Mixed Reports for 2015 Summer Bookings from Germany—Will it be Another Flat Year?
According to a couple of regularly released travel trade surveys, bookings for summer holidays have picked up, reports the German travel trade publication FVW, belying the sense of hesitation and anxiety that one sensed at ITB earlier this month in Berlin, and in the longer trend line for German arrivals in the U.S. over the past several years.
U.S. Arrivals from Germany
2012-2015
| Year | USA Arrivals (000s) | % Change vs. Previous Year |
|---|---|---|
| 2015 | 1,994† | 1% |
| 2014 | 1,969 | 3% |
| 2013 | 1,916 | 2% |
| 2012 | 1,876 | 3% |
† Forecast
Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Administration
The Nuremberg-based market research firm GfK reported that, based on its monthly survey of 1,200 leisure travel-focused agencies, holiday bookings for summer 2015 were 10 percent higher year-on-year in February, although it should be noted that February of last year began a period of weak bookings that continued up until the summer of 2014. Cumulative summer sales are now 6.4 percent ahead of last year. Bookings were particularly strong for departures in May and July, said GfK, and there was good demand for June.
Another monthly survey—this one by Frankfurt-based Travel Agency Technology & Service (TATS)—had less upbeat numbers. It showed a sales increase of just 2.5 percent for leisure travel in February, resulting in a cumulative increase of 4.5 percent for the first two months of 2015. The TATs figures suggest a growth in business that is closer to the NTTO arrivals forecast in the above table.
Brand USA’s DMO DNA Shows … and More Info Bytes from Brand USA’s Board Meetings
From the March 12 Meeting of the Brand USA Board of Directors …
- New Marketing Committee Has Three out of Five Members with DMO Connection: At its recent board meeting, the DMO signature of Brand USA was more and more apparent—something that ought not come as a surprise: it should be noted that the Travel Promotion Act that established Brand USA called for two of BUSA’s eleven board members to represent state tourism offices and one to have CVB expertise. At its meeting, Board Chairman Arne M. Sorenson, president and CEO of Marriott International, Inc., announced the makeup of BUSA’s standing committees. On the marketing committee, which elicits the most interest from U.S. travel suppliers and DMOs who are Brand USA partners, three out of the five members on the committee have a DMO background: Caroline Beteta, president and CEO of Visit California; John Edman, director of Explore Minnesota Tourism; and George Fertitta, formerly the president and CEO of New York City & Company, and now CEO of Bloomberg Associates, a global consultancy founded by former New York City Mayor Michael Bloomberg. Chairing the committee is Barbara Richardson, chief of staff of the Washington Metropolitan Area Transit Authority (Metro). The remaining member is Randy Garfield, who retired last year from his post executive vice president of worldwide sales & travel operations for Disney Destinations after serving more than 20 years with the Walt Disney Company. As well, Christopher Thompson, headed Visit Florida prior to becoming president and CEO of Brand USA.
Also, Tom Garzilli, senior vice president reported that, in a just-completed partner feedback study of nearly 70 partners, the largest segment comprised DMOs. The smaller partners, including DMOs, rely on Brand USA, explained Garzilli, for the bulk of their international marketing and see great value in it. Most, he added, indicate that they will continue to contribute to Brand USA and—a sure sign of smaller DMO involvement—are looking to BUSA for help in the results of their international marketing efforts and measuring ROI.
- FY 2014 ROI Study Near Completion: Results of its second major Return on Investment (ROI) study will be released next month. The results are expected to be in line with the original, projected impact of Brand USA prior to enactment of the Travel Promotion Act, which was signed into law on March 4, 2010: i.e., a marketing ROI of 20:1 within five years of full deployment.
This should help to quell some of the skepticism that greeted BUSA’s first ROI study, completed and released in February 2014. In that study, Oxford Economics, in coordination with its Tourism Economics subsidiary company, conducted an analysis of Brand USA’s marketing in its 2013 fiscal year (October 1, 2012-September 30, 2013), basing it on an econometric model of how the eight markets in which Brand USA was fully active would have performed without its investments in marketing compared with actual performance. The markets included Canada, Mexico, Japan, South Korea, the United Kingdom, Germany, Brazil and Australia. Following is what the report revealed.
