Is Hotelbeds Up For Sale?
In a recent issue of Travel Weekly, Christine Franks, Tui Group’s head of M&A, told a reporter that the Tui specialist and activity division, which includes Hotelbeds as well as Hayes and Jarvis, Crystal and Citalia, is a prime candidate to be sold off, either as a group or individually, however, Franks said, Tui was in no rush to make a decision.
According to several sources, the most persistent rumor circulating within the industry is that Expedia made an offer that was accepted, but at the last minute a private equity company outbid them and is currently in due diligence. The most likely outcome, many believe (or hope), is an acquisition by a private equity firm where current management would retain a portion of the ownership. Stay tuned.
Meanwhile, earlier this year, Tui announced a major restructuring within their organization that revised the way products would be contracted as follows:
- There is high anxiety at Hotelbeds after a restructuring earlier this year by its parent company, Tui, clearly delineated roles for its American subsidiaries:
- Hotelbeds, with 6,000 employees worldwide, was dedicated to online wholesale accommodation and FITs;
- Destination Management (Brand Destination Services) was put in charge of Groups, Mice, Roundtrips, Tailor Made, charter ops, cruises, etc. for third-party clients and Tui Roundtrip Clients; and
- Tui Destination Services in charge of the charter services and operations of Tui clients.
WTM Launches Midst Most Robust Outbound Travel Market for UK in Years
Less than 10 days before the first delegates enter the Excel exhibition center for the opening of the World Travel Market this coming Monday, the UK Office for National Statistics (ONS) released its report on outbound travel activity by UK residents; its provisional results revealed that for the peak season of June, July and August, overseas travel to North America took off, increasing 15 percent over the same period for 2014—1.25 million departures for Canada and the U.S vs. 1.08 million.
Q3 UK Departures to North America
| Month | 2015 Departures | 2014 Departures | Change (%) |
|---|---|---|---|
| June | 349,000 | 330,000 | 5.70% |
| July | 350,000 | 293,000 | 14.50% |
| August | 550,000 | 458,000 | 20.00% |
| Three-month total | 1,249,000 | 1,081,000 | 15.50% |
| Source: ONS |
Source: ONS
Overall, UK residents made 63.7 million visits abroad from September 2014 through August 2015, 7 percent higher than a year earlier.
In addition to the decidedly upbeat ONS numbers, another report from Abta—Abta’s Holiday Habits Report—UK holidaymakers are set to spend more money on their trips in 2016 than during this year: Specifically, 23 percent of UK consumers expect to spend more; this is up from 20 percent who planned to increase their expenditure on tourism last year. The table below illustrates some of the key findings of the Abta report.
| 2015 vs. 2016 | ||
| Category | 2015 Percentage | 2016 Percentage |
| Want to travel to a country they have not visited before | 9 | 18 |
| want to try a new resort or city | 10 | 26 |
| Source: Abta | ||
| 2015 vs. 2014 | ||
| Category | 2015 Percentage | 2014 Percentage |
| British residents who took a holiday within UK September 2014 through August 2015 | 77 | 80 |
| British residents who took an overseas holiday September 2014 through August 2015 | 55 | 53 |
| British residents who took an overseas package September 2014 through August 2015 | 47 | 51† |
| † Still down from 2011 levels when 63% took a trip abroad. | ||
| Source: Abta |
Could Excess Capacity Lead to Price Wars among Germany’s Major Operators?
It may be that the new normal—a travel market operating with a Euro that is closer to $1.10 vs. $1.20 or more as it had been for years—is having a real-time impact on product sales in Germany. According a recent analysis by industry analyst Paul Needham, writing in the German travel trade publication, FVW, “the German tour operators are heading for problems after expanding their long-haul programs too optimistically this winter, and a price war now looks inevitable.” Some highlights from Needham’s analysis:
—Just a few months ago operators such as TUI, Thomas Cook, DER Touristik and FTI—they are the number 1, 2, 3 and 4 operators in Germany, accounting for more than 50 percent of business volume—revealed significant expansions of their winter long-haul product, but there is now an excess supply.
—The upbeat forecasts by operators “are now looking over-optimistic and it seems that tour operators may have miscalculated demand – and also prices. There is significant excess flight capacity on many routes from Germany at present.”
