Complete Issue December 12, 2019

U.S. Travel Market Share to Continue Decline Through at Least 2023

In its final forecast on the subject in 2019, the U.S. Travel Association said last Friday that “Sluggish demand for overseas travel to the U.S. will sustain the trend of the country falling behind international travel growth worldwide.”

While global long-haul travel is projected to grow an average of 4.8 percent annually through 2023, the forecast noted, the pace of U.S. growth is projected to be just half of that figure—2.4 percent.

“That gap will further diminish the U.S. share of the total long-haul travel market to 10.4 percent by 2023,” said US Travel, “continuing the steady slide from its previous high of 13.7 percent in 2015.”

The 2019-2023 decline in market share would translate to a loss to the U.S. economy of a further $78 billion in visitor spending and 130,000 American jobs. As a result of the decline since the 2015 high, the economy has already lost $59 billion and 120,000 jobs through 2018.

Click here to access more information from the latest U.S. Travel forecast.

LATAM-Delta Deal Sharply Alters Capacity Channels between U.S. & South America

OAG, perhaps the most authoritative source of information on the global airline industry, said it all and said it succinctly through an analytical report on the news of Delta’s investment in LATAM: “With the dust only just settling on Delta Air Lines $1.9 billion, 20 percent investment in LATAM Airlines, the long-term impact on the Americas aviation market will be dramatic. The speed of the agreement and subsequent changes that will result in both competitive structures and airline alliances probably makes this the investment of the year or indeed the deal of the decade in the aviation sector.”

Until the surprise news of the major investment, LATAM had already been regarded as the airline of Latin America. The carrier is the result of a June 2012 merger between LAN Airlines of Chile and TAM Airlines of Brazil. Brand loyalty being what it is, one will still find instances of Chilean and/or Brazilian nationals referring to them as LAN or TAM. The recognition of the LATAM brand has slowly but steadily grown.

What happens when a carrier such as Delta Air Lines makes a move to own that much of another global airline? The answer gets complicated when one realizes that American, Delta and United (the world’s largest, second largest and third largest, respectively) are also the dominant carriers in their respective alliances: they are Oneworld (American), Skyteam (Delta) and Star Alliance (United).

Much like the ripple one sees spreading out from the point at which a stone was thrown into a small pond, the keen observer will see ripples spread their way through the world’s global airline industry. They will also have an impact on the other suppliers in the travel distribution system and the many partnerships, joint ventures and reciprocal marketing and promotional agreements that bind the industry sectors to one another.

Making sense out of all of the above is John Grant, the OAG analyst who tells us: “At a global level securing an investment in the largest airline in Latin America has tremendous strategic value and also alters the global airline alliance structures as the two charts below highlight. A near four percentage point shift between two alliances is very rare and although having no impact on the largest global alliance (Star), it does create a wider gap in position when compared to OneWorld”

Of Chart 2 above, Grant said: “A major part of the attraction for Delta Air Lines of LATAM is the complementary rather than competitive nature of their respective as the table below shows. Perhaps surprisingly there is no network overlap between the two airlines making for an enhanced network for Delta Air Lines and Delta’s position will be boosted significantly by LATAM’s strong position in South America.”

Seasonality & Chinese Tourism: Why It Matters

Thanks to the digital marketing firm Dragon Trail Interactive and its webinar late last month on the subject, we at INBOUND have a better appreciation of how the seasons and the holidays that go with them affect the patterns of Chinese travelers.

“The more you know about seasonal trends in Chinese tourism and Chinese holidays, the more you can prepare,” explained Sienna Parulis-Cook, associate director of communications for Dragon Trail, who moderated the webinar session.

For instance, because the Chinese holiday calendar is different from the Western one, it creates opportunities for filling the shoulder seasons or low seasons of U.S. destinations and travel suppliers, making tourism more evenly distributed, and more sustainable. It is also important that travel sellers be aware of the Chinese calendar, because, although the same holidays are observed every year, several are tied to the lunar calendar and others are not officially set by the Chinese government until December of the previous year, although the 2020 calendar was released late last month.

The official Chinese public holiday calendar for 2020 shows an extension to the May 1 holiday, as well as an eight-day Golden Week, giving Chinese workers more time off to travel in the new year.

