The Destination Marketing Association International (DMAI) held its 2016 annual convention Aug. 1-3 in Minneapolis, and change was in the air. This year’s convention theme— “It’s a Brand New Day”—was meant to convey a rebranding of the vision created by a mostly new team of senior executives recruited by new CEO Don Welsh, who left his job as president and CEO of Choose Chicago to join DMAI earlier this year after Chicago Mayor Rahm Emanuel waffled on the matter of renewing Welsh’s contract and the Illinois State Legislature froze $7 million in tourism funding for Choose Chicago.

Within two weeks of joining DMAI, Welsh fired 75 percent of the association’s senior staff. The new team—several of whom worked for Welsh in Chicago—formulated the convention program in just three months with a blend of content that was generally acclaimed for its variety and relevance. One could sense the welcome felt toward Welsh and his team by a travel and tourism industry segment that constantly under siege from funding sources over accountability and relevance in an era where hoteliers have a variety of other channels to generate bookings and the sharing economy is forcing them to choose between consumer preference and members who see it as an existential threat. Below are some highlighted points from presentations by Carolyn Beteta, president and CEO of Visit California, and Chris Thompson, president and CEO of Brand USA that dealt with the international travel market and global travel trends.

 

Caroline Beteta:

—In recent years, the number of travelers from China to California grew 890 percent, buoyed by Chinese visitors from the nation’s emerging middle class.

—Chinese visitors spend 40 percent of their annual budget on retail, and shopping has become a destination driver.

—In recent years, there has been 44 percent increase in air passenger seats from China to California … a total of 44,000 a week.

—China was the state’s No. 34 overseas market in 2010; this year, it ranks No. 2 behind the UK.

—The U.S. share of the Chinese travelers total is just 2 percent.

—Chinese travel buyers from secondary cities used to buy USA product from Shanghai and Beijing operators, but now they are developing their own products.

—The group market seems to be finished; FITs are now brave enough to try local cuisine.

—Emerging markets for California: Brazil, which was tier 1, but is now tier 2.

-—Gulf carriers (Etihad, Emirates and Qatar Airways) have reduced what was once a 10 hour layover in Los Angeles down to one hour.

—South Korea and Mexico continue to perform well.

 

Chris Thompson:

—Four percent of Chinese have passports today, by 2020 it will be six percent.

—Since the validity period for U.S. visas was extended from 1 to 10 years, there has been a 50 percent increase in visa requests by Chinese.

—Chinese Incomes are growing at an annual rate of 10 percent.

—Desire to travel is among middle and upper classes is now at 56 percent.

—The USA is the largest long haul market for Chinese travelers.

—Chinese outbound is projected to grow to 250 million outbound visitors by the year 2020.

—In order to meet its goal of 100 million international inbound visitors to the USA by 2021, Brand USA needs to get carriers to expand lift capacity.

—Marketing tip: Like stock markets, travel companies need to invest in a portfolio of countries for the long term.

—The USA is able to overcome strength of the dollar because we have such a vast variety of products at different price points.

 

 

The 2015 Trade Show Showdown–NTA vs. ABA Events Held Less than One Week Apart: NAJ, the parent company of INBOUND, recently attended both the ABA and NTA 2015 trade shows, which took place less than a week apart. Although they don’t admit it, the leadership of NTA and its Travel Exchange and the American Bus Association (ABA) and its Marketplace are competing with one another tooth-and-nail for the attention and participation of the same operators and suppliers. Impressions and highlights from the two events follow.

