As Economy Falters and Bookings Fall, Record Number of Chinese Getting Visas to Travel to USA
Air travel bookings from China have slowed sharply over the past three months, especially to Europe and the USA, closely mirroring a decline in the country’s stock market, according to ForwardKeys, a Valencia, Spain-based business intelligence company. Total outbound international bookings from China during the period fell from a growth of 21 per cent year-on-year (for the period ending with August 2015), to just 1 per cent, since the Shanghai Composite hit its peak. Meanwhile, the U.S. State Department indicates that the number of visas granted to Chinese travelers to visit the United States reached a record level—increasing 47 percent year-on-year for the same period ending August 31.
The slowdown in bookings that analysts say is related to the condition of the Shanghai Composite was compounded by lower Chinese purchasing power as a result of the weaker Chinese yuan vs. the U.S. dollar. The data from ForwardKeys, which monitors future travel patterns by analyzing 14 million reservation transactions each day, shows the biggest fall was in August when growth in outbound bookings turned negative. However, departures from China during the September to December period will still grow compared with the same period last year, the analysis showed. Also, travel during the upcoming Golden Week national holiday, from October 1 to 7, seems not to have been affected by the stock market drop because bookings were made months in advance.
However, bookings to Europe and the U.S. for November and December are lagging behind the volumes for the same period last year. The weaker Chinese currency is clearly making an impact on travel decisions, according to ForwardKeys, whose founder and CEO, Olivier Jager said: “Once again our data reveals how changes in the broad economic climate can have a great impact on the travel industry. The prospects for the low season after Golden Week are still uncertain because Chinese travelers are becoming late bookers. Nevertheless, despite the slump in travel to Europe and the U.S., overall departures from China will turn back to growth from September to December.”
Meanwhile, Surge in Visa Numbers Continues: Ever since the U.S. and China signed an agreement last Nov. 10 that extended the period of validity for tourist visas to each nation from one to ten years, there has been an explosion in the number of Chinese who have sought and received the new 10-year visa.
| Fiscal Year | Number of Visas Granted | Percentage Change |
|---|---|---|
| 2005 | 325,995 | -- |
| 2006 | 382,085 | 17% |
| 2007 | 443,802 | 16% |
| 2008 | 503,438 | 13% |
| 2009 | 524,949 | 4% |
| 2010 | 706,818 | 35% |
| 2011 | 945,040 | 34% |
| 2012 | 1,283,250 | 36% |
| 2013 | 1,467,563 | 14% |
| 2014 | 1,767.60 | 20% |
| 2015 | 2,264,531† | 47% |
Source: U.S. Dept. of State, Report of the Visa Office 2014, Statistical Table No. 19
† Information provided by the State Department Visa Office to Inbound Report: Through August 31, 2015, there have been 2,264,531 NIVs issued at Mission China. This is a 47 percent increase compared to the 1,539,079 NIVs that were issued during the same date range in FY-2014
Note: Figures do not include Hong Kong
It is difficult to speculate what impact the huge increase in 10-year visa holders will have on Chinese travel to the USA—the data do not break down first-time visa approvals vs. repeat visa approvals—but the number granted during the current Fiscal Year, which ends Sept. 30, 2015, is already well above the total arrivals if Chinese travelers to the USA in 2014—2,188,000.
Which Companies Are Number One, Two and Three among German Tour Operators?
According to the German travel trade publication FVW’s annual dossier on the German tour operator market, the three largest tour operators have a combined share of about 43 percent of the market: TUI is the number one with 16.9 percent of market share; Thomas Cook (including Condor) is number two at 13.2 percent, and DER Touristik, which recently acquired Kuoni’s tour operator businesses in Europe, is number three with 12.4 percent. The 55 operators listed in the dossier comprise about 80 percent of the sales volume of the German market, which is estimated at €26 billion ($29.5 billion).
Overall, here are the top tour operators in Germany, along with their share of the market, ranked according to 2013/14 business year figures:
| Tour Operator | Share of German Market | |
|---|---|---|
| TUI | 16.90% | |
| Thomas Cook | 13.20% | |
| DER Touristik | 12.40% | |
| FTI Group | 8.10% | |
| Alltours | 5.60% | |
| Aida Cruises | 5.00% | |
| Schauinsland-Reisen | 3.70% | |
| Small operators overall | 35% † |
† FVW estimate
Source: FVW dossier
What seems most intriguing, the report suggests, is the estimated 35 percent of the market, representing estimated revenues of some €9.1 billion ($10.3 billion), shared by a large number of smaller tour operators. “These are mostly specialist tour operators offering certain destinations, focusing on particular target groups or specializing in specific market segments such as cruises, cultural tours, club holidays, holiday homes and active holidays,” said FVW. “Also many companies with a focus on dynamic packaging like Vtours, JT, LMX or Tropo are expanding.”
