WTF @ WTM
(For those of you who think impure thoughts, WTF stands for “Walking the Floor.” Shame on You!)
The INBOUND Report’s intrepid publisher and editor-in-chief, Jake Steinman, has been Walking the Floor (WTF) at this week’s World Travel Market (WTM) in London. Here are some of the tour and travel industry leaders he’s encountered while traversing the trade show floor.
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More Photos in Next Week’s Issue of INBOUND
Weary Brits Cutting Back on Holiday Spending
News comes during WTM Week: Just before the World Travel Market convened on this past Monday, the Deloitte Consumer Tracker for the third quarter of 2017 came out and it showed that, following three consecutive quarters of decline, consumer confidence in the UK had picked up. But as bright as this factor shone on the economic horizon, the report did not bode particularly well for the tour and travel industry.
Deloitte described the increase in confidence as “tentative,” adding, “this quarter-on-quarter growth has occurred against a well-publicized backdrop of high levels of unsecured debt and rising inflation.” Deloitte also noted that there was some post-Brexit anxiety. The June 23, 2016 referendum in which UK citizens voted to exit (or “Brexit”) the European Union caused British Prime Minister David Cameron his job. His successor, Theresa May, hoping to establish mandate of confidence in her government’s handling of Brexit process, then called for a snap general election just five months ago, on June 8th. The election proved inconclusive, with some in May’s own Conservative party calling for her to step down.
Some of the results from Deloitte’s third quarter report, based on the results of a survey of 3,000 adults, include the following:
—Concerns about these rising debt levels and the growing disparity between earnings growth and inflation have created a squeeze on disposable income, meaning that consumers are having to make a choice between essential and discretionary purchases, which includes spending on holidays.
—Holiday spending has seen a decline in the last year, with spending on short breaks of four nights or less having fallen by three percentage points.
—Spending on longer breaks was down by two percentage points vs. the same period in 2016.
—Spending intentions for the next three months have also seen a year-on-year decline across the majority of leisure categories.
—British Millennials are planning to spend less across the majority of leisure categories over the next three months compared to spending intentions at the same time last year, including eating out and culture and entertainment.
—UK seniors (those aged 55 and older) have been less affected by cost pressures, but they intend to cut back on future leisure spending across a number of categories including habitual spending and, significantly, holidays.
Said Deloitte’s hospitality and leisure partner Simon Oaten, partner for hospitality and leisure: “The combination of rising inflation and lower wage growth is stretching disposable incomes and causing consumers to rethink their expenditure. It is no surprise that we are seeing UK consumers tightening their belts.”
And Then There is the Still-Stronger Dollar: Despite some hints that the British pound would grow strong against the U.S. dollar in the coming year, the fact is that there has not been much upward movement since the pound began plummeting in value against the U.S. dollar two years ago. Two years ago, on Nov. 6, 2015, the pound traded at $1.55. In the week following the Brexit vote on June 23, 2016, it fell to around $1.30, reaching its low point—$1.20—on Jan. 16 of this year. Since then, it moved fitfully upward, just past the $1.30 mark by the beginning of July and has stayed in that vicinity since then. With this kind of loss in value, it is a challenge for British tour operators to make much of a margin selling U.S. product.
Which is Brazil’s Number One Travel Brand?
In the fiercely competitive world of Brazilian tour operators and travel agents, in which a travel consumer might find both wholesaler and retailer occupying the same office location, CVC has retained its position as the Top of Mind award winner in the annual brand survey conducted by Folha de São Paulo, the largest circulation daily newspaper in Brazil.
CVC, the largest travel company in Brazil, has been leading the Folha brand review since 2011, its first year in the survey. it reached 18 percent in the memory of those surveyed. TAM Viagens, with 9 percent, is second. More than a third of respondents—37percent—were unable to recall a brand in the category.