• The ABA Marketplace, held Jan. 10-13 in St. Louis, was declared a success by 80 percent of the sellers we met with; they appreciate the clear focus of the show and the fact that it is designed so that sellers can get in and out in two days, should they wish to do so. Domestic operators, in general, reported consistently stronger sales results for 2014, although the increases over 2013 seemed surprisingly low given the strong stock market and buoyant economy, and they believe that 2015 will be even stronger. Several told us that their business was flat—but that was fine with them because they didn’t want to work that hard to build it.
• The student tour market has rebounded strongly after a post-2008 slump, as parents view learning by travel as an investment in their children’s future and are willing to explore creative fundraising ideas for student tours or actually finance the trips themselves. ABA seemed to have the edge for this market segment.
• While there were several large tour operator companies at ABA Marketplace, the show is primarily comprised of mom-and-pop buyers and motorcoach companies that have created tour divisions to increase utilization of their fleets when they are not engaged in charter business. They are very open to meeting with new destinations and suppliers but, realistically, their primarily challenge is in marketing their tours. According to most of the DMO’s and suppliers we spoke with, ABA operators rarely deliver more than one or two groups a year to a destination. But in an industry segment where the ROI is measured by the number of contacts generated and the quantity of appointments consummated, leads can be more important than the materialized groups itself when justifying one’s attendance. And no one goes hungry at ABA.
• The Moveable Feast—the ABA Comfort Food Court trough is always open. Were the two shows simply evaluated on free-food-grazing for attendees, it would be no contest. We don’t know how or when it started, but, over the years, the ABA Marketplace has become a comfort (aka junk) food court where exhibitors tempt buyers with snacks found nowhere on the heart-healthy foods list of the American Heart Association. Maybe attendees were trying to sate hunger pangs before they walked into the first luncheon served at the St. Louis Convention Center, where clearly half the people at our table left after the first bite. Moving from booth to booth, there was: Minnesota grilling spam; Wisconsin slicing and dicing cheese; Connecticut with a potato chip sampling operation; Atlantic City hedging bets with two types of popcorn; and Texas distributing Coke and other soft drinks, while others offered pecan pie, chocolate bars, candy and, of course, the crowd favorite, ice cream scooped by Wyndham sales executives.
• NTA—A Work In Progress with no Progress: “For the past five years, NTA has been a work-in-progress with no progress.” That’s how one supplier described the association’s state of affairs at its Travel Exchange–an unwieldy collection of events that combines the NTA Annual Convention, the United Motorcoach Association (UMA) Expo and the Faith Travel Association (FTA) Annual Conference—held Jan. 18-22 in New Orleans. The fact is the once dominant association has been trying to move forward since the CrossSphere rebranding debacle by experimenting with both international outbound and Chinese inbound receptive operators, new dates, and co-locating its show with UMA which created a muddled purpose and failed to gain acceptance with many suppliers and DMOs.
•  Held less than a week apart from ABA’s show, this year’s Travel Exchange brought out many fairly senior executives who wanted to be present to evaluate the show for participation in the future. Even longstanding NTA stalwarts reported that they were confused about the direction in which organization is headed.
•  NTA’s board recruited Pam Inman, former executive vice president and chief operating officer of the American Hotel and Lodging Association (AH&LA), as the new president who, in earlier interviews stated that she was hired because of her experience in association change. (Before her tenure with AH&LA, she had served for nearly five years as president and CEO of the Tennessee Hotel & Lodging Association.) She‘s been aboard at NTA since last September. During the NTA business meeting following the show’s opening breakfast, Inman announced several initiatives that were greeted favorably by many attendees we spoke with.
• The first, and most significant, was that the organization is moving the show back to a November or December date next year, essentially having two shows that fall in the calendar year 2016. This move will also terminate the co-location relationship with UMA after the third year as the November timing is not advantageous for them. Inman then announced that she would propose changes in the bylaws that would infuse the president with more authority. For the past few years, the newly elected NTA volunteer chairman, served as the face of the organization, representing NTA at various functions and speaking engagements while the president remained in Lexington minding the store.
• In 2015, this may change, especially since the new chairman for the first time is an Argentinean tour operator, Jorge Cazenave, general manager of Buenos Aires-based Cazenave Argentina for whom any trip to U.S. destinations outside of a gateway can be an all day ordeal. To Inman’s credit, she seemed to be accessible and omnipresent at Travel Exchange, while NTA’s previous president, Lisa Simon, seemed as if she were in the witness protection program ensconced in important meetings.
• News that NTA would be more welcoming to travel agents caused many suppliers and DMOs to wince, as that is usually handled by another department and means crossing over into someone else’s silo. While the pool of traditional tour operators is dwindling, the market for new operators seem to be emerging from new sources with an existing infrastructure to reach consumers that fall outside the traditional tour and travel industry. The motorcoach owners—as evidenced at ABA this year—are becoming the new channel of distribution for smaller and mid-size destinations and suppliers with over-the-road product. In this world, the lowly travel agent may emerge as a primary future source of escorted tours as the customer base for senior center group leaders die off. And with the U.S. dollar gaining 20 percent against the Euro, interest in Europe this year will surely increase for the coming summer season and travel agents may find more interest in groups.
• The main challenges for NTA’s Travel Exchange are twofold:

1. How to grow the international outbound segment of the business grow in a way that doesn’t alienate its core domestic suppliers and DMOs    who have provided the bulk of the association’s funding.
2. How to differentiate itself from the ABA Marketplace.

One idea may be to “hide” the outbound portion of the show from the domestic suppliers by dedicating one day that focuses solely on outbound travel that domestic suppliers and DMO’s could avoid. During a brief conversation in the press room at the show, Inman was asked about her vision for the future of the association. She stated she was only in the job six months, but she had experience turning around her previous association and is not afraid to institute changes. She also maintained that there was only a 20 percent overlap among buyers at the two shows and that suppliers could be selling NTA operators differently than they do ABA operators. (We met two attractions who were doing just that.   Showing ABA operators “entry level” basic information from a motorcoach operator’s perspective—parking, driver perks, etc.—while being more collaborative with NTA operators about actual experiential product development.)

 

• At a press conference, however, Inman did lay out the NTA’s legislative priorities for 2015. She said the organization will be working toward initiatives that will contribute to or help with transportation infrastructure modernization, the Visa Waiver Program, the centennial of U.S. National Parks next year, travel to Cuba and the NTA’s China Inbound Program.
• The Faith Travel Association—was it a Hail Mary Pass? This year there was speculation as to how NTA would integrate its new Faith Travel Association (FTA), an organization that was launched by the NTA at last year’s Travel Exchange and that now has 189 registered members, including 43 travel agents. This year, the FTA had its own area on the NTA trade show floor, with 18 exhibitors on the first day of the conference, dedicated to FTA seminars and programming. However, the organization had difficulty in attracting domestic worship leaders and church ministers who have the ability to pre-form groups from their base of churchgoers. Exhibitors told us that most of the buyers they met seemed interested in outbound Holy Land programs.
• When NTA announced that its November 2016 show would end the co-location with the UMA show, the response of many suppliers was: “Amen.” The two shows didn’t really seem to fit together either practically or culturally. While UMA attendees were focused on buying hardware—equipment–NTA sellers were selling software in the form of tour itineraries and ideas.