According to the FVW dossier information, one can reasonably conclude that, while the tour and travel industry in other major markets has experienced acquisitions and consolidation that have reduced the number of travel companies in recent years, small and mid-sized operators have prospered, comprising a sizable share of the tour and travel market in Germany.
Market Note: It will be some time before the U.S. National Travel and Tourism Office (NTTO) can furnish data on 2015 arrivals from Germany for the summer travel season, meanwhile:
—NTTO projected in its spring market forecast earlier this year that arrivals for 2015 will be about the same as in 2014;
—Overall, summer 2015 package bookings in Germany increased 7.5 percent this year, as of the end of July, according to market researchers GfK;
—The German Travel Association (DRV) has put growth at a “single-digit increase; and
—Industry experts believe the market is heading for growth of about 3-4 percent for 2014/15 as a whole.
What Two States Own a 70 Percent Share of the Latin American Market?
During the past decade, the steady and sometimes dramatic growth in the arrival of visitors to the United States from the nations of Latin America—primarily Mexico, Central and South America—has drawn the attention of more and more receptive tour operators as well as investors who see value in the product that an expanding market is able to purchase (a case in point is the acquisition in the past five years of the largest tour operators in both Brazil and Peru by the Carlyle Group, a Washington, D.C.-based venture capital firm). Now, for the first time, the U.S. National Travel and Tourism Office (NTTO) has used its data base to provide a more detailed statistical profile of the Latin American market and its various components.
Ron Erdmann, deputy director of NTTO, debuted the report at the recent La Cita de las Americas trade show in Boca Raton, Fla. Here, the Inbound Report covers key portions of his presentation, using excerpts from Erdmann’s own words.
South America’s Top Markets: Brazil is almost three times larger than the next country, its rate of growth is nearly twice that of the regional growth and because of this, Brazil dominates with over 40 percent of all arrivals from the region, and since 2005, its share of the region has increased by 15 percentage points.
Central America Nearly a Million-Visitor Market: Among the Latin American regions, Central America has the closest grouping of their top arrival markets. Guatemala moved into the number one spot in 2005 and has held that position ever since. Panama has posted the fastest growth over the decade.
When They Travel: When we look at when do travelers from the top Latin markets visit, you can see their top four months for arrivals to the country are different. Especially when you compare them to all overseas countries which only excludes Canada and Mexico. All but Venezuela share July as one of their top months, and December is also among the top months for visiting the country for 4 of the 5 markets within the region.
Who Buys on Time? In addition to knowing what types of things Latin travelers purchase, we also have data on their method of payment for expenses while within the country. Another new thing we started asking in 2012 is if they purchased travel insurance for their trip. The credit card companies and travel insurance firm may also be partners for you in selected markets.
Where They Arrive in the USA: Airports are the first place the international travelers must go. They work very hard to obtain international air service and work to keep it. Latin American travelers on average visit two places. There are dramatic differences in the ports of entry for the four countries. Only MIA, JFK, LAX, and Houston are on all 4. (A significant number of Latin American travelers are willing to take another domestic flight or use many other types of transport while in the USA to get to their ultimate destinations.)
Which Two States Have a 70 Percent Share of the Latin American Market? In 2014, there were 10.1 million travelers from Latin America. That’s up from 9.3 million last year. The same 10 states listed here were also the same top 10 in 2013, and while the volumes and market shares shifts the ranking for these states did not change. Only New Jersey and Massachusetts traded places.
Which Three Cities Have a Three-Quarters Share of the Latin American Market? All of the cities listed here were in the top 13 last year with the exception of Dallas. There were far more shifts (from 2013 to 2014) among the rankings, volume and market shares.
Outbound Travel from Japan Continues Sustained Slump
The decade-long slide of the number of visitors to the United States from its number two overseas source market, Japan, has affected all outbound travel from the country, not just that of the USA. According to data released by the Japan National Tourism Organization (JNTO), the number of Japanese who traveled abroad in July was 1.32 million, a 6 percent drop compared to the same month last year. From January to July this year, the number of overseas travelers decreased by 5.1 percent—down to 8,944,500. The downward trend in outbound travel by Japanese, which began with June 2014, has now continued unabated for 14 consecutive months.
