Fresh from the Front Lines of a China Sales Mission—Groups Still Rule, NYC & L.A. are the Top Cities and …
Beyond-the-Gateway Tours are Popular, as are U.S. National Parks: Stefan Merkl, president of Explore Marketing, a San Francisco-based company that represents Touroperatorland.com, owned NAJ Media & Events—it publishes the Inbound Report—and other organizations, recently from a sales mission to China where he had the opportunity for a number of one-on-one meetings with Chinese tour operators and others in the travel trade. His discussions resulted in the following observations that revolved about four major areas of conversation.
Where Does the USA Stand as a Long-haul Destination?
—Europe still sees larger volumes of Chinese travelers than the United States, and also is perceived as the better FIT destination due to the excellent public transit system.
—However, the United States continues to grow in popularity as a destination for long-haul travel, particularly as it is considered to be fairly safe.
—This is especially true since the terrorist attacks that hit Europe since last fall, has caused many Chinese travelers to reconsider their travel plans and travel to the United States instead.
—Although Donald Trump is widely seen as an ill fit for the U.S. presidency by the Chinese public, I was told that people in China don’t try to voice opinions in regards to political matters, and hence their travel decisions to come to the USA may only get impacted minimally by a potential Trump presidency.
—Many operators that traditionally have focused on Southeast Asian (short-haul destinations) and Europe are now adding the United States into their product mix.
What Mix of Travelers to the USA are Group? FIT?
It is true that FIT travel from China to the United States is on the rise for a variety of reasons:
—Safety concerns due to the terror attacks in Europe caused some FIT travelers to switch destinations and consider the USA instead.
—Due to the 10-year visa (in October of 2014, the validity period of visas for travel between China and the U.S. was extended from one to ten years), second and third-time visitors have become increasingly familiarized and comfortable with traveling in the USA independently.
—Some tour operators are adjusting their product offerings by adding “Semi FIT” programs that let their customers explore cities as FITs and then transport them as groups to the next city.
—Yet, leisure groups still dominate outbound travel from China to the United States and will continue to do so in the long-run for several reasons:
—The United States continues to be a fairly new destination for most Chinese travelers, so there is almost an unlimited supply of new leisure group participants.
—The majority of people that can afford to travel to the United States is an older demographic that may not be fluent in English and as a result will be hesitant to travel independently.
—Younger travelers that prefer to vacation on their own, may not be able to afford a destination like the United States until they built up a nest egg.
—Group itineraries tend to be very competitively priced.
—While at Ctrip, I was told their sales of FIT programs has increased by 50 percent from last year to this year, while their group business has increased by 15 percent.
—However, the volume of FIT versus leisure group clients is still comparatively small, so most of the companies I met with still focus on leisure groups.
Within the USA, What Are The Favorite Destinations of Travelers? Are They Changing? Are Travelers Choosing Non-Gateway Itineraries?
—The main gateway cities, such as Los Angeles, San Francisco and New York, continue to be the favorite destinations for travelers from China, as they are the most familiar with these cities and also function as the starting points for leisure group itineraries to surrounding destinations. These are tours that most first-time visitors experience:
—A common East Coast itinerary: New York-Philadelphia-Washington DC-Hershey-Niagara-possibly Boston-New York.
—A common West Coast Itinerary: Los Angeles-Las Vegas-Grand Canyon-Yosemite-San Francisco-Los Angeles
—Second time visitors, whose numbers are increasing due to the 10-year visa – may add destinations such as the following:
San Diego, due to Seaworld and the San Diego Zoo; Seattle due to the improved flight network from China; Texas, which seems to benefit from an improved flight network and vast visibility in the market; and destinations that are close to gateway cities and can be experienced in day trips or overnight stays (for example, San Francisco: e.g. Napa & Sonoma).
—FIT travelers, which tend to be younger or come from a more educated, upper class background, seem quite independent and comfortable traveling on their own.
—One customer in the travel trade even told me about her attending Burning Man (an annual event in the Black Rock Desert in Nevada) this year-and she loved it. So there’s definitely a sense of adventure.
—Self-Drive itineraries are becoming increasingly popular to destinations along the West Coast, the National Parks, along the Northeast corridor and Texas.
