From NAJ’s TourOperatorLand IPW Magazine

Learning to Play Defense: After eight years of playing offense, the game has changed. Following the Great Recession of 2008- 09, during which the overseas popularity of the United States and its President were at an all-time high driving international arrivals to record levels, the USA now has President Donald Trump’s travel ban, which is immensely unpopular in Western Europe, Middle East and other source markets. Destinations and travel suppliers will have to defend their market share by appealing to the loyalty of opera-tors and their clients, and in stressing how they welcome all visitors, regardless of race, nationality or religion.

Strong U.S. Dollar = Weaker Demand: On the currency exchange markets, the U.S. dollar will remain strong versus other major currencies. The U.S. Federal Reserve Board seems intent on keeping the dollar strong by pushing up the prime interest rate and allowing investors to earn slightly higher dividends on bonds and other financial instruments. This means that inbound travelers using euros, pounds, Canadian dollars and Mexican pesos will look elsewhere to holiday this year.

The One-Man Receptive Company: Acquisitions, consolidations and downsizing in recent years of receptive tour operators in key U.S. cities brought out the resourceful- ness in some of those who were downsized or RIFFED. There are a number of them who’ve leveraged their long-standing relationships with groups to launch their own one-person operation out of their apartments or in small or shared office space to save on overhead. With most business transactions now paperless, a sales call or sale is no further away than an e-mail, text, facetime phone call or a QR code.

Bedbank Receptive Consolidation: Consolidation in the receptive tour operator industry in order to compete with OTAs has continued apace and will likely go on as RTOs try to reinvent themselves or grow in size in order to create a scale of economy that enables them to compete with online travel agencies and group booking platforms. Last February, Hotelbeds acquired Tourico Holidays—one of the largest U.S. receptive tour operators with a huge hotel inventory. And then, two months later, Hotelbeds acquired the other remaining major global bedbank—GTA, a Kuoni brand based in London.

Canada is Hot: A strong dollar, a weak loonie and the yearning to travel brought international visitors to Canada in near record numbers in 2016, just four-tenths of a percent lower than 2002’s 20.6 million. The year also brought more than 4 million air travelers (a first) from the USA to Canada. With Europeans and Mexicans looking for an alternative to the USA because of a strong dollar or a President they do not like, Canada is poised to be a stronger North American destination than ever.

China and India Remain Strong: Midst declines or barely modest increases in the volume of visitors sent to the USA by most international source markets, the U.S. National Travel and Tourism Office (NTTO) forecasts that, from 2017 to 2021 visitation to the USA from China and India will increase by 65 percent and 42 percent, respectively. Both countries have burgeoning travel-ready populations, increased airlift with connections to the U.S. and currencies that have remained relatively stable vs. the U.S. dollar (although China’s yuan has declined by 10 percent in the past year). While “mature” markets such as Europe and Latin America are less likely to be targets of vigorous promotions by DMOs, U.S. travel suppliers, China and India are perceived as a safe bet for marketing investment.

Where Was Intercontinental Hotel Group? As more tour operators find themselves circumventing hotels’ leisure sales staff to a group booking platform or to the program of one of the major online travel agencies (OTAs) and, by doing so, eliminating the need for signed paper contracts, it is becoming a threat to devalue leisure sales and FIT. “It” is what happened earlier this year when the InterContinental Hotels Group eliminated its entire leisure sales department, relegating operators to director connections to the hotel booking system. This meant no IHG booths at this year’s IPW and at other trade shows. Other hotel chains may see this as a signal to follow suit.

Welcome to the South, Y’all: The eleven states that comprise the U.S. South (Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Kentucky, South Carolina, Tennessee and West Virginia) have moved to the top of many new itineraries. They are becoming favorites for new FIT and self-drive tours—the result of increase international promotions, additional lift capacity, both direct and indirect—and price points that are lower than one finds in most U.S. cities. Repeat visitors to the U.S. are especially interested in the region for its food and music culture, as well as the swelling interest in Bourbon.

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