Most observers of Brazil’s tour and travel industry, including the INBOUND Report, do not believe it is an accident that CVC has such a high profile in the minds of the Brazilian consumer. The company has carried out an aggressive growth and expansion campaign for the last three years—even after the country fell into its worst economic recession in a century during the second quarter of 2015 and a number of travel companies went bankrupt and shut down operations.
Late in 2015, CVC, when it already had a 1,000 travel stores in Brazil, CVC announced that it planned to open 100 new travel agency locations a year for the next three years, concentrating on bringing travel products to the country’s more remote areas and to middle-income consumers. The company also promoted domestic travel within the country to those who could not opt for more expensive international travel.
And now, for the Brazilian consumer, Marcelo Oste, director of marketing at CVC told Folha, “Instead of spending a week off, he buys a five-day package. Instead of an international cruise, he chooses a road map for the Northeast.” By the end of 2017, its second year of the 100-new-locations-a-year goal, the company expects to have 1,200 stores in all regions of Brazil.
For the category of Top Brazilian Airline Brand, it’s a virtual tie as TAM and Gol were cited by 29 percent and 27 percent of respondents, respectively (a technical draw, due to the margin of error). Folha reported that, in measuring the tiebreaker criterion, the “awareness”, they go together in the lead: Gol got 50 percent and TAM, 48 percent.
TAM stands out among class A and B (35 percent)—Brazil’s market classification system has five categories, A to E—and those with higher education levels (36 percent). And it has been in Top of Mind’s leadership since 2008, when he overtook the extinct Varig, which shut down in 2011. Last year, it changed its brand to Latam, reflecting its merger with LAN airlines, but the TAM brand is what has top of mind. Meanwhile, Gol has shed its image as a “sky bus” and has slightly broadened its appeal over the past several years, as the table indicates.
An emerging factor in the rankings is Azul (which means “Blue” in Portuguese, the young carrier launched in late 2008 by Brazilian-born David Needham, who is also the founder of the U.S. low-cost carrier, Jet Blue. Azul has been steadily gaining share in both the domestic and international market in Brazil, and its top-of-mind awareness rated 6 percent among those surveyed by Folha.
Thomas Cook India Takes over TC Travel and Services & More …
Thomas Cook India, already the largest tour operator in India, has grown larger still with the acquisition at the end of last month of TC Travel and Services. Officially, the acquisition was completed at the end of October when the Thomas Cook Group—it is owned by Toronto-based Fairfax Financial Holdings, which was created by India-born Prem Watsa, who has been called the “Canadian Warrant Buffett”—completed its acquisition of Tata Capital Limited. The purchase included the wholly-owned subsidiaries, Tata Capital Limited, Tata Capital Forex and TC Travel and Services. (The acquired companies will henceforth be referred to as TC Forex Services Ltd. and TC Travel and Services Ltd.)
TC Travel and Services and TC Forex Services (foreign exchange activity is a major component of the travel industry in India) includes 24 locations and 263 employees throughout India. Madhavan Menon, chairman and managing mirector, Thomas Cook (India) said: “Our acquisition of Tata Capital’s Forex and travel companies serves to further reiterate our focus on the travel and foreign exchange sector in the country.”
The acquisition of TC Travel and Sources marks the third major step in the entry into, and growth of, the Fairfax Financial presence in the tour and travel industry in India since the company acquired Thomas Cook India in 2012, when the number of visitors from India to the USA totaled 724,000. The U.S. National Travel and Tourism Office has forecast that the number should double by next year, to 1,457,000.
Watsa’s Fairfax Financial Holdings went on to acquire, in August 2015, the holdings of Kuoni India, as Kuoni began to divest itself of its holdings on its way to being acquired by the Swedish private equity firm, EQT Partners, in February 2016.
Thomas Cook India has maintained Kuoni’s SOTC brand, which is a familiar presence at international travel trade shows, including IPW.