Aside from Shopping, What Activities Are Most Popular? Sightseeing? National Parks? Historic and Cultural Tours?
—Dining and experiences that involve food are very popular amongst FIT travelers.
—The USA’s National Parks are hugely popular among Chinese travelers, and Yellowstone seems to be at the heart of it all this year, in part due to marketing the 100-year anniversary of the National Park system.
—Theme Parks and themed attractions that offer safe, family-fun and animal encounters are very popular choices as well. Seaworld, for example, seems to be a main reason why Chinese travelers go to San Diego.
—Hop-on Hop-off tours and city tours on land and water are increasingly popular amongst FIT travelers that spend several days on their own in cities.
—Educational travel is very important for many Chinese families that are looking for universities to send their kids to.
Brexit, Brazil and the U.S. Brand—Key Operators Offer Their 2017/18 Outlook Next Month in Orlando
International Digital Day, the first of the two days of the NAJ Group’s RTO Summit Orlando slated for Nov. 15-16 at the B Resort in Orlando, features a day-long program of discussions and presentations aimed at equipping tour and travel industry international sales and marketing professionals with up-to-date digital skills necessary to navigate and negotiate in today’s marketplace. A product that grew out of the NAJ Group’s popular e-Tourism Summit, held annually in San Francisco, next month’s International Digital Day will also incorporate a panel of receptive tour operators with offices or headquarters in Orlando who will focus on the question, How will Brexit, the Strong U.S. Dollar, Brazil’s bumpy economy and Terrorism affect international arrivals in 2017-18?
The receptive operators scheduled to take part in the session include: Uri Argov, CEO, Tourico Holidays; Jay Santos, managing director USA, TrendTravel USA; Pabs Raghava, CEO, Tours Limited; and Gisa Kuserow-Hansen, general manager, Florida for AlliedTPro. Florian Hermann, founder & CEO of Boulder, Colo.-based HMS Global, will moderate the panel discussion.
Above, left-to-right: Uri Argov, Jay Santos, Pabs Raghava, Gisa Kusserow-Hansen and Florian Hermann
Following is the complete schedule for International Digital. A limited number of registration slots are still available. For more information, visit: http://www.rtosummit.com/rto-summit-mice/rto-summit-mice-supplier-fees-registration-policy/
RTO Summit Orlando(Tentative agenda, subject to change. Last update 10/4/16. (i)= Invited speakers, not confirmed)
Tuesday, Nov. 15, 2016: RTO Summit Orlando “International Digital Day”
Online media marketing ideas for International Tour and Travel Professionals.
In Partnership with Destination Academy by TripAdvisor (DATA)
9:00-9:30 am: How We Use Online Tools to Generate Demand to Tour Operators? While relationships with buyers continue to be important, there are new online tools and tactics that can be “bolted on” to help drive demand to tour operators’ websites in a measureable way. Presenter: Florian Herrmann, CEO, HMS-Global
9:30-10:00 am: Q: Where’s the Best Place to Hide a Dead Body? A: The Second page of Google? How to Use Google Predictive Analytics to Forecast International Intent to Travel to Specific Destinations from a Variety of Source Countries. Presenter: Laszlo Horvath, CEO, Active Media. Horvath is a worldwide authority on international Search Marketing techniques and will demonstrate the process in real time.
10:00-10:25 am: Key Travel Trends from UK, Germany and France: Our partners at TripAdvisor will be releasing the most recent version of their European Travel Monitor research including how inbound hotel bookings have been affected by Brexit and the Euro. Presenter: Steven Paganelli, Head of Destination Marketing and Latin America, TripAdvisor
10:25-10:45 am: Should you use YouTube and Facebook Videos to Market to International Audiences. The Role of YouTube and Facebook has grown l to two major media channels that are ideal for converting sales. With a sharp rise in search for travel content, management of a channels and quality video content allow you to create, own and control video that can easily be presented in multiple languages.
Presenter: Robyn Levin, CEO, R Levin Marketing
10:45-11:00 am: Tricks of the Trade Part 1: Tricks and Tips to help traditional tourism sales professionals use the latest digital tools to access new media in key overseas markets. How tour and travel sales professionals can work with media, bloggers and influencers at international trade shows.
