A combination of forecasts and the latest data available for the UK, Germany and France suggest that, even with the euro and British pound still performing at sluggish levels against the U.S. dollar, the outlook for this year has tour and travel industry leaders and analysts anticipating an increase in visitors to the USA from the three countries, which rank as three of the Top 10 overseas source markets for U.S. inbound tourism.
In fact, the U.S. National Travel and Tourism Office’s forecast arrivals totals for visitors to the U.S. in 2018—4.67 million from the UK; 2.14 million from Germany; and 1.8 million from France—show that the three country markets produce just over one out of every five (21 percent) of all overseas arrivals to the United States. Following are some notes gleaned from the latest dispatches of the tour and travel industry trade press in the three countries.
UK
Just released data from the UK’s Office of National Statistics (ONS) show that overall outbound travel from the country was up across the board during peak travel months in 2018—this despite a year-long drumbeat of news that has all but predicted a decline a in British travel abroad. In fact:
—British travelers made more than 24 million trips abroad in the peak travel months of July, August and September of 2018, which is one percent above what it was for the same period in the previous year. Travel spending was up three percent.
—Visits to other countries in Europe remained about the same.
—Even though the peak travel months had widely varied totals (See table below), overall year-to-date travel to North America in 2018 was up one percent vs. 2017. The figure for July is skewered because almost all of England stayed home from June 14 till mid-July as England’s soccer team played into the final week of the event. And nearly no one traveled abroad (unless it was to Moscow, host city for the event) during the World Cup finals that followed.
—Most travel agents across the UK have reported strong January summer holiday sales for 2019.
GERMANY
It’s a “Sunny outlook for 2019” declared the German travel trade publication FVW as it reported that, according to TUI, the largest tour operator in Europe, “German leisure travel will grow solidly this year.” Over the past half-year, the tone of the language assessing the outlook for the German market has gotten considerably brighter—from cautiously optimistic to almost buoyant. The change in tone was evident at the recent (Jan. 12-20) CMT show in Stuttgart, where the findings from the annual Reiseanalyse survey of some 7,500 consumers were released. Overall, it indicated that “the prospects for German outbound travel look good for 2019 thanks to a stable economy and continuing high travel demand.” Other findings included the following:
—Prof. Martin Lohmann, responsible for the in-depth annual survey, which is conducted by the FUR research network, described the current “mood for holidays” as “extremely good.” In general, Germans are “experienced travelers, demanding, wanting to discover and multi-optional,” and are planning more trips and higher spending in 2019, he emphasized.
—Germans have both time (63 percent) and money (60 percent) to go on holiday this year, one percentage point higher than last year’s figures.
—Travelers plan to keep a closer eye on costs in 2019. Twenty-nine percent of respondents want to spend more on their holiday (down one percent from last year) while 14 percent plan to reduce holiday spending compared to 13 percent last year.
—In 2018, Germans went on about 71 million holidays (+2 percent) and spent a total of €75 billion, or $85.2 billion (+3 percent), the survey results showed. In addition, the number of short trips (2-4 days) increased by one percent to 92 million.
Meanwhile, TUI Germany also released its current bookings trends, with Stefan Baumert, TUI Germany’s tourism director telling FVW “Germans are again in the mood to travel in 2019. There are already signs of a good start to the summer season.”
TUI’s market assessment indicated that while demand for USA, which is the number one long-haul destination, is modest, long-haul holidays are gaining popularity, with the company reporting a 20 percent increase in bookings for this segment.
FRANCE
“The United States continues to be popular among tourists!” declared Didier Forray in a column for the French travel trade journal Tour Hebdo. The column took issue with a recent outlook for international travel piece to the U.S. in which David Huether, senior vice president for research at the U.S. Travel Association, said “a number of factors, including rising trade tensions, slowing global growth and the rising dollar against other currencies throughout 2018 could potentially hinder international passenger arrivals in the short term.”
“This global forecast appears to be well out of date on the French market, which should break all its records in 2018,” said Geoffrey Duval, president of the Paris-based United States Office of Tourism in France, declaring that “All the tour operators, be it in B2B or B2C, agree that last year was excellent.”
“Some tour operators have even recorded double-digit growth, which had not happened for a long time in this market,” he added, noting that the list of favored destinations in America remains the same as in previous years with New York, the U.S. West and Florida leading the list. Duval indicated that Hawaii and Oregon are starting to make their mark, alongside Colorado, Nevada and Louisiana.
As for 2019, reported Tour Hebdo, French tour operators say it is still too early to communicate figures but all expect an increase. Duval says that the tour operator members in France are said to be “satisfied” with the first bookings for the coming summer.
Other notes on the French market from Tour Hebdo:
—Tour operators note a decline in guided tours for the benefit of autotours and “à la carte” itineraries. “The circuits are clearly down while autotours continue to grow, year after year,” said Thierry Maillet, sales director of the French Circuits.” The” à la carte “is more and more requested which makes us optimistic for 2019,” noted Charles Julien, product manager North America at Jetset.
—The weakness of the euro against a rising dollar should also have an impact on travel to the United States. “This is not going to prevent people from leaving, but the dollar is changing travel patterns,“ said Duval, “with a strong dollar, some customers will be inclined to book a lower-class hotel or reduce the length of their stay.” Barbara Grenie, product director of Vacances Fabuleuses, was more reassuring, saying “We do not have any particular concern about the exchange rate because this trend exists one year out of two at most for this destination”.
—The socio-economic situation in France weighs on the morale and behavior of consumers. “With the movement of yellow vests, the French are not too thinking about the holidays,” said Maillet, who is, however, optimistic for the rest of the year: “The United States will always (be a) dream and, sooner or later, customers will return to agencies! “
For the Record: In it most recent long-term forecast for arrivals to the U.S., the National Travel and Tourism Office has forecast that, for 2019: UK arrivals will increase by 2 percent; Germany by 2 percent; and France by 4 percent.
Data from GfK (Gesellschaft für Konsumforschung, or Society for Consumer Research), the Nuremberg-based market research company, are about the closest thing we have to real-time, relevant data for any major source market. And if the latest sales numbers from GfK are any indication of where the market is going, the tour and travel industry can look forward to a modest but certain increase in business from Germany, which is the largest source market for inbound international visitor traffic from Continental Europe.
INBOUND readers who regularly visit our HODGE PODGE section might have noticed last week’s news that René Herzog, head of DER Touristik’s Central Europe division—it is the company’s largest—is leaving the company with no particular place to go. At the same time, Ingo Burmester has left the top job at Thomas Cook UK to take the top position at DER Touristik in a handover that will be effective next May.
A just-released survey of the top-earning one third of the population by German marketing and management consultants Inlux and Keylens have found, as the German travel trade publication FVW put it, “Luxury travelers in Germany want not only five-star hotels and top comfort but also unique experiences and quality time with their family, according to a new survey as well as specialist tour operators.”
The principal findings, contained in the annual report, “Consumer Generations,” indicated that “luxury customers are paying more attention to internet ratings and reviews but a five-star standard remains by far the most important factor.”
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This week, we take a look at what our colleagues at the authoritative German travel trade publication, FVW, have to say. In the most recent issue of the INBOUND report, we discussed the 2019 outlook for the German market, along with an assessment of the country’s expected performance as a source market for the U.S. in the current year—from the perspective of two major German tour operators: FTI and America Unlimited. While both anticipated just fair results for 2018 and next year, neither anticipated any fall-off, which is good news, considering the fact that Germany is the fourth largest overseas source market for inbound travel to the U.S., behind only the UK, Japan and China.