 • (We point out here that the above holidays are not those in the sense that Americans and Europeans understand the word. That is, they are not extra. Usually, Chinese travelers or holidaymakers will work somewhere an extra day in their schedule to compensate for the “extra” day off from their regular workweek because of a holiday.)Chinese New Year: Top Tourism Facts

Understanding the Significance of the Major Chinese Holidays for Travel—First up, Chinese New Year: Those INBOUND readers who follow the Chinese market are no doubt aware of the first major holiday period on the calendar: Chinese New Year, which totals seven days. (Sometimes referred to as one of the two “Golden Week” holidays, it is especially conducive to long-haul travel among passport-holding Chinese travelers.) Each year is named after the 12-year cycle of animals which appear in the Chinese zodiac related to the Chinese Calendar.

Next up, beginning January 25, 2020 is the Year of the Rat. Rat? Yes, Rat. “From a marketing perspective, this might seem like a challenge,” said Parulis-Cook, “since rats don’t have a lot of positive connotations in western countries.”

“But,” she added, “there is nothing to worry about. The word in Chinese also means ‘mouse,’ which could be represented in aesthetically pleasing ways.” 

Second—National Day, Mid-Autumn Festival, Golden Week No. 2: The second major holiday period for overseas travel, especially for long-haul trips, is China’s National Day, the second “Golden Week,” which starts on October 1 each year. The Mid-Autumn Festival, another one of the most important traditional Chinese holidays, is based on the lunar calendar and is celebrated with one day off. Always around the end of September or beginning of October, Mid-Autumn Festival can sometimes overlap with the National Day holiday, merging into an eight-day holiday. In 2020, the holiday runs eight days, Oct. 1-8.

The Mid-Autumn Festival is noteworthy because it is a time of the year for eating mooncakes. Why? Said Parulis-Cook, “Mooncakes are given to elderly family members … but these days in China they’re also often given to important business partners and clients as a sign of honoring their relationship. If you do have partners and clients in China, you can consider sending mooncakes, or at least sending holiday wishes or some other kind of gift to mark the holiday, as most people usually receive more mooncakes than they can actually eat.”

Third—Not Really a Holiday, but a Season—Summer: The time of the year is important because it is a time for family and student travel, including graduation trips and study tours. Chinese school children generally have six to eight weeks off in the summer. The holiday starts at the beginning to middle of July, with the new school year normally starting on the first Monday in September.

Important to note: There are about 370,000 Chinese students studying at U.S. colleges and universities. Were Chinese students studying in the U.S. a stand-alone market, it would be No. 23—behind Israel and ahead of Chile.

Fourth—the Other Holidays: While extremely important to the Chinese and to those selling short-haul product, the other major holidays listed in the table are not of sufficient length to have a significant  impact on travel to the USA, which has held steady in its position as the most visited long-haul market for Chinese travelers.

To learn more about other holidays and their significance to Chinese travel patterns, try reading Dragon Trail’s The Ultimate Guide to Chinese Holidays: 2020 Update. Click here.

More Over-55 Brits Are Taking More Holidays

As is the case with other developed nations worldwide, the population of the UK is growing older. And as the average age increases, it is likely to result in a greater number of over-55 Brits taking more and more holidays. Is there anything else to this trend?

To get a quick grasp of what is going on here, INBOUND checked with the UK’s Office for National Statistics (ONS), as well as a new release put out by Mintel, the global marketing and research firm with several offices in the UK and more than 50 worldwide.

First, the demographics. Several months ago, ONS put out a news release in which Sarah Coates, from its Centre for Ageing and Demography, reported this: “In 2018, the UK population reached 66.4 million people and migration remained the main driver to population growth. “The structure of the UK’s population is changing: people living longer and having fewer children means the age structure is shifting towards later ages. The ways in which people live are also changing with cohabiting families the fastest-growing family type and more young adults living with their parents.”

While this brief quote invites some rather daunting questions for people such as labor economists (Who is going to replace the current workforce as more of them retire? And how will an aging population with so many older citizens travel?), we offer some of the data for travelers from Mintel’s research in which from which readers can come to their own conclusion:

—The number of holidays taken by over 55s has risen to a record 34 million.

—Domestic holidays taken by over-55s rose by 2 percent in 2018, reaching 20.6 million.

—In a figure of particular interest for those who sell long-haul travel to North America, the number of holidays abroad taken by over-55s increased by 1 percent in 2018, reaching 13.4 million.

—Over-55s accounted for 32 percent of all holidays taken and 35 percent of all expenditure. said the Mintel report.

