Complete Issue may 02, 2019

Ouch! Jing Travel Tells RTO Summit to Lower Your Expectations for the Chinese Market this Year

“We think that 2019 will be a really challenging year for the U.S. travel industry, when it comes to attracting Chinese inbound tourists.” This was the first sentence out of the mouth of Yiling Pan, editor of Jing Travel, the Chinese publication and website that specializes in coverage of the Chinese luxury travel market, as she greeted delegates to Connect Travel’s RTO Summit East last week in New York.

And as she continued, the message got no better as Pan, in terms and tone that were both polite but blunt, explained that what data there are available tell us that it is not going to be a good year; Chinese travelers have concerns over their personal safety when they travel to the United States; and there has been a negative reaction to policies of U.S. President Donald Trump that are perceived as “against minority groups like Latino and Asian populations” and have created an atmosphere in which the latter “don’t feel safe to be here.”

Following are some of the data Pan used to buttress her projection for a weak year for the Chinese market, followed by three factors that are contributing to what amounts to a contraction in the market.

The Numbers: Since it is still relatively early in the year, Pan pointed out, there are no meaningful or real-time data for 2019 available that would support or weaken the case for her outlook for the Chinese market. But there are numbers from 2018, and they do not auger well for 2019.

For instance:

—According to the U.S. State Department, from May through September in 2018 there were 100,000 fewer Chinese people receiving business, leisure and educational visas compared to the same period in the previous year—a 13 percent drop from the previous year.

—A Skyscanner report revealed that Chinese airline reservations to U.S. destinations have shown a significant decrease. It dropped 42 percent in the first week of October 2018—which was a seven-day national holiday for Chinese people. That normally means an increase outbound travel, but last year it was a significant drop

— According figures made available by the World Travel and Tourism Council, spending by international visitors to the United States dropped nearly one percent last year vs. 2017; this was largely due to a lack of growth in visitors from China, whose numbers account for 11 percent of all spending worldwide.

—Though no official figures on the subject have been released, it seems that there was an increase in visa rejection rates

Key developments that helped create the outlook described above include the following.

Trade War and International Relations between U.S. and China. Said Pan: “This has an impact on the sentiments of the Chinese. Regarding the U.S. Not a huge impact, it’s not wide spread, but there are pedagogic voices in discussion on the social media talking about whether they should come to the states; how do they feel about this ongoing trade war; and how do they feel about Trump’s policies, and things like that—which affect people’s positions about whether they want to come or not.” Added Pan: “We do feel that the feelings of Chinese people about the U.S. have changed a lot (and affected) the appeal of this country (the U.S.) as a destination.”

Perception of Safety. “A lot of people outside of China don’t think safety will be a huge factor that will cause people to travel or not,” Pan explained. “But, for Chinese travelers, you have to understand: security and safety abroad is a real concern for them, and it’s one taken seriously when planning a trip.” It doesn’t whether people are wealthy or not, observed Pan, who told Summit delegates, “you have to understand that Chinese people prioritize safety in the travel decision-making process.“

—Pan cited a hotels.com survey from last year indicating that 61 percent of Chinese travelers indicating that safety was the top priority that they have to consider when determining if they want to visit a place or not.

—A study by HURUN, a research firm that focuses on High Net Worth Chinese indicated that its survey of high net worth Chinese showed that traffic safety, natural disasters, and robbery and theft are major travel concerns they have when considering whether to visit a place or not.

—Some delegates winced a little when Pan explained that, “When one thinks about the United States, we hear about gun violence, terrorist attacks and things like hate crimes—these things have been frequently and constantly reported by Chinese media, or speculated about on the social media. So, ordinary kinds of people gain access to information like that and this will actually affect their perception of this country. They will feel, ‘maybe it’s not a good idea to visit the U.S. at this time of the year. We don’t want to have gun violence or terrorist attacks happening.’ ”

—Trump’s Immigration policy is having a negative impact on how Chinese people feel about his country. Pan pointed out that, “based on our reporting and also talking to people in China, some people … mention that, after see Trump’s policies against minority groups like Latino and Asian populations, they feel like it’s not safe to travel here. They don’t want a hate crime to happen, and they are afraid of any violence against Asians, because we are a minority and they’re abroad and many of them don’t speak English, so they don’t feel safe to be here.”

Chinese Government’s Push for Domestic Travel (vs. International Travel)

According Pan, in recent years, China’s government has put a lot of effort into making Chinese people rediscovering the beauty of their own country. Some efforts include new infrastructure, like high-speed bullet trains. Most provinces and popular destinations will have such trains to use for travel.