Japanese Outbound Travelers
| Month | 2014 | 2015 | Change |
|---|---|---|---|
| January | 1,253,404 | 1,235,612 | -1.4 |
| February | 1,404,873 | 1,257,154 | -10.5 |
| March | 1,596.75 | 1,534,026 | -3.9 |
| April | 1.189,132 | 1,144,833 | -3.7 |
| May | 1,280,765 | 1,262,103 | -1.5* |
| June | 1,289,029 | 1,190,805 | -7.6* |
| July | 1,414,912 | 1,320,000* | -6.7* |
| Year-to-date (thru July) | 9,428,866 | 8,944,500* | -5.1* |
Source: JNTO
* Preliminary estimate by JNTO
A Static Market: In the 10-year period from 2005 through 2014, arrivals from Japan dropped 8 percent. And the U.S. National Travel and Tourism Office (NTTO) projects that they will drop another three percent this year.
| Year | Arrivals | Change (%) |
|---|---|---|
| 2005 | 3,884 | -- |
| 2006 | 3,673 | -5% |
| 2007 | 3,531 | -4% |
| 2008 | 3,250 | -8% |
| 2009 | 2,918 | -10% |
| 2010 | 3,386 | 16% |
| 2011 | 3,250 | -4% |
| 2012 | 3,698 | 14% |
| 2013 | 3,730 | 1% |
| 2014 | 3,579 | -4% |
| 2015 | 3,472? | -3% |
ᶠ = Forecast
Source: U.S. Department of Commerce, International Trade Administration, National Travel and Tourism Office (NTTO)
Meanwhile, according to JNTO, overseas travel to Japan is booming. Foreign arrivals to Japan grew by 51 percent, year-on-year, in July, to 1,918,000 visitors. Year-to-date (through July) for 2015, 11,058,300 foreigners visited Japan, a 46.9 percent increase from the same period last year.
NEW AND INTERESTING PRODUCT—From Overnighting with Nuns to ATV Tours near the Grand Canyon
Stay Overnight in a Docked Boat: In its statement announcing its Sleep Aboard product, GetMyBoat, a company that lists and rents boats online, the company offering it, says: “There is nothing like the rock of a boat to fall asleep to — especially when it is half the price of a hotel room and packs a one-of-a-kind experience.” Sleep Aboard is a boat-and-breakfast-type experience where travelers can stay aboard owners’ boats without leaving the dock.” It also offers boat owners an opportunity to let travelers sleep aboard in a controlled environment. In the first two weeks since the launch of Sleep Aboard, the company says that nearly 1,000 boats were been added to its online marketplace. GetMyBoat has a global inventory that comprises 35,000 boats listed in 143 countries. It points out that, with the addition of Sleep Aboard, GetMyBoat aims to provide additional accommodations during events that lock up a destination’s city-wide hotel inventory. For more information, visit www.getmyboat.com, or call 415.365.6382.
Kansas Farm Operated by Nuns Offers Stayover Packages for Small Groups: The Dominican Sisters of Peace is a small order of Catholic nuns better known within religious circles for its work in education, health care, pastoral care, prison ministry and the arts. They are active in a number of U.S. states, Honduras, Peru and Nigeria. But now, they are getting attention as operators of a registered agritourism attraction—Heartland Farm, an 80-acre farm near Great Bend in south-central Kansas, where the nuns grow crops, shear alpacas and feed their guests, all of whom take part in some activity—spiritual activities, too, if they choose—when they are there. The order describes itself as “a ministry … a Christian community committed to working for the healing and care of the Earth and its inhabitants.”
The farm, its guest house, its facilities and activities and the peace of mind it offers are available for overnight stays. Heartland also offers a weekend retreat package for small groups for $225 a person. It costs less during the week. For more information on both the Dominican Sisters and Heartland Farm, visit: www.heartlandfarm-ks.org, or call 620.923.4585.
Toronto “Rage Room” Allows You to Bash Things to Smitherines: Already a place where groups can attack one another with foam-tipped arrows while carrying on in an indoor archery range, Battle Sports in Toronto has opened its Rage Room, where, for $20, customers can take an oversized bat and smash objects from a “rage menu” for a half-hour. Before they actually grab a bat and smash objects, participants are equipped with protective gear, including work gloves and a paintball mask, and offered a room full of breakable items. After destroying a several complimentary items, they have their choice of things to destroy from a menu that includes the following: plate, $2; picture; $2; vase, $5; chair, $20. Other items involve custom pricing. Video “product demos” are available viewing at the Battle Sports website. For more information, visit: www.battlesports.ca, or call 647.406.2927.
