All Bets Are off—Plummeting Pound Threatens UK Outlook
Just last week, on the very day that we published the last issue of the Inbound Report, the news from the UK was positive—despite any after-effects of the June 23, 2016 “Brexit” vote by UK residents to pull out of the European Union (EU)—with the latest data for July showing that outbound departures by British travelers suffering little and other sources indicating that the market was headed for an all-time high in outbound travel.
Now, with the annual World Travel Market, which is the principal event on the global travel industry calendar for marketing and promoting product to the UK, less than a month away (it convenes Nov. 7-9 in London), tour operators will find themselves in a situation in which USA product is about 20 percent more expensive than it was at last year’s World Travel Market.
What Happened? As the tables below indicate, the pound seemed to be holding its own against the U.S. dollar, after declining nearly 10 percent in the first full week following the Brexit vote, By the end of last month, it had declined only two percentage points more.
Then, something happened as the currency exchange markets went from Oct. 6 to Oct. 7. Within minutes of early morning trading, the pound fell six percent in two minutes.
As reported by The Economist, “The best explanation seems to lie in the world of algorithmic trading—the computer programs that automatically generate transactions. Such programs have been blamed for “flash crashes” in the equity markets, particularly the May 2010 event which saw the Dow plunge nearly 1000 points in minutes before recovering. The problem seems to be that programs feed off each other. Each may have a trigger point which requires the program to sell an asset (currency, bond or share) when it falls below a certain point, in order to limit losses. These sales drive the price down, which triggers the selling points of other program and so on. Eventually, the fall is large enough that other elements of the algorithm generate a buy signal. Hence the whole event can be over very quickly.”
There was also speculation that traders were influenced by the Oct. 6 remarks of French President Francois Hollande who, according to the Financial Times, used unusually blunt language in discussing what he believes the UK must face as a consequence of its Brexit vote: “The U.K. has decided to do a Brexit … Well, then we must go all the way through the U.K.’s willingness to leave the EU. We have to have this firmness,” Hollande said, adding, “”There must be a threat, there must be a risk, there must be a price,” Hollande asserted.
Finally, to view an up-to-date chart displaying the value of the pound vs. the dollar over the past year, visit
http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1Y
Docked in Philadelphia—Ride the Ducks
Citing the high cost of insurance, the owners of the Ride the Ducks amphibious tours of Philadelphia have announced the shutdown of operations for the foreseeable future. In a statement on its website, the company indicated that, as of October 5, 2016, Ride the Ducks Philadelphia had suspended operations indefinitely.
The company said, “Due to circumstances outside of our control, including a 330 percent increase in our insurance premiums, continued operations in Philadelphia are not financially feasible at this time. We enjoyed serving the people of Philadelphia since 2003, serving over one million guests during that time. We are working with the 42 full and part-time employees from our Philadelphia location offering severance and outplacement assistance.”
The closure ends a bumpy Philadelphia experience for Ride the Ducks:
—Last year, on May 8, 2015, one of the company’s boats struck and killed a visitor from Texas during evening rush hour as she was crossing the street at 11th and Arch Streets downtown. Eyewitnesses said the visitor, Elizabeth Karnicki, crossed against the light; her family’s lawsuit says a poorly set up traffic light was partly to blame. (An attorney for Karnicki’s family said the announcement that Ride the Ducks was shutting down operations would not affect his pending lawsuit against the company, which is in the pre-trial discovery phase.)
—The Karnicki incident came more than five years after a July 7, 2010 incident in which a sludge barge towed by a tugboat plowed into a disabled, 33-foot Ride the Ducks boat as it was riding on the Delaware River, plunging the amphibious vessel and its 35 passengers and two crew members underwater. Two Hungarian students died as a result of the crash. Families of the two students later received a $17 million settlement, which was divided between them. The other passengers received a total of $2 million.
There are other Ride the Ducks operations in Branson, Missouri; Newport, Kentucky; and Stone Mountain, Georgia.
Is Brazil Recovering? South America’s Largest Operator Has Some Clues
As has been the case each year when NAJ reviews the results of the Listening Tour conducted in the fall by its founder and CEO, Jake Steinman, the early warning antennae of receptive tour operators and U.S. travel suppliers who regularly work country markets gave us a unique—and somewhat unexpected—perspective on what to expect from Brazil, the USA’s top inbound source market from Latin America.
