Complete Issue June 22, 2017

Chinese Tourism Driven by Expanded Airlift from Tier 2 Cities to Major US gateways…

…and from major Chinese cities to secondary US Gateways.   It seems that, on the basis of the Brand USA Trends Update for China presented at the recent IPW in Washington D.C., Chinese travelers will keep coming to the United States in larger and larger numbers for the foreseeable future—no matter what. And the “no matter what” includes President Donald Trump and his political rhetoric and policies affecting those who want to come to the United States.

Jerome Leroux—he’s vice-president, Asia-Pacific & director, Greater China Region, at AVIAREPS, Beijing and represents Brand USA there—a eschewed a review of arrivals data, except to note that China should become the USA’s number one overseas source market by 2021. Instead he focused on trends and the type of ancillary data that support the trends. We’ve taken Leroux’s lengthy presentation in outline form below.

China-U.S. Airlift is Soaring

Direct non-stop airlift between China and the U.S. has more than quadrupled in the last decade.

More than 4.8 million (annual) non-stop seats are now available direct from China to the U.S.

In 2016, airlift to the West Coast along jumped by 61 percent.

Chinese airlines have increased their market share at the expense of U.S. airlines and now account for 57 percent of annual seat capacity.

There are now 15 U.S. Non-Stop Gateways to China

Los Angeles                                          Washington, D.C.                                      Dallas

San Francisco                                       Boston                                                         Detroit

New York                                              Las Vegas                                                    San Jose

Honolulu                                               Chicago                                                        Saipan

Seattle                                                    Houston                                                       Guam

Current annual seat capacity stands at 4,846,873 seats—a capacity jump of nearly 600,000 more seats than there were eight months ago.

There were 55,000 new seats added in the last three months alone.

There are 16 China Non-Stop Gateways to the U.S.

Beijing                                                 Shenyang                                                      Jinan

Shanghai                                             Shenzhen                                                      Tianjin

Guangzhou                                         Qingdao                                                         Xian

Chengdu                                              Chongqing                                                    Hangzhou

Wuhan                                                  Jinan                                                             Changsha

Nanjing

Issues to Watch in 2017

• U.S. Travel Ban

—It is receiving little media coverage in China.

—There is little interest in the issue among media and general public.

—The perceived image is that it is regarding increased safety in the U.S.

• Rhetoric on China

—Disagreements on policies at the top echelons between the two countries are expected.

—The Chinese public is not concerned with U.S. politics.

—Rhetoric does not offend the average man in the street.

• Visa Rejections

—Visa rejections for MICE groups have created concern among both Chinese travel partners and some U.S. destinations.

• Open Skies

—Open Skies agreements are critical in order to allow for continued airlift growth.

2017 New Trend No. 1: Shift to Mobile

• Shift to Mobile

—Travel search and planning: over half of destination search and planning is done on mobile.

—Bookings: 72 percent of online bookings on Top 5 OTAs are done directly via mobiles, 81 percent of online hotel bookings are made on mobiles.

—Regarding booking apps: OTAs lead the way, with traditional tour operators and travel agencies playing catch up.

• Media Consumption

—Source of information: media, information and entertainment are now consumed primarily on mobile.

—Apps: phone-based news apps have become the No. 1 source of information; social media are NO. 2, and traditional media are becoming irrelevant.

Trend No. 2—Changing Purchasing Patterns

• FIT Segment is Booming

—Up 20 percent last year vs. +11 percent overall outbound.

—In certain states, pure FIT now represents 40 percent of travel and is rapidly rising.

—Semi-FIT (air/hotel/packages) represent up to an additional 40 percent of the market.

• Growth is found Online

—20 per cent growth in online purchases of travel in 2016

• OTAs and Supplier Websites Gaining Market Share

—Three OTAs dominate: C-trip, Qunar and Tuniu comprise more than 80 percent of China’s OTA sector.

—Air tickets (No. 2 after OTA booking) and accommodations (No. 3) are increasingly being booked directly on the websites of service providers.