Bullets and Burgers Expands Product Line: Well known among visitors to Las Vegas who enjoy the experience of shooting firearms of all sizes at a remote location in bordering Arizona—about 25 miles south of The Las Vegas Strip—Bullets and Burgers is adding a new product to its basic “ultimate outdoor machine gun adventure” which includes of a shooting range experience followed by a burger meal just before heading back to Las Vegas. Now, the company is offering an ATV tour that includes a swimming stop at the Colorado River. Featuring a six-passenger ATV, the new tour includes:
—Complimentary round trip (shuttle) transportation from any Las Vegas hotel;
—Photo opportunity stop at the Hoover Dam as a guide gives passengers the history behind the making of the world famous dam;
—A presentation that will provide guests with the facts and history of Lake Mead National Park and Colorado River;
—Three-hour ATV motorized tour through Lake Mead National Park;
—15 minute photo opportunity at the Colorado River, as well as time to take a quick swim in the river; and
—The “World Famous Burger,” fresh cut fries and a soft drink at the company’s on-site restaurant.
The ATV tour retails for $199. All ATV scenic motorized tours can be combined with shooting packages and with transportation of choice: i.e., helicopter, Harley, muscle car or with private shuttle.) For more information, visit www.bulletsandburgers.com, or call 702.825.1411.
: One of the most popular tourist shopping attractions in the U.S. Midwest just had its grand opening for the 250,000-square-foot expansion of the Chicago Premium Outlets mall in Aurora. It is operated by the Simon Property Group, which is the largest shopping center operator in the world. The expansion includes 30 new or expanded stores, two new restaurants, 2,200 more parking spaces, fireplaces, new pieces of public art and a large pond. The expansion brings the size of the entire outlet to about 688,000 square feet. New anchors include Saks Fifth Avenue Off 5th, Clarins and Robert Graham, both with their first Midwest stores, and Wellensteyn, its first Midwest store and only its second in the U.S. Most of the new stores have opened, while some will open by early 2016. For more information, visit: www.premiumoutlets.com/chicago/ 630.585.2200.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Susan Stiner has been picked to run the new Orlando office of UK-based travel wholesaler JacTravel that the latter opened as part of its U.S. expansion plans. Stiner, regional head of contracting for the Americas, has four staff, although she is in the process of recruiting two more. Before joining JacTravel earlier this year, Stiner was with Radius Travel for three years. Before that, she was a regional vice president of product development for Tourico Holidays.
Collette Worldwide general manager UK, Peter Traynor, is quitting his job by the end of September. He has indicated that He added he will start looking for another job working with a tour operator at the end of October, after tending to other important business.
Phil Gardner has been named as the new head of merchandising for Thomas Cook UK and Ireland. He will report directly into commercial director Chris Mottershead and will focus on bridging the commercial functions of product, yield, retail and online. Gardner was previously at Tui UK, where he was general manager – commercial for Thomson and Island Cruises. Gardner replaces Rob Rospedzihowski, who was brought in by former chief executive Harriet Green from her former employer Premier Farnell two years ago. Rospedzihowski left Thomas Cook in April.
Four staff, including managing director Karen Gee, have been let go as a result of the closure of tour operator Journeys of Distinction as the latter—a one-time Kuoni brand—is folded into the operation of DER Touristik, which acquired Kuoni’s European tour operator apparatus earlier this year. While the Journeys brand will disappear, some of its tours have been integrated into Kuoni’s program of tours for 2016, Kuoni Journeys.
Neerja Bhatia has been appointed as Etihad Airways’ new vice president for India and the Sub-Continent. Ms Bhatia joined Etihad in 2004 as sales manager for Western India, shortly after the airline had launched its first flights to Mumbai. She was later promoted to the role of GM for India.
The management team in charge of Travel 2 and Gold Medal has been announced the hiring of Thomas Cook’s ex head of long-haul product, Matt Appleby. Prior to his tenure as head of long-haul product at Thomas Cook, Appleby was head of product for Thomas Cook Scheduled Businesses, which included the Gold Medal and Netflights brands. Before that, he was destination manager-North America, Caribbean and Pure Luxury for Gold Medal.
