NOTE: The INBOUND Report will not publish next week. We will resume publication with the issue of July 13. Publication will be biweekly until after the Labor Day Holiday in the United States.
JTB Chosen to sell Brazilian tour Operator CVC in the U.S.
The recently announced move by Brazil’s largest tour operator/travel agency—CVC—that it has retained JTB Americas to serve CVC’s customers New York, Florida and California in the United States, suggests that it is trying to expand its footprint in both North America and South America through the synergy brought about by its partnership with JTB and the latter’s global network, which includes subsidiaries in Brazil.
In making the move, CVC ended its contract with US Travel, a receptive operator that bills itself as “the largest tour operator in New York (City) that exclusively serves Brazilian customers” and whose own product portfolio is almost exclusively within the confines of New York City. CVC also ended its contract with Orlando-based Alltour.
Judging by the remarks of Fábio Mader, CVC’s director of international products, the changeover to JTB took place around the same time as the company was close to acquiring the operator Grupo Trend, one of the largest tour operators in Brazil. It also has a substantial presence in Orlando and southern Florida.
According to a report in the Brazilian travel trade publication, PANROTAS, Mader said “as the contracts with previous suppliers were to win, CVC has carried out a competitive process in these regions, that has happens every few years.” Several local suppliers participated, including the previous suppliers (US Travel and Alltour), and JTB was the winner “considering quality standard, prices and service provision recommended by CVC.”
The Japanese Connection: JTB is uniquely positioned to sell and service the products of CVC which sells both domestic and international tours and packages in Brazil. JTB’s major Brazilian subsidiary Alatur JTB, has a substantial presence in the country and has sold the country to Japanese travelers for more than 25 years.
Brazil is home to the largest Japanese population outside Japan. One 2013 report said that there were approximately 1.8 million people of Japanese descent in Brazil. The first Japanese immigrants arrived in Brazil in 1908 and they have had a solid presence in the country’s business and industrial sectors for decades. Currently, Japan is Brazil’s sixth largest trading partner (behind China, the U.S., Argentina, Netherlands and Germany) and it sends a sizable number of corporate and MICE travelers to Brazil through Alatur JTB, which has been voted the best corporate travel agency in Brazil.†
† According to a 2016 study by PANROTAS
UK Arrivals to USA down only Two percent through April 2017
It is unclear which is the most important variable of three—Donald Trump as U.S. president, the post-Brexit impact, or the weak British pound sterling—is affecting outbound travel from the UK but. no matter what, it seems that the latest data on travel to North America by UK residents indicates that it is going nowhere. That is “nowhere” as in a zero percent change in the number of departures to North America (about 90 percent of the total is traffic to the USA) in April 2017 vs. April 2016.
What makes the figures for April 2017, as just reported by the UK’s Office for National Statistics (ONS), significant is that they are the first monthly numbers that would reflect the impact on bookings of Donald Trump’s presidency, which began on Jan. 20, 2017, because January-into-February is the period during which travelers from many country markets, including the UK, make holiday plans.
Here are some highlights from latest ONS release:
- April 2017: UK departures to North America were 360,000 (vs. 359,000 in April 2016) = Zero percent change (Overall, UK residents made 6.1 million visits abroad in April 2017—just 2 percent more than in April 2016.)
- Latest three months: 840,000 (vs. 804,000 in 2016) = Up 4 percent
- Year to date for 2017: 1,070,000 (vs. 1,093,000 YTD in 2016) = Down 2 percent
- Latest 12 months (May thru April): 4,110 (vs. 4,100,000) = Zero percent change
The following table, which covers a five-year window of travel activity to North America by Britons, helps to put the April numbers into perspective.
So, what’s the Outlook? The data above might suggest that the only variable that is new to the mix of those that have an impact on UK travel to the United States is the presidency of Donald Trump—something that caused Graham McKenzie, a veteran UK travel journalist to speculate upon when he closed out a column he wrote for TravelMole about the recent IPW in Washington, DC. Said McKenzie: “If one thing or one person dominated IPW17 it was President Trump. His travel ban efforts, his stated intent to get rid of Brand USA and his ability to tweet at the most inappropriate times (like a matter of hours after the London Bridge incident) does absolutely nothing to encourage visitors to the USA … Will people still travel to the USA? Of course, they will but the numbers may not improve until November 2020.”
