Fog, a Rail Strike and How to increase Sales in a Mature Market
While there was the usual drama at the World Travel Market (WTM) in London earlier this month that can be found at all major trade shows—the push and pull of buyers and sellers jockeying for position and advantage— this year’s event also included the looming threat of a two-day work stoppage by the Docklands Light Railway (DLR), the above ground railway company that serves to transport attendees the final leg between the underground system and the Excel Centre; and a pervasive fog that canceled scores of flights from Europe preventing thousands of buyers coming from several Western European destinations from attending the first day of the show. The strike, which would have impacted the show on Tuesday and Wednesday, turned out to be a non-issue as DLR management decided to operate the trains during the stoppage and traffic seemed less chaotic than normal.
How does one address a mature market? The UK, with over 52 USA destinations and suppliers employing in-country representation, is at once the most important—and most mature–source market for America is also one of the most mature. But the answer may be provided by that old Woody Allen quote: “85 percent of success is showing up.” This year, the general consensus was that, despite ADR increases from hotels and a little-to-no decrease in airfares, the UK arrivals would provide a low single-digit increase, due to the improving economy and the fact that the Pound Sterling has not been devalued, as compared to the Euro.
The first 10 of 20 Insights, observations and Trends developed from discussions with over 30 DMOs, tour operators, receptive tour operators and suppliers at this year’s show.
- While many operators reported a strong 2015 selling season, there was a great deal of uncertainty about the 2016 summer season for the Eurozone countries. On an anecdotal basis, attractions and suppliers from Florida and New York already report decreased bookings from Eurozone countries, Canada and Brazil, causing many to redirect marketing funds to the domestic market. Operators who were able to hedge their currencies in 2015 found they had the lowest prices in the market and were able to actually increase sales They are, however, concerned about next year.
- Florida and Southern destinations that depend on Canadian snowbirds are already feeling the effect of a weaker Canadian loon. The latter declined by 14 percent against the U.S. dollar from November 5, 2014 to November 5, 2015.
- WTM is a good show at which to meet with buyers from Holland, Italy, France and Belgium (if their travel plans weren’t disrupted by fog), but there were few buyers from German speaking countries and Eastern Europe, as they prefer to attend ITB.
- Receptive operators find the only way to grow and maintain business is to expand into new source markets to make up for lost business. This has resulted in their investing in trade shows in smaller markets that have increased air service to North America such as Nigeria, Croatia, Turkey and ITB Asia.
- While the French and German markets are expected to decline this year, several operators reported that the Spanish market, which has suffered more than other European source countries, is rebounding.
- Political turmoil in the Middle-East from Egypt, Tunisia, Turkey and even Thailand, has tour operators focusing on long haul destinations perceived to be safe and politically stable-a definite advantage for the USA that may help offset the effects of the exchange rate.
- GTA Snubs WTM—and maybe all shows. All major receptive operators had a presence at WTM, with the exception of Kuoni-owned GTA, which was completely absent. One competitor told us that at last year’s ITB they announced they would no longer be attending trade shows, thereby saving over $500,000 on their two level exhibit booth costs
- New Air Lift to the USA from low cost carriers such as Iceland-based WOW, which is offering $99 Euro fares to the US-including taxes, is making substantial strides. One rep company reported that outbound bookings for KLM in Germany were down 40 percent from the OTAs and up 5 percent from travel agents and tour operators, who service more affluent clients.
- The Cluster Approach to trade show appointments is a win/win. The cluster meeting represents a holistic approach in which 7-10 destinations and suppliers meet with one tour operator or travel media. Oregon, Arizona, Colorado, Utah, New England and even New York State used this approach and were consistently busy. Many states employed geographic order to the seating that made sample itineraries come to life and create discussions in which product could be built based on buyer needs in real time. Operators and media found this approach very efficient as well. Meanwhile, many of those who opt for single, kiosk-style counters without appointments had to depend on random walk-up foot traffic were idle much of the time.
- Where will growth come from in 2016? Key countries and regions for growth marketing for 2016 will be China, India, the Middle East, Colombia and Africa.
