IPW 2015 Report—The Quick Take
Euro-based exchange rates and Brazilian economic woes created a slight headwind at an otherwise upbeat ipw this year. Or, it’s all about China. Despite a noble effort to put the best face on the 2015/16 season from Western Europe and Brazil—the two huge markets are experiencing currency difficulties this year—several Western European countries will be flat or down for the 2015/2016 season unless the Euro begins to gain strength. Receptive operators are reporting a 20-30 percent decrease already in Brazilian arrivals to key markets such as New York and Florida.
According to an analysis by Brand USA, it’s China, India, France and the UK that will continue to drive the growth necessary to grow from 75 million international visitors to its goal of 100 million in 2020. To reach that goal would require a 4.3 percent Compounded Annual Growth Rate (CAGR); meanwhile, the U.S. National Travel and Tourism Office (NTTO) has forecasted a3.4 percent CAGR. So Brand USA will continue to focus on the markets with the most growth potential—China and India.
So pervasive was the focus on China that it seemed to even seep into just about every press conference as one after another supplier announced new products—followed by their strategy for the China market. Apparently the China references became so all-encompassing that it was beginning to enervate some of the non-Chinese journalists who were accustomed to being the center of attention. Finally, one utterly exasperated Italian journalist blurted out. “I’m tired of hearing about China this and China that; what about those of us from Europe who’ve been loyally covering the U.S. and sending visitors for decades?” This drew a unexpected burst of applause from journalists who were clearly beginning to feel marginalized.
IPW 2015 Report: Seven Top Takeaways
1. The impact of the strong U.S. dollar is already being felt in the following ways:
• Shopping and attractions in New York City are reporting lower numbers of European and Brazilian visitors.
• Some of the effect has been neutralized by lower airfares from the European destinations to the USA.
• Retailers are reporting that tourism spend has been lower this year; while hotels report that visitors are spending fewer days in the destination or scaling back hotel quality.
• Changing itineraries to include free or low cost options such as U.S. National Parks that will lower the overall price of a trip.
2. Regardless of pressure applied by American carriers Delta, United and American Airlines over government subsidies and the unfair advantages they may have, it is the Gulf carriers—Emirates, Qatar, and Etihad—that are driving the greatest amount of new lift into North America by connecting India and European countries to the North America through their hubs in the middle east.
In 2014, the Gulf network carriers – Emirates, Etihad and Qatar Airways – offered 2.7 million seats into the U.S. with barely a peep of public antagonism. But now the U.S.-Gulf carrier dispute is a loud topic. Is the sudden attention to Gulf airlines clouding judgment? In recent weeks Emirates and Qatar Airways have announced growth in the US: Emirates adding Orlando as a destination and increasing Boston and Seattle services while Qatar will open Atlanta, Boston and Los Angeles while growing New York JFK, with plans including A350 deployment.
The U.S. axis is asking for a freeze on Gulf carrier capacity, making some to suggest Gulf carriers are expanding “while they can” or are growing to antagonize U.S. carriers. Atlanta may be a good market, but Qatar’s announcement of service 14 months in advance will ruffle Delta feathers. Qatar Airways announced plans last month to add three U.S. destinations in 2016: Atlanta, Boston and Los Angeles. This will bring Qatar’s U.S. network to 10 points of entry, the same as Emirates. Etihad serves six points. The addition of Los Angeles brings to five the number of U.S. cities to be served by all three Gulf carriers.
U.S. Destinations for Emirates, Etihad and Qatar: 2016, as of May 2015
| City | Emirates | Etihad | Qatar |
|---|---|---|---|
| Atlanta | - | - | X |
| Boston | X | - | X |
| Chicago | X | X | X |
| Dallas/Ft Worth | X | X | X |
| Houston | X | - | X |
| Los Angeles | X | X | X |
| New York JFK | X | X | X |
| Miami | - | - | X |
| Orlando | X | - | - |
| Philadelphia | - | - | X |
| San Francisco | X | X | - |
| Seattle | X | - | - |
| Washington Dulles | X | X | X |
Source: CAPA—Centre for Aviation and OAG
3. Receptive operators continue to pursue the right balance between being a hotel resource and a service provider. For example, even the three hotel aggregators–GTA, Tourico and TUI-Hotelbeds—have established distinct attraction and experience divisions not only to “sell the fun,” but also to package hotels and attractions dynamically in one rate to circumvent hotel rate parity restrictions.
4. Brazilian operators survive by being scrappy. Specialist RTOs dependent on Brazilian business are already down between 20-30 percent in 2015. Several have reacted by cutting staff. At ipw, we spoke with Tereza C. Reis. president of Personal RKG, an Orlando-based receptive focused on MICE from Brazil, who told INBOUND that her Brazilian business was off 30 percent this year, but she was able offset the loss by diversifying into Peru, Paraguay and Chile where she is receiving consistent group business. Other insiders at ipw reported that Colombia is seeing strong growth to the USA this year with a stable government and buoyant economy.
