The Inbound Report

Covering the Inbound Tourism Industry Since 1996

Is the Terrible Winter Triggering Holiday Purchases for Germans?

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German winterSubmitted by Betsy Cooper, International Editor

The latest report from the Nuremberg-based marketing research company GfK had some good news for the German travel trade, reporting that its monthly survey of travel agencies showed a 13 percent summer bookings rise in December, and that demand had picked up strongly in the second week of January, and midst a particularly harsh winter for Germans.

Last fall, European experts announced that the winter of 2016-2017 would be the coldest in the last 100 years as arctic air masses arrive over the European continent. And they were right. And according to German meteorologist Dominik Jung, the lowest temperatures were expected to be recorded in January and February. March will not be any warmer, and temperatures would not increase until April. His predictions were supported by AccuWeather meteorologist Joe Bastardi and by Elena Volosiouk, specialist at Phobos Meteorological Centre.

In reporting on the GfK release of the survey results, the German travel trade publication FVW said that Germans already started booking their summer holidays early in good numbers in November and December, and that “this trend appears to have strengthened in the first few weeks of the new year, which is traditionally the strongest booking period of the year.” Some other highlights from the report:

  • Alltours, the Number 5 tour operator in Germany on the basis of market share, had a “good” bookings increase compared to last year.
  • Schauinsland, Germany’s Number 7 tour operator, said it had a “very satisfactory” December.
  • North America specialist Canusa reported double-digit growth for Canada and a single-digit rise for the USA.
  • Travel agents are also happy with the start to 2017. For example, Derpart, one of Germany’s largest travel agencies, has a sales increase of about 8 percent compared to last year
  • Another major agency, Lufthansa City Center, said it has had a “high single-digit” rise.
  • As for destinations, Spain remains the favorite among German travelers. But, with the decline of Turkey as a destination for German travelers, Greece has become popular, with TUI, indicating that it has experienced a 41percent increase rise in bookings for the destination for summer 2017.
  • Thomas Cook, Germany’s second-ranking tour operator, told FVW that Greece was an “absolute trend destination” for many different customer groups this year.
  • Mexico is performing very strongly with TUI, the Number 1 tour operator in Germany, reporting a 71 percent bookings increase. TUI also reported strong growth for the USA, South Africa, Canada, Mauritius, Seychelles, the Dominican Republic as well as Indonesia.

 

Asia Travel Boom, Led by China, to Continue in 2017

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ITB World Travel TrendsSubmitted by Betsy Cooper, International Editor

According to the ITB World Travel Trends Report 2016/2017—it was prepared by IPK International on behalf of ITB Berlin—all indices point to substantial growth in outbound travel by Asians. Some highlighted items from the Trends Report:

  • Asians traveled more than ever so far this year, with a surge in trips to destinations within the region and including many more beach holidays. China was once again the growth driver. After a double-digit rise in international trips this year, the outlook remains strong for 2017.
  • The Asian economy continued to grow well in 2016 and is expected to maintain on a solid growth path, according to figures from the ifo Institute for Economic Research in Munich.
  • After GDP growth of 4.8 percent in 2015, the region is forecast to grow by 4.6 percent in 2016 and also in 2017, slowing to a 4.4 percent increase in 2018.
  • In China, fiscal impulses will continue to generate annual economic growth rates of about 6 percent, but Japan and South Korea will be held back by low growth in international trade, according to the ifo experts.
  • Outbound travel by Asians grew by11 percent in the first eight months of 2016, according to World Travel Monitor® figures.
  • There was a very strong 14 percent rise in trips to destinations within Asia and an 11 percent increase in travel to the Americas.
  • The number of trips to Europe dropped, however, by one percent between January and August 2016.
  • China was the driving force for growth with an 18 percent rise in outbound trips (excluding to Hong Kong and Macao).
  • South Korea also performed very well in the 2016 measuring period with an 11 percent rise in international travel.

 

ASIAN OUTBOUND TRAVEL TRENDS

January through August 2016

World Travel Trends Rept A

  • Holidays, which account for an overwhelming 81 percent of all outbound trips by Asians, increased by 11 percent over the first eight months of 2016.
  • There was a healthy 7 percent increase in international business trips, and a strong 12 percent rise in the number of visits to family and friends (VFR) and other leisure trips abroad.
  • Asians are clearly going on more sun & beach holidays, which grew by 20 percent between January and August 2016, according to World Travel Monitor® figures.
  • There was also good growth for countryside trips (+15 percent) and city trips (+8 percent) but the number of touring holidays increased by only 2 percent.