At the same time, many Chinese DMOs are putting a lot of effort into marketing and promotion, in order to educate Chinese people as to why they should visit their destinations. They are telling Chinese people, “You have to come here and experience that; it’s very different from what you’ve seen before.” Said Pan: “We think these efforts have been kind of successful in getting more Chinese people to focus on traveling within the country instead of going abroad.”

The Changing Group Tour and “Living Like a Local”—A Couple of Trends to Watch for over the Next Five Years

One got the impression listening to Jake Steinman, founder of the RTO (Receptive Tour Operator) Summit Series at last week’s RTO Summit in New York that travel sellers and DMOs looking to stay ahead of the curve will be able to handle the process quicker through the RTO channel than by waiting for the findings of macro-survey results that identify tour and travel industry trends whose timeliness is often dated, much like forensic analysis.

Steinman, on the other hand, based his findings on several other sources that reflect almost immediate trends and directions on the marketplace. His presentation last week was based on his most recent “Listening Tour” in which he met some 30 receptive operators, as well as discussions with suppliers. He also had further sessions with international tour operators at industry events such as IPW. Also, he studied the range and substance of new product in operator brochures, as well as material that is being posted on the TourOperatorLand.com website, which can tell users what new packages and itineraries receptives are offering, as well as what more than 90 destinations have to offer receptive and international tour operators.

The TourOperatorLand.com site—along with the RTO Summit Series and other properties—is among those acquired last month by Connect Travel. At the site, both receptives and suppliers regularly update products and offerings, key contact information and services such as royalty free photos and itinerary ideas.

In discussing trends that are ahead-of-the-curve, Steinman highlighted two that stood out for INBOUND, which has digested them below.

Group Tours for Independent Travelers: Until recently, the norm for those who buy and sell tour product has been the 45-to-55-seat passenger tour bus that serves as the nexus and mode of movement through all-inclusive itinerary—from the moment a group arrives at a gateway airport until it leaves.

Now, however, tour operators are creating group tours for independent travelers This started when some U.S.-based receptive found that, while some clientele like the hassle-free experience of the escorted group tour, others want flexibility build their own experience.

The hassle-free service component is still promoted, but now an itinerary is basic: it includes air, hotel, ground transportation and Wi-Fi on the bus or, in many cases, a Mercedes Sprinter van, Tour customers will go to their hotel, meet for breakfast in the morning and, then, everybody decides what they’re going to do for the day and with whom they want to spend time with.” Explained Steinman, “Some people want to go to the beach. Some want to go to the museum. And on the way to the destination, they use WI Fi to learn what to do at the next city.”

While not gone from the equation, he said, tour leaders become transformed into concierges in the new tour model, earning commissions from selected vendors and tips for making restaurant reservations.

What you Saw vs Who You Met.

Steinman melded two items—a complimentary set of trends—into one as he discussed the growing desire on the part of travelers to experience something different, something authentic.

If you want to meet locals, you’ve got to know where to find the experiential tours

“It used to be what you saw – the Golden Gate Bridge, Statue of Liberty. And now it’s about who you met,” Steinman said. “If you want to meet locals, you have to find the experiential tours where you interact with locals.

“In order to do that, they have to find the products that tell them where the locals are going. And this is helping to create a (new) area of product.” It is also creating ways for receptive operators to differentiate themselves from those who have similar programs.

Steinman described to Summit delegates how he went on Air BnB and found a number of experiences operated by locals who are basically independent entrepreneurs who have a passion or expertise that can be easily included and offer a unique twist to an existing product.

He pointed to a New Yorker, John Coughlan, a retired New York City police officer, who developed “9/11 Tours by a First Responder” and “New York Crime Tours” on the Airbnb platform. Airbnb also vets each provider and requires that they receive above a 4 rating after each tour or they pull them off the platform and they need to reapply.

In closing, Steinman indicated that he would seek to curate more of the entrepreneurs who have products like that of Coughlan and invite them to next year’s RTO Summits.

Images from the RTO Summit East 2019

Just prior to the last business meeting of the day, everyone waved goodbye to the 2019 RTO East Summit.

To see all the photos from RTO East click here.

Better Late than Never? NTTO Releases 2017 Arrival Data in March 2019.

