Complete Issue June 14, 2018

UK: Nearly 700 UK Travel Agencies Shut Down Last Year

According to a new report from the Local Data Company (LDC), almost 700 high street travel agencies closed last year amid stiff competition from online rivals. LDC’s retail and leisure trends report found that 679 travel agency outlets closed in 2017, accounting for the third highest number of closures among high street sector operators. (Pubs saw the biggest decline with 747 outlets shutting their doors, followed closely by banks which closed 711 branches.)

“The figures underscore the overwhelming level of competition facing the traditional high street travel agents from their online rivals,” said the report’s authors. Also, research conducted by audit, tax and consulting firm RSM earlier this year found that among 2,000 consumers, fewer than one in five said they booked their holidays in-store.

Ian Bell, head of travel and tourism at RSM said: “The competition from online travel firms is not a new phenomenon but the pace of decline among high street operators is still quite alarming. Consumers are still choosing to visit the high street in large numbers, but the overwhelming majority prefer the ease and convenience of booking their holidays online.

Private Equity Firms Betting Big on UK Travel Companies

Livingbridge has purchased a majority stake in Loveholidays. In announcing the transaction, the two groups said that the deal would allow the business to further expand in the UK and internationally. Livingbridge says it will continue to work with the existing Loveholidays senior management team who will remain with the business, led by founders Alex Francis and Jonny Marsh.
Loveholidays, an OTA that has grown rapidly, is licensed to carry 804,618 UK passengers this year. In April 2018, it became the UK’s sixth-largest Atol holder, having more than doubled its capacity since 2016.

Loveholidays was set up in 2012 by founders Francis and Marsh and reported turnover of £23,219,535 ($31.1 million) in the year ending October 2016.Loveholidays was ranked in the top 10 in the Sunday Times’ “Fast Track 100” list for the second year running in 2017, in recognition of its fast-growing sales.

In a shakeup at Travelopia—it is the collection of more than50 specialty brands acquired early last year from TUI by UK-headquartered private equity firm KKR—Martin Froggatt’s role as managing director of exhibitions and event has changed slightly. While he will retain responsibility for all sports events, adventure and U.S. tour operating businesses, he will relinquish responsibility for polar expedition brand Quark and private jet holiday operator TCS to chief executive Andy Duncan.In addition, Froggatt will become chief sales officer for the group, looking at “sales expertise and new sales opportunities”, Duncan said. The wide-ranging reorganization also resulted in the departure of Mathew Prior, managing director tailor-made and marine.

Travel Counsellors has been bought by private equity firm Vitruvian Partners in a deal understood to be worth around £250 million ($335 million). The company said that Vitruvian had backed the company in a “secondary management buyout” from Equistone Partners Europe.Equistone injected around £100 million ($134 million) into the business in October 2014 in a move led by chief executive Steve Byrne.In a separate announcement, Travel Counsellors founder David Speakman announced that he had sold his remaining interest in the business that he founded in 1994. Vitruvian has some experience in tour and travel, having previously invested in Skyskanner, OAG and JacTravel.

Speakman oversaw Travel Counsellors’ transformation into one of the largest independent travel agencies in the country, and its expansion to six more countries: Ireland, the Netherlands, Belgium, Australia, South Africa and the UAE.He stepped down from his role as chairman of Travel Counsellors in 2015 shortly after Equistone’s investment.

Corporate travel company Reed & Mackay has acquired rival Hillgate Travel in a private equity-backed deal that which creates a combined business will handle more than one million corporate travel transactions a year in the UK alone, with a UK staff of about 600 and UK turnover approaching £500 million.Hillgate Travel is an Advantage Travel Partnership member and has been headed by chief executive Anthony Rissbrook since September 2011.

Reed & Mackay has expanded globally since its acquisition by private equity firm Inflexion in a deal which valued the business at £170 million ($228 million)in August 2016.The company, headed by chief executive Fred Stratford, acquired Chicago-based Gray’s Travel Management for an undisclosed sum in January 2017. The company recently opened an office in Singapore to add to offices in the U.S. and Dubai.