11:00-11:10 am: Tricks of the Trade Part 2: What Do You Do When You’re Approached to Buy Advertising at Trade Shows. Presenter: Susan Wilson, President, Susan Wilson Marketing |TravMedia Brand Ambassador, who has over a decade of experience conducting international outreach for tourism DMOs and attractions and whose current and former clients include Grand Canyon National Park Lodges, CityPASS, Westfield Shopping Centers, TravMedia, Tuolumne County/Yosemite.
11:10-11:30 am: Coffee Break sponsored by TourOperatorLand.com
11:30-11:50 am: How to Increase your Website and Social Media Traffic from key International Markets by understanding the media landscape. Presenter: Frank Vertolli, Co-founder of Net Conversion which he founded in 2007 with long-time colleague Ryan Fitzgerald. Under their travel industry leadership and experience, Net Conversion provides results-oriented paid digital marketing and comprehensive analytics services to a focused list of long-term, primarily Travel & Hospitality clients including Universal Studios. Blue Man Group, the Orlando Magic and Nassau Paradise Island.
11:50-12:10 pm: The Power of TripAdvisor for International Online Marketing. More than a review site, TripAdvisor has data-driven options that can help international inbound travel marketers isolate targeted source countries for tactical advertising programs that are surprisingly affordable. Presenter: Steven Paganelli, Head of Destination Marketing and Latin America, TripAdvisor
12:10-1:50 pm: Enjoy Lunch on Own
1:50-2:10 pm: I Chat, You Chat We all Chat for We Chat. How tourism professionals can use the power of We Chat, a Chinese App with 810 million users that is a cross between What’s App, Twitter and Tinder. Presenter: David Becker, CEO, Attract China.
2:10-3:10 pm: How will Brexit, the Strong US Dollar, Brazil’s bumpy economy and Terrorism affect international arrivals in 2017-18. A panel of receptive operators discuss the exchange rate’s impact for 2H 2016 and their insights beyond. Moderator: Florian Herrmann, NAJ Group; Invited tour operators: Uri Argov, CEO, Tourico Holidays (i); Jay Santos, Managing Director USA, TrendTravel USA; Pabs Raghava, CEO, Tours Limited (i); Gisa Kuserow Hansen, GM Florida, AlliedTPro (i)
3:15-3:30 pm: Coffee Break sponsored by TourOperatorLand.com
3:30-4:30 pm: Collaborative Product Development Ideation Roundtables. Attendees will be divided into roundtables, each of which will feature product development discussions among participants and the receptive assigned to that table. Receptives will then be asked to rotate to a different roundtable after 30 minutes. A facilitator from NAJ will be designated for each roundtable.
4:30-5:30 pm: 3-Minute MICE Presentations by Suppliers. (For suppliers who signed up for this feature)
Are UK’s Millennials Causing a Resurgence in the Popularity of Packaged Travel, High Street Stores?
More than Half of All Brits Booked Packages for Overseas Holidays: Packaged travel products are enjoying a resurgence in their popularity, according to Abta’s Holiday Habits Report 2016, based on the results of the Abta Consumer Trends survey, which also revealed that 19 percent of UK travelers booked in-store over the last 12 months, up from 17 percent in 2015. We’ve highlighted some of the numbers from the Abta report, which was released earlier this month at the organization’s annual convention:
—For in-store bookings, the most affluent households were found to be the most likely to book in such fashion, with 35 percent having done so.
—Younger generations were also found to be more likely to book in-store, with 25-34 year olds leading the way at 29 percent.
—Use of high street retailers fell with age, with over-65s the least likely to book in-store (13 percent).
Top Ten Types of Holiday Taken in the Past 12 Months
—Over-65s were also most likely to book a holiday by phone (38 percent), which Abta said suggests that they particularly like to book holidays from the comfort of their home.
—Overall, travelers were found to be most likely to book in-store for trips to new destinations, holidays of seven nights or more and city breaks.
—The Abta report also found that package holidays were the most popular type of overseas holiday, with more than half (53 percent) of British holidaymakers buying a package in the last year. This was an increase of 6 percent over 2015 and more than 10 percent over 2011.