—As a result, operators have been forced into renegotiating rates with hoteliers to bring down the overall price of long-haul packages. FTI, for example, has cut prices to Asia, Indian Ocean, South Africa and South America by up to 20 percent.
—“Other tour operators may have to make similar price cuts,” said Needham,“ resulting in a general price war that would inevitably hit margins. The bigger losers, however, are likely to be the leisure airlines flying too many empty seats on long-haul routes with high operational costs.”
What Are Receptive Tour Operators Located in the USA’s Top Destination up to?
Orlando has emerged to be a prime location for RTOs working the Latin America market, but its reach has grown beyond that, as we found during our stop there during our recent 2015 East Coast Listening Tour to meet and talk with receptive tour operators, DMOs and travel suppliers based there. Following are some highlights from our conversation with Tourico‘s CEO, Uri Argov.
A Thrust to “Convince the Unconvinced”–Always aggressive, Tourico Holidays is trying to distinguish itself by introducing its hotel inventory into new and uncharted waters, while OTAs—by expanding their distribution and their competitors are simply taking orders—are essentially convincing the convinced. By pushing their hotel inventory to new audiences, Tourico is powering the hotel booking sites of American Airlines, Emirates, El Corte Ingles in Spain, Sam’s Club and a host of others.
During our wide-ranging conversation Argov emphasized that the company’s goal is to “Convince the Unconvinced.” For example, he explained, a team of product managers fresh out of the Tourico Academy made a presentation to skeptical revenue managers at an airport hotel in Savannah, Georgia that was experiencing lower bookings because visitors don’t go to Savannah to stay in an airport hotel. Through a data-centric presentation, the young Tourico crew showed managers how they could increase bookings to their property. Once the contract was signed, Tourico began pushing the property internally with its offices in China where the company now has more than 150 staff, as well as India and other Asian markets. Within days, the hotel received a quick flurry of unexpected bookings from Asia, a market they never attracted before. The management of the hotel chain that operates the Savannah property then signed 87 of its other hotels with Tourico. “That,” said Argov, “is an example of convincing the unconvinced, as our team promoted that hotel to a whole new segment of tourists that never connected to Savannah before.”
Meanwhile, Argov told Inbound that, of all programs Tourico has initiated in the last 20 years, he is most gratified by the reaction he is receiving from the Tourico Academy. Especially surprising is the unexpectedly high-skilled level of the applicant pool. Among those seeking admission this year were many with Master’s Degrees, one of whom was from Harvard Business School and another with an engineering degree from M.I.T. Asked why these applicants would apply for a tour operator training program, Argov responded by noting that this generation’s professionals are less money-motivated and do not see themselves in cubicle jobs–they find the prospect for a career in travel alluring.
NEW AND INTERESTING PRODUCT
Elvis’ Hometown Looking to Sell Its Elvis Connection Worldwide: Tourism officials from Tupelo, Mississippi—the birthplace (see photo at left) of late Elvis Presley, who comprises the de facto sum and whole of the city’s tourism product—are taking off to sell both the city and the birthplace of the unofficial King of Rock and the city itself (population: around 35,000) at next week’s World Travel Market. They’ll also be making other stops in London as a part of the city’s most ambitious sales mission ever.
Neal McCoy, executive director of the Tupelo CVB, has also been invited to take part in Elvis at the 02 (The O2 is a convention/exhibition center in London), which is promoted as the largest Elvis exhibition ever in Europe. The event, which is a direct-from-Graceland (Elvis’ mansion, which is now a major attraction in Memphis) product, was originally scheduled to run nine months ending last month, but it has been extended another three months because of its popularity.
Tupelo Mayor Jason Shelton is joining McCoy on the trip. They will fly to London on Sunday, Nov. 1 and return Nov. 13. McCoy told a local newspaper that the venture had been in the works for months, but that Tupelo didn’t get a final OK from Graceland until just recently.
At meetings with tour operators, the Tupelo delegation hopes to sell itself as a fly-drive destination. The city is less than 110 miles from Memphis and Graceland, where Elvis is buried. Memphis has good connections to U.S. international gateways via Delta Air Lines, American Airlines and United.
Straight from MARS—A Unique Embassy Tour in Washington, DC: Based in Virginia’s Shenandoah Valley with an office in northern Virginia near the nation’s capital, Mid Atlantic Receptive Services (MARS) has developed a number of products unique to Washington, DC visitors. In particular is its three-day package that takes clients to the embassies of other countries during a period each spring during which countries from throughout the world open their embassies to the public. The program is overseen by Cultural Tourism DC.