It’s coming back, said participants in the Salon conducted by NAJ several weeks ago in Orlando and attended by key receptives and suppliers based in the area. (Orlando is the most popular USA destination for Brazilians.) That is, Brazil—while it is still mired in what most economic analysts would agree in its worst economic recession in more than a century—is on its way back, even though the most recent data available from the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) show that, from January through April of 2016, arrivals to the USA from Brazil are down 25 percent.
Part of the problem for Brazilian operators in the first quarter of the year was an increase, at the beginning of 2016, in the tax on remittances abroad from 6 percent (an effective 6.38 by the time other charges are incorporated) to 25 percent (a de facto 33 percent). By March, the Brazilian Congress and then-President Dilma Rousseff had passed and signed into law a measure repealing the increase. But the existence of the surtax, if only for a quarter, cut into outbound travel and advance bookings from Brazil for the first half of the year. Salon participants, keen to fluctuations in the levels of shopping and shopping tourists in Central Florida, believe that the absence of the surtax was beginning to have a positive effect on bookings from Brazil.
But beyond the tax issue and NTTO data, there are other numbers that are quantifiable: those of CVC, the largest tour operator and travel agency brand in Brazil and all of South America. Just after NTTO released its data for April 2016 arrivals, CVC said that in addition to the overall growth of its business, year-over-year in September 2016, international sales increased 14.6 percent in the third quarter. against a stable second quarter and a first quarter decrease of 6 percent
The increase, while encouraging for those involved in the Brazilian market, has not necessarily benefited USA destinations and travel suppliers, since many Brazilian international travelers are apparently opting to go to European destinations, such as France in the UK. The Brazilian real trades much stronger against Euro and the pound sterling than it does vs. the U.S. dollar. Regardless, the consensus for the panelists is that the decline in the Brazilian has bottomed out. The inbound tour and travel industry will be able to have a better measure of recovery at the end of this year, as December and January are usually months that contribute the most visitors to the annual total of Brazilians who come to the USA.
Following are some other numbers and actions registered by CVC, recently and during the past year—and remember, some of these are from the trough of the nation’s economic recession—and suggest that CVC and the tour and travel industry professionals in Central Florida know something that many others in the tour and travel industry do not.
—At the close of August 2015, CVC, which is responsible for more than one out of every eight trips booked in Brazil (According to the Brazilian Ministry of Tourism and IPC-Marketing Ltda, CVC and Submarino Viagens accounted for 13.9 percent share of total spending by consumers in the Brazilian leisure travel market in 2015) acquired RexturAdvance, thus entering the corporate travel segment (small and medium-sized companies) and becoming the leading player in the segment; and Submarino Viagens, the latter strengthening CVC’s position in the leisure travel online segment.
—This past February—just as the economic recession was nearing its lowest point—CVC, which already had about 1,000 travel agency/tour operator locations in Brazil, announced that it would begin the addition of 300 new locations at the rate of 100 a year over three years.
—For all of 2015, CVC bookings, excluding its August acquisitions, totaled approximately 5.2 billion reais ($1.6 billion) and 3.8 million passengers.
—CVC’s bookings for 2015 (which was in recession the entire year) bookings, excluding acquisitions, increased by 6.0 percent from 2014.
—For the six-month period ended June 30, 2016, its bookings sold totaled approximately $2.6 billion reais ($807.3 million) and approximately 1.8 million passengers.
—For the first half of 2016, including the bookings sold through RexturAdvance and Submarino Viagens, the company’s consolidated bookings totaled approximately 4.2 billion reais ($1.2 billion).
—The overall business volume for the CVC, which comprises CVC, Rextur Advance and Submarino Viagens, should reach between 9 billion reais and 10 billion reais fo 2016. So far, in the second half of the year, the group did better than it did the first, according to calculations of the travel trade publication PANROTAS in its market reports.