—The growth in package holidays was driven by the youngest and oldest age groups.
—Older holidaymakers showed the biggest increase in package bookings, with almost two thirds (63 percent) of people aged more than 65 taking a package holiday last year, compared to 47 percent in 2015.
—The increase in numbers of 18-24 year olds booking a package holiday suggests that a new generation is discovering the benefits of the package. More than half (55 percent) of 18-24 year olds took a package holiday abroad in the last 12 months, compared to 46 percent in 2015.
—The most popular reason for choosing a package holiday is “Having everything taken care of’,” selected by 73 percent of consumers, while last year’s top reason, “Best value option for price,” fell to second place at 59 percent.
Reasons People Book a Package
To review the complete copy of the Holiday Habits Report 2016, visit:
Memo to Donald J. Trump: The Country that Benefits Most from Muslim Travel Spend is …
You guessed it. The Muslim travel market accounted for $145 billion of total international tourism spend in 2015, with the United States receiving a 24 percent share—or almost $35 billion—according to The Economic Impact of Muslim Tourism on the United States 2015 -2016 research paper.
“The United States benefits more from Muslim tourism than any other economy in the world in terms of direct GDP impact,” says Faeez Fadhillah, the co-founder and CEO of Salam Standard, which produced the paper. Launched in October 2015 from its offices near Kuala Lumpur, Malaysia, Salam Standard is an online reference tool for Muslim travelers seeking accommodation that meets their faith-based needs–provisions such as prayer mats, halal food and the removal of alcohol from the hotel mini bar, for example. (Earlier this year Fadhillah was named by Forbes Magazine as one of the “30 under 30” in Asia’s Retail & E-commerce sector.)
Previously, in 2013, Fadhillah and his partner, Juergen Gallistl, started Tripfez, which offers Muslim-friendly tour packages and advice about halal food, as well as a site that compares prices and features for 650,000 properties in some 83,000 destinations
With such numbers, Fadhillah says, the U.S. should therefore be looking for ways to boost its halal-friendly tourism offering and marketing it digitally to the fast-growing Muslim travel community, the research paper suggests in its executive summary.
Salam Standard’s executive summary of the impact of Muslim tourism on the US economy is one facet of a major Global Economic Impact of Muslim Tourism research paper. The full report, which is scheduled for release before the end of 2016, will provide a true global perspective of the growing importance of the Muslim travel sector.
Two key points raised by the paper are as follows:
—First, while the unique faith-based needs of Muslim travelers can vary according to country of origin, universal requirements include the availability of halal-certified food, the observance of prayer times and the absence of alcohol.
—Second, the U.S. should also make information on its Muslim travel facilities and services more accessible to raise its profile as a halal-friendly destination. “Creating online resources, from websites and apps to digital marketing campaigns, is the way forward,” suggests Fadhlillah.
Fadhillah’s movement to serve the Muslim travel sector with innovative online resources–he calls it “Taqwa Tech”—has attracted attention from major media outlets including the BBC and CNBC, both of which are currently filming documentaries about his business. For more information, visit salamstandard.org.
NOLA on a Roll: New Orleans Gets Second Long-Haul International Non-Stop Air Service for 2017
British Airways (BA) has announced that it will begin flying to New Orleans next spring. Service to BA’s hub at London Heathrow will begin March 27. The airline will offer four flights a week on its 214-seat Boeing 787-8 “Dreamliner” aircraft, which is smaller than the carrier’s wide-body aircraft used on other long-haul routes. The Dreamliner has enabled BA to scheduled service to smaller U.S. markets, where demand is not as great as it is from and to major U.S. gateways. BA said the new service will enable passengers from New Orleans to connect via Heathrow to 130 other cities in Europe and other points beyond.
Last June, the German airline Condor—it is a part of the Thomas Cook Group— announced that it will begin seasonal nonstop service from New Orleans to Frankfurt starting next summer, meaning that BA will be the first international carrier to launch non-stop, Europe-to-New Orleans service.
While New Orleans has non-stop international flight connections to the Caribbean, Central America and Toronto, it has not had non-stop long-haul international service since the 1970s, when the now-defunct National Airlines flew non-stop between New Orleans and Amsterdam.