Without much notice, the National Office of Travel and Tourism (NTTO) last week released completed 2017 figures for overseas visitor traffic to the states and territories of the U.S., as well as the top 100 source markets comprised of the country’s major cities. In the wake of shutdown in the release of data on international visitors to America caused by a snafu in the way other federal agencies tallied the data on visitors, NTTO had to suspend what had been its usual practice of announcing the release of its data replete with substantive commentary. Now, sharply affected by a reduction in NTTO staff numbers, the agency’s postings are given little notice.

In any event, the information for both U.S. states and its most visited cities show that the traditional gateway favorites for overseas visitors to the USA remain the same, with not much change in market share among the top states and cities, suggesting once again that DMOs will have to be creative in the way they tap into the visitor traffic that feeds into major cities and goes “beyond the gateways.” In the table below, covering U.S. states and territories, one sees that only 14 states have an overall market share of more than two percent, with roughly one out of every four overseas travelers visiting New York or Florida, and one out of every five choosing to visit California.

Not Surprisingly, NYC is Tops: The data regarding the top cities are a little fuzzy, as they take into account the U.S. government’s numbers on Standard Metropolitan Statistical Areas (SMSAs). However, there aren’t any real surprises if one filters out the second- and third-tier cities that are included in the data. Statistically speaking, the only real head-scratcher in the table below is the position of Flagstaff, Arizona in the top 20 cities. However, Flagstaff—it is 291st largest SMSA and has a population of just 72,000—is also the closest city of any consequence (about 80 miles away) close the nearby Grand Canyon, which is an enormously popular destination/attraction for international visitors to the United States.

In compiling the table below, INBOUND has limited the cities included to only those with at least a one percent market share.

Japanese Intent to Visit the US rises for the first Time in Recent Memory

Perhaps buoyed by last month’s 10-day Golden Week and a generally good vibe over the upcoming quadrennial Olympic Games in Tokyo later this year, Japanese travelers and the agents and operators who supply them with product are unusually optimistic about the near-term outlook for overseas travel to most international regions, according to the most recent quarterly survey of the Japanese travel trade by the Japan Association of Travel Agents (JATA).

It is possible that the positive outlook is skewed by the fact that the majority of those responding to the JATA survey are retailers who, by definition, are closer to the pulse of the retail marketplace, which is more sensitive to short- and near-term demand. About 65 percent of those surveyed by JATA are retail travel agencies, both large and small. Tour operators and tour wholesales represent a small portion (5 percent) of the total, and overseas travel specialist agencies comprise just 7 percent of the number surveyed.

The retailer/wholesaler breakdown notwithstanding, the tone of the JATA report—as well as the numbers involved—are encouraging to U.S. travel suppliers and receptive tour operators who sell to the Japanese market:

—With the exception of Asia, demand for tours to Hawaii, America & Canada and other destinations has increased. All destinations except for South Korea are expected to enjoy stronger demand during the April –June quarter. Thanks to the long holidays and other factors, demand for Hawaii, Europe and other long-haul destinations continues to be robust.

—Compared to the previous quarter, demand for America & Canada and Micronesia is respectively 15 and 11 points stronger. Travel to China and South Korea has declined by 14 and 8 points respectively. Asia is at level zero, keeping its highest rank among the overseas destinations

—During the April–June quarter, all destinations with the exception of South Korea are expected to see strong demand. Hawaii in particular will score 11 points, Oceania and Europe 9 points each, and America & Canada will grow by 8 points. Asia, Hawaii and Europe are expected to step into positive territory

—Driven by individual travelers, overseas travel has exceeded the forecast made during the previous quarter. Despite the slight decline, the Golden Week holidays are expected to see an increase in overseas travel. With the exception of South Korea, all destinations –and the long-haul ones in particular –will see an increase in demand.

(In order to better understand the following table, take a look at the Note on Methodology below*)

* A Note on Methodology: The Japan Association of Travel Agents (JATA) asks all member companies to register as survey monitors. JATA conducts the quarterly Survey of Travel Market Trends involving 607 registered companies and publishes the results. The Survey of Travel Market Trends is designed to grasp trends in the travel market based on responses to questions on current conditions and those anticipated over the next three months. The survey asks participating companies to rate their sales results for each destination and customer segment by choosing from three categories: “good,” “average,” and “poor.” For items outside their business scope, respondents select “do not handle.” Each share of “good,” “average,” and “poor” is then divided respectively by the denominator, which is equal to the total number of responses minus the “do not handle” (including “no reply”) responses. Finally, each share is processed into the Diffusion Index (DI) by subtracting the percentage of “poor” from the percentage of “good.” The highest possible index figure is +100, and the lowest is -100.