Beyond the Sales and Booking Numbers: There are more data from CVC and, while not all of them show increases, they show steady growth and confidence on the part of the company’s management over the decision to grow CVC in the midst of a recession. There is a logic to this strategy, and published as well as anecdotal accounts explain the strategy thus:
All of the 300 stores that CVC has opened and plans to open in Brazil are located in smaller cities and non-urban parts of the country, where 150 million or so people live. Traditionally, the core international market exists among the more than 50 million people living in Brazil’s major provinces and cities in the nation’s Southeast.
For the locations of the new stores, leases are cheaper than they are in larger cities. Also, the new locations are building brand loyalty among the populations they serve, most of whom have never dealt with a travel agency before. And for bottom-line purposes, these locations helped customers who have traveled locally or within Brazil during the recession.
Complementing its decision to increase B2C connections with consumers, earlier this year CVC announced that it would forego having a booth at all trade shows in Brazil this year. The company decided that, while it has “much affection for these fairs, (it) decided to invest in exclusive CVC events this year in regional meetings where travel agents will meet our customers to talk about sales, destination, seasons …”
Finally, in a most meaningful endorsement of CVC’s current business plan, the company’s board of directors has announced that executives Luiz Eduardo Falco, (left, above) CEO and Valter Patriani (right, above), vice president of sales and marketing, the architects of the stronger B2C strategy, renewed their contracts with CVC for over three years and stay until 2019.
JIFT! … Or Market Your Product Just in Freaking Time to Tour Operators
When is it too late to promote your product to international tour operators, U.S. receptive tour operators and U.S. domestic tour operators? You will find the answer by visiting TourOperatorland.com—the website of the NAJ Group, which also publishes the Inbound Report.
If you’re not already aware of what we’re doing, and what we’ve done, in this regard, we thought you might find both helpful and useful our 2017 Tour Operator Planning Cycle matrix below, which we launched earlier this year. For instance, between the dates highlighted in yellow for each segment, we will launch/have launched a “just-in-time” e-mail campaign for TourOperatorland.com that coincides with the various cycles. For example, we’ll highlight itinerary ideas for domestic operators in June and Royalty Free photos in August as they get closer to the inclusion deadline. This is designed to increase ROI for all of our partners.
*Note 1: Most Japanese operators are now making efforts to cope with rapidly changing situation of the market and also to meet changes of availability of airline seats, hotel rooms and dollar- yen conversion rate. Some of them are now publishing brochures every two months.
Note 2: Receptive operator Florida contracting Jan-August 2016.
The Inbound Report would like to thank the following who contributed their input in this project:
Peter Pantuso, president and CEO, American Bus Association; Charlie Gu, partner, China Luxury Partners; Jane Rutter, product manager, Meeting Point International; Greg Evans, CEO, Greg Evans Consultancy, UK; Jeff Karnes, vice president, New World Travel; and Ko Ueno, executive director, Japanese Tour Operator Association.
New Museum Will Accommodate more Statue of Liberty Visitors
“Give to me your tired, your poor, Your huddled masses yearning to breathe free” reads the poem by Emma Lazarus (1849-18878) that is inscribed on a bronze plaque on the Statue of Liberty on Liberty Island in New York Harbor in New York City. And now, the famous site—it is a U.S. National Monument and arguably, one of the most recognizable signatures of American culture, especially to international travelers visiting the USA and New York City—is going to have a larger museum to take care of the hundreds of thousands of tourists and sightseers who visit it.
Announced last week, the new building behind the statue will replace a smaller museum opened in the 1980s in Lady Liberty’s base. Only 20 percent of the 4.5 million people who visit Liberty Island each year are able to get tickets for the museum, due to security measures that were implemented after 9/11. When the new, 26,000-square-foot museum opens in 2019, all island visitors will be allowed entry.
The $70 million project will be built by the Statue of Liberty-Ellis Island Foundation, with fashion designer Diane von Furstenberg heading up fund-raising; she said that she was inspired to get involved in the project by reading a book—“Liberty’s Torch: The Great Adventure to Build the Statue of Liberty”—by long-time New York Daily News writer Elizabeth Mitchell.
