Kuoni, U.S. Suitors Vying for Tui’s Travelopia
he last of the component part of a Tui collection that comprised tour operators, hotel bedbank, attractions and entertainment inventory to go up for sale since the company—Tui is Europe’s largest travel business—merged with its parent company in December 2014 is close to being acquired.
Up for sale/bids is TUI’s collection of 50 specialty brands that operate under the Travelopia label. They include such names as American Holidays, Citalia, Brightspark, Educatours, Gullivers Sports Travel, Grand American Adventures, Hayes & Jarvis, HTS Total Ski, Jetsave, jumpstreet, MarcoPolo, StudentCity, trekamerica and more.
Reports from Europe indicate that Tui is taking its time with the process which, it had earlier indicated, should be completed during the first half of 2017.
Among the suitors mentioned are:
—The Zurich-based Kuoni Group, which itself was acquired a year ago by EQT Partners, a private equity firm that is part of Sweden’s Wallenburg family of businesses. It was only a year ago that EQT acquired Kuoni from its Swiss owners, which included descendants of Alfred Kuoni, who started the business in 1906.
—Warburg Pincus a half-century old U.S. private equity firm based in New York with offices in Europe, Brazil, China and India. Their portfolio does not appear to include many tour or travel-related businesses.
—KKR, another New York private equity firm which only last month joined with an affiliate of Denver-based KSL Capital Partners and purchased Apple Leisure Group (which includes the operator Apple Vacations®) from Boston-based Bain Capital.
Assisting Tui in the sale is Citi. Reports indicate that Tui is seeking about €500 million ($530 million) for the business.
Aside from the capital involved, the sale will allow Tui to intensify its focus on its core activity of selling tour packages and unifying the company brand—a process that is eliminating all Tui national brands as well as the venerable First Choice and Thomson brands in the UK—by sometime this year.
Tui last year sold its Hotelbeds unit to the private equity group Cinven and the Canada Pension Plan Investment Board in a deal worth €1.165 billion euros ($1.32 billion).
How Top Markets Rank in English Proficiency
Just recently released, the Sixth Annual Edition of the Education First (EF) English Proficiency Index (EPI) puts the Netherlands at the top of all countries in its proficiency, replacing Sweden, which was No. 1 in the previous edition. And when one reviews the entire list of 72 nations ranked, it appears that—based on the size of the market and the degree of English proficiency—India appears to have the greatest potential for growth as a market for overseas visitors to the United States.
This sixth edition of the EF EPI ranks 72 countries and territories is based on test data from more than 950,000 adults who took our online English tests in 2015. The report looks at the relationship between English and a range of economic and social indicators, including earning power, innovation, and connectivity.
First, a look at the table of all of the nations ranked, along with their EFPI (See explanation below table), as compiled by the Inbound Report.
Why Such a Study? In a world where integration is the norm, says EF, English “has become the medium of cross-cultural communication for a growing number of people in an increasingly diverse set of situations. No skill since literacy has held such potential to increase the efficiency and earning power of so many. The impact of English on the global economy is undeniable.”
Over the past decade, EF has tested the English skills of millions of adults around the world. Each year, EF publishes the EF English Proficiency Index (EF EPI), a worldwide benchmark for measuring and tracking adult English proficiency over time. The EF EPI adds to ongoing discussions about the strategic importance of English in the world today.
This sixth edition of the EF EPI ranks 72 countries and territories based on test data from more than 950,000 adults who took EF’s online English tests in 2015. The first section of the report looks at the relationship between English and a range of economic and social indicators, including earning power, innovation, and connectivity. The second section examines the position of English in four different regions of the world – Europe, Asia, Latin America, and the Middle East and North Africa (MENA) – and discusses the challenges and opportunities that countries in these regions experience as they strive to develop English-speaking workforces.
Highlights of this year’s findings include the following:
- -English is a key component of economic competitiveness at both the individual and national levels. -Higher English proficiency correlates with higher incomes, better quality of life, more dynamic business environments, greater connectivity, and more innovation.