Germany’s Tour & Travel Industry Wobbles Onward …
Wobbly” is a word one does not often find on the business news websites to describe an economic situation or outlook, but it seems to fit when one contemplates or discusses the condition of the outbound tourism industry in Germany and, in particular, its Visit USA business.
On the one hand, it appears that there are some savvy marketers—both the international tour operators in Germany, as well as the receptive tour operators within the United States—who’ve managed to keep the inbound traffic from Germany coming at a healthy pace.
On the other hand are the numbers. For the whole of the German tourism industry—including those who market and serve travel by Germans taking their holidays within Europe and Germany itself—it has been a challenge to find product and destinations not tainted with the penumbra of terrorist attacks; the numbers are holding up vs. 2015. But for those who sell USA product, what numbers there are have been awful. The latest data from the U.S. National Travel and Tourism Office (NTTO) for April 2016—the latest month for which figures are available—indicate that arrivals to the U.S. from Germany in April were down 15 percent over 2015 and down 7 percent year-to-date (through April 2016) for the same period in 2015.
Now, for the first time since the wake of the 2008-09 economic recession, there are news reports of insolvency among German tour operators—though none involve any company that sells Visit USA product—that suggest that not all is well in the German travel industry. Following are narrative snapshots gleaned from various news sources, including the German travel trade publicans, FVW and Touristik Aktuell.
—Insolvency proceedings against the Berlin-based Asia specialist Suntrips will open on Oct. 31. Meanwhile, the dynamic packing provider LMX Touristik plans to take over parts of the insolvent specialist and to maintain the brand. LMX Touristik had taken a lot of the trips for already booked customers of Suntrips. Meanwhile, all journeys have been completed, according to Mario Krug, LMK’s managing director. Suntrips filed an application for insolvency August 5th.
—Angelika Vogel, CEO of Dusseldorf-based Ibero Tours, has written customers asking for asks for an understanding of the company’s situation and patience with outstanding funds. It is also “in the interest of the customers” that the company’s long-term efforts “reach a complete creditor satisfaction with the avoidance of the insolvency.” The company’s high level of debt led to travel cancellations, cancellations and unpaid hotels, news reports indicate.
Vogel said that Ibero Tours’ investors have assured the company “that no later than January 2017 sufficient capital will be available to compensate all liabilities of the company without any deduction.” Until then, she wrote customers, it is “unable to make binding payment promises,” adding,” I would be very much obliged if you would give us the time to be able to comply with all our obligations. According to the shareholders of our company, this is currently not possible.”
—Alltours, Germany’s fifth-largest tour operator, reported pre-tax profits of €52 million ($56.6 million) for the year ending October 2016 even though customer numbers are likely to fall by 241,000 to 1.63 million. The company said that it maintained its profits by sharply cutting back on full charter flights.
“Despite lower customer numbers, the Alltours Group is very satisfied with the financial results,” said managing director Markus Daldrup.
The decline in volume was largely due to an overall loss of 260,000 bookings for Turkey, Tunisia and Egypt. For the near-term, is targeting a 4.5 percent increase for both customer numbers and revenue in the 2016/17 year. Winter bookings are currently “going (according) to plan,” although demand for Turkey remains below last year.
—The Munich-based tour operator Studiosis—a large cultural holiday specialist which also operates the Marco Polo brand— increased its revenues this year by 2 percent to nearly €263 million ($286 million) but customer numbers fell to 100,150 from 103,509 in 2015.
Owner Peter-Mario Kubsch said he was very satisfied with these figures given the many crises and incidents around the world during the year. Destinations with strong growth this year included Japan (+40 percent), Cuba (+31 percent), Iceland (+21 percent) and Southern Africa (+18 percent) while the number of Russia bookings nearly doubled to 1,861 guests. In general, the tour operator saw a trend towards European and long-haul destinations.
Bookings of city trips declined by up to 60 percent following the terrorist attacks in Paris, Brussels and Nice. Even demand for Rome, which celebrated a Holy Year, remained well behind expectations. The company expects a similarly difficult year in 2017 with no significant improvement in demand. Tours for families, smaller cities and short trips will be expanded following good demand.
—The family owned tour operator Schauinsland-Reisen—it is headquartered in Duisburg, in the western part of Germany—reported that it had flat revenues and customer numbers this year, but still says that it increased its market share. Owner and managing director Gerald Kassner announced figures for revenues and customers in 2015/16, with turnover of €1.1 billion ($1.2 billion) and nearly 1.4 million guests, which showed little change from the previous year. Kassner admitted that the company’s profits have fallen this year, but he declined to indicate by how much.
He was nonetheless positive as the company presented of its summer 2017 program, however, saying, “We’re very happy that we can close this competitive, turbulent year without any drop in volumes or revenues. That means we are ahead of the market.”
Looking ahead, Kassner is cautiously optimistic for the forthcoming year. In 2016/17 as a whole, he is aiming to “increase customer numbers and turnover and achieve growth on a solid, healthy basis,” although he declined to make any precise forecasts “at this stage.”
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Hubertus Funke has been promoted to the position of senior vice president of tourism for the San Francisco Travel Association. Funke joined San Francisco Travel in 2007 and later became vice president of tourism prior to his promotion. He began his career in the tour and travel industry in 1998 as a product manager for AlliedTPro and also worked at New World Travel before joining San Francisco Travel.
Tom Klein, president and CEO of Sabre Corporation, has been elected by the board of directors of Brand USA’s board of directors as the organization’s new chair. Klein succeeds Arne Sorenson, president and CEO of Marriott International, Inc., who originally joined the Brand USA board on Oct. 1, 2012, and has served as board chair since Jan. 22, 2015. Sorenson, who is in his second term as a board member, will continue to serve as a member of the board. Klein was one of the original 11 Brand USA board members appointed in September 2010. He was reappointed in September 2011 and December 2014 Klein is eligible to serve on the board through the expiration of his consecutive terms on Dec. 1, 2017.
Jonathan Woodall has been promoted to group head of commercial at Hays Travel, as part of a new commercial strategy across the business. Woodall, who worked in retail for four years before moving into the finance team in head office, most recently served in the role of finance manager. In his newly-created position as group head of commercial, he will be taking a group-level approach to driving sales for partners across the company; this includes the Hays Independence Group, tour operating, transfers, and beds.
Christophe Peymirat (left) has been named chief commercial officer of Egencia Worldwide. Egencia is the corporate travel division of the Expedia group. Peymirat, who most recently led Egencia’s European and Nordic businesses, takes over the role following Egencia’s reorganization into two divisions. The second organization will be focused on scaling Egencia’s business operations and also on leading all supplier partner relationships worldwide. This organization will be led by another Egencia veteran and experienced travel industry innovator, Mark Hollyhead (right), who has been leading Egencia’s Americas business and who just completed the integration of Orbitz for Business, will become Chief Operating Officer, Egencia Worldwide.
Dennis Wormwell, CEO of Shearings Holidays, is leaving the company at the end of the year. Wormwell, who joined the business almost a decade ago, is leaving to pursue a non-executive career. He led the management buyout of the business from in 2014 and the subsequent sale to Lone Star Funds earlier this year. Gary Speakman, chief financial officer and deputy chief executive, will assume the role on an interim basis until Wormwell’s replacement is announced next year. Shearings Group sells coach, air, rail, cruise and hotel breaks across 170 destinations worldwide.
Renee McKenney has been named senior vice president/chief experience officer at the Dallas CVB in a move that makes the Dallas the first bureau in the country to create an entire division focused on the customer experience. In her role as CXO, McKenney will provide strategic direction and operational leadership to the organization’s customer service teams that currently include client services, strategic alliances and visitor information. A veteran of nearly three decades in the tour and travel industry, McKenney most recently served as national sales director for Disney Destinations–the Walt Disney Company.
Satomi Yamamoto has been appointed as director for the Japan market at the Guam Visitors Bureau. Yamamoto previously served as the director of Alaska Travel Industry Association in Japan, and as a corporate communication and marketing manager in the Tokyo office of the Hong Kong Trade Development Council. She also served as the Japan representative of Visit Orlando at Double Six Marketing Ltd.