ROI Estimates
| Net Revenue Generated | $3,401,951,199 |
|---|---|
| Total Marketing Expenses | $72,740,306 |
| Total Budget, Including Start-up costs & Overhead | $99,022.80 |
| Estimated Marketing ROI | 47:01:00 |
| Total Budget ROI | 34:01:00 |
Source: Oxford Economics, The Return on Investment of Brand USA Marketing: 2013 Fiscal Year Analysis
- New to Brand USA: It was announced that several individuals have new positions on the organization’s staff, including Cassady Bailey as director of partner services, and Mark Lapidus as digital and social media director. Bailey, who joined BUSA in October 2012, was promoted from her post as manager, partner services. She takes over the position previously held by Patricia S. McNally, who left the agency last December. Prior to his appointment, Lapidus served for nearly seven years as vice president of Comcast SportsNet, Mid Atlantic (NBC Universal).
UK Trade and Trend Talk
Seniors Planning Holidays around Caring for Their Grandchildren: More grandparents seem to be scheduling their holidays around childcare responsibilities—this is one of the key findings of a new study conducted by Mintel, the market research and intelligence company, for Warner Leisure Hotels, which specializes in holidays for over-55 travelers.
The study report, “Great Expectations: Balancing the Benefits and Burdens of Modern Retirement,” had other key findings that included the following:
— Travel is still the number one priority for people in retirement.
— Many grandparents are central to making their family work, so they are often depended on for childcare.
–A trend has developed in which those in retirement take breaks when the school term resumes. This is referred to as “The Grey Escape.”
—Over 55s are showing an increased interest in active holidays, as their priorities are changing and they want to stay fit and healthy during their holidays.
STA Travel Launches “Bleisure Travel” Brand: The 18-to-35 specialist, STA Travel is expanding the product it provides its core student-and-youth market group by offering business travelers an online booking tool, account management and other benefits, along with the standard packages it has available. STA has had a B2B business travel component for more than 15 years, but the new offering marks the first time it has targeted business travelers directly. STA said it plans to benefit from what it calls a “bleisure” travel blend; it referred to recent research showing that 69 percent of business travelers in the 18-to-35 age group add a leisure component to a business trip.
Harriet Kerr, STA’s business development director said: “We’ve worked in this sphere behind the scenes for some time, and in recent years we’ve noticed not only a surge in younger people making business trips, but also a shift in the sorts of travel they’re booking.” An example of the type of product offered is a Multiflex Pass, which enables customers to change a ticket without fees. For more information, visit: http://www.statravel.com/corporate-travel.htmhttp://www.statravel.com/corporate-travel.htm
Thomson Opening a Holiday Design Store in London: Driven by the apparent desire of many Brits for an in-store experience, as well as the success of a half-dozen “design” travel stores elsewhere in the UK, Thomson Holidays is opening a new Holiday Design Store in London this summer at Westfield Stratford City. Similar stores have opened in the past year-and-a-half in Gateshead’s Metrocentre, Bluewater Shopping Centre and Sheffield Meadowhall as well as Liverpool, Bristol and Glasgow in the last 18 months.
The stores feature HD screens and projections featuring destination and hotel content. An 84-inch touch screen interactive map, a Top Ten 10 holiday list and live weather information will be available at the new store together with reviews and destination videos. As well, social media feeds will be streamed onto screens, with customers encouraged tweet their name and holiday destination. The store will be zoned with specially designed areas for customers to browse for holidays on their own devices or by using interactive screens.
“Our existing Holiday Design Stores have been a huge success with excellent feedback from both customers and staff,” said Jill Carter, UK & Ireland director for TUI (Thomson is a TUI brand), “and we have already started to introduce elements from these new stores to our existing ones and have implemented changes to 24 so far.”
Nasty War of Words between Airlines and U.S. Travel over Gulf Air Carriers Making Headway into USA: Blunt, harsh and contentious language from lobbyists in official Washington is not unusual, but it is unusual to see or hear it as opposed to the polite prose usually employed by the representatives of the U.S. travel industry and its components who, by the nature of their business, serve a bipartisan constituency.
But the third-person courtesy has been abandoned during the past month as major airlines in the USA contend that airlines in the Persian Gulf—specifically, Etihad, Emirates and Qatar Airways—are being subsidized by the United Arab Emirates and Qatar and therefore have an unfair advantage in operating lucrative flights from the Persian Gulf area into the U.S. (It should be noted that Etihad and Emirates, which operate out of Abu Dhabi City and Dubai, respectively, have greatly expanded the number of connecting flights to and through these cities from points in Asia—especially India—to destinations in the U.S.). Emirates is a subsidiary of The Emirates Group, which is wholly owned by the government of Dubai’s Investment Corporation of Dubai, while Etihad was established by royal decree in 2003. Its CEO is Australian James Hogan, former CEO of Gulf Air, who took over at Etihad in 2006.