- Women are better than men. In nearly all countries surveyed, women have stronger English skills than men. Women speak English better than men in almost all countries and age groups. This finding has been consistent across all editions of the EF EPI.
- The range of English proficiency is broader than we have ever found. Both Asia and Europe have at least one country in each of the five proficiency bands.
- English proficiency in Europe remains the strongest in the world by a wide margin, with Northern European countries occupying the top five positions in this year’s index.
- For the first time ever, an Asian country, Singapore, is in the highest proficiency band. Malaysia and the Philippines are also in the top 15 countries worldwide.
- Though the decline is slight, Latin America is the only region with an average proficiency level that has dropped in the past year.
- Countries in the Middle East and North Africa are uniformly in the lowest proficiency bands, and in most MENA countries, English proficiency is not improving.
- Young adults aged 18-25 have the strongest English proficiency worldwide, although some countries have markedly different national trends.
- English skills are a basic requirement in today’s global economy. Mastery of a language is difficult and expensive, but parents and professionals understand the value of investing in English training, and companies and governments recognize the link between workforce English and long-term competitiveness in the 21st century.
Major Regions of the World, with the EFPI scores of key countries:
About EF: In the early 1960s, a young Swedish man named Bertil Hult traveled to England for the first time. As a dyslexic, school had always been a challenge for him. But he was surprised by how effortlessly he picked up English in England.
Hult became convinced that traditional classroom-based teaching was not always the most effective. In 1965, he decided to start a small company called Europeiska Ferieskolan (European Holiday School – EF for short) that combined language learning with travel abroad. He called the program Språkresor, or Language Travel, which provided one of the world’s first hands-on learning experiences outside the classroom.
Today, EF is a multibillion-dollar tour, travel and education program spanning the globe. It employs more than 40,000 people in 53 countries.
In the Middle of it All—Middle East Airports Comprise New Hub for International Traffic
The ascendancy of the Middle East’s airport infrastructure to the point at which is the major connection point for international air commerce is now a fact. It’s in the numbers.
For the past several years, professionals in the global travel and tourism industry have experienced growing evidence of this as they have pursued growth markets in Asia from destinations in Europe and the Americas. Ever since the modern era of international air commerce became a fact—most business historians would date it to the 1950s with the first use of jetliners for commercial purposes—the acknowledged hub of East-West connections was London.
This reality obtained through the beginning of the current century and into and through 2005—just before the young carriers of the Middle East began to acquire more aircraft, get approval for expanded routes and make connections between East and West.
What a Difference a Decade Makes: 2005 international passenger data show the pre-eminence of London as a base and connecting point for traffic: London’s Heathrow carried 70 million international passengers that year, while Gatwick (28.7 million) and Stansted (19.3 million) brought the location’s total international passengers to 118 million. Nowhere in the table below does one see an airport from the Middle East.
Source: Airports Council International
Today, it is not London, with its Heathrow and Gatwick Airports that anchor the major connecting point for international air commerce. The new hub—a cluster of three major airports in an area at the southern tip of the Persian Gulf—is comprised of Dubai International Airport (in Dubai, U.A.E.), Abu Dhabi International Airport (in Abu Dhabi, U.A.E.) and Hamad International Airport in Doha, Qatar.
Dubai is the home base for Emirates airlines, with more aircraft of international passengers than any other in the world; Abu Dhabi serves as headquarters for Etihad; and Hamad International Airport is home base to Qatar Airways. Passengers from Asia are connecting to Europe and the Americas through these three points; and passengers from the Americas are heading to Asian and Pacific destinations through the area.
—Distance from Doha to Dubai International Airport: 235 miles
—Distance form Doha to Abu Dhabi International Airport: 187 miles
—Distance from Dubai International Airport to Abu Dhabi International Airport: 83 miles
The area around these base cities is slightly larger than the U.S. state of Maryland.
Just ten years after the three airports mentioned above appeared nowhere on the list of Top 30 Airports for International Passengers, the new list reads as follows.
It is probable that the dominance of the region as a hub and connecting point for international passenger traffic will increase as more carriers use the region for connections, layovers and more. In the latter category is Abu Dhabi International Airport, which is the only location in the Middle East and Continental Europe combined of a Customs and Border Protection (CBP) Preclearance facility.