—Mintel found that travel was a high priority for the over 55s age group When asked to choose their top three priorities for the next five years, spending time with family came top (54 percent) followed by improving health (38 percent), relaxing (37 percent) and travelling (36 percent).

“The space between the kids leaving home and the onset of ‘old age’ is widening,” said John Worthington, Mintel senior analyst, adding, “For those with the resources to enjoy it this is a golden time for travel. Competition for the silver pound is set to be intense. Digital research and online booking are becoming the norm amongst this group, but the trusted advice of their well-travelled peers is paramount.”

Here Are the Cities that Will Lead the Mobility Revolution

New Index ranks Singapore, Amsterdam, London, Shanghai, and New York as the top five cities, with Asian cities dominating the top 10: As the international tourism industry prepares to leap into another decade during which it is expected that countries with the greatest mobile access and innovation will lead the competition for market share, it appears that cities in the Asian regional market are already there.

The global business consulting company Oliver Wyman—headquartered in New York City with offices in more than 60 nation—just completed study that resulted in an Urban Mobility Readiness Index (see graphic below) which ranks 30 cities on how prepared they are to incorporate the latest mobility technologies and what they are doing to reshape urban mobility.

“Cities destined to become tomorrow’s mobility leaders are forward-thinking and user-centric,” said Guillaume Thibault, an Oliver Wyman partner and one of the creators of the new index. “They take a data-driven approach and work with the private sector to find solutions.” The research was conducted with The Institute of Transportation Studies at the University of California, Berkeley.

The index analyzes existing public and private mobility networks; current regulation, policy, and infrastructure; a city’s livability; and its capacity to absorb future technologies. While the index attempts to rank the outlooks for various cities, the research also provides best practices and concrete strategies that will allow cities to upgrade their offerings with a goal of transforming urban mobility from a challenge into a competitive economic advantage.

There is no “one-size-fits-all” solution when it comes to urban mobility because no two cities are starting from the same point. For example, cities around the world operate at vastly different stages of development when it comes to mobility. In Los Angeles, 89 percent of travel involves a car, while in Hong Kong only seven percent does. In Amsterdam, 60 percent of people get around by cycling or walking; in Mexico City, 70 percent take mass transit.

Key to success for cities is a focus on the development of mobility ecosystems that provide a holistic framework to incorporate advanced technologies and create seamless, multimodal networks. Another pivotal element for cities is working closely with academic and private sector mobility research efforts and testing the latest technologies.

Key to success for cities is a focus on the development of mobility ecosystems that provide a holistic framework to incorporate advanced technologies and create seamless, multimodal networks. Another pivotal element for cities is working closely with academic and private sector mobility research efforts and testing the latest technologies.

Why Singapore is on Top: Singapore, Singapore, the island city-state off southern Malaysia, ranks number one in the index because, it tells the reader, it recognizes the importance of building ecosystems, private sector and research partnerships, and infrastructure investment. It has been a pioneer in reducing traffic congestion through various initiatives and has adopted an aggressive approach to integrating cutting-edge technology with progressive transportation policies. The region is leading the way in the latest mobility tools, platforms and services, as well as autonomous driving and real-time, digitized traffic management.

While most of the top 10 represent sprawling metropolitan areas, Amsterdam, the index runner-up, stands in stark contrast, because of its relative compact size and population. Like many other top-scoring cities, it is known for its robust infrastructure, extensive public transportation system, and efforts to downplay the automobile as a transport mode. In recent years, it has adopted policies to foster electric and autonomous vehicles, increase the number of charging stations, and encourage alternate modes of transportation, particularly bicycles. The city has attracted considerable private investment which is helping it with a large-scale smart city initiative as well as the development of a domestic mobility industry.

Additional key findings:

—The top five cities all have legacy infrastructure such as public transit systems, a history of sustained investment, rapid technology adoption, an engaged private sector including innovative startups, and forward-looking policies that aim for growth.

— Five of the top 10 cities are in Asia including Singapore, Shanghai, Tokyo, Beijing and Seoul. The average index score is 51 out of 100 across all 30 cities.

—Of the 17 cities that scored above average: six are in Europe, six in Asia Pacific, four in the US and Canada, and one in the Middle East.

For more on Oliver Wyman’s research and publications on the subject of city readiness (including such titles as How Cities Should Prepare for Artificial Intelligence, visit here

Why Are English Language Training Centers Being Shut Down in China?