There is no dispute as to the ranking of Thomas Cook India as the nation’s number one tour operator whose operations also include foreign exchange, visa, passport and travel insurance services. It is listed overall as the second largest travel company in India, just after the online travel agency, MakeMyTrip. Prior to its latest acquisition, Thomas Cook India it had about 3,000 employees.
Past Two Years Register a Shift in Chinese Travel Activity
Just released by the global management consulting firm of Oliver Wyman, a new report based on a survey of 2,000 people representing a cross section of Chinese travelers—Prepare for turbulence: The Chinese Traveler of Today and Tomorrow—tells travel sellers that Chinese tourism is being transformed through more diverse tastes on the part of the Chinese traveler.
To cite the report: “Chinese travelers are becoming more independent, spending longer in distant locations–and are even spending less on shopping. … the traditional ways of serving them may no longer work.”
Alluding to the sharp drop in travel by Chinese to South Korea due to the latter’s the deployment of the THAAD missile defense system—year-on-year visitor numbers to South Korea dropped by 67 percent in April 2017—the report says that “Travel-related businesses should also consider the impact of high-profile negative events that might put Chinese tourists off a destination.” On an upbeat note, however, the report indicates that past declines in Chinese tourism due to trouble with a specific destination typically reverse after six-to-nine months.
The report highlights three areas of activity measured in both 2015 and 2016 that the travel seller should pay attention to:
—a shift in the way Chinese travelers are planning their travel as, increasingly, more people are planning and booking travel on their own;
—a change in the composition of the travel party, with more families traveling together; and
—a decline in the importance of shopping as, overall, shopping fell to the third reason to travel in 2016, down from second in 2015, and shopping as a percentage of overall travel spend is likely to continue to drop.
The following tables illustrate the changes in these areas of activity.
Receptive Tour Operator of the Week: RTT Services, Inc.
RTT Services, Inc.
122 East 42 nd Street
New York, NY 10168
212.317.2372
RTT Services Is a full-service receptive tour operator offering highly personalized services for Groups, Series, FITs, Incentives and VIP “Platinum” level customers. RTT offers a complete range of Destination Management offerings and is widely recognized as the premier group travel specialists. (The company’s president, Marilyn Reis, is a long-time industry veteran, as well as the author of “The Receptive Tour Operator” (2001), which remains the definitive work on the subject.) RTT is able to provide rapid and comprehensive group quotes in as little as 24-to-48 hours; develop and manage complex, unique and creative itineraries; and deliver consistent and exceptional results for your customers.
The TourOperatorLand.com website by the NAJ Group (it also publishes the INBOUND Report) has introduced both receptive tour operators, U.S. tour operators and international tour operators to travel product and services of U.S. travel suppliers and DMOs. Visitors to the website can use its exclusive Receptive Finder™ to find the right RTO. It is designed to help both the travel trade and travel suppliers find the right U.S. based receptive tour operator to sell their products on the international travel market place.
The receptive operators, who are vetted and qualified by the NAJ Group, also take part in at least one of NAJ’s RTO Summits series. The Summits take place annually in Los Angeles (Feb. 21-22, 2018), New York City (April 17-18) and Orlando (TBD, 2018). For more information, visit www.rtosummit.com
CHINA Market Briefs
Will China Growth Continue in 2018? One clue to answering this question lies in a report given by Laurens van den Oever, chief marketing officer of ForwardKeys, ,who was speaking at the World Bridge Tourism conference in London, said: “The Chinese dragon is breathing more hotly than ever. Bookings for outbound travel during Chinese New Year, in February 2018, are currently 40 percent ahead of where they were at the same time last year.” Looking at a broader period, from the beginning of November until the end of February, bookings are also strongly ahead. The growth story has been running for a number of years and the long-term trend shows no indication of slowing. According to the Chinese National Tourism Administration (CNTA), outbound travel has grown 270 percent since 2008 and it is forecast to reach 200 million departures by 2020. In the same period, traffic to the USA has increased from 493,000 visitors in 2008 to 3,964,000 in 2018, according to the most recent forecast of the U.S. National Travel and Tourism Office—a more than eight-fold increase.