Under its Preclearance program, CBP law enforcement personnel overseas inspect travelers prior to boarding U.S.-bound flights. They conduct the same immigration, customs, and agriculture inspections of international air travelers typically performed upon arrival in the United States before departure from foreign airports.
A number of carriers with flights to the U.S. are taking advantage of the preclearance option; one notable result is the resultant increase in traffic to the U.S. from India, which has grown to become a Top Ten overseas source market for the U.S. inbound tourism industry.
CVC Acquires Educational Travel Unit, Closes out 2016 in the Black
Not letting up on nor reducing its expansion plans, CVC, Brazil’s largest travel company—the CVC group includes the tour operator and travel agency CVC, Rextur Advance (an agency-only business) and Submarino Viagens, an online travel agency—kicked off 2017 by announcing its acquisition of Experimento, one of Brazil’s oldest education agencies.
CVC became involved in the study travel sector in January 2016 through a new division (Intercâmbio) that focused on language travel. It subsequently opened a number of retail agency stores to promote the product.
The latest acquisition will open the company up to an even broader segment of the study travel market. Experimento offers high school, university and vocational programs overseas, as well as language courses and holiday programs. It also provides opportunities to work abroad, including au pair positions and work/study programs.
CVC aims to expand the Experimento brand by opening up 30 new stores in Brazil over the next three years. “The Experimento acquisition allows us to expand the CVC student exchange programs segment and with the CVC Intercâmbio brand will complement our portfolio and further strengthen our relationship with trading partners and distribution channels,” Pedro Aparicio, CVC Group treasurer and investor relations, told The PIE News, an international education news site.
The move also fits into the long-term growth vision of the CVC’s CEO, Luiz Eduardo Falco, who believes that more Brazilians should learn to speak English. About five percent of Brazilians speak English, according to a report released several years ago by the British Council. In a wide-ranging interview in early 2015, Falco said that learning English would help to strengthen demand for travel destinations where English is spoken—principally the USA. But, more important, Falco indicated at the time, it would strengthen Brazil competitively on the international business marketplace.
Not Quite the Goal of 100: Early last year CVC announced its intention to build a 100 new travel agency stores a year for three years—a wildly improbable goal, most observers in the nation’s travel and tourism industry thought. According to its year-end report, the company almost achieved the goal. It opened 91 new stores in 2016, closing out the year with a total of 1,095 leisure stores.
And in a year that travel businesses measured success merely by how it was able to reduce losses, CVC reported The CVC Group (composed of CVC, Rextur Advance and Submarino Viagens) sold 8.8 billion reais ($2.7 billion) in tourism products and services last year, a growth of 1.5 percent over 2015. While online travel sales were weak, the tour operator division of the company closed 2016 with 5.5 billion reais ($1.7 billion), an increase of 6.5 percent over 2015.
China’s Airlines Offering Lower Fares to North America for Indian Travelers
Low-cost Chinese carriers are going head-to-head with Indian airlines and attracting Indian passengers who make up the latter’s outbound travel market—flying them to destinations in the North America, the Far East, Australia and New Zealand by offering low fares on crowded routes.
“In the past few years we have seen a gradual increase in Chinese carriers operating in India,” Indiver Rastogi, president, global business travel at Thomas Cook (India) Limited, told the Times of India, adding, “These airlines offer a combination of value-for-money fares and high quality experience that has attracted the price-conscious Indian traveler. These airlines are also popular with corporate travelers who have business interests in China or want to use the country as a hub to fly onward to the USA.” The competition opens up a whole dynamic for India, which has grown in numbers to be the Number 9 overseas source market for the U.S. inbound tourism industry.
It is all about the price point. As Rastogi explained it: “The fare difference varies between 20,000 rupees ($293) and 25,000 rupees ($366) for long-haul destinations like the U.S. and Canada compared to other carriers like Singapore Airlines (SIA), Thai Airways and Malaysian Airlines. The competition price differential for China and Japan is from 15,000 rupees ($220)—20,000 rupees ($293).”