Up in the Air: Hainan to Launch Nonstop NYC-Chonqing Service this October
New Air Service—Near Future
Hainan Airlines will launch a nonstop service between Chongqing, China and New York (JFK) on October 20, 2017, marking the first non-stop service between a city in the western part of China and New York. Beginning October 20, round-trip flights will be available twice each week. The new route departs Chongqing Jiangbei International Airport on Wednesdays and Fridays at 10:00 pm (Beijing time) and arrives John F. Kennedy International Airport at 12:50 am (U.S. East Coast time) the following day. Return flights depart John F. Kennedy International Airport on Thursdays and Saturdays at 2:50 am (U.S. East Coast time) and arrive Chongqing Jiangbei International Airport at 6:35 am the following day (Beijing time). The new service between Chongqing and New York is Hainan Airlines’ 13th direct service offering to North America.- Beginning December 14, 2017, Thomas Cook Airlines is extending its Manchester-New York flight to a year-round service. Three additional flights to John F Kennedy airport will launch, making it the airline’s first full service to the U.S. from Manchester. Current U.S. routes from Manchester include Miami, Orlando, New York, Boston, Las Vegas, Los Angeles and San Francisco.
- In the summer of 2018, Condor will have a new U.S. destination in its flight plan: Phoenix, Arizona will be accessible beginning May 18 from Frankfurt nonstop on Mondays and Fridays at 5:35 pm. In return, Condor is no longer offering flights to San Diego in 2018. The reason: Lufthansa has announced a new route on this route. Starting next summer, Lufthansa has said it will fly between San Diego and Frankfurt, Germany, five days a week.
- WOW air is scheduled to add yet another route between its Reykjavik/Keflavik based in Iceland and North America beginning July 13 when it plans to launch service to Chicago O’Hare four times a week (Mondays, Wednesdays, Thursdays and Saturdays). Connections to a number of European cities are available from Reykjavik/Keflavik.
New Air Service: Just Started
- Air Canadalaunched its latest long-haul service from Vancouveron June 8, a week after it started service from Vancouver to Frankfurt. The carrier now offers a daily service between Vancouver and Taipei Taoyuan. Air Canada becomes the first North American-based carrier to serve this route, with China Airlines and EVA Airways already connecting the two cities. †
- TAP Portugal has expanded its operations to include Toronto Pearson Apart from Lisbon. †
- Norwegianhas begun three new transatlantic routes from Edinburgh and the New York City metropolitan area: to Stewart Airport 65 miles north of Manhattan in New Windsor, N.Y. on June 15; to Providence, R.I. on June 16; and to Hartford, Conn. on June 17. †
- On June 14, Air Europa added a three-times-a-week flight from its Madrid hub to Boston—its third U.S. destination. The airline already flies daily to New York JFK and Miami from Madrid. †
- Beginning June 18, Air Transatlaunched its longest flight—a connection between Montreal and Tel Aviv. Air Transat will link the Canadian and Israeli cities twice-weekly (Wednesdays and Sundays). Also, on June 22, Air Canada began serving the same route twice-weekly (Thursdays and Sundays). †
- On June 16, WOW airadded Pittsburghto its network of routes in North America. The new service offers five weekly flights from Reykjavik/Keflavik. No other carrier offers service between the two destinations. Also, Condor began flights between Pittsburgh and Frankfurt began on June 23. †
† Source: anna.aero
Agency Activity Suggests German Industry is Putting its “Lost Year” in the Past
It doesn’t seem that long ago that the Nuremberg-based marketing research firm GfK reported, when it released monthly data on German travel agency sales for the year ending Oct. 31, 2016, that “the travel agency sector has effectively lost a year of growth.” The latest GfK monthly report on agency sales—it’s a representative sales analysis of 1,500 agencies across Germany—for May 2017 shows a mixed but slightly positive outlook for an industry that is recovering from a “lost year.” Consider the following, a reported by the German travel trade publication, FVW:
- Travel agencies in Germany increased their overall sales by 4 percent in May following an 8 percent decline in April.
- Bookings for summer 2017 remained stuck at last year’s levels in May after mostly good increases in recent months. This left the underlying cumulative growth for this summer at up 3 percent—the same level as in April.
- Looking at months of departure, July (up 4.6 percent) and September (up 8.8 percent) both show increases, but August—it is the peak travel month for nearly every European nation—was 3.2 percent lower.
- May sales closed with a 13.8 percent decline, but bookings for June were up by 20.6 percent due to this year’s later spring holidays in parts of the country.
- There was a boom in early bookings of winter 2017/18 holidays last month. Sales revenues for holidays next winter soared by 21 percent compared to May 2016, and accounted for a quarter of total sales revenues last month.
- The key factor in this surge, according to GfK, is the continuing policy of leading tour operators to open up their winter programs for travel agency bookings ahead of their official brochure presentations and earlier than in previous years.
- This year’s rising sales following stagnant business in 2016 has improved the mood and expectations in German travel agencies, according to the latest monthly FVW sales climate index, as nearly 40 percent of participating travel agencies expect improving demand in the next 6 months—10 percentage points higher than last month.
Which U.S. Destination is No. 1 for UK Holidaymakers?
And other Verities of the UK Market: A new and expansive report by Thomas Cook which tells us that Orlando is the top long-haul destination for British travelers on vacation also details today’s five categories and seven ages of travelers, as well as a host of other details in between that help to make selling to the UK, which is still the number one overseas source market for inbound travel to the USA, at least a few percentage points easier.
One of the points that stand out—there are more than a few—is that more than a fifth of a key demo (the 25-to-34 year-old age group) don’t start planning and researching their holiday until three weeks out. Some of the more useful info bytes in the Thomas Cook Holiday Report 2017 follow.†
- The long-haul market continues to grow in popularity. Despite some fearing a ‘Trump slump’, bookings to the US are good and even compared to a particularly strong 2016, it is the fourth most popular destination with bookings up 10 percent for summer ‘17. Flight-only bookings to Boston have increased 116 percent year-on-year, while “La La Land” (Los Angeles) has seen a 33 percent increase.
- Parents are also doing their bit to boost long-haul destinations and they’re taking the kids to destinations you might not expect. Having travelled abroad with the kids since they were very little, they’re now happy to expand their horizons and travel further afield.
- Summer 2018 holidays launched in March; the sales to date show the same top four compared to summer 2017 sales this time last year. Bigger trips, like Orlando, take a lot of planning so it’s no surprise that holidaymakers want to get this booked early so they can save for theme park tickets.
Top Destinations for 2018
Note: The top four are the same top destinations for 2017.
- Although a proportion of holidaymakers without kids do book last minute, particularly the Independents, perhaps more than you think are planning ahead. In fact 37 percent of those with children left booking their main overseas holiday until a month or less before departure, compared with 23 percent of those without children. Do parents have less time to plan than their child-free peers?
- Planning a holiday is something families do together. 75 percent of parents ask for their children’s opinion when planning a holiday and 85 percent of kids suggest places they’d like to go.
- Timing is Everything I: January is still the peak month for holiday bookings – almost one in five of Thomas Cook’s package holidays are booked during the first month of the year. Not only does everyone want to get Christmas out of the way before thinking about their next trip away, but tour operators also respond with early booking offers and advertising. Are the deals driving the bookings?
- Timing is Everything II: Time spent searching for holidays slowly gives way to time spent actually booking them and transactions overtake searches around 5pm, before peaking between 8-10 pm. Is it a coincidence that this is the time when you are most likely to have a glass of wine in your hand?
Here are the seven ages of holiday that Thomas Cook thinks everyone is likely to take in their lifetime:
A Note on the Numbers: The majority of statistics in the Thomas Cook Holiday Report, unless stated otherwise, are based on UK tour operator and flight-only bookings up until May 2, 2017 and a survey of 2,635 UK customers in April and May 2017.
Survivor Japan? H.I.S. Leases Entire Island to Create Exclusive Experience for their Clients
As outbound travel numbers from Japan to the United States remain stuck in a rut, the Japanese travel trade is sustaining a recovery in overall outbound travel volume and, at the same time, migrating to online travel bookings away from traditional travel distribution channels by consumers.
Agencies have begun to “go experiential” to hold on to their customers. Some notes from a recent item by the Nikkei Asian Review:
- H.I.S. reserves an entire uninhabited island off the coast of Cairns, Australia for its package tour customers. That is, travelers have an option to visit an inhabited island off the Australian city of Cairns where sea turtles can be found. The company reserves the entire island so customers can have the exclusive experience all to themselves. H.I.S. also reserves early morning hours at a local zoo for an option to visit and experience the facility exclusively.
- In Singapore, JTB reserves after-hours slots at an aquarium for tour participants so they can have a private dinner while viewing fish.
The actions taken by the two giant travel agencies come as overall outbound travel is staging a recovery from a four year slump. In 2016, the number of Japan’s outbound travelers grew 5.6 percent to 17.1 million, breaking the consecutive declines from the 2012 peak of 18.4 million.
Despite the recovery, JTB’s sales from its overseas travel business dropped 3.8 percent from a year ago in the year ended this past March. At the same time, Nikkei reported, the total value of travel reservations made on the Japanese website of Expedia, the world’s biggest online travel agency, for the first time exceeded $1 billion in 2016, underscoring the growth of online reservations in a country whose residents have been more resistant than those of other nations in making the shift to online travel booking.
Regardless of the increase in overall outbound travel, the number of visitors making the long-haul trip to the United States have hardly budged (a six-tenths-of a-percent change) in during the five year-window of 2012-2016.
Tourism Pro Profile: – Jim Deliman, director of travel industry sales for Earl Enterprises
Tell us a bit about how you got started in the tourism industry.
In 1989 I worked as an entertainer and eventually a cruise director for Carnival Cruise Lines. I loved my time on the ships and it really gave me a lot of insight into how the tourism industry works. I spent over 5 years on ships and wouldn’t trade those experiences for anything.
What is your current job and what are your primary responsibilities?
I am director of travel industry sales and marketing with Earl Enterprises, owners of Planet Hollywood, Buca di Beppo, Earl of Sandwich and Planet Dailies restaurants. I am based in New York City at the Planet Hollywood and Buca di Beppo location in Times Square. I manage national travel industry accounts for the north east coast. I attend trade shows selling our brand nationally to top tour operators. I work in the NYC market to create partnerships with top attractions, Broadway and other theatrical productions and make sure as many people as possible experience the fun and excellent food we offer.
What are some of the changes you have seen since you began your career?
Packaged travel has changed quite a bit. There was a time when most operators dealt with pre-formed* groups almost exclusively. Now many operators and coach companies are more flexible with their passengers’ travel plans and we are constantly adapting to make sure we are in front of mind for those travelers.
* Pre-formed groups are ones made up of people who belong to a club, association, or other pre-existing organization. They communicate regularly with their members and schedule fairly regular events that they attend together
What tourism trends are you seeing that will impact your job and how you work in the next 2 years?
There are so many apps where people can book travel, attractions and restaurants. Finding ways to remain a part of that wave are super important to the tourism industry, especially in a major city like New York.
It’s vacation time – where do you go?
One of two places; We love going to vineyards, most likely either in the Finger Lakes or the North Fork of Long Island or to the beach. We love the beaches of North Carolina!
What is your favorite app and tell us a bit about it.
Well, this may seem a bit strange, but as an NYC commuter, the NYC Bus Tracker app is a life saver. It lets you know where in the route your city bus is and how many stops away. Really helps when planning your daily commute. Not very exciting, I know!
What is your favorite tradeshow and why?
SYTA – Student and Youth Travel Association Annual Conference. Student travel is so important to form well rounded individuals. Taking school trips when I was a student helped make me the person I am today. To be involved with so many people who have the common goal to provide safe, quality travel for these groups of young people is just amazing. I have life-long friends that I met at my very first SYTA conference so MANY years ago.
What advice do you have for someone just getting started in the tourism industry?
Be a sponge. Learn everything you can at your job. Soak it in and be great at it. Learn the ins and outs of the industry and make sure to learn from those who have spent a lifetime in this industry. Be passionate about what you do. Take advantage of any and all networking opportunities and put yourself out there; meet people, introduce yourself. If you have business cards, ALWAYS have them with you. Sometimes you can build business just by striking up a conversation with someone at the grocery store or tasting wine at a vineyard!
(This interview was conducted by Sally Berry, tourism sales and marketing manager at the Corning Museum of Glass, and was first featured on her excellent blog www.theattractionscoach.com.)
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Anna Perrott has been appointed commercial, sales and cruise manager for Birmingham-based tour operator JTA Travel. Perrott, who was previously product manager for Belleair, will be responsible for developing JTA business and managing supplier and key agent relationships for cruise and commercial.
B
rand USA has moved its PR representation account for the UK and Ireland about 2.1 miles across the River Thames in London from Black Diamond to Hills Balfour. The selection followed an in-depth review process initiated by Brand USA in March 2017. Black Diamond had represented Brand USA in the UK and Ireland for five years.
Audrey Brooks-Wiggins, head of trade partnerships at Thomas Cook, has left the company and will not be replaced. Cook’s trade partnership managers will now report to Phil Gardner, head of commercial sales and relations. Brooks-Wiggins joined Cook in 2014 as senior key account manager. She went on to be head of the commercial and merchandising sales team, before being made head of trade partnerships in January 2016.
Sarah Mathews, head of destination marketing Asia Pacific, TripAdvisor, who is based in Hong Kong, has been elected chairperson of the executive board of the Pacific Asia Travel Association (PATA). She replaces Andrew Jones who was elected chairman in May 2016 and who remains a member of the executive board as immediate past chairman.
Joe Vallely has been named the new vice president of external affairs at the U.S. Space & Rocket Center in Huntsville, Alabama. A former director of government relations at Lockheed Martin, Vallely also served as the assistant vice president of corporate relations at the University of Alabama in Huntsville and director of economic development for the City of Huntsville.
Jon Lucas has been named chief operating officer for Hard Rock International, overseeing operations, marketing, legal, finance, design and construction. He will report directly to Chairman and CEO Jim Allen. Previously, Lucas served as president of the first Hard Rocksino in Northfield Park, Ohio. Prior to that, he was general manager of the IP Casino in Biloxi, Mississippi.
Luciano Macagno has been appointed director of the Delta Air Lines for all of Latin America. He’ll be based in Miami, moving there from Brazil, where he was country manager since 2014. Previously, Macagno had tenures with Latam, Tam and Lan airlines.