DEEP DIVE: The Mexican Market–What Could Possibly Go Wrong? Answer: Plenty

Delegates to last month’s IPW received the latest updates on key markets¹ from in-market representatives of Brand USA. For the most part, the outlook for Mexico was mildly positive. Despite a dramatic drop in the value of the Mexican peso vs. the U.S. dollar (see table below) in 2015 and 2016, the peso seems to have stabilize and, with it, so has the outlook for inbound tourism from the country which, according to the latest estimate from the U.S. National Travel and Tourism Office (NTTO), supplies almost a quarter (23 percent) of all international visitor to the United States. NTTO has projected annual increases in visitor volume from Mexico of two to three percent through 2021.

What Could Go Wrong? For many who follow developments in Mexico, what could go wrong is already going wrong and could get worse. That is, the Administration of President Donald Trump is preparing to drop out of the North American Free Trade Agreement (NAFTA)—the 1994 trade pact between Mexico, Canada and the United States—if the U.S. cannot improve its terms. Most analysts agree that the dissolution of NAFTA would hurt Mexico the most. In addition, recent tariff measures imposed on Mexican imports by Trump have only exacerbated the trade picture.

Also, President Trump is singularly unpopular in Mexico, with an approval rate in the single digits—an unpopularity that has translated into a diminished regard for the U.S. itself. All four candidates in the July 1 presidential election in Mexico are sharply critical of Trump.

With the above as preface, we have synopsized the information that Brand USA presented at IPW in its market update.

About Mexico—Demographics

Population: 124.6 million.
Country is second largest user of Internet in Latin America, behind only Brazil.
Twenty-one percent of population comprises high and upper middle class.
Mexicans who have private health insurance: 43.57 percent.
More than half (51.8 percent) of its population are between 18-44 years old.
Percentage of overall population under 50 years old: 85.28 percent.
Thirty-five percent are millennials.
Of overall population, 48.8 percent are male; 51.2 percent are female.
Among nations of the world, it ranks No.11 in population.

Source: CIA, World Fact book 2018, INEGI, ComScore

About Mexico—Economy

Its $2.406 trillion in GDP makes in the 12th largest in the world.
It is the No. 2 economy in Latin America.
GDP real growth rate is 2.1 percent.
Per capita GDP is $19,500
Unemployment rate is 3.6 percent.
Inflation rate is 5.9 percent.

Source: CIA World Fact book 2018

Trend: Increasing Traveling and Increasing Spending

Mexican visitors to USA spent $20.3 billion on travel to and within U.S.
Mexico ranked No. 2 market in spending after China.
While the number of Mexican travelers decreased in 201/17, the average spent per visitors increased.

(Source: U.S Department of Commerce, ITA; National Travel & Tourism Office, Bureau of Economic Analysis)

Airline Seat Capacity: There has been an increase of 10 percent in seat capacity between both nations, resulting I more frequencies, new routes, new airlines and new gateway cities. Much of the growth stems from the success of the low cost carrier Volaris, a young carrier that began service to the U.S. less than a decade ago, and now has a fleet of planes almost the size of Aeroméxico, Mexico’s flag carrier. Also, Delta Air Lines has increased capacity substantially in recent years.

Source: Dirección General de Aeronáutica Civil (DGAC), from the Ministry of Transports and Communicactions of Mexico. 2016 vs 2017

Mexico’s Gateway Cities

Source: Dirección General de Aeronáutica Civil (DGAC), from the Ministry of Transports and Communicactions of Mexico. Feb 2018

U.S. Gateway Cities

Source: Dirección General de Aeronáutica Civil (DGAC), from the Ministry of Transports and Communicactions of Mexico. Feb 2018

Market Trends

—Mexico is the largest consumer of video in Latin America.

—By 2020, Mexicans will grow from having 78 million smartphones (2016) to 90.7 million.

—Digital marketing is increasing considerably; it is forecast to increase by 50 percent over previous years.

—Marketers in Mexico allocate 50 percent into event marketing as a source of creating “storytelling” and “client interaction and experiences.”

—70 percent of brand engagement comes from working with influencers.

Source: ComScore, El Economista

Trend: Television audiences are shrinking in comparison to other media platforms, although overall viewership in Mexico is still in excess of 54 million viewers.

Source: NIELSEN MSS – 2016

Trend: YouTube is Capturing the Attention of Millennials

Source: MSS. IBOPE

Trend: Integration of Technology for Travel Journey

—77 percent of Mexican travelers will prefer the use of technology to plan their holidays.

—One third (33 percent) of Mexican travelers say that they feel comfortable if a computer organizers their trips based on their past travels.