The Times account points out that the limited access to the Indian market granted to mainland Chinese carriers has saved airlines like SIA, Cathay Pacific, Thai, Malaysian and even Air India from a Chinese takeover on routes to the east. At the moment, all major Chinese carriers fly mainly to and from Delhi.
Among mainland Chinese carriers that operate to India, China Southern has the maximum number of flights with a twice-daily on the Delhi-Guangzhou (its hub) route, with both flights on the wide body Airbus A-330 aircraft. Chengming Yan, China Southern head in Delhi, said: “Almost 60 to 70 percent of our flyers from India take connections via Guangzhou to the U.S., Australia and New Zealand. We have a great network from our hub to those places. Indian flyers do not need to wait for more than two hours for their connections.”
Asked about the competition, John Nair, head of Cox & Kings‘ business travel, told the Times that cheap Chinese carriers pose a major challenge to airlines globally “Their fares are quite low compared to Indian or other foreign carriers via Singapore, Thailand, Hong Kong or Malaysia. They compete at 20-30 percent lower fares than other carriers operating in these sectors,” he says.
It seems as if Indian and other non-Chinese carriers—aware of the competition—are stressing instead the quality of their service and their experience in dealing with the market. In the meantime, the Chinese carriers have apparently tapped into an Indian market—one in which travel in large and often multigenerational groups—in which a ticket price that is $220 cheaper can translate into thousands in savings.
German Trade Playing “Catch up” as Industry Tries to Shake off “Lost Year”
Following a dismal 2016, the tour and travel industry in Germany—it is the Number 4 overseas source market for U.S. inbound tourism—is trying to catch up. At least, this is the way that Sebastian Ebel, CEO of Tui Germany, the country’s largest travel company, prefers to view the situation.
Just a little more than a week into the New Year, Ebel told the German travel trade publication, Touristik Aktuell, “We are currently observing a catch-up effect. Many Germans, who did not spend the holiday last year, book their travel very early this year,” with overall demand “significantly” higher than it was for the previous year.
As for the previous year, the Nuremberg-based marketing research firm GfK put it aptly when it released monthly data on travel agency sales for the year ending Oct. 31, 2016, saying “The travel agency sector has effectively lost a year of growth.”
Catching up might be a challenge, Touristik Aktuell seemed to suggest, when capacity is less than it has been in the past: “Interestingly, according to TUI, ‘there are significantly fewer options than in other years. Rather, customers usually book directly after the consultation,’ it says from Hannover.” (Tui is headquartered in Hannover, Germany.) Other points highlighted by the publication:
—The trend is that smartphones and tablets are becoming increasingly important when it comes to finding the right vacation: nine out of ten travel bookings are researched online at least one time.
—When it comes to travel bookings, holidaymakers combine TUI studies with more and more online media and personal advice in the travel agency. Thus, 42 percent of the Germans book their previously online researched trip at the counter. For package holidays, the rate is even 58 percent. Tui pushes this through its own on-line link: around 500,000 Tui.com customers are advised annually by travel agencies.
—Especially in the trend: Spain, Italy, Greece and overseas destinations, including the USA, Indonesia, Mexico, South Africa, Canada, Mauritius, the Seychelles and the Dominican Republic.
The tour and travel industry in German will get a better reading of its overall condition, including the prospects for what kind of business year 2017 will be, at the upcoming (March 8-12) ITB show in Berlin.
Tourico’s Room Bookings in and from Key Markets are up 27 Percent Worldwide vs. Last Year
Room nights booked in key international destinations so far for 2017 are far outpacing the number that were booked for the same point in time for 2016—this from the just-released from Tourico Holidays 2017 Global Hotel Trends Report. According to the 2017 Report, nearly all of the world’s major travel regions are currently outpacing their prior year hotel bookings, indicating a very healthy outlook for the hotel industry and tourism in general. Collectively, the total number of hotel room nights booked has increased significantly, growing 28.7 percent around the globe.
“It’s still early, but it’s extremely encouraging to see that booked hotel room nights for 2017 are already significantly outpacing 2016,” said Lauren Volcheff Atlass, Tourico’s executive vice president of global sales. “Even despite attempts to frighten people away from traveling, the industry is not only surviving, but thriving – and the hotel sector in particular, continues to grow.”