Trend No. 3—Rise of Tier Two Cities: Airlift

• Tier One Gateways: Thee years ago, there were only three cities in mainland China with direct non-stop flights to the U.S.—Beijing, Shanghai and Guangzhou.
• Tier Two Gateways—this year, China has 16 gateways with direct non-stop flights to the U.S., including: Beijing, Shanghai, Guangzhou, Chengdu, Kunming, Wuhan, Xian, Nanjing, Hangzhou, Changsha, Chongqing, Jinan, Qingdao, Xiamen and Shenzhen.
• Airport Development—a China is building 66 new airports, nearly all of which are in Tier 2 cities.

Trend No. 3—Rise of Tier Two Cities: Population

Key to the rise of China’s Tier 2 markets is the massive population of its secondary markets.

Trend No. 3—Rise of Tier Two Cities: Growth in Spending Power

• Tier 2 Growth: The GDP of Tier 2 cities is growing 9-10 percent per year, significantly faster than Tier 1 cities, which are growing at 6-7 percent.
• Tier 2 Affluence: The spending power in Tier 2 cities is soaring and by 2020, 46 percent of China’s affluent class will live in Tier 2 cities.
• Tier 2 Travel Spend: A major Q4 2016 study by C-trip and the China Tourism Academy revealed that the top three biggest spending markets on outbound travel are Tier 2 markets.

Travel Trade Overview

• Travel behavior, purchase patterns, long-haul experience, FIT vs. Group ration and advance booking window vary from region to region.
• The nuances of each region can only be truly understood by people from those regions.
• Knowledge of local customs, attitudes and behaviors ensure successful marketing of a destination.

Established relationships are key. (Said Leroux: “You have to be on the ground; you have to be proactive.”)

 

What Operators Wanted from us at IPW

Here’s what the 92 tour operators who were trained on the newly redesigned TourOperatorland.com (TOL) website found most useful on touroperatorland.com

1. Royalty-free hi-res photos from destinations. (There are 3000 of them on TOL)
2. Itinerary ideas for first timers and repeat visitors.(90 destinations itineraries-translatable in 50 languages)
3. ReceptiveFinder that lets them search for RTO’s that speak their language? (103 RTO’s vetted by NAJ staff each year)

 

TourOperatorland.com,  given a soft launch earlier, was just reintroduced to the tour and travel industry from throughout the world at IPW in Washington, DC by the NAJ Group, the same company that publishes INBOUND.

So, visit now. But before you take our word on just how helpful TourOperatorLand.com is, listen to and watch this endorsement from Sanya Hamilton, head of sales at AlliedTPro, one of the largest receptives in the U.S.

How is NAJ able to offer all of this information at no charge? Simple: the partners featured in TourOperatorLand pay to be there and receive trackable notices when operators download their content.

Visit the site now. You might want to see our “Steal From Us” video For destinations, attractions and receptives interested in becoming a TourOperatorland partner,  find more information here.

 

Where is British Tourism Headed in 2017? May as Well Ask Your Astrologist

Judging from what we heard from our British colleagues during the recent IPW trade show in Washington DC, along with a stream of surveys, the outlook for long-haul travel from the UK, which is still the number one overseas source market for the United States, is in a state of animated chaos—not unlike a tea party scene in Lewis Carroll’s “Through a Looking Glass.” In the past two weeks, we’ve read or heard reports that:

1. More than a third of Britons believe that last year’s vote (the June 23, 2016 “Brexit” vote) to leave the European Union (EU) has caused a hike in travel prices;
2. Brits seem to be turning more to “staycations”—decided to holiday in the UK rather than venture outside of the country;
3. Consumers have been hit with a two-fold increase in the price of travel, said TUI’s chairman, caused by a weaker pound and rising prices for holidays to favored destinations;
4. Data from the U.S. National Travel and Tourism Office (NTTO) showed that for the last month for which it has preliminary numbers, September 2016, travel to the USA from the UK was down more than 10 percent year-on-year, while figures released earlier from the UK’s Office for National Statistics (ONS) showed travel to North America (the USA usually accounts for 90 percent or more of the number) was down for the same two months by 1.5 percent; and
5. The inconclusive outcome of the June 8 snap general election called for by Prime Minister Theresa May which left no party with an absolute majority in Parliament is reflective of the inconclusive outlook for travel and tourism abroad.

More on each of the above.

1. A survey of 2,000 people by the Institute of Customer Service that looked at potential losses for the travel and tourism sector found that a total of 39 percent of those surveyed said that prices had risen since the decision to leave the EU, though that vote came June 23, 2016, more than a month after the same survey taken in May 2016.
2. The same survey said that the above has resulted in 39 percent of people opting for a staycation in 2017 vs. 36 percent last year. This seems to square, somewhat, with the results of a Travelodge survey which indicated that over half (55 percent) of Britons surveyed reported that they are holidaying at home this year because it is too expensive to go abroad and a staycation break offers better value for money
3. Speaking at a conference in St. Petersburg, TUI chairman Klaus Mangold said British holidaymakers are being hit by a ‘two-fold’ price increase, caused by the fall in the value of the pound and rising prices in holiday destinations. One reason for the increase was a decline in the value of the pound and rising prices in holiday destinations. TUI, he said, will have to pass rising costs onto customers following the pound’s collapse. Mangold noted that his company has already noticed Brits taking shorter holidays as a result of rising inflation, with vacations cut down by two to three days on average. Buttressing Mangold’s claims were figures released June 13 by the UK’s Office for National Statistics (ONS) which indicated that overseas holidays and imported computer games were both affected by the drop in the value of sterling. As the rate of inflation was pushed up to 2.9 percent in May 2017 last month from 2.7 percent in April – the highest since June 2013, and above the Bank of England’s 2 percent target.
4. On May 31, just hours after our last pre-IPW issue was published, NTTO issued a release indicating that preliminary figures for September 2016 showed UK visitors to the USA numbered 443,000*—down 10.1 percent from the 493,000* travelers who came to the U.S. from Britain. However, data released earlier by ONS indicated that 450,000 Brits traveled to North America (usually, visits to the U.S. comprise about 90 percent of the total) in September 2016—down just 1.5 percent from the 457,000 who visited in September 2015. (*U.S. figures are preliminary; all figures are rounded.)
5. As an atmosphere of controlled chaos seemed to settle upon officialdom in the UK—by some accounts, the government of Theresa May was about to fall at any moment—confusion over cabinet appointments seemed to show that tourism was receiving the sleight of hand. The job of UK tourism minister was given to Salisbury MP John Glen just days after it was suggested publicly that former incumbent Tracey Crouch had been re-appointed. Crouch, Conservative MP for Chatham and Aylesford, was instead given the position of minister for sport and civil society.

To be continued …

 

Brand USA issues Rosy Forecast for India. What a Surprise!

At the Brand USA Market Trends Update session held during IPW in Washington, D.C., U.S. travel suppliers heard mostly good news about the prospects for continued growth from the Number 9 overseas source market for inbound travel to the U.S. Here’s a brief outline of the presentation by Sheema Vohra, president and managing director, Sartha Marketing and Sartha Global Marketing, which is based New Delhi and represents Brand USA in India.

Current Consumer Trends in the Indian Market:

• India’s outbound travel market is expected to reach 50 million travelers by 2020.
• Growth is taking place in all segments—FIT, special interest and MICE, with FIT growing the fastest.
• Indian travelers are among the highest spenders on hotel rooms globally.
• Indian Millennials are looking for adventure, sports and entertainment.
• There is a growing demand for free and easy itineraries.
• Websites and social media rank high as travel influencers for consumers—though the travel industry gets maximum yield from traditional advertising.

• Among Indian travelers, there is a willingness to extend the duration of a holiday, spend more, explore the countryside, local art and culture and cuisine.
• Within a large segment of India’s young population, it is a generation to “connect and share.”
• There is a preference for shorter duration trips.

Cultural Nuances

• Travelers prefer to be with others who have the same socio-economic background—there are regional and ethnic differences among Indians
• Be aware of dietary factors; one will find vegetarians, as well as pork or beef eaters
• “Maximizers”—those who want to get the most of their trip and their spending—are found especially among first-timers, and they are multi-destinations travelers
• Take a flexible approach with their itineraries
• Much of their trip is relationship driven; they will shop for friends and family
• Everyone is looking for value for their money—all segments, from the budget traveler to the high spende

 

Tour Operator says German Travelers “Have Gotten Used to a Clown in the Whitehouse.”

About the only sure bet on the inbound market from Germany for the rest of 2017 and on into 2018 is that it will perform in a range that will, at best, be flat—i.e., it probably will not increase vs. 2016. Indeed, “flat” seems to have been the consensus opinion among the operators and other travel professionals we spoke to during the recent IPW 2017 in Washington, DC. Such, too, is what one gleans from a review of German operators at IPW by the respected German travel trade publication, FVW.

Early on at IPW, a Brand USA presentation on key markets suggested that “intent to travel” to the USA by Germans in 2017 was hurting, but not that much—it was off vs 2016 in the range of two to three percent, according to Carroll Rheem, BUSA’s senior vice president for analytics in research.

One operator we spoke with speculated that distaste for the USA because of the rhetoric and policies of President Donald Trump might be offset by a slightly stronger euro that fell from $1.39 vs. the U.S. dollar in May 2014 to $1.05 in March 2015 and, lately, has hovered around the $1.10 mark. Last week, it crept up as far as $1.13, with some economists expecting it to edge up even more.

Another far-out guess we heard was that bargain prices for Turkey—a once popular destination that suffered from acts of terrorism that resulted in the deaths of German tourists—are now so attractive that some Germans might forego a long-haul visit to the USA for a short-haul trip to Turkey. But this was a minority opinion. The FVW report on its survey of operators at IPW looked like this:

• Despite widespread forecasts that foreign visitors could be scared off the strong dollar and by President Trump’s rhetoric and policies, such as the travel ban on seven Muslim countries, it is unclear whether there is any real ‘Trump slump’ or not.
• Hardly any German tour operators admitted any decline in bookings or sales revenues for the USA this year, with a mix of stable figures and moderate growth. With Canada continuing to boom, North America is proving popular this year overall.
• Fabio Negro, North America product manager of theFTI Group, told FVW, “We’re very satisfied with USA trends and will close the year ahead of last year. Campervans and car rentals are going well, and there is only slightly reserved demand for coach tours.”
• Robin Brückner,TUI’sNorth America product chief, declared: “The USA has lost none of its pull. We are seeing good demand and expect the USA to close the business year positively.”
• Gerrit Seefeld, senior product manager forNeckermann Reisen, said: “The season has started well for the USA. The dollar exchange rate is generally influencing booking behaviour more than the political situation.”
• On the other hand, Per Illian, product manager ofDER Touristik, acknowledged, “At present we are experiencing more holding back of bookings than at the start of the year. But price discounts and incentives from many destinations are driving late sales.”
• Tilo Krause-Dünow, managing director ofCanusa Touristik, said: “We’re very satisfied with the single-digit increase in US sales. Despite the fairly robust dollar, the prices are not completely off track.”
• Holger Howind, product manager ofDiamir Erlebnisreisen indicated that “Canada is going well and the USA is good, but not as good as we hoped for. Customers are switching more often to other destinations due to the political situation.”
• Rüdiger Berger, managing director ofExplorer Fernreisen, was hardly optimistic, telling FVW, “The USA is slightly down. We expect US business will close at last year’s level or with a slight decline.”
• Friedrich Roth, chief operating officer ofCRD, observed that “Requests and bookings for the USA are slightly negative. We expect a decline for the (overall) tour operator market, but that should not be over-interpreted due to the strong previous years.”
• Said Timo Kohlenberg, president ofAmerica Unlimited, “I think the market is clearly heading downwards. At trade fairs and in social media we are experiencing a strong rejection of the US president. We’re responding to this with strong marketing measures.”
• Dirk Büttner, owner of Argus Reisen, was blunt about the outlook: “We lost some bookings in January and February. But people seem to have got used to the clown in the White House in the meantime.”

 

PART TWO OF THE CHINA LUXURY TRAVELER 2017 REPORT

Luxury travelers have an average accommodation budget of around 3,800 yuan ($560) per night, while 32 percent have a budget of over 5,000 yuan ($735) per night. Great service is the main point of consideration, while whether or not the room has a good view is another.

The Chinese luxury traveler have an average accommodation budget of around 3,800 yuan per night. There is also a slight 7 percent increase in the accommodation budgets of the Post-80s generation, coming in at around 3,325 yuan ($490) per night. Thirty-two percent of luxury travelers have accommodation budgets of over 5,000 yuan ($735+) per night.

At 49 percent, provision of personalized service is the most important factor for luxury travelers when choosing a hotel. Second to sixth place are all hardware factors that can be divided into requirements for the room itself: a good view (48 percent), clean facilities (44 percent), comfortable bedding (34 percent); and requirements for the hotel as a whole: good location (44 percent) and good style (36 percent). Word of mouth recommendations (17 percent), value for money (15 percent) and membership benefits (10 percent) are of secondary concern to most luxury travelers.

Local cuisine is the most popular style of cuisine: Local dishes (56 percent) are the cuisine of choice for Chinese luxury travelers, followed by Japanese and Cantonese fare with 32 percent and 31 percent respectively. Cuisines that rank in the top ten include French, Italian, and Sichuan, while hotpot and Korean cuisine did not make the list.

Private Dining Facilities are Increasingly Prioritized for Private Banquets and Business Dinners: The percentage of travelers who consider a hotel’s private dining facilities to be important and very important have surpassed those who consider private dining facilities to be unimportant and very unimportant (53 percent. Fort-seven percent of Chinese luxury travelers mainly use a hotel’s private dining facilities to host private banquets (68 percent), business banquets (24 percent), and business dinners (19 percent).

Accommodation sharing still in its early stages of development: Chinese luxury travelers have not been affected by the popularity of accommodation sharing. Private home-stay options like Airbnb are selected by only 25 percent of respondents, trailing behind the boutique hotel (48 percent) and the cruise (45 percent), two much more traditional vacation accommodations. Sixty-nine percent of respondents say they are ambivalent towards or will not explore home-stay options in the next three years.

Air China and Emirates are the most popular domestic and international airlines respectively: When choosing airline memberships, Air China has been an overwhelming favorite (54 percent) for three consecutive years, with China Southern Airlines (22.4 percent) and Cathay Pacific (21.9 percent) coming in after. Among foreign airlines, Emirates and Singapore Airlines both run ahead of the pack at 23 percent and 22 percent respectively.

Customized travel services are experiencing a surge in popularity, with agencies placing a strong emphasis on the quality of travel itineraries to retain customers.

More than half of luxury travelers (58 percent) have experienced customized travel services. Fifty-five percent of travelers report that the provision of such services is why they choose one agency over another.

Luxury travelers are partial to travel agencies that provide well-designed itineraries, personalized services, and are actively problem-solving, placing 59 percent, 55 percent, and 49 percent of the emphasis on each aspect respectively. The emphasis placed on the problem-solving ability of travel agencies has experienced an 11% increase in two years.

The things that respondents felt least satisfied with include poorly-organized itineraries (29 percent), bad food (24 percent), and tour guides not meeting expectations (21 percent).

Hurun Best Outbound Luxury Travel Agencies 2017: Agencies in the “Hurun Mainland China Outbound Luxury Travel Agencies 2017 Top 12” ranking include 8 Continents, Diadema, D-Lux Travel*, CITS Amex, HHtravel, My Tour, Magic Travel, Ctrip, Zanadu, CITS, CTS, and CYTS. (Agency names are listed alphabetically; * denotes newcomers).

Agencies in the “Hurun Hong Kong Outbound Luxury Travel Agencies 2017 Top 6” include Wincastle Travel, Cathay Pacific Holidays, Charlotte Travel*, American Express, Swire Travel, and Westminster. Agencies in the “Hurun Taiwan Outbound Luxury Travel Agencies 2017 Top 6” include One Style Tour*, Seascape Escape, Let’s Travel*, American Express, International Travel Information Services, and Lion Travel. (Agency names are listed alphabetically; * denotes newcomers).

Last year’s most memorable travel destinations: For their most memorable travel destination last year, a staggering 13.5 percent of respondents chose Antarctica, while the United States (7 percent) and Fiji (6 percent) followed. In the past three years, Antarctica has ranked first consistently. Fiji is new to the list and shows the Chinese luxury traveler’s bias towards Island with Beach. Thailand, particularly Phuket, holds a special place in the heart of the Post-80s respondents, surpassing last year’s favorites Japan and France, as their destination of choice. Japan, South Korea and Europe all showed sharp declines among this demographic, as the Post-80s generation look beyond traditional destinations in pursuit of exotic new adventures.

Over a third (37 percent) of respondents experienced their most memorable trip with their family or friends. The average number of travel companions was three. The average number of days spent on this trip was 10. Over a third (37 percent) of respondents do not have pre-planned holidays. Those who plan on travelling during national holidays usually prefer the Chinese New Year holiday (24 percent).

Travelers prefer to fly business class (48 percent). When planning travel itineraries with travel agencies, over half of travelers prefer fine-tuned packages (27 percent) or fully-customizable packages (23 percent). Standard packages fell from 2015’s 37 percent to 26 pecent, as they are increasingly unable to fulfill the needs of luxury travelers, 64 percent of which prefer to decide their travel destination.

 

Luxury Travellers Like to Buy Cosmetics and Local Specialties: The average luxury traveler has an annual family consumption budget of 1.73 million yuan ($255,000), of which travel expenses take up 22 percent of this total, coming in at around 380,000 yuan ($56,000). On their travels, respondents spend an average of 220,000 yuan ($32,000) shopping.

Chinese luxury travelers like to purchase cosmetics (45 percent), local produce (43 percent), bags and suitcases (39 percent), clothes and accessories (37 percent), and jewelry (34 percent). Other than local produce, the four other most popular purchase categories are all dominated by female consumers. When compared to numbers two years ago, there is a noticeable increase in the percentage of travelers who bought cosmetics. With regard to the purpose of the purchase, 76 percent of purchases are personal, while 47 percent of purchases are gifts, and 4 percent are purchased on the behalf of others.

Travel Products are one of the Most Common Gift Categories Being Given Today: Travel has always been the favorite leisure activity of the high net-worth community, though it has been surpassed once in 2008 by swimming. Travel products are one of the most common gift categories given today. According to the Hurun Research Institute, travel products rank among the top ten when it comes to best gifts for men under 20,000 yuan; among the top five when it comes to best gifts for women under 20,000 yuan; and in second place when it comes to gifts for the elderly, falling just short of health products. (According to the “Hurun Best of the Best – Chinese Luxury Consumer Survey 2017”)

High Net-Worth Individuals’ Interest in Purchasing Second Homes: In the past year, high net-worth individuals’ interest in purchasing second homes has increased drastically by 60 percent. Over a quarter of respondents prefer to buy second homes in Sanya, while 8 percent of respondents prefer the second-place location of Hangzhou. And 7.7 percent of respondents prefer Yunnan, coming in at third place. There is a marked increase in those who prefer to buy second homes overseas, from last year’s 20% to this year’s 33%. Of the 33%, 15% prefer European locations while 12 percent prefer North American locations. (According to the “Hurun Best of the Best – Chinese Luxury Consumer Survey 2017”)

Scale of the Chinese high-end consumer market: According to data collected in May of 2016 by the Hurun Research Institute, there are approximately 3,380,000 individuals in mainland China with 6 million yuan ($883,000) in assets. There are approximately 1,340,000 millionaires, 89,000 billionaires, and 57,000 individuals with assets totaling $30 million. As the “2016 Hurun Rich List” reveals, 2,056 individuals have assets valuing 2 billion yuan ($294 million) and above. If the “hidden billionaires” are included, mainland China has around 6,000 individuals with assets totaling 20 billion yuan and above. The “2017 Hurun Global Rich List” shows China surpassing the United States for amount of billionaires for the second time, with 609 individuals owning over a billion USD in assets. Of the 609, 501 are in mainland China, 72 in Hong Kong, 1 in Macau, and 35 in Taiwan. Beijing also surpasses New York City for the second time to become the city with the most billionaire inhabitants. If the “hidden billionaires” are also included, China has around 1,200 billionaires with over a billion U.S. dollars in assets.

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Notes on Methodology:  Hurun Research Institute carried out the survey between March and May in association with three of China’s leading luxury travel agencies: Diadema, Magic Travel, HHtravel and 8 Continents. The respondents to this survey were drawn from the ranks of China’s high-end tourists, comprised of 334 aggregate samples from 12 mainland Chinese cities, including the first-tier cities Beijing, Shanghai, Guangzhou, and Shenzhen, and the second-tier cities Tianjin, Nanjing, Hangzhou, Chengdu, Chongqing, Qingdao, Dalian, and Fuzhou. Respondents average 42 years of age and 41 percent are male, with per capita wealth of nearly 22 million yuan ($32,000). Forty-one percent of them are male. Their wealth mainly comes from investment (49 percent), salary (37 percent) and company ownership (21 percent).  Seventy percent of them are married, and half have one child, while 27 percent have two. On average, they have worked or studied abroad for 1.4 years. They were more enthusiastic about shopping on their travels than in 2015, with 220,000 yuan of their average travel budgets of 380,000 yuan devoted to retail therapy, up 57 percent year-on-year.

Hurun Report, ILTM and GHC Asia also partnered to survey the most popular luxury travel agencies for overseas travel. From April to May 2017, senior management from 56 luxury hotels around the world were surveyed and posed the question, “In your opinion, what are the three best Chinese (including the mainland, Hong Kong, and Taiwan) travel agencies for overseas travel?”

This survey finds that outbound travel remains popular, with Europe and Southeast Asia being preferred destinations and island holidays being the biggest dark horse in overseas travel trends last year. Resorts were the most popular type of luxury accommodation and had an average cost of nearly 3,800 yuan ($560) per night, with 32 percent of hotels charging more than 5,000 yuan ($735) and 60 percent more than 3000 yuan ($440) per night. The quality of service provided was the most important factor when it came to choosing a hotel. The hotel’s private dining facilities have also received attention, and local cuisine was the most popular style of cuisine in hotel restaurants. Accommodation sharing is still in its infancy in the high-end market, as private home-stay options like Airbnb are only used by 25 percent of respondents. Customized travel services are becoming popular, with agencies placing a strong emphasis on the quality of travel itineraries to retain customers. Luxury travel trends in the next three years show a rise in the adventurous spirit of tourists. The seasons have a significant impact on the choice of destination. Cosmetics, local produce, bags and suitcases, clothes and accessories, and jewelry were the Chinese luxury travelers’ favorite purchases.

 

A Picture is Worth … IPW Part II

Day Three: The first day of face-to-face business had INBOUND’s photographer making stops at the BRAND USA press conference, and taking part in the day-long Media Marketplace—sponsored by CityPass—along with a look-in at the opening sit-down luncheon for some 6,000 delegates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Day Four: A morning full of press conferences; a show-biz luncheon sponsored by New York City & Company and Broadway Inbound; and face-to-face business appointments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Day Five: On the exhibit floor, a stop by the closing luncheon, and the closing event at Nationals Park in Washington, D.C.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico: Performs Above Low Expectations

Probably, as the Data Indicate Fall-off due to Trump, Currency Exchange Rate not that Serious: Even though one public opinion poll in Mexico had President Donald Trump registering an approval rate among Mexicans in single-digit percentages and even though the Mexican peso has shrunk in value against the U.S. dollar in recent years (from about 13 to the dollar three years ago, ballooning to just over 18 to the dollar this month), it appears that Mexican travelers still plan to visit in the United States this year and next—even if the intent to do so is off by some percentage points, according to the latest proprietary Brand USA research on the matter.

In Brand USA’s Mexico Market Trends Update presented during IPW in Washington, DC, the outlook all came down to one very important table:

It would be a stretch, statistically speaking, to translate the first two sets of numbers in the above as a significant decline, especially in the wake of several months of “gloom and doom” anecdotal accounts on the market situation in Mexico that have appeared in the travel trade news media there and in the United States.

One reason Mexicans like to visit the USA is that so many of them have family and friends here.  “In 2014, more than 11.7 million Mexican immigrants resided in the United States, accounting for 28 percent of the 42.4 million foreign-born population—by far the largest immigrant origin group in the country.” (MigrationPolicy.org, March 17, 2016). Millions more of Mexican descent are first and second generation U.S. residents or citizens.

Suzy Shepard, manager, global trade development at Brand USA—she is responsible for Brand USA and its partners, prospects, and international representation firms in Mexico, Central America, and Brazil—touched upon other reasons why travelers from Mexico like to visit the U.S. We’ve outlined part of her presentation below.

Mexico—Travel Trade Trends

• Mexican travelers view the U.S. as a convenient and familiar destination choice. It also has great and plentiful airlift.
• Key words used to describe the U.S. from Mexican travel businesses: “convenient,” “familiar” and “fun.”
• Annual vacations/holidays are the most common trip type.
• The USA means fun and excitement, annual vacation and VFF.

Improving DMO Partnerships

Interactions:

Trade executives prefer contact with local DMO offices. (Hint—it’s a good idea to visit them in Mexico.)

—Ease of communications (language and time zone).

—Deeper knowledge of consumer behavior and travel trends.

Top destination and education tools:

—Most trade professionals identified FAM trips and off-site seminars as the most effective tools for destination training.

—Online training programs, interactive webinars and in-offices visits from suppliers or DMOS were also rated highly effective by a smaller majority.

Most important marketing tools and resources:

—A majority of trade professionals identified a variety of marketing resources as highly important … from sales and discounts to web content to print brochures.

 

HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry

Gold Medal and Travel 2 have announced their new UK B2B sales senior management team following the departure of five senior figures the previous week. Colin Currie has been appointed head of sales B2B, Gold Medal and Travel 2. Previously the senior key account manager, the role will see Currie lead the sales team across both brands nationwide. Currie’s direct reports will include the team of eight-strong key account managers. Karen Fletcher, formerly wholesale and Gold Medal agency sales manager, has been promoted to head of trade support for both Gold Medal and Travel 2 overseeing all sales support operations across the Preston and Glasgow offices. The actions follow the departure of five senior figures last week, including managing director Andy Freeth.

 

 

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Sebastian Ebel (left) is handing over his interim post as head of TUI Germany to Polish-born Marek Andryszak (right) as of July 1. Ebel took over the TUI Germany role in addition to his TUI group-level responsibilities in mid-2015 in place of Christian Clemens, but only on an interim basis. He is responsible for the company’s Central Region (Germany, Austria, Switzerland, Poland). The turnover of responsibilities means that Andryszak, 44, will be in full charge of the German market leader just six months after moving to Hannover. Previously, he was managing director, TUI Poland.

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55 Destinations, the leisure operator of the Alatur JTB group in Brazil, has new sales executives. For the Rio de Janeiro market, they have retained Fernando Moreira (left), and for São Paulo, Rogério Niita  (right). A veteran of more than four decades in the tour and travel industry, Moreira he has served tenures with Lan, Air Europa, ADVtour, Receptive Travel Service and other companies. Niita, has had eight years of industry experience in Japan. He also had more than 20 years’ experience with the leisure operators Panexpress and Nascimento in São Paulo.

 

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Air Berlin and its offshoot, Schwechat, Austria-based Niki airlines have appointed two new sales executives. At Niki, Armin Bovensiepen (left) has taken over the position of chief commercial officer. He follows Julio Rodriguez who, according to the company, left at his own request. Rodriguez had switched from the Air Berlin sales operation to the newly formed holiday airline in March. At Air Berlin, sales in Germany, Austria and Switzerland will be managed by Tim Howe Schröder (right). The former CEO of Ryanair was appointed vice president, corporate sales last month.

 

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John Lawn has been named the new CEO of Hershey Entertainment & Resorts Company. He succeeds Bill Simpson, who is retiring at the end of the year and will hold the title of CEO Emeritus until his retirement. This announcement is the result of the succession plan established when Simpson announced his retirement in June 2016 and Lawn was named president in October 2016. Lawn joined HE&R in 2004 as director of food & beverage at Hersheypark Entertainment Complex. He rose through the ranks, become chief operating officer in June 2015 and president in October 2016.

 

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In France, the tour operator Nationaltours continues to organize its sales structure and has made  Vanessa Lesiourd project manager (chef de projet) responsible for sales promotion. Lesiourd joined Nationaltours in 1999 and has held the position of product manager for several destinations, including South Africa, Vietnam, Portugal, Madagascar and others.

 

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Mike Testa, the current chief operating officer of Visit Sacramento, has been named its next president and CEO. Testa has been with the organization since 2001, when he was hired as director of public relations. He will take over as CEO on July 1, following the retirement of Steve Hammond, who has been with the bureau for 18 years.

 

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Kristen Wenger has been promoted to the post of director of communications for the Pittsburgh CVB from her post as manager of communications, where she had served for five years. Wenger began working at the bureau since 2000 as a public relations liaison.

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UK-based Back-Roads Touring has announced the appointment of a new global general manager, Daryl Raven, who joined the small group specialist earlier this year having previously held roles with Tourism Holdings and Magic Travellers Network in his native New Zealand, and ICEF in Germany.

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Jane Atkins has joined Shearings Leisure Group as strategy director, and in her new role will report directly into Richard Calvert, chief executive of the group. Atkins came to the post from Superbreak UK, where she was international sales director. Meanwhile, Caroline Brown has decided to step down from her role as commercial director of Shearings Holidays.