—77 percent of Mexican travelers would like to use Virtual Reality, if available, before booking their next holidays.

—71 percent Mexican travelers said that OTAs personalized suggestions are very important when they decide to book.

—72 percent of Mexican travelers will use travel apps.

—Mexican travelers share their travel experiences via social media across all age groups; young millennials also share memories on Instagram.

Source: Booking.com

Top 10 Online Booking Sites

Best Day Travel
Despegar.com
Price Travel
Expedia
Booking.com
Almundo
American Express
Mundo Joven
Carlson Wagonlit
BTI – Business Travel International

Source: Euromonitor International

China Issues Blacklist that Bans People from Travel

Chinese authorities are cracking down further on disruptive travelers. At the beginning of June, the government published a passenger blacklist that identified information on 169 Chinese who have been banned from air or rail travel. In total, 86 individuals are banned from air travel for a full year after breaking one of the nine rules that have that been established by the new Ministry of Culture and Tourism, whose responsibilities consolidate those of other government agents that dealt with travel and tourism. The full list of the 86, along with offenses, is available online. Here is the link: http://www.caac.gov.cn/XXGK/XXGK/XZQL/HYXYGL/201805/P020180524390037034465.pdf.

Moreover, banned passengers can also be searched on the government website Credit China (信用中国) by name and citizen identification number. As reported by Jing Travel, the following offenses can lead to placement on the blacklist:

—Bringing banned items on board such as lighters, knives, tear gas, electroshockers, handcuffs, and bullets

—Using other people’s IDs to take flights

—Picking quarrels on the plane

—Disobeying cabin orders

—Smoking on the plane

—Making up and spreading terror information

—Forceful boarding, intercepting an aircraft, intruding on the pilot cabin, runway, or apron

—Hindering or inciting others to hinder boarding and security checks, or attacking others

—Stealing people’s belongings in the cabin

This year, the 86 people banned from air travel had each broken one of the rules one through five, with no recorded incident of passengers breaking the last four rules.

It is not exactly clear if airlines and/or other travel companies are expected to use this information to do the report information on offenders to Chinese authorities, or if the purpose is simply to same or embarrass those named.

The Next Step: The government is not targeting travelers alone. The new Ministry of Culture and Tourism is going to launch a platform to “regulate and supervise the tourism industry.” Not much is known about the move except that it will be used primarily to make it easier for customers to monitor travel agencies and tour guides, as well as file complaints.

From TourOperatorLand.com—the Industry’s Top Networkers

The essence of the tour and travel industry is formed around relationships, and the TourOperatorLand.com website of NAJ, which publishes the INBOUND report, has embarked on a program to acknowledge the industry’s top networkers. The best industry networkers have a loyal following by selflessly sharing experience, contacts and advice with their peers, as well as great follow-up with tour operators in a way that makes them both successful because they know that, in tourism, positive connections benefit everyone. We solicited nominations and comments from our industry data base, and share a few of them with you here.

—Mike Prejean, international services, Louisiana Office of Tourism. Mike is very engaged with the industry at all levels. He tirelessly leads the effort for his state—makes communicating with clients and partners a priority. Known to send spiffy e-mails in the wee hours of the morning; there is not a better networking in our industry.

—Lisa Catron, international sales manager, Memphis CVB. Everyone loves Lisa, and she does an amazing job representing her city, state and region around the globe. You can count on her to do what she says she will do—and always deliver 150 percent of what she promised.

—Jane Chang, global sales-Asia market, Millennium Hotels & Resorts. “Mama Jane” is the go-to person for many of us when we have questions about the Chinese market. She takes the tie to share insights, make introductions and help with WeChat without ever expecting anything in return.

—Robert Graff, corporate vice president of marketing and international sales, Papillon Group-Papillon Helicopters/Scenic Airlines. No question, Robert has a strong grasp of how to use digital marketing platforms! He seems to know everyone and is always willing to “share the wealth” with the rest of us through introductions and referrals.

—Sally Berry, tourism sales and marketing manager, Corning Museum of Glass. Sally really knows the industry from all sides and goes out of her way to work with anyone who wants here help and is always mentoring others.