While it is not quite clear what impact, exactly, the development could have on Chinese visitation to the United States, or precisely what is prompting it, Chinese officials seem to be cracking down on what has heretofore been the loosely regulated, or unregulated, business of English education schools or  language training centers in China. In a news item one does not find in regular outlets, the Sixth Tone, a sort of alternative online publication based in Shanghai, has published a rather thorough investigative piece on the matter.

What one learns is that more than 20 English training schools have been shut down in 2019. At the same time, the Chinese government has launched an official campaign to clean up the practice, Sixth Tone reports, noting that According to China’s minister of education, Chen Baosheng, officials had investigated more than 401,000 training organizations as of March this year, finding illegal practices in 273,000 of them—as businesses learn that the regulations for operating an educational organization are much more complex than operating a business. For the complete story, visit here

Mergers & Acquisitions

• A new, major presence in the retail sector of Spain’s travel and tourism industry is the result of a just announced agreement to merge Halcón Viajes (part of Globalia) with Avoris (part of Barceló) to generate a mega-group of retail agencies with 1,500 locations in Spain. The Globalia group brings to the venture the brands Halcón Viajes, Viajes Ecuador, Geomoon, Travelplan, Welcome, Globalia Meetings & Events, Globalia Corporate Travel and Globalia Autocares. Barceló brings B the Travel Brand, Catai Tours, Rhodasol, Bedtoyou, BCD Travels, and BCD Meetings & Events, in addition to its air division consisting of Evelop and Orbest Orizonia Airlines, among others. The new entity will have 36 brands, a staff of 6,000 employees and a turnover close to € 3.7 billion ($4.07 billion). The action comes in the wake of last month’s sale by Globalia of Air Europa to the IAG Group (British Airways, Iberia) in a $1 billion deal. The logistics of the transaction did not involve that much travel: both companies are based in Palma, which seems to be a de facto capital of the Spanish industry. Other well-known players based in Palma include Hotelbeds and preferente.com, the Spanish travel trade journal.

• After announcing last month that it was going to acquire the Holiday Land agencies and other Thomas Cook brands, DER Touristik, Germany’s second-largest tour operator, announced two weeks later that it had been unable to finalize the terms of the deal with the administrators who are overseeing the Thomas Cook bankruptcy. Ingo Burmester, CEO of DER Touristik for Central Europe, said: “We would have been delighted to provide the Holiday Land franchisees a successful and stable framework for their work under the roof of DER Touristik. However, the contractual terms that were absolutely essential for us could not be reached.” Shortly after the deal fell through, it was announced that RTK, the German travel agency cooperative network announced was taking over the franchise organization with its 360 members, including brand and system rights. Thomas Bösl, RTK managing director, said: “I’m delighted to have won this established brand for us and at the same time to be able to offer successful travel agency owners a new home in a well-known business environment.” Joint managing director Lars Helmreich added: “Cooperation with the independent travel agency owners within the strong Holiday Land family will strengthen our position as the leading sales organization on the German market.”

• In the UK, the Portman Travel Group, owner of Elegant Resorts, has acquired the trade-only tour operator If Only. The agreement means that If Only founders Brendan and Mary Maguire will retire 18 years after establishing the business. The senior sales and management team—it includes Andy Freeth, Gordon McCreadie, Tracy Docherty and David Irving—will remain with the company. Freeth said the If Only and Elegant Resorts brands will remain “distinctly separate” from one another, and there are no immediate changes planned for either business. Portman chief executive Redmond Walsh said: “I’ve known Andy for 10 years and (the brand) is an obvious fit given Portman is already in the luxury space with Elegant Resorts.”

• Nederlander National Markets LLC, one of the largest operators of theaters and music venues in the U.S., has merged with Jam Theatricals Ltd., one of the largest presenters and producers of Broadway shows in the U.S. Steve Traxler, formerly the president and chief executive of Jam Theatricals, will stay on in the new company as director of strategy and integration, overseeing subscription seasons in 26 cities. The new company will retain the Nederlander name. As part of the merger, the National Theatre Group will become a Nederlander company and will continue to operate the National Theatre in Washington, D.C. 

The new Nederlander National Markets will operate under the direct leadership of Nederlander President James L. Nederlander and Nick Scandalios, executive vice president. Jam’s Traxler, co-founder, president & CEO, will continue in the new company as director of strategy and integration, overseeing the subscription seasons in 26 cities as well as the management of the National Theatre.