The open skies policies supported by both U.S. political parties in the past have come under attack from United Continental Holdings, Delta Air Lines and American Airlines groups, as well as by a coalition that includes the Air Line Pilots Association, the Allied Pilots Association; the Airline Division of the International Brotherhood of Teamsters; the Association of Flight Attendants; the Association of Professional Flight Attendants and the Communications Workers of America.
The crux of the position of the latter is included in a statement they directed at U.S. Travel which said, “The Gulf carriers claim that their subsidized expansion into the U.S. market is delivering economic benefits to the U.S. but the truth is that every roundtrip international flight that is lost to the Gulf airlines results in a net loss of more than 800 U.S. jobs. Furthermore, if U.S. carriers are pushed off of international routes, they’ll be forced to cut back on domestic routes to small and mid-sized communities too, cutting off millions of businesses and leisure travelers from the networks that connect them to destinations across the world. The Gulf nations’ subsidies are threatening a legacy and a service that our members are proud to provide the American public.”
But U.S. Travel President and CEO Roger Dow would have none of it, replying, “Unfortunately, having carefully scrutinized the Big Three airlines’ and their unions’ recent position on Open Skies, we arrive at a diametrically opposite conclusion: contravening these open and transparent agreements that were negotiated in good faith holds dire consequences for sustaining the U.S. economic recovery and recent encouraging job growth. I say this on behalf of the industry that has restored jobs 33 percent faster than the rest of the economy since the ’07-’08 downturn, and is now responsible for 10 percent of all U.S. exports—partially thanks to Open Skies.”
Outlook: US Travel should prevail on this issue—despite all-channel campaign by open skies opens that has even placed ads in the Washington Metro system. As important as it may be to the travel industry, this is not a front burner issue, which means that Dow and the US Travel government affairs team has an advantage: They do their best work out of the public eye, through back channels and make certain to take no credit, encouraging their legislative partners to do so. Also, as some news accounts indicate, even some legislators who would normally be supportive of union positions are not sympathetic because they believe that the airlines have not reduced ticket prices or passed along to consumers the benefits of reduced fuel oil prices they’ve experienced since last year.
How Reliable is NTTO’s Forecast for Inbound Travel?
It turns out that the NTTO forecasts are pretty reliable. Since the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) ended the contracting out of its semi-annual forecasts in early 2010, the agency has been able to increase the input provided for the process, as well as expand the number of sources and the diversity of information configured into the development and fine-tuning of the model for the forecast, which has proved to be a valuable planning tool for U.S. travel suppliers and DMOs that are marketing and promoting the U.S. travel experience internationally.
There are two reasons why. First, it has become increasingly accurate. A look at the last semi-annual forecast, which was released last November—at the time, NTTO has just released international arrivals data for up to, and including, August 2014—shows why. (Final figures for 2014 did not come out until earlier this month.) By the time a year finally happens, Mark Brown, the Department of Commerce economist who heads the forecast team, NTTO will have forecasted volume for that year up to 12 times as it deals with a fluid set of metrics in its calculations.
And, second, it is free.
INBOUND recalled the projections NTTO made last November for 2014 arrivals from the then-top 20 international markets and compared them in the table below to the actual 2014 arrival numbers posted earlier this month. What they show is that a fairly conservative NTTO was dead-on accurate or near-dead on accurate for the key markets of the UK, Japan, Germany, France, South Korea, Australia, India, Italy, Colombia, Sweden and Taiwan.
Overall, the government agency was off by percentages that are small: international arrivals off by +1 percent and overseas arrivals off by +2 percent. Other key markets registered as follows: China (-2 percent); Spain (+2.6 percent); Brazil (+2.6 percent); India (+2.7 percent) and Mexico (+4 percent).
Forecast and Final Arrivals Figures for 2014
For International Arrivals to the USA
(000s)
| Country/Market & Rank for Full Year 2013 | 2013 Arrivals-Actual | 2014 Arrivals Forecast in November 2014 | 2014 Arrivals-Actual |
|---|---|---|---|
| (date from March 15) | |||
| 1. Canada | 23,387 | 23,621 | 22,975 |
| 2. Mexico | 14,343 | 16,638 | 17,334 |
| 3. UK | 3,835 | 3,950 | 3,972 |
| 4. Japan | 3,730 | 3,618 | 3,580 |
| 5. Brazil | 2,060 | 2,205 | 2,264 |
| 6. Germany | 1,916 | 1,955 | 1,969 |
| 7. China | 1,807 | 2,240 | 2,188 |
| 8. France | 1,505 | 1,625 | 1,625 |
| 9. South Korea | 1,360 | 1,442 | 1,450 |
| 10. Australia | 1,305 | 1,277 | 1,276 |
| 11. India | 859 | 936 | 962 |
| 12. Italy | 839 | 948 | 934 |
| 13. Venezuela | 788 | 670 | 616 |
| 14. Colombia | 748 | 875 | 881 |
| 15. Argentina | 686 | 720 | 685 |
| 16. Spain | 620 | 682 | 700 |
| 17. Netherlands | 589 | 619 | 616 |
| 18. Sweden | 477 | 534 | 543 |
| 19. Switzerland | 473 | 506 | 487 |
| 20. Taiwan | 385 | 404 | 413 |
| Overseas Total | 32,028 | 33,629 | 34,419 |
| International Total | 69,768 | 73,877 | 74,729 |
Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Administration; Secretaria de Turismo—Mexico; Statistics Canada
Where the agency was off—in the case of Venezuela (-8 percent), Argentina (-4.9) and Switzerland (-3.8)—the impact was not that great, except for Canada in which a slightly off-mark projection (-2.7 percent) translated into more than 640,000 arrivals.
But, there were unforeseen factors that help to explain the divergence between forecast and final figures. For Venezuela, a bad situation got worse toward the end of 2014 as airline lift capacity was reduced by major airlines that, in some instances, are still waiting to convert into dollars the Venezuelan currency (bolivares) they hold that was used to pay for billions of dollars worth of travel. Also, out-of-control inflation and a nearly worthless bolivar ruined the opportunity for many Venezuelans to take any international trips during the last third of the year. The outlook for 2015 is not much better than the outcome of 2014—an outlook made even cloudier by the Venezuelan government’s decision to force the U.S. embassy to cut its staff by 80 percent, which will make the review and approval of visa applications a slow and lengthy process. Argentina, too, has been plagued by inflation and currency devaluation so bad that it has had an impact on international travel for the past six months.
In the matter of Canada’s Q4 falloff, the slide of the loonie vs. the dollar was so dramatic in the past 30 months that, toward the end of 2014, short-haul overnight travel to the U.S.—the sort of travel used for overnight shopping trips—fell off precipitously. Instead, there was a spike in short-haul travel from the U.S. to Canada.
Toward the Future: Perhaps the public or private sector will come up with a mechanism that is able to track, in real time, data based on the input of the receptive tour operators who are the point of contact for the tour international tour operators who are buying, assembling and selling USA travel product. Such a mechanism would be a valuable addition to the NTTO information already available. (In the meantime, until that happens, read INBOUND.)
Oregon Takes Domestic Campaign and Extends it to UK
So successful was Travel Oregon’s “Seven Wonders of Oregon” campaign last year—it targeted in-state travelers and in-close drive markets—that it is has re-launched it for 2015 and extend
ed it overseas, to the UK. Introduced last spring, the campaign contributed to a nearly 10 percent growth in statewide lodging revenue in 2014 over 2013, according to the research firm STR, Inc. In addition, Travel Oregon’s online fan base grew by more than 120,000 and the state’s tourism website, TravelOregon.com, experienced a record number of unique visitors during the campaign, giving a new audience a view of Oregon’s diverse natural attractions.
So, with the beginning of March, the Seven Wonders campaign featured seven well-known natural wonders of Oregon as the focus of destination travel: the Oregon Coast, Mt. Hood, the Columbia River Gorge, Crater Lake, the Painted Hills, the Wallowas and Smith Rock.
Linea Gagliano, Travel Oregon’s manager for industry and public affairs, told INBOUND that it was able to extend its presence into the UK with a Tripadvisor buy that was enhanced by the Brand USA presence in the market and in the campaign. From March 5 to March 20, the agency served up “7 Wonders of Oregon” banner ads to 357,955 UK consumers who were on Tripadvisor searching for Oregon, Washington, Idaho and/or for outdoor, ski or beach-related content. Total cost for the UK venture was a modest $7,500.
Following its previous format, the campaign also includes a sixty-second “anthem” video featuring all Seven Wonders of Oregon. The spot will air in cinemas and on television in the key markets of Portland, Seattle, San Francisco, Boise, Vancouver B.C. and, now, the UK.