5. Large European operators are demanding coop support from second- and third-tier destinations, who need brochure inclusion to prove they.ve achieved distribution. One major Western European product manager intimated to INBOUND that such activity was the purpose with 50 percent of her appointments.
6. While everyone expressed gratitude for Brand USA … and applauded US Travel’s herculean campaign that culminated in an 11th hour re-authorization that kept the agency alive, there was grumbling during the show about the bureaucracy that has been created around the organization, the slow response time to get questions answered even on the simplest matters, and the elimination of many of the co-op advertising programs that Brand USA had been offering in the past and not giving much attention to smaller niche destinations. What some may not realize is that the agency is under intense scrutiny from legislators who would still like to eliminate it; so, staff is acting more like a governmental agency.
7. The South is now a hot destination for repeat visitors from Europe, especially the UK where, for example Memphis and Nashville are in 106 of the 126 UK tour operator brochures, and Louisville’s bourbon program is in half of them.
Top Operators Honored at IPW
In a special ceremony on Saturday night at ipw, the U.S. Travel Association and Brand USA recognized the top international buyers at the inaugural chairman’s circle honors ceremony. The awards event honored 52 of the world’s highest volume tour operators and buyers of the U.S. travel product from 16 different countries. Honorees were nominated by members of the US Travel’s Chairman’s Circle level, which includes some of the largest U.S. travel companies and top U.S. destinations. Following is the list of honorees
| Company (Country) | Company (Country) |
|---|---|
| Abercrombie & Kent (UK) | H.I.S. Co., Ltd. (Japan) |
| Adventure World (Australia) | Hana Tour Service, Inc. (Korea) |
| Air Canada Vacations (Canada) | House of Travel Ltd. (New Zealand) |
| Alidays (Italy) | Infinity Holidays (Australia) |
| America As You Like It (UK) | Jalpak Co., Ltd. (Japan) |
| America Unlimited (Germany) | Jan Doets America Tours (Netherlands) |
| amerikareisen.at (Austria) | Jetset Voyages (France) |
| Audley Travel (UK) | JTB Corporation (Japan) |
| Best Day Travel (Mexico) | Kintetsu International Express, Inc. (Japan) |
| Bon Voyage Travel and Tours (UK) | Maison des Etats-Unis (France) |
| British Airways Holidays (UK) | Meier's Weltreisen/DER Touristik Frankfurt GmbH & Co KG (Germany) |
| CANUSA Touristik (Germany) | Miki Travel Ltd. (UK) |
| Compagnies du Monde (France) | MMTGapnet Tour (Brazil) |
| Comptoir des Etats-Unis (France) | Nascimento Turismo (Brazil) |
| Creative Holidays (Australia) | Newmarket Air Holidays (UK) |
| Cvc Brasil Operadora E Agencia de Viagens S/A (Brazil) | North America Travel Service (UK) |
| DER Touristik Frankfurt GmbH & Co. KG (Germany) | Nyhavn Rejser A/S (Denmark) |
| Designer Tours (Brazil) | Shanghai Ctrip International Travel Services Co., Ltd. (China) |
| Evergreen Tours (Australia) | Swanson's Travel AB (Sweden) |
| Flight Centre Ltd. (Australia) | Tam Viagens (Brazil) |
| FTI Touristik (Germany) | Thomas Cook Tour Operations UK (UK) |
| Galaxy Tour, Inc. (China) | Trailfinders Ltd. (UK) |
| GOGO Worldwide Vacations (Canada) | TravelBrands, Inc. (Canada) |
| GTA UK (UK) | TUI Deutschland GmbH (Germany) |
| H.I.S. Co., Ltd. (Japan) |
PW 2015 Report: Daily Highlights—Items Sourced from the IPW Daily
Oregon leverages the hit movie “Wild” into niche product that may resonate with UK tour operators: Travel Oregon held a screening of the movie, based on the best-selling book, “Wild: From Lost to Found on the Pacific Crest Trail” by Cheryl Strayed and, according to research, nearly 35 percent of visitors participate in some form of hiking activity. On a separate note, Author Cheryl Strayed will be one of the keynote speakers at U.S. Travel’s ESTO Summit Aug. 25-28 in Portland.
India: In 2013, arrivals to the U.S. from India grew by 18.6 percent due to expedited visa interviews and in 2014 the growth settled back at 11.9 percent reaching just under 1 million visitors. By 2019, according to Sheema Vohra, managing director of Sartha Global Marketing, Indian arrivals are expected to grow by 47 percent. Hottest destinations for Indian travelers to the USA are: NYC, California, Las Vegas, Orlando and Miami. Fastest growing segment is Custom FIT and honeymoons for upscale travelers.
Australia: More than 60 percent of U.S.-bound travelers are repeat visitors; they averages 20 days in the U.S. last year, and grew 6 percent year-over-year in 2014 to 1.27 million visitors. Trends: Growth in escorted tours by mature travelers, increased interest in individuals traveling alone, culinary experiences and adventure and outdoor. Hottest destinations: California, Hawaii, New York, Nevada and Florida.
UK: Among the top five activities in the US are fine dining, visiting national parks and visiting small towns and the countryside. Trends: Brand USA’s focus on national parks will resonate with UK visitors as well as a desire to have “authentic” American experiences. Hottest destinations: In addition to the usual top three—NYC, Orlando, and Las Vegas—there has been tremendous interest in the South, focused more on music culture, as well as bourbon, continues to generate interest.
Hotelbeds: Had it sister brands at Orlando—JBS, which serves as a receptive that works with the Chinese tour operators, and its newest brand, Travel and Activity Bank. Top Selling cities in the US: 1. Orlando 2. Las Vegas 3. NYC 4. Miami 5. Los Angeles
GTA Renews Focus on USA: Flavia Alzetta, senior vice president, global sales and marketing, GTA, told IPW Daily that the company, now owned by GTA, will make a significant investment in its business-to-business activities. Other snippets: UK, USA and Australia were GTA’s top source markets for North America … GTA had triple digit growth from Thailand to the USA (probably from a small base) … NYC, Orlando, Las Vegas and Honolulu are the most popular cities overall … The company predicts continued growth from the following emerging markets: Brazil, Russia, India, China, Indonesia, and Turkey.
IPW 2015 Report: Buzz & Bytes
-Exhibitors along the Federal Row section of the show were a little startled by the presence of U.S. Secretary of Commerce Penny Pritzker, who was on the floor of the show personally thanking each Federal employee for their service with a kind greeting. Must have been her hospitality genes coming out.
-Shopping maven Kathy Anderson will be moving into semi-retirement, gradually phasing out by giving up all of her shopping supplier clients with the exception of Fashion Outlets in Newport Beach, Calif.
–Mary Twomey, former director of sales for Chicago Essex House, now under renovation, has been appointed to open the Cellet PR office in the US. It will be based in Chicago.
–Craig Parsons, who retired from Disney three years ago, showed up at the Sunday night party at Disney World. He came out of retirement last year to be a part of an Orlando-based consulting firm, Fouche, Parsons & Associates
How I Got My Start in the Travel Trade
“How I Got My Start” is a regular segment in which we cull a couple of selections from our interviews with international operators, domestic operators, receptive operators, destinations, hotels and attractions to explore the path that led to a career in the travel trade industry. One thing we have learned: the road to where they are is almost never the same. In this issue, we feature Teresa O’Neill, vice president, global sales, Travel Oregon; and Wendy Ferrigno, tourism marketing manager, Visit Loudon.
Teresa O’Neill: After college and a year of working three jobs (at the same time) in Montana, I headed to Oregon and was hired at the Portland Hilton at the front desk. After watching the sales staff host clients at fancy lunches, and meeting Donna Marcou (currently vice president of leisure sales at Tropicana Las Vegas), I decided hotel sales was the job for me. I was promoted to sales manager and for over 25 years in tourism, I’ve loved being engaged with the travel trade market.
Wendy Ferrigno: Take beautiful wine country and its proximity to Washington D.C., and you get a great destination for tour and travel. Three years ago our then-CEO saw potential for growth in this market and, after successfully developing our weddings market, I was ready for a change. I had the dedication to stick with a new initiative and the desire to build something from the ground up. So, here I am! Thankfully, operators are much easier to work with than brides.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
CityPass has announced that Brian Gallagher recently joined the company as business intelligence and financial analyst. A graduate of the McDonough School of Business at Georgetown University in Washington, D.C., Gallagher was an associate at Bank of America Merrill Lynch Investment Banking in San Francisco before joining CityPass, which was co-founded by his father, Mike Gallagher, who is also co-chairman of the company.
After nearly 20 years on the job, Phil Hannes is leaving his post as director of tourism development for the Anaheim CVB. He told INBOUND that he is making the move because his wife, Marilyn, who is vice president of global sales, Seaworld Parks and Entertainment in San Diego, is being transferred by the company to its Orlando operation. Prior to his tenure with the CVB, Hannes held sales positions at the Holiday Inn Buena Park and the Doubletree Club Hotel in Santa Ana.
TUI Group joint CEO Peter Long has been named by Royal Mail, the 450-year-old postal service system (it also has an international logistics company) in the UK as its new chairman. Long will join its board as a non-executive director and chairman designate on June 18, and will stand for election at its annual general meeting on July 23. He’ll then replace current chairman, Donald Brydon, who plans to step down this year. Long has already announced that he will step down as co-chief executive of TUI in Febr