Ctrip China’s Only OTA? Not Yet. A July 2016 article posted on ChinaMoneyNetwork said “Ctrip is now the absolute monopolistic force in online travel in China. One anonymous analyst jokingly describes it as holding a 100 percent market share.” But not yet. Third-quarter resuts showed that China’s number one OTA posted substantial gains, with net revenue growing by 42 percent year-on-year, to $1.197 billion (7.9 billion yuan). Gross margin was up 82 percent compared to Q3 2016, up from 82 percent in Q2 2017. However, according to an item in Jing Travel, “Ctrip faces potentially fierce competition from Tencent-backed Meituan-Dianping. To make matters worse, Ctrip shareholder Priceline has also invested substantially in Meituan-Dianping. Ctrip executives have declined to comment on these developments, but all indications are that Ctrip is in for increased domestic and foreign competition.”
Where do Wealthy Chinese Want to Live Abroad? According to a recently released study by the Hurun Report, the U.S once again leads the list of destinations for Chinese high-net worth individuals (HNWI) looking to move abroad. Canada came in second and the UK ranks No. 3.
The Hurun Report interviewed 304 individuals with net worths ranging from $1.5 million to $30 million to produce these findings, which were released in its report: Immigration and the Chinese HNWI 2017. The report only considered countries that had investment immigration policies.
Travel Suppliers—Here are Eight Travel Predictions for 2018
Perhaps it’s too late to include them in a brochure for next year, but the ideas that one might derive by reviewing Booking.com’s latest report on what to expect of travelers next year might just might help provide last-minute product additions or, just as likely, some thought-starters for 2019. Facilitating reservations for more than 1,500,000 room nights each day, Booking.com combined customer insights from over 128 million real guest reviews with research from 19,000 travelers across 26 countries around the world to reveal the biggest travel predictions for 2018. Following is an INBOUND synopsis of their report.
- New Tech Frontiers: Taking the hard work and stress out of decision making, in 2018 technology will continue to guide travelers seamlessly to find the best stays and experiences for us. Immersive experiences will reach the next level in 2018, with travelers looking to technology to help better understand a destination or accommodation before they book. Artificial intelligence and digital technology are helping consumers turn the corner when it comes to smart destination intuition, reshaping the way we research, book and experience travel.
—Twenty-nine percent of global travelers say they are comfortable letting a computer plan an upcoming trip based on data from their previous travel history.
—Half (50 percent) don’t mind if they deal with a real person or computer, so long as any questions are answered.
—Over six in 10 (64 percent) of travelers say they would like to “try before they buy” with a virtual reality preview, while 50 percent find that personalized suggestions for destinations and things to do encourages them to book a trip.
- From Dream to Reality: Next year, 2018, is the year to dream big. Forty-five percent of travelers have a travel bucket list in mind and the majority of those (82 percent) will aim to tick one or more destinations off their list in the coming year. The yearning for experiences over material possessions continues and drives our desire for more incredible and memorable trips. With dwindling patience, instantaneous appetites and empowered by technology, travelers in 2018 will seize the moment like never before.
—Most likely to feature on a bucket list is seeing one of the wonders of the world, as almost half of travelers (47 percent) will look to tick this off in 2018.
—More than a third (35 percent) yearn to tantalize their taste buds by trying a local delicacy.
—Just over a third (34 percent want to head to an island paradise.
—Another 34 percent are thrill seekers wanting to visit a world famous theme park. Adrenalin junkies should consider Orlando, USA, The Gold Coast in Australia and Dubai, United Arab Emirates, which are the top destinations endorsed by Booking.com travelers for theme parks. —Of the other top travel activities to complete in 2018, 28 percent will try to experience a unique cultural event.
—28 percent will be learning a new skill.
—A quarter (25 percent) will go on an epic road or rail journey.
—Another 25 percent will visit a remote or challenging location.
- Retro Reboot: As well as new experiences, travelers will be revisiting their favorite childhood memories as part of their trips in 2018. Blending the future with the past, they will be inspired to return to previously loved destinations and explore them in a whole new way. Travelers say that former family holidays recall the fondest memories, even more so than childhood sweethearts or family pets
—A third of travelers (34 percent) will consider a holiday they experienced as a child for 2018.
—Millennials look set to be even more sentimental with 44 percent of 18-to-34 year olds keen to hark back to favorite family destinations.
—With 60 percent of travelers in 2018 intending to post on social media each day, we can expect to see these nostalgic places brought back to the future and captured for social posterity.
- Pop Culture Pilgrimage: In 2018, television shows, films, sport and social media in particular look set to have an increasingly significant sway over booking decisions, as travelers turn to pop culture for their travel inspiration.
—Reading blogs or watching YouTuber recommendations will spark ideas for four in ten (39 percent)
—Travelers and on-screen locations from television, film or music videos will win over 36 percent of travelers in the coming year.
—More than a fifth (22 percent) of travelers will be tempted by traveling for a major sporting event, with 43percent of those considering a summer of football in Russia.
—The top television program locations travelers most want to visit in 2018 are Croatia, Spain and Iceland inspired by “Game of Thrones” (29 percent), London as seen in “Sherlock and the Crown” (21 percent and 13 percent), New York and Manhattan from “Billions” (13 percent) and Los Angeles viewed in “Entourage” (10 percent).
- Walk your Way to Wellness: Compared to 2017, with almost double the amount of people planning to take health and wellbeing trips in 2018—from one in 10 in 2017 to nearly one in five in 2018.
—Walking will be the ultimate way to explore next year, with 56 percent of travelers saying they want to do walking or hiking trips in 2018.
—33 percent indicated that they intend to visiting a spa or receiving beauty treatments.
—24 percent plan to go cycling.
—22 percent will engage in water sport activities.
—17 percent will be taking a full body detox holiday.
—16 percent will be going on a yoga retreat.
—Another 16 percent said they will do some running.
—15 percent will be undertaking meditation/mindfulness vacation time.
—Altogether, 59 percent of travelers said they prioritize experiences over material items when on holiday.
—More than half (55 percent) said that going on holiday is a moment for them to reflect and make better lifestyle choices.
- Economic Intuition: Every year, travelers are becoming savvier, especially when it comes to getting the most for their money. With significant numbers basing their travelling decisions on finance-related matters, 2018 will see travelers looking to be even more economically intuitive.
—Nearly half (47 percent) will take currency exchange rates into consideration when planning their travels for the year, and almost the same amount (48 percent) will think about the economic climate of a destination before making the decision to travel.
—In what is good news for the retail industry, a third of travelers (30 percent) plan to make more purchases from airport duty free shops in 2018.
—One in four (26 percent) will even go on holiday specifically to buy goods such as fashion items because they are cheaper than in their home country.
—Travelers are less obliged to follow the herd, with over half (57 percent) wanting to do more independent travel in 2018, placing growing value on personalized endeavors.
—Almost half of travelers (44 percent) will use travel apps more in 2018, with technology continuously developing to make travel stress free. in 2018. This includes geo-location technology directing you to your accommodation, all within one click from your app, or
—41 percent of travelers will be planning activities while on holiday using apps on their smartphones.
- The Great Mate Escape: Next year gearing up to be all about the group get-away. When asked who their 2018 traveling companions were likely to be, the segment with the biggest increase when compared to 2017 was traveling with a group of friends—increasing from 21 percent to 25 percent.
—Friend based getaways also have financial advantages as four in 10 (42 percent) said that joint holidays with friends will allow them to stay in accommodation they wouldn’t be able to afford on their own.
- Live like a Local, not with One: Rental homes are going to be particularly popular next year– not just for travelers looking to stay in one, but also home owners who are thinking of inviting others to stay in their own abode.