Zoom through Customs at DFW Airport

Disney, Universal Anchor USA Attractions Product

Which Are the Top Two Theme Park Companies in the USA? If you don’t know the answer to this question, you don’t belong in the tour and the travel industry in North America or in any of its country source markets. Disney and Universal, of course, reign at the top. And one can see by how much in the latest “Theme Index/Museum Index 2017,” the Global Attractions Attendance Report by the Themed Entertainment Association (TEA) and The Economics Practice at AECOM (formerly Economics Research Associates).

Globally, last year was a very good year, according to the report: “After a fairly flat 2016, the industry resumed its historic pace of growth in 2017 fueled by Disney, China, and Indoor Entertainment Centers. The top 25 theme parks expanded volume by 4.7 percent.” The only wrinkle in the upbeat picture presented by the TEA data have to do with SeaWorld properties, which suffered from attendance declines due primarily to an increased negative reaction over the past two years to the use of killer whales in its entertainment programs. The company announced last year that it would phase out the programs.

In the destination that is North America, most of the story is told by what happens in Orlando, Florida and Southern California. And in terms of brands, nine of the Top 20 theme parks in the U.S. are Disney or Universal Brands. No.10 is Knott’s Berry Farm in Orange County, California. It is owned by the Cedar Fair Entertainment Company, which also owns Cedar Point in Sandusky, Ohio (No. 14 on the Top 20 List). Here are the Top 20 in North America.

Also, there is this: The Top 20 Museums in North America

New Air Service

With the peak summer travel season now upon us, the past several weeks have experienced the launch of a number of new overseas flights to the United States and North America, primarily from Europe and with many from low-cost carriers. Meanwhile, there were also announcements of new service expected later this year and in 2019. Our tally includes the following:

—Delta Air Lines plans to resume nonstop flights between the U.S. and Mumbai in 2019, a service which the airline had ended in 2009.The flights will begin next year and either depart from New York JFK or Delta’s home base at Hartsfield-Jackson Atlanta International Airport, however the full schedule details will come later this year.

—Philippine Airlines (PAL) has announced a new non-stop flight from New York to Manila starting in October for an initial fare of $664 round-trip. One-way, it’s a 15½-hour flight. The airline previously only had non-stop flights from San Francisco, Los Angeles, Honolulu and Vancouver while flights from New York landed in Vancouver for refueling. This long-haul flight is part of PAL’s strategy to improve its position in the North American market.

—Virgin Atlantic will switch its Las Vegas flights from Gatwick to Heathrow from beginning in the spring of 2019. The airline is also adding a second daily Boston service with fares starting from £313 ($420). The Las Vegas flights begin from on March 31, 2019, departing at 12:40 pm and from Las Vegas at 19:05. The second daily service between London Heathrow and Boston will launch on the same day, departing London Heathrow at 20:30 and Boston at 08:30.

—On May 23, United Airlines launched two transatlantic routes, with it now serving Reykjavik from New York/Newark and Edinburgh from Washington Dulles. The route between Newark and Reykjavik/Keflavik airport is already well served by WOW air and Icelandair. Currently, Qatar Airways holds the world record for its Doha-Auckland route. The Arabian airline flies the 9,000-mile route in 16.5 hours.

—Avianca has announced a new direct flight between Bogotá and Chicago. Scheduled to start on Nov. 17, it will be the first and only airline that will connect directly the two cities. The Bogotá-Chicago flight will operate four times a week on Mondays, Wednesdays, Fridays and Saturdays.

—American Airlines has just launched (on June 7th) daily non-stop service to Reykjavik from Dallas-Fort Worth. The new service will operate through October.

—Aer Lingus began service from Dublin to Seattle-Tacoma last month. Along with its routes from Dublin, the airline also provides flights from Shannon to Boston and New York JFK. All totaled, the carrier is currently operating 15 transatlantic services this summer.

—Condor has started a new flight from from Frankfurt to Phoenix.

—Icelandair has began service between Cleveland and Reykjavik on May 16. Icelandair follows fellow Icelandic carrier WOW air in serving Cleveland. On May 25, the airline began service to Kansas City from Reykjavik.

—The new European carrier Primera Air has begun service between Birmingham and New York Newark. The new service operates six times weekly.

—Volaris Costa Rica has begun service between San Jose, Costa Rica and Washington Dulles. The twice weekly service—on Mondays and Wednesdays—operates via San Salvador.Volaris Costa Rica also serves Los Angeles and New York JFK in the US.

—WOW air has, launched flight service between Reykjavik and St. Louis. This is the first non-stop European service for St. Louis since 2003 when American Airlines stopped flights to London Heathrow.