Kate Scopetti, the founder and president of MARS—over the years it has developed both outbound and receptive product—told us that, once the participating embassies are announced, she works with Cultural Tourism DC and develops her itinerary, has her tour guides versed in the history and stories of each embassy on the tour, and arranges for the MARS tour to make a private visit to a selected embassy before public open-house hours.
A special appeal of the tour product—it also includes visits to historic buildings, museums and sites in Washington, D.C.—is that visitors do not have to depend on the shuttle service that takes the public from one embassy to another. Whatever the reason, the Embassy Open House Tour, Scopetti said “it has become a staple in our product line,” filling four to five busloads, mostly with seniors, each year. For more information visit www.takeafuntrip.com. Or, as we did, you can visit www.tapintotravel.com, the website of the Travel Alliance Partners (TAP), where we first learned of the Embassies tour. Scopetti’s MARS is a part of TAP.
San Francisco Museum of Modern Art Schedules April Reopening: After a two-and-a-half year closure for a multi-million dollar renovation and construction of a new addition, the massive San Francisco Museum of Modern Art will open on May 14, 2016. Buttressed by a $610 million fundraising campaign, the refurbished museum will have a new 10-story building addition, which will add 235,000 square feet to its existing 225,000-square-foot building.
Highlighting the museum’s exhibits will be works from the Doris and Donald Fisher Collection, including pieces by Alexander Calder and Chuck Close. Overall, the museum has acquired 3,000 works of art from more than 200 donors.
With the additional space, the facility will have a 45,000-square-foot ground floor that will have three different exhibition areas free and open to the public. There will also be an enhanced performance space and two education centers: the Koret Education Center and the Pritzker Center for Photography, which comprises a gallery, research and interpretive space. And the museum’s two-story conservation center features a living wall with over 15,000 plants. For more information, visit www.sfmoma.org, or call 415.357.4000.
New Holocaust Museum Opens in Seattle: After more than 25 years of going into classrooms and educating students about the lessons and horrors of the Holocaust, the Henry and Sandra Friedman Holocaust Center for Humanity, which is now open to the public. And rather than take its program into the classroom as it has in the past, the new, $3.4 million center combines a museum, classroom and office space, creating a place where students as well as the public can come to learn.
Founded by survivors living in the area, the center focuses on the stories of those locals. It is named after Henry Friedman, a retired business owner, who was hidden for 18 months in the barn of a young Ukrainian woman, narrowly avoiding being sent to a death camp. Stories of compassion like this are told to students and visitors.
Until the new center was built, the Holocaust Center for Humanity operated out of its own offices in the Jewish Federation of Greater Seattle building. The center has worked with middle- and high-school students around Washington state by providing boxes of teaching materials, visits from survivors, historical artifacts and teacher training.
Among that collection are the contents of the suitcase of someone deported to a camp, donated by the Auschwitz-Birkenau State Museum. The center is one of only three museums in the United States to receive artifacts from that museum. This March, the center will receive an exhibit from The Anne Frank Center in New York. Next fall, the United States Holocaust Memorial Museum will bring an exhibit about medical experiments and ethics to the center.
For information on the cost of admission, as well as groups, visit www.holocaustcenterforhumanity.org, or call 206.582.3000.
Are Chinese Travelers Ignoring Economic Signals and Going Abroad Anyway?
China’s National Day Golden Week Holiday earlier this month (Oct. 1-7) generated a huge volume in both domestic and international activity by Chinese travelers, generating a spate of coverage trying to analyze or predict whether sluggish economic conditions in the world’s largest national economy would put the brakes on outbound travel in the near-term future. In its latest projection on the matter, for instance, the World Bank reduced its projection for growth in China’s economy in 2015 from 7.1 percent to 6.9 percent.
The consensus, it seems to the Inbound Report’s review of news articles, is that the sluggish economy probably won’t have much of an impact. A sampler of some of the points made in various publications includes the following:
—A study published by HSBC found that outbound Chinese traveler numbers are expected to hit 242 million by 2024—a number more than double last year’s amount, which was estimated by HSBC to be 116 million.
—Another report by the Fung Business Intelligence Center and China Luxury Advisors found that outbound Chinese traveler spending will hit $422 billion by 2020, up from an estimated $200 billion this year.
—Perhaps, most significant—given the size of the arrivals numbers and spending projections—were the numbers in the just-released Visa Global Travel Intentions Study 2015, which indicated that the USA is positioned to benefit from its status as the favored long-haul destinations of Asian travelers.
The Visa study reported the following findings regarding the ways in which Chinese overseas travelers plan for, budget for and actually spend during a trip:
—Almost one in two Chinese travelers has shopped for luxury goods on their most recent trip.
—One in two Chinese travelers have shopped at airport duty in free stores
—Chinese travelers love to buy local food specialties as souvenirs. Three in five did so on their most recent holiday
—The spending power of Chinese travelers has increased over the past two years. Also, for Chinese travelers creating the best travel experience is valued more than the actual cost of it. On average, Chinese travelers partake in more activities than the global average.
Budget Approach of the Chinese Traveler vs the Global Traveler
| Approach | Global Traveler | Chinese Travelers |
|---|---|---|
| Search for the best experience and then sum up the amount before making adjustments | 46% | 46% |
| I will keep strictly to the budget I planned | 29% | 18% |
| Source: Visa Global Travel Intentions Study 2015/Prepared by Millward Brown | ||
Travel Activities: Global Traveler vs. Chinese Traveler
| Activity | Global Traveler | |
|---|---|---|
| Visited the local night scene such as clubs, bars, etc. | 30% | 57% |
| Trekked/backpacking | 16% | 27% |
| Participated in local festivals | 20% | 28% |
| Source: Visa Global Travel Intentions Study 2015/Prepared by Millward Brown |
HODGE PODGE—Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Richard Doucette has resigned from his post as executive director of the Massachusetts Office of Travel and Tourism (MOTT) after less than six months on the job. A long-time friend of Gov. Charlie Baker, who appointed him to the post, Doucette “has chosen to resign,” sources told the State House News Service in Boston, describing the action as a “personal decision.” Doucette joined the Baker after having served in some of Boston’s largest advertising firms, including Hill Holiday and Arnold. He has known Baker personally since the governor ran for local office in their hometown of Swampscott in 2004.
Chris Baum was fired from his post as president and CEO of the Reno-Sparks Convention and Visitors Authority by the group’s board of directors in a 5-2 vote. Baum was in the first year of a three-year renewed contract. Apparently, some key CVA board members did not believe he had done enough to raise the destination’s profile and develop a strategy for long-term growth. Baum came to Reno in December 2011 from the Detroit Metro CVB, where he was senior vice president of sales and marketing.
Kane Webb of Little Rock, a senior adviser to Gov. Asa Hutchinson, will succeed Richard Davies as executive director of the Arkansas Department of Parks and Tourism on Dec. 1, the governor announced Thursday. Webb will succeed Richard Davies, who is retiring, effective Nov. 30, after spending more than 40 years with the department. He became executive director in 1990 when then-Gov. Bill Clinton appointed him. Before joining the Hutchinson administration, Webb worked as an editorial writer for the Arkansas Democrat-Gazette, editorial director for the Democrat-Gazette special publications and editor in chief of Louisville Magazine.
Tom Mullen has left the Los Angeles Tourism and Convention Board to join the Hawai’i Visitors and Convention Bureau as the company’s senior vice president, a role newly created. He will also serve as chief operating officer. Mullen had been with the Los Angeles agency for two years. Before that, he had spent more than 20 years with American Express Travel Related Services, Inc. lastly as vice president, sales and account development, merchant services America. He also served as chairman of the board of directors for the L.A. Tourism and Convention Board from July 2008 to June 2013.
Neckermann Reisen, Thomas Cook’s top German brand, has a new logo featuring the group’s ‘sunny heart’ image instead of the former large “N.” (CEO Stefanie Berk with new logo at left.) The new logo will be used not only in Germany but also in Austria, Switzerland, Poland, Czech Republic and Hungary. The well-known “Neckermann macht’s möglich” slogan (“Neckermann makes it possible”) remains.
Carol Wallace, CEO of the San Diego Convention Center Corp., has announced that she will leave her position at the end of this year but will stay on as a consultant for one more year, ending what will be a 25-year tenure with the center. Outgoing Convention Center Corp. Board Chairman Steve Cushman said he has been asked by the board to lead a search committee that will look for Wallace’s replacement.