Liberty Island, along with nearby (less than a kilometer) Ellis Island, comprise the Statue of Liberty National Monument in Upper New York Bay. (In photo above, Liberty Island is in the foreground.) Ellis Island Ellis Island was the gateway for over 12 million immigrants to the United States as the nation’s busiest immigrant inspection station from 1892 until 1954. Both islands can be reached by ferry; most tour operators include one or both of the sites in their New York City itineraries.
For more information, visit: www.libertyellisfoundation.org.
Big Bus Tours Picks up Smart Destinations
London-based Big Bus Tours is continuing a program of growth and expansion into new markets with its acquisition last week of Boston-based Smart Destinations, which produces the Go City Card attraction passes.
Big Bus Tours, known for its double-decker open-top bus tours, was formed by the merger of two established sightseeing tour businesses. The Big Bus Company Ltd – based in London, and Les Cars Rouges, which was based in Paris. The two businesses created Big Bus Tours in May 2011. Before last week’s acquisition, the company’s portfolio included Abu Dhabi, Budapest, Chicago, Dubai, Hong Kong, Istanbul, Las Vegas, London, Miami, Muscat, New York, Paris, Philadelphia, Rome, San Francisco, Shanghai, Vienna and Washington DC.
With the Smart Destinations collection, Big Bus Tours expands into some new cities. Smart Destinations has operations in Boston, Chicago, Las Vegas, London, Los Angeles, Miami, New York, Oahu, Orlando, San Antonio, San Diego, San Francisco, Washington, D.C., and in other parts of Florida and California.
Pat Waterman (left, in above photo) CEO of Big Bus Tours, said that the acquisition “is truly a significant one. Smart Destinations is the leader in the attraction pass category, offering customers unbeatable value for money, access to some of the best attractions in the world and a very easy way to buy and redeem passes.”
Ted Stimpson (right, in above photo), CEO of Smart Destinations, indicated that Big Bus Tours complements the Smart Destinations product: “TBig Bus Tours is the perfect introduction to a city, guiding guests to the key places of interest. Go City Card passes provide a convenient and cost-effective way to pay for admission to those same top attractions. Together, we will deliver travelers to the gate and through the turnstile of the top paid attractions of the world.”
Another note: In February 2015, London-based Exponent Private Equity purchased Big Bus Tours, with a shared vision to develop the company into the most recognizable brand in sightseeing. This year Merlin Entertainments PLC became a shareholder, “offering a natural synergy with Big Bus Tours and Merlin attractions and experiences globally.” Merlin—it operates 124 attractions, 16 hotels and 3 holiday villages in 25 countries—is second only to Disney in the number of visitors it receives at its attractions, which include such famous brands as Legoland and Madame Tussauds.
Customs & Border Protection Makes it Easier, Quicker for International Visitors to Get, Pay for, I-94 Form
U.S. Customs and Border Protection (CBP) has announced an enhancement to its I-94 website which allows travelers to apply and pay for their I-94 online prior to arriving at a land port of entry. Travelers can speed up their entry into the U.S. by providing their biographic and travel information, and paying the $6 fee for their I-94 application online up to seven days prior to their entry.
Travelers will now receive a provisional I-94 after submitting their application and payment online. The I-94 application will collect information that is otherwise collected in-person at the land port of entry, to include biographic information (name, date of birth, country of citizenship), passport details, visa details (if applicable), and petition/Student and Exchange Visitor Program (SEVIS) number (if applicable).
In order to finalize the I-94 issuance process, a traveler must present himself or herself at a land port of entry within seven days of their application and submit biometrics, if applicable, and be interviewed by a CBP officer. Travelers should be prepared to show evidence of their residence, employment, and/or travel plans, if requested by the CBP officer
.If the traveler does not complete their I-94 issuance process within seven days of their application, their provisional I-94 will expire and they will have to reapply and the pay the fee again. There are no refunds if the I-94 is not issued within the seven day period or if the traveler is denied entrance to the United States.
The secure website is easy to use, and payment can be made with a credit card, debit card, direct debit, or through PayPal. The benefits of this process include increased efficiencies during processing, decreased paper usage, a streamlined CBP inspection process for the traveling public and reduced operating costs.
Form I-94 provides non-immigrant visitors evidence they have been lawfully admitted to the U.S., which is necessary to verify alien registration, immigration status, and employment authorization. In May 2013, CBP automated the I-94 in the air and sea environment. The automated system allows CBP officers to create an I-94 Arrival Record within primary and secondary inspection processing systems at the time of inspection with passenger manifest information—eliminating the need for paper forms and manual data entry. The automation of the I-94 Arrival/Departure Record has improved the traveler experience while saving the U.S. government an estimated $34.5 million in its first two years.
“The new I-94 offering expedites entry into the U.S. at land ports of entry, while maintaining the highest standard of security,” said R. Gil Kerlikowske, CBP’s commissioner, adding, “This automated functionality increases the efficiency of the entry process and reduces administrative duties for CBP officers—ultimately resulting in shorter waits for travelers requiring an I-94.”
For more information regarding the I-94 land automation or to access an electronic Form I-94, visit www.cbp.gov/I94. To apply for the I-94 online, visit https://i94.cbp.dhs.gov
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Marc Anderson has been promoted from his position as chief sales officer of Choose Chicago to the post of executive vice president of the organization. A 24-year veteran of the travel and tourism industry, Anderson had served for the organization, previously known as the Chicago Convention & Tourism Bureau, from 2002 to 2007 He then served more than eight years with The Peninsula Hotels from 2007-2015 as a regional director of marketing, returning to Choose Chicago in early 205.
Jennifer Rudolph has left her post as communications director for Colorado Ski County—she had been in the post for nearly nine year—to join POWDR, one of the largest ski resort operators in North America, where she is involved in the company’s corporate communications efforts.
Benjamin Maddy has been named director of travel and tourism sales at The Madison Square Garden Company in New York City. Well-known in the tour and travel scene in New York, Maddy joins the Garden from Discovery Times Square, where he was director of sales and tourism. Prior to this, he had served as national marketing and tourism sales manager for Dave & Busters.
Dionne Hulsey has joined Visit Spokane as the organization’s new director of national accounts, Central Region. Hulsey, who will be based in Chicago, has a CV that includes tenures at Tourisme Montreal and Ottawa Tourism, as well as managing her own hospitality sales and marketing company.
Michelle Moore has been appointed director of sales for Experience Kissimmee. An industry veteran with more than 14 years of experience, Moore spent the previous 10 years with Visit Orlando in a variety of sales positions, with the most recent as destination services senior manager. Her career experience in Central Florida also includes sales positions with The Ritz-Carlton and JW Marriott Orlando Grande Lakes and the Hyatt Regency Grand Cypress.
Simon Lehman has been named president of Phocuswright, a well-known travel industry research organization that is a division of the Northstar Travel Group. A 25-year veteran of the industry, Lehmann most recently served as CEO of Biketec AG and Interhome AG. He has also held executive positions at Swissport and Hotelplan Group. Northstart is the parent company of brands that include Meetings & Conventions, Successful Meetings and Meeting News and Incentive.
Miles Phillips, an outdoor recreation expert at Texas A&M University Extension, has been hired by Oregon Sea Grant and the Oregon State University Extension Service where his top priority will be to use Extension’s research-and-outreach-based approach to combine the many arms of the area’s tourism industry into one alliance. At Texaa A&M, his work brought together elements of the agriculture, forestry, natural resources and adventure industries to create a cohesive and sustainable tourism program.
Noelani Schilling-Wheeler has been appointed executive director of the Oahu Visitors Bureau. Schilling-Wheeler succeeds Les Enderton, who is retiring at the end of this year after leading the bureau for nearly 20 years. Schilling-Wheeler is being promoted from her position as senior director of sales and marketing, a title she has held since January 2005. She joined the visitors bureau in December 1997 as director of sales and marketing.
Reegan McCullough is leaving his post as executive director of the Oilsands Community Alliance in Alberta, to take over as CEO of The Niagara Parks Commission, which operates the parks and public spaces along the Niagara River and at the Falls. McCullough replaces former general manager John Lohuis, who retired at the end of August. Prior to his current role, Reegan served as assistant deputy minister of Tourism, Parks and Recreation for the Province of Alberta. McCullough will assume his duties as CEO on Nov.7.