—Icelandair has introduced Dallas-Fort Worth to its route map, launching service from Reykjavik. It has also reintroduced service between Reykjavik and San Francisco. Icelandair will face direct competition on both routes, with WOW air operating Dallas/Fort Worth three times weekly and San Francisco daily.

—WestJet began flights between Halifax, Nova Scotia and Paris (CDG) on May 31st, with the French capital becoming the airline’s first destination in mainland Europe.

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At a Glance: Bloomington, Minnesota

For fill information Click Here

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

Robert Graff tells us that his position as vice president of marketing for the Papillon group has been eliminated. The multilingual Graff, who is widely throughout the tour and travel industry in the U.S. and numerous overseas markets, had been with the company for more than 17 years.

Barry Moskowitz has been promoted to the position of vice president, sales and industry relations, for the Greater Miami CVB. A veteran of more than 20 years with the bureau, Moscowitz had served as vice president of sales for the past eight years.

Geoff Freeman, who had once been rumored to be the heir apparent to U.S. Travel Association President Roger Dow, is leaving his post as president and CEO of the American Gaming Association and will lead the Grocery Manufacturers Association beginning Aug. 1. Freeman, who has been with the Gaming Association for five years, had previously served as chief operating officer at US Travel.

In a shakeup at Travelopia—it is the collection of more than 50 specialty brands acquired early last year from TUI by UK-headquartered private equity firm KKR—Martin Froggatt’s role as managing director of exhibitions and event has changed slightly. While he will retain responsibility for all sports events, adventure and U.S. tour operating businesses, he will relinquish responsibility for polar expedition brand Quark and private jet holiday operator TCS to chief executive Andy Duncan. In addition, Froggatt will become chief sales officer for the group, looking at “sales expertise and new sales opportunities”, Duncan said. The wide-ranging reorganization also resulted in the departure of Mathew Prior, managing director tailor-made and marine.

Contiki has named Dave Marathakis as its new national sales manager, Canada. Once a trip manager for over three years overseeing Contiki adventures throughout the UK and Europe, first joined the Canada team as a sales manager for Eastern Canada before recently becoming the team’s senior sales manager. In his new role, Marathakis will lead sales for the youth travel expert and continue to further develop relationships with trade partners across Canada. Originally from Australia, Marathakis first got his taste of travel 10 years ago in his role as a trip manager for Contiki, running all adventures in continental Europe and specializing in the UK and Ireland.

Gold Medal and Travel 2—both brands are part of dnata Travel—have announced new sales team appointments. Clare Weatherall (left), who has been with the organization for four years as key account manager, is appointed head of national accounts and will report directly to sales director B2B Europe Nick Hughes. Gemma Wilks (right) joins the team in the role of key account manager, from Bourne Leisure, where she has been sales executive for the last two years. Hollie Stillion, current key account manager for London, is promoted to the new position of business development manager.

Ravneet Bhandari, is the new chief commercial officer of Brightline—the inter-city passenger rail service connecting Miami, Fort Lauderdale and West Palm Beach, with plans for future service to Orlando—where he will be responsible for all of Brightline’s revenue generation and consumer-facing endeavors, including the marketing, revenue management, sales, business development and strategic partnership department. Previously, he was the CEO and co-founder of LodgIQ, a technology startup that developed revenue management software implemented by more than 500 hotels.

Grupo Trend (it is a CVC brand) took the opportunity during its just completed sales convention to announce promotions and hirings for its sales team for the interior of São Paulo, Brazil’s largest state (Est. population of 45 million). André Pedroso has just been promoted to supervisor for the regional office, responding directly to Esequiel Santos, manager of relationships and sales. There are also two new sales executives—Monica Dantas and Gustavo Magalhães. (In photo, left to right, are: Pedroso, Dantas and Magalhães.)

José Luiz Christofanelli, a founding partner of the Pagtur Group and a former director of the now-defunct Nascimento Turismo, is leaving the company to start new projects. The former commercial director was with the company at its founding in 2002, he took over the commercial director’s post in 2007.

Complete Issue June 14, 2018

UK: Nearly 700 UK Travel Agencies Shut Down Last Year

DEEP DIVE: The Mexican Market–What Could Possibly Go Wrong? Answer: Plenty

China Issues Blacklist that Bans People from Travel