The latest survey was an Internet survey conducted February 4,2019 to February 22, 2019. It was sent to 607 companies and had 267 responses (43.9%).

“How Does India Travel” Report Reveals New Information about Indian Tourism.

The Indian tour and travel industry has more than come of age, with consumers having spent approximately $94 billion in 2018, on around 2 billion domestic and international trips, helping the industry in India achieve unprecedented scale. The momentum is expected to continue and the industry will grow at a 13 per cent (compound annual growth rate) to $136 billion by 2021,

The economy of India, along with the volume of trips—both international and domestic—taken by Indians has more than reached developed levels, and it is time, a new report by Bain and Company and Google India declares, for travel businesses to adapt to the challenges of an economic activity that is expecting such exponential growth.

Released last week, the report, “How Does India Travel,” outlines how Indians spend their money for travel, the influence of online channels in their purchase journey and potential growth opportunities for travel businesses till 2021.

The report frames the report’s discussion by identifying the five “cohorts” of travelers in India, across business and leisure travel, and categorized each against their online research behavior. There are:

Frequent flyers:Nearly 70 per cent of them booked online cumulatively spent $17 billion in 2018. They make their choices based on convenience, availability, brand preference and past experiences.
Budget business traveler:86 per cent of them researched online whereas only 60 percent book online, cumulatively spent $20 billion in 2018. This cohort makes their decisions based on cost of travel, availability and consultation amongst their personal business network.
Experience-oriented traveler:Around 70 per cent of their bookings were done online. And cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.
Budget group traveler:90 per cent researched online and 55 per cent booked online, cumulatively spent $29 billion in 2018. There are multiple decision-makers in the process and take the final decisions based on minimal cost.
Occasional travel visiting friends/relatives:92 per cent researched online but only 60 percent booked online, spent $6 billion in 2018. They maximize family convenience within a budget and believe online terms and conditions are restrictive.

A Problem of Trust and Stepping Back at the Point of Purchase: In explaining the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing. The report states that

—During key research-heavy phase of interest digital plays a pivotal role with over 86 per cent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on searching for travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 per cent of travelers being influenced by this platform.

—In the booking and sharing phase, the report states that nearly 60 per cent of customers’ book transport and lodging online, and over 50 per cent share feedback online with social media being the dominant platform.

However, according to Arpan Sheth, partner Bain & Company, “There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms. It is imperative for businesses to address these concerns in order to effectively tap into the growing base of users.”

Seeming to reinforce the point, Vikas Agnihotri, country director – sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travelers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline.” If travel players tap these online users through personalized marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”

So, travel marketers face a challenge of penetrating existing users who exhibit a marked distrust in use of online channels to make bookings, especially around payment and pricing terms and booking experience compared with offline channels. Consequently, their online usage drops between the research (86 per cent online influence) and booking phases (40 per cent offline bookings).

The Google/Bain and Company report cites the following major shifts that marketers need to make to market to the online travelers:

—First, alleviate consumer concerns by improving the booking and payment experience to build a trusted brand and increase adoption.

—Second, they need to address the negative customer perception issues by mass customization to drive higher share in the segment.

—They also need to utilize consumer technology to penetrate mass segments (standardize, enable sharing), reach non-transactors (build offline presence), and create new user access.

—Moreover, they need to find innovative and frugal ways to package the experience to increase both adoption and retention.

A note on methodology: The How Does India Travel report was commissioned by Google India. Bain and Company conducted the overall research and analysis, interviewed industry experts for qualitative inputs and authored the report. The quantitative survey and primary interviews with customers and offline travel agents were conducted by Kantar IMRB.

What are the 10 Most Costly Cities for Business Travel?

According to the latest authoritative report on the subject, business travel is—brace yourself—very expensive in some U.S. destinations. In fact, four of the 10 most expensive cities in the world for business travelers are in the United States, says ECA International, which just released its updated Top Ten most expensive cities for business travel. Another four cities are in Switzerland.

Here’s the table.

A note: ECA International—it has headquarter offices in London, New York, Sydney and Hong Kong—provides data on cost of living, salary, accommodation, tax law, labor law, benefits and quality of life for international assignees in about 400 locations worldwide. The figures above represent a tally of the average cost of hotel accommodation, meals, drinks, laundry, taxi journeys and daily essentials.