—One in three travelers (33 percent) say they’d prefer to stay in a holiday rental (a holiday home or apartment) over a hotel.
—One in five (21 percent) would consider listing their home on a travel accommodation site.
—Travelers are keen to have a local experience and will look to hosts for their expertise, as a quarter of them (25 percent) say it will be important that their host has strong local knowledge about local food and places to visit.
—However, travelers will want the flexibility to interact with hosts on their own terms. In 2018, it will be important for travelers that their host is available but not too over-bearing (30 percent).
— One in 10 (12 percent) want a host who they don’t have to speak to at all.
Note on the Survey: Research was commissioned by Booking.com and independently conducted among a sample of adults who have taken a trip in the last 12 months/plan to take a trip in the next 12 months. In total 18,509 respondents were surveyed (1,000+ from the UK, US, Brazil, China, Germany, Italy, Spain, France, India, Singapore and Russia and 500+ each from Australia, Argentina, Belgium, Canada, Denmark, Hong Kong, Croatia, Indonesia, Japan, Mexico, Netherlands, New Zealand, Sweden, Thailand and Taiwan). Respondents completed an online survey in August 2017.
At a Glance: Rapid City
For full information click here.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Scott Balyo recently began duties as the new executive director of Capital Region USA (CRUSA), the organization that does international marketing for Virginia, Maryland and Washington, D.C. He succeeds Matt Gaffney, who retired after serving CRUSA for more than 16 years. Balyo, with 20 years of experience in international tourism marketing, organizational leadership, marketing and communications, once served as executive director of the Cody County (Wyoming) Chamber of Commerce, where he handled tourism-related matters.
Caro Degryse has been named director of long-haul production for TUI France. Degryse, 47, has 20 years of experience working with large tour groups, receptive or niche tour operators. Previously, she was director of development at Emirates Holidays. She had also worked the TUI group in Belgium from 1997 to 2005.
In Brazil, the tour operator BWT has hired Alessandra Fernandes to head its office in the United States, which is located in Orlando. The move is part of the expansion of the international presence of the company. Fernandes has 13 years of experience in the industry, with expertise in managing corporate events, such as business roundtables and workshops, through the public and private sectors. She has served tenures with the Tourism Foundation of Mato Grosso do Sul and Tam Linhas Aéreas (before the carrier’s merger with Lan).
Beginning Dec. 1, Sascha Büsseler will assume even more responsibility in the Thomas Cook Group in Germany. As head of yield & product, he will be responsible for all product types, destinations and brands of Thomas Cook in Central Europe. The reason for the reorganization is the beginning parental leave of Sonja Karl, head of yield & product for the areas of long-haul and luxury travel. Büsseler had already taken over the management category of TCI Germany from Nadja Schotte.
Allison Schult has left her position as vice president of marketing for Visit Tucson to join
MMGY as the newest member of the company’s research, data and insights team. Schult’s role with the organization will be to identify syndicated and custom solutions for brands across travel and tourism verticals while promoting all agency brands within the MMGY Global family.
Saga Holidays has appointed Iain Powell as head of trade sales for Saga Holidays and Saga Cruises. Powell will join company on the Jan.15 from Carnival UK where he was a business manager within the national travel partnerships team, managing the regional sales team. He has previously held roles at TUI and Virgin Holidays.
The Pennsylvania Great Outdoors Visitors Bureau has appointed Danielle Taylor to its staff as the new marketing and membership service coordinator Taylor comes to the bureau with a strong editorial background and a wealth of experience in outdoor and tourism communications. For the past two years, she has worked full-time as a freelance journalist focusing on outdoor recreation, conservation, public lands, and travel.
The Valley Forge Tourism & Convention Board recently added five new staff members: Kristin Eichengreen, sports sales manager; Jon Scheuren, sports sales manager; Rachel Riley, communications & media relations manager; Emily Keel, marketing & communications associate; and Caitlin Hoppel, business intelligence analyst.
