Stefan Merkl Schools Delegates to RTO Summit in Orlando on Current Trends: A long-time veteran of the tour and travel industry who heads up the Explore Marketing firm, which represents a number of DMOs and travel suppliers, Stefan Merkl shared with delegates to NAJ’s RTO Summit last week in Orlando insights gleaned from his meetings spread over four months with tour operators and OTAs in key European source markets for the U.S. inbound tour and travel industry.
The multilingual Merkl recently concluded a series of sales missions that took him to 7 countries, meeting with a total of 52 operators in Germany, Austria, Switzerland, The Netherlands, Belgium, France and the UK. Operators visited included: DER Touristik; Kuoni, Booking.com; fairflight.de; Jetset; TUI; USA Travel and Jan Doets (America Tours).
With occasional quotes included, INBOUND has digested is presentation in outline form. (For additional information, contact Merkl at stefan@explore-marketing.com.
- TREND: New flights have been launched between Europe and the U.S. by Aer Lingus, LEVEL, XL Airways France, IcelandAir, Primera Air, WOW, American Airlines, British Airways and United. During the same period, however, American Airlines cancelled flights serving Munich and Frankfurt; American Airlines dropped flights from Philadelphia to Glasgow, JFK to Dublin and Edinburgh, and Chicago to Manchester. Also, airberlin went out of business late in 2017, affecting the volume of flight routes available in the peak 2018 travel season.
- TRENDS: The top USA destinations for 2018 among the trade in Europe have been: Hawaii, California, Alaska, Nevada, and New York. Destinations that are the USA’s main competitors are Canada, Australia and South Africa. And Florida is facing some hurdles in its key source markets.
- TRENDS: Growth opportunities are presenting themselves through an increase in fly-drive options when visiting the USA, with some Europeans booking RVs as well as rental cars. Groups from high-end consumer segments are smaller up to 16 passengers), and there is a shift to booking direct. Maybe it’s part of a global shift: some established European operators are setting up shop in the USA, acting as their own receptives.
- TRENDS—Technology and OTAS:
—Sourcing done by OTAs now includes attractions and sightseeing tickets, with Expedia, Get Your Guide and Ceetiz active in this area.
—Acquisitions in this sector include the TUI Group’s purchase of Musement and Booking.com’s acquisition of Fareharbor.
—Technology is now providing tools for, and helping agents handle, tailor-made travel.
—XML and API connectivity for latest pricing and product availability reflect the trade’s need for real-time data.
—When it comes to promotion, OTAs have greater budgets for marketing and promotion. And one will find the OTAs engaged in competitive pricing.
- MARKET UPDATE—UK
—Operators reported a successful 2018
—The year got off to a slow start, and bookings came in later than usual.
—Bookings for 2019 are strong and are up year-on-year.
—However, Brexit negotiations continue to cloud the market.
Opportunities
—The contracting of Virgin Holidays has shifted to the UK.
—Expat Explore expands group series into the USA.
—Southhall Travel expands into the USA.
—Leisure Pass Group is introducing the LPOS system to the USA to allow DMOs to launch their own attraction passes.
—There is attraction contracting by the Thomas Cook Orlando office.
RTOs and Wholesalers frequently mentioned
—Hotelbeds, Bonotel, ATI, Destination America
- MARKET UPDATE—FRANCE
—2018 was described as a good year for France, with elections being over.
—The market still focuses heavily on group series for more mature travelers.
—Younger travelers come as FIT and use OTAs to make their own arrangements.
—For New York, clients tend to make their own arrangements, while for the West Cost, the help of tour operators is being requested more frequently.
—France is a very price sensitive market, with base packages being offered.
Opportunities
—Rise of B2B platforms such as Worldia, Amerigo and Marco Vasco.
RTOs and Wholesalers frequently mentioned:
—Go West Tours, New World Travel, Meting Point, Bonjour USA, Hotelbeds, Cali Fun, American Holidays, AmericanTours International, Ceetiz.
- MARKET UPDATE—ITALY
—This has been the best year ever for inbound traffic to the USA from Italy. Total visitation for Italian travelers to the U.S. surpassed 1 million for the first time in 2015, and then again in 2017. Through April of this year, according to the U.S. National Travel and Tourism Office, it was up more than 1 percent vs. 2017.