Tourico came up with its figures by examining booking data from nearly 80,000 hotel properties located in more than 4,500 destinations around the world—and comparing it to booking data captured at the same time last year, revealing where traveler interests have shifted.
According to the 2017 Report, nearly all of the world’s major travel regions are currently outpacing their prior year hotel bookings, the company said in a news release, indicating a very healthy outlook for the hotel industry and tourism in general. Collectively, the total number of hotel room nights booked has increased significantly, growing 28.7 percent around the globe.
As a source markets:
—North America has increased its hotel room nights booked for 2017 by 28 percent year-over-year compared to this time in 2016.
—The EU has increased its room nights by 28 percent year-over-year,
—Latin America has increased its room nights booked by 43 percent year-over-year; and
—Asia-Pacific has increased its room nights booked by 23 percent year-over-year.
Strong regional outlooks for 2017 are being buoyed by major tourist countries throughout the world, Tourico said, noting that room nights booked in the United States have increased by 26 percent year-over-year. Meanwhile, the following table illustrates how booking activity has increased in key national markets, year-over-year.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Joe Thompson will take over as managing director of Virgin Holidays next July. Thompson is currently senior vice president of sales and distribution for Virgin Atlantic and will take up his post in July following parental leave. He takes over from Mark Anderson, who has been promoted to executive vice president, customer at Virgin Atlantic. Until Thompson returns from parental leave, Virgin Holidays will be led by interim managing director Dave Geer, who is currently product, commercial and business development director for Virgin Holidays. Thompson joins Virgin Holidays after 14 years with the airline.
Susannah Costello has left Visit Florida where she served for eight years as vice president of global brand, to establish her own company, BrandTap (BrandTap.com), which will be help companies tap into the power of other brands through collaborative storytelling and marketing. Before joining Visit Florida, Costello had served as director of industry growth initiatives for the Recreational Boating and Fishing Foundation in Alexandria, Va.
Marianne Bieri-Oppliger has been appointed head of purchasing at FTI Ticketshop. In doing so, she directs the purchasing of the wholesaler in Switzerland and France. She is responsible for all the company’s purchasing activities on the Swiss and French market, and also manages the marketing team for both companies. She reports directly to Maik Gruba, the managing director of FTI Ticketshop AG and FTI Ticketshop SAS. Bieri-Oppliger succeeds Mike Steinmann, who left the company at his own request. Previously, Bieri-Oppliger was with Carlson Wagonlit Travel in Zurich for 10 years.
In Australia, Robert Halfpenny is leaving his post as sales director, global account & Asia Pacific development for Rocky Mountaineer to take over as CEO of Expedition Cruise Company, Aurora Expeditions. He succeeds Lisa Bolton, who stepped down last September to pursue other opportunities. A veteran of more than 25 years in the tour and travel industry, Halfpenny has previously held senior roles with Globus, Virgin Australia, the Travel Corporation and, most recently, Rocky Mountaineer.
Phil DeLone has been appointed president & CEO of the Reno-Sparks CVA. He joins the bureau from his post as CEO of Safari Club International (SCI), a position he’s held since 2012. DeLone has 20 years of executive sales and management experience working at Reno hotels, and is being welcomed back to the destination after acquiring more than four years of experience as an established CEO, a prerequisite many CVA board members set for candidates when their search for a new leader began.
Alan Palmer has been named group sales director for Snowmass Tourism. A veteran of 30 years in the tour and travel industry, Palmer most recently worked as director of group sales at the five-star Rancho Valencia Resort in San Diego. Prior to his tenure at Rancho Valencia, Palmer spent 18 years in Colorado promoting group sales within the ski resort industry.
Merlin Entertainments has announced today that representation in Brazil of the Orlando complex that includes Madame Tussauds museum, Sealife Orlando aquarium and the Coca-Cola Orlando Eye, has been moved from Interamerican Network to São Paulo-based Wolf Marketing, whose founder and CEO is Claudia Lobo.