 

ASIAN OUTBOUND TRAVEL TRENDS

January through August 2016

Type of Holiday

World Travel Trends Rept B

 

Rolf Freitag, IPK International founder and president, commented: “This year’s boom in Asian outbound travel, especially by the Chinese, is remarkable. Moreover, we can observe an important long-term trend. Asians are starting to go on fewer sightseeing trips taking in several countries. Instead, many of them dream of relaxing on sun & beach holidays. In other words, they are gradually becoming ‘normal holidaymakers’ like in Western countries.”

The social-demographic profile of Asian outbound travelers reflects this trend towards more short-haul holidays within Asia. They are mostly relatively young:

  • About 38 percent of Asians taking international trips are aged between 15-34.
  • Another 49 percent are aged 35-54.
  • Just 13 percent are aged over 55, according to World Travel Monitor® figures.

The proportion of older international travelers is much higher in Europe and North America. Asian outbound travelers are on average also slightly better educated and better off than their counterparts in Europe and North America.

Against this very positive background, the outlook for Asian outbound travel remains good. IPK International predicts a 6 percent rise in Asian outbound trips in 2017, based on its Travel Confidence Index which measures travel intentions for the following year.

Kuoni, U.S. Suitors Vying for Tui’s Travelopia

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Submitted by Betsy Cooper, International Editor

TTravelopia Brandshe last of the component part of a Tui collection that comprised tour operators, hotel bedbank, attractions and entertainment inventory to go up for sale since the company—Tui is Europe’s largest travel business—merged with its parent company in December 2014 is close to being acquired.

Up for sale/bids is TUI’s collection of 50 specialty brands that operate under the Travelopia label. They include such names as American Holidays, Citalia, Brightspark, Educatours, Gullivers Sports Travel, Grand American Adventures, Hayes & Jarvis, HTS Total Ski, Jetsave, jumpstreet, MarcoPolo, StudentCity, trekamerica and more.

Reports from Europe indicate that Tui is taking its time with the process which, it had earlier indicated, should be completed during the first half of 2017.

Among the suitors mentioned are:

—The Zurich-based Kuoni Group, which itself was acquired a year ago by EQT Partners, a private equity firm that is part of Sweden’s Wallenburg family of businesses. It was only a year ago that EQT acquired Kuoni from its Swiss owners, which included descendants of Alfred Kuoni, who started the business in 1906.

—Warburg Pincus a half-century old U.S. private equity firm based in New York with offices in Europe, Brazil, China and India. Their portfolio does not appear to include many tour or travel-related businesses.

—KKR, another New York private equity firm which only last month joined with an affiliate of Denver-based KSL Capital Partners and purchased Apple Leisure Group (which includes the operator Apple Vacations®) from Boston-based Bain Capital.

 

Assisting Tui in the sale is Citi. Reports indicate that Tui is seeking about €500 million ($530 million) for the business.

Aside from the capital involved, the sale will allow Tui to intensify its focus on its core activity of selling tour packages and unifying the company brand—a process that is eliminating all Tui national brands as well as the venerable First Choice and Thomson brands in the UK—by sometime this year.

Tui last year sold its Hotelbeds unit to the private equity group Cinven and the Canada Pension Plan Investment Board in a deal worth €1.165 billion euros ($1.32 billion).

 

Operator Notes from Europe

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ryanair-holidaysSubmitted By Betsy Cooper, International Editor

Ryanair has launched a package holiday service offering flights, accommodation and transfer packages on its website. The company has created the new business, Ryanair Holidays, in partnership with Spain-based tour operator Logitravel and accommodation provider World2Meet, owned by Iberostar Group. Ryanair Holidays initially launches in the UK, Ireland and Germany today, with other markets to follow in 2017.

 

tui-groupTui chief executive Fritz Joussen said last week that the sale of specialist division, Travelopia, is expected to be finalized in the first half of its financial year. Travelopia is the umbrella group of 50 specialist brands, including Hayes & Jarvis, Exodus, Travelmood, Citalia and Jetsave. Tui put the division on the market three months ago with the intention of selling the business as a single entity. The deal is potentially worth €500-600 million ($527-633 million).

Tui Group also reported a growth of 12.5 percent and describes move away from tour operating as ‘paying off.’ For TUI Germany, winter sales are up by 2 percent, with a 7 percent rise in average selling prices outweighing a 5 percent drop in customer volumes.

 

thomas-cookIn the UK, Thomas Cook has launched a new web based booking platform to support independent agents ahead of peak season. Thomas Cook Trade, which extends to all Thomas Cook brands, includes TripAdvisor reviews and video tours for selected hotels, an image gallery, software to produce tailor-made window cards and an emphasis on extras like room. A training portal, The Thomas Cook Training Academy launches on Dec. 15 and focus on four key modules for Thomas Cook exclusive roduct. The operator has increased its sales team ahead of peak booking season, with staff due out on the road visiting key agents in January.

 

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