Additional 30-second spots will showcase the unique experiences to explore around each individual wonder. Along with Portland-based Wieden+Kennedy, Travel Oregon worked with a team of agencies to bring this campaign to life, including LANE, MEDIAmerica, Sparkloft and Substance. For more about the campaign, contact Linea Gagliano, manager, industry and public affairs, Travel Oregon at 503.729.6021, or Linea@TravelOregon.com.
Survey Profiles NAJ User Community
The results from a r
ecent survey conducted for the NAJ Group by San Francisco-based Destination Analysts show a strong presence of tour operators—domestic, international and receptive. The online survey was sent out in late October and early November to more than 4,800 recipients comprising travel trade professionals who make up NAJ’s subscriber base and use its website, TheTourOperator.com. Highlights from the results of the survey include the following:
- More than a third (35.3 percent) of respondents are domestic tour operators.
- Almost half (46.4 percent) are international operators, travel agents or inbound receptives.
- More than three out of four (78.6 percent) sell leisure group tours, and more than half (52.6 percent) sell FIT independent tours, while Fly-Drive and MICE business are sold by 31 percent and 21.4 percent, respectively.
- The tour operator segment is generally comprised of small businesses—more than three quarters of this segment’s survey respondents were an organization with 10 or fewer employees (49.8 percent) or 11-50 employees (27.9 percent).
- During the survey period, nearly half of the respondents (48.7 percent) said that there 2015 bookings were about the same as their 2014 bookings at the same point in the previous year, while 43.4 percent reported that their bookings were “greater than last year.”
For the complete slide show illustrating the survey results, click on:
http://www.slideshare.net/jakes92294/naj-tour-operator-survey-preliminary-findings-12-914?related=1
HODGE PODGE
Tennessee has a new state tourism director as Gov. Bill Haslam has appointed Kevin Triplett as commissioner of the state’s Department of Tourist Development. Triplett, 49, will leave his post as vice president of public affairs for Bristol Motor Speedway (BMS). Prior to joining BMS in 2005, he worked in various roles for NASCAR, ultimately serving as managing director of business operations, guiding the operation and administration of NASCAR’s Sprint Cup Series, Nationwide Series, and Camping World Truck Series. Triplett succeeds Susan Whitaker, who announced her departure in December. She is a former Dollywood executive who served as commissioner during Gov. Phil Bredesen‘s administration, as well as during Haslam’s first term.
Hyatt Hotels Corp. has announced two key appointments: Debra Goetz has been named senior vice president, corporate marketing and global communications; and Sandra Cordova Micek has been appointed senior vice president, global brands. Goetz joins Hyatt with more than 20 years of brand marketing expertise, including most recently as vice president of corporate marketing for the Gannett Company where she led marketing and communications initiatives. Prior to Gannett, she served as vice president at NBC Universal where she led the company’s Healthy at NBCU and Green is Universal initiatives, and as vice president for Univision Communications Inc. Cordova Micek brings more than 20 years of brand-building experience to the role, most recently as senior vice president of marketing for USA TODAY . Prior to USA TODAY, she was a vice president at NBC Universal, where she led cross NBCU sales and marketing and ran Women at NBCU.
SeaWorld Entertainment has announced the selection of a new president and CEO: He is Joel Manby, who most recently spent a decade as president and CEO of Herschend Enterprises, the largest family-owned theme-park and entertainment company in the country, with more than 20 entertainment attractions includes Silver Dollar City in Branson, Mo.; Wild Adventures Theme Park in Valdosta, Ga.; and the Harlem Globetrotters franchise. Manby, 55, succeeds Jim Atchison, who stepped down as CEO in January.
Marc Anderson was recently named chief sales officer and senior vice president for Choose Chicago. Before joining Choose Chicago, Anderson served as regional director of marketing for the U.S. and Canada for Peninsula Hotels. Anderson is, in effect, returning to the tourism agency. Prior to his work with Peninsula, Anderson worked for the Chicago Convention and Tourism Bureau, which was renamed Choose Chicago. During his previous tenure, he served as assistant vice president of sales.
American Express Global Business Travel has announced the appointment of Christine Ourmieres-Widener as chief global sales officer. She joins the company after leaving her post as CEO of CityJet. She will start her new position in June.
Cosmos Holidays has announced the appointment of a new managing director, Richard Francis, to replace Phil Boggon, who will be leaving the business at the end of April. Francis, who is currently finance director, and has been with the tour operator for more than 14 years. He will also join the company’s group executive committee.