—It is the 4th largest source market from Europe, and 12th largest international market overall.
—It faces internal political and economic challenges that could result in market volatility.
Opportunities
—Attraction contracting with TUI’s Musement.
RTOs and Wholesalers frequently mentioned:
—TeamAmerica, Go West Tours, Gastaldi USA, Opentours.
(Merkl’s caution: “I think they’re going to face some challenges this year because it of economy was downgraded in terms of credit worthiness.”)
- MARKET UPDATE—BELGIUM
—A mature market with a heavy focus on FIT and fly-drive travel.
—There were changes beneficial to the industry made recently in laws regulating marketing; operators can re-introduce catalogs with pricing.
—TUI Belgium has introduced a new tool for tailor-made itineraries.
Opportunities
—Vayamundo is adding Florida as a destination.
—Company is working with TUI and Euram on furnishing their tailor-made tools.
RTOs and Wholesalers frequently mentioned:
—AmericanTours International, Hotelbeds, Travalco, American Ring, Rocky Mountain Holidays, AlliedTPro, Cali Fun.
- MARKET UPDATE—THE NETHERLANDS
—Operators seemed content with the performance of the U.S. as a destination.
—American Ring Travel is leaving the FIT space, and s focusing purely on groups.
—Travalco was mentioned repeatedly as one of the leading RTOs for FITs.
—“Wide open spaces” of the Western USA are popular among Dutch travelers.
—FTI just launched new product, and the market Is happy with it.
Opportunities
—Booking.com is starting to sell attractions.*
—When it comes to selling US, Booking said, Germany, UK and France form the top tier
—Booking.com says “vacation rentals are picking up in popularity, “because it’s all about the local experience.”
—Tiqets is a fairly new OTA for cultural experiences.
RTOs and Wholesalers
—Travalco, AmericanTours International, American Ring, AlliedTPro.
* Merkl said, “Booking.com is starting to sell attractions … In a meeting with them, they told us they’re five times the size of Expedia and they basically have 1.5 million room nights sold every 24 hours. To me, that’s pretty interesting.” Inbound Note: Of course, that probably doesn’t include Expedia’s other brands: Orbitz, Travelocity, Hotels.com and Hotwire, but there’s no doubt that Booking.com has a quantum advantage over Expedia from Europe where they were originally formed.
- MARKET UPDATE—GERMANY, SWITZERLAND/AUSTRIA
—Overall, numbers are almost flat compared to 2017.
—This year, there was a slow start before things started picking up again in July.
—Some operators were down 20 percent from the previous year until June.
—They’re now experiencing more last-minute bookings.
—There has been an increase in fly-drive.
—Coach tours are challenging, and slowly recovering.
—The coming year, 2019, looks promising. Forecast is 10 percent ahead of 2018.
—Travelers are using OTAs for travel experiences.
RTOs and Wholesalers
—New World Travel, Meeting Point, AmericanTours International, Rocky Mountain Holiday Tours, Tour Mappers, America 4 You, AlliedTPro.
Here are some action items for travel suppliers and DMO to take note of:
ACTION ITEMS
Suppliers
—Ensure that your offerings are contracted with key RTOs
—Have all your marketing collateral readily available, as well as clearly identify booking and cancellation procedures in order to simplify purchasing.
—Distribution is key … make sure you have e-ticket programs available.
—API/XML connectivity isn’t just important for hotels.
—Work with international tour operators on marketing your service.
—Education RTOs and wholesalers on ow you service fits group/FIT needs.
DMOs
—Encourage your members to contract their properties with RTOs and OTAs.
—Ensure that your members have in place asset libraries to market their offerings.
—Educate trade buyers about how to integrate your destination with existing itineraries.
—Clearly identify unique selling points for your destination, and ways to support trade.
—Most print collateral for the 2019/20 season is done, so focus on online at this point.
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FINALLY …
From the German operator FTI: “A lot of CVBs want to do marketing campaigns with them, and they’re happy to do so. The problem is, if your members aren’t willing to contract their accommodations or travel experiences–or simply are not responsive—any kind of marketing campaign is not going to help you drive more numbers.”