Visit Booth # 2235 at IPW

Connect Travel, new owner and publisher of the INBOUND Report, will be at full strength at IPW June 1-5 in Anaheim. Connect team members who will be in Anaheim include (left to right): Will Seccombe, president, Connect Travel; Betsy Cooper, international editor, INBOUND; Shari Bailey, director of international, Connect Travel; and Fernando Harb, senior director of sales, Connect Travel.

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

Brevard County, Florida (Space Coast Office of Tourism) has selected veteran Florida marketing executive Peter Cranis as its new head of tourism development. Cranis has spent his entire professional career in various marketing and related communications positions in Florida. He most recently served as head of marketing and sales for ICON Orlando (formerly the Orlando Eye), the 400-foot observation wheel in Orlando’s International Drive tourism district. From 1999 to 2016, Cranis was vice president of global consumer and convention marketing for Visit Orlando. Cranis replaces Eric Garvey, who served as executive director of Florida’s Space Coast Office of Tourism for nearly four years before departing last July.

Hans van de Velde has been selected as the new chairman and CEO of TUI France. Based in Levallois-Perret, van de Velde, former tour operator director of the company, will chair its executive committee. At the same time, Serge Laurens, who has served as deputy chief executive officer, director of marketing, online & customer experience and head of external relations, also takes responsibility for the TUI and third- party distribution networks.

Jennifer Breed has been named account manager, USA West at Musement. Based in Las Vegas, Breed comes to the new job from The Las Vegas Monorail Company, where she had served for five years as director of sales and marketing.

The Providence Warwick CVB has named the bureau’s vice president of marketing and communications, Kristen Adamo, as its president and CEO. She succeeds Martha Sheridan who left the bureau in December to become President and CEO of the Boston CVB.

Adamo joined the Providence bureau in 2005 as the director of communications and was promoted to vice president in 2007.

Helen Tate (left) and Stephanie Robertson have joined the Canadian specialist Canadian Affairs as travel trade sales executives. Together, the pair bring almost 50 years’ travel experience to the company. Tate’s 30 years’ travel experience is mainly in senior sales roles with companies such as The Travel Corporation, Titan Travel and Travelworld. Robertson started her career in travel in 2000 and has held a range of sales and business development positions at All Leisure Holidays, Insight Vacations and Trafalgar Tours.

Colin Skerritt has been named Brand USA’s regional director in Canada. He’s be based in Toronto. Skerritt has more than 15 years of experience in the travel and tourism industry in Canada. From 2016 to 2018, Skerritt was director of tourism in Canada for the Antigua and Barbuda Tourism Authority (ABTA). Prior to his time at ABTA, Skerritt handled corporate and leisure sales and marketing programs for Air Canada, where he was the global accounts manager from 2010 to 2016

TravelBrands has announced that Shannon Smith has been promoted to director of sales, Ontario. Smith brings 19 years of experience and a wide range of expertise to the role. Her travel career began in 2000 when she worked as a Cultural Rep at Epcot for the Walt Disney World Company. Since then she has had many different roles at a variety of organizations including Carlson Wagonlit Travel and Encore Cruises and now TravelBrands.

Stephen Braun has been appointed marketing manager for tourism, external affairs, for The Metropolitan Museum of Art in New York City. Braun comes to the role from Macy’s, where he served for four-and-a-half years and was national manager, tourism marketing and development.

JG Travel Group has appointed former Thomas Cook head of marketing Danny Crowe as sales and marketing director. He is responsible for marketing across all four brands in the group: Just Go Holidays, Omega Breaks, Cruise Connections and Albion.

Raphael Magalhães has been hired as the new sales manager of Visual Tourism for the São Paulo market. (Visual is a subsidiary of CVC.) He comes to the company after almost two years with Flytour. Magalhães resume also includes tenures with Nascimento Turismo and MMTGapnet.

Lisa Strader was recently named director of Visit Southern West Virginia, based in Beckley. She joined the agency after spending more than a dozen years doing independent public relations and managing websites. She also served for nine years as marketing director for Songer Whitewater, an outdoor adventure company in southern West Virginia.

Happy Work Anniversaries

Erika Elisabeth for 23 years at Harlem Spirituals /New York Visions /Maven DMC

Suzanne Evans for 13 years at Trendy Tours LLC

Dennis Edwards for 12 years at Greater Raleigh Convention & Visitors Bureau

Joseph Cappuzello for 10 years at Group Leaders of America, Select Traveler, Going on Faith, African American Travel, SMM & Boomers Groups Conferences