The Nederlander Organization owns or operates Broadway venues the Brooks Atkinson, the Nederlander, the Gershwin, the Neil Simon, the Lunt-Fontanne, the Palace, the Marquis, the Richard Rodgers and the Minskoff; and venues outside New York including Los Angeles’ Hollywood Pantages; five Chicago theaters including the James M. Nederlander; London’s Adelphi, Aldwych and Dominion; and venues in Oklahoma City, San Diego, San Jose, Tucson and several in North Carolina and South Carolina.

• Abercrombie & Kent has acquired luxury operator Cox & Kings, a competitor, for an undisclosed sum. The viability of Cox & King, which was founded in 1758 and had offices in a number of overseas locations, had begun to wane after financial difficulties effectively shut down its parent operation in India. KPMG was appointed administrator to Cox & Kings on December 4, and the acquisition agreement was announced the following day. A&K said the agreement safeguards all current and future bookings and will see “substantially all” 66 UK jobs transfer to the new owner.

Overseas Operator Scores the Great American Outdoors Index

Ranking in the top spot as the best U.S. state for outdoor enthusiasts is … California! Hawaii also came in at a strong second place. Here are the top 10 states in the ranking by Rickshaw Travel—a UK-based tour company that focuses on adventure and outdoors travel. It rates the United States as an outstanding destination and especially likes the United States and its scenic outdoors and, in particular, it seems, its national parks. The top 10 states are: California; Hawaii; Washington; Vermont; Oregon; Alaska; South Dakota; New Hampshire; Idaho; and Montana.

Rickshaw came out with its index and ranking in what is a de facto celebration of the U.S. For the index,  the company scored each state on the following categories: National parks; wildlife biodiversity; natural beauty; carbon dioxide emissions; greenest states; and ir quality. Using these categories, the Rickshaw team established an overall Great American Outdoors score by scoring each state out of 5 across the elements and totaling this together, allowing for the highest available score of 35. (Analysts used seven different information sources in its review.)

The Carbon Dioxide Emissions score was first assigned a ranking which was then scored out of 5, as the highest level was far above the average across the states. If there was a tie in the total score, we used the greenest states score as the determining ranking factor.

Here is what the factors look like in a color scheme:

Finally, what the USA states look like according to the Great American Outdoors Index:

There is more commentary on why some of the states scored so well (“California soared to the top with nine national parks across the entire state, which was more than anywhere else in the U.S. It’s also home to a staggering 6,717 different species of native plants and animals.”), as well as a brief slide show here.

Wake up to the New Year with New Market Opportunities from Connect Travel

The overall international inbound travel market and China, in particular, will soon be shaking off the drowsiness of the past two years and waking up to the opportunity afforded next year by the USA product.
Explains Shari Bailey, Connect Travel President & General Manager of Connect Travel events, “This means that Connect Travel’s young Travel Market in mid-February at the Gaylord Palms Resort & Convention Center Florida, as well as its decade-old Active America-China Summit at the beginning of April at the Hilton San Diego Bayfront San Diego, offer U.S. destinations and travel suppliers the chance to make a good first strike with international tour operators as the U.S. market swings into full recovery mode.”

“A review of some key facts, along with a quick citation of what some major industry professionals are telling us about the market recovery for the international and Chinese sectors should be a signal for those serious about doing business to sign up for both events,” added Baily, who noted the following:

Connect Travel’s TourOperatorLand.com and its Partner of the Week

Through its Trek Around the Northwest Itinerary, visitors to Seattle Southside find the ideal location for a breathtaking Pacific Northwest getaway. It will take you to some of the most picturesque destinations of the Evergreen state. From the iconic Space Needle, to snowy Mount Rainier, to the largest private air and space museum in the world, you’ll be able to make the most of your three-day journey in Seattle’s Backyard.

Customized Tours, Tours Northwest, and Totally Seattle Tours all offer Seattle city tours, and they cater to guests staying in Seattle Southside hotels. The tours take around three hours and you’ll be able to see some of the most iconic landmarks in the Pacific Northwest.

For more information, visit Seattle Southside’s portal on TourOperatorLand.com: https://www.touroperatorland.com/destinations/seattle_southside_regional_tourism_authority1

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

Happy Anniversaries

Posted Industry Jobs

Job of the Month

—In the UK, you can apply to be the travel planner and manager for the Queen and her Royal Household. For more details, visit here.

From SearchWide Global:

From HARP wallen Global Executive Recruitment and Search: