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.
