by now.

travelocity gets closer

At the start of this year Travelocity, a United States-based online travel agency, said it would probably take up an option to buy the almost 90 per cent of regional online agency Zuji that it does not own. Singapore-based Zuji operates various sites in Asia Pacific - including Hong Kong, where it offers an extensive range of travel options.

The date for the purchase was set for January next year, and the price at US$34.5 million. The delay is to give time for the other owners - 15 mostly Asian airlines - to decide.

However, the sale to Travelocity looks likely to proceed.

Travelocity's interest in Zuji is certainly linked to its interest in the mainland market - which Zuji once said it would enter by this year, but which has still not happened - and India.

These changes are also likely to become related to developments in Europe. Earlier this month, Travelocity's owner, Sabre, said it would spend US$1 billion on Lastminute - one of Europe's top-three online agencies.

Sabre/Travelocity, Cendant and Expedia are the world's three-largest online agencies.

Customers in Hong Kong and elsewhere are likely to benefit. Big buying power will lower the rates that the Travelocity companies can negotiate with airlines, hotels, and others. And working through Zuji will improve Travelocity's product in the marketplace.

Until now Travelocity's regional sites look like what they are - US implants - rather than home-grown sites.

Compiled by Murray Bailey, research director and editor, Travel Business Analyst