The Inbound Report

Covering the Inbound Tourism Industry Since 1996

Mark International and the Calculation that a VIP Product Will Produce

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Mag coverIt’s all about the VIP—both the client that Mark International (MI) seeks to please as well as its “Very Impressive Product.” That’s the sense one gets in talking with Sean Bayless, MI’s vice president and general manager, and a veteran in the U.S. receptive tour operator industry who talked with the Inbound Report recently about his company’s expanded presence—through its VIP Concierge Service—into a lucrative market segment that hinges on its ability to appeal to, and serve, upscale international travelers to the USA.

MI underscored its move earlier this year through the launch of an online magazine that has a presentation which is the equivalent, in hard copy terms, of the traditional coffee table book. The 84-page publication suggests luxury experiences in upscale hotels and resort destinations—a presentation not unique to MI: AlliedTPro, Teamamerica and Bonotel Exclusive Travel have VIP product and online magazines at least as impressive.† Our discussion with Bayliss allowed us, then, to better understand what makes the VIP/concierge approach work in general and, on the other hand, why it is not for every receptive. Following are some points that Bayliss made during our discussion.

It was a way to break out: “We have a very different product. We’re not just a bedbank,” he told us, explaining that MI launched the new identity at the beginning of the year, even though the product line has been around, domestically, for more than six years (through Mark Travel’s Traterra Vacations). The latter figure seems to sync with the emergence, during and in the immediate wake of the 2008-09 economic recession, of VIP brands offered by other receptives as they sought product that would be immune from damage during difficult economic times. MI’s VIP Concierge Service is strictly international.

It helps to be part of a corporate environment that can synergize its components: MI is part of a large, Milwaukee-based company, Mark Travel, that also has Blue Sky Tours, Funjet Vacations, Southwest Vacations, My Destination Wellness and Showtime Tours. Bayless pointed out that one of the features of the VIP Concierge is ability to offer live, 24-7 service with the extended Mark Travel staff.  “The synergy  created by Mark Travels’s (different brands) gives us a lot of advantages,” he said. “At any one time, one brand’s staff might depend on others.”

 

Sean Bayliss
Sean Bayliss

Could he give us an example of what VIP Concierge Service means? To illustrate what the service can  mean, Bayless explained that, recently, the company sent a concierge to join a small group of six clients and serve them, 24-7, throughout the group’s four-day itinerary in Los Angeles. (A group of six is about as large a group as MI serves on most occasions, as 90 percent of its guests are FIT. Bayliss acknowledged that the definition of a group has changed include smaller sizes; he defines a real group as 10 or more people booking 20 or more room nights.). While such personal attention is important to some, for others, the priority or the reasons are different. For instance, some clients are members of royal families, Bayless said, and, for royals security and privacy are very important.

 

What are the top source markets for the service? What destinations does it feature? Currently, Brazil, the UK and Mexico are the top three markets for MI’s VIP Concierge Service. Based on the number of pages in MI’s magazine, Inbound found that that Las Vegas is the locale of most of the inventory featured (26 pages), followed by Florida (14 pages), although it seems to have diversified as other destinations/properties comprise 31 pages. Asked if Las Vegas is still the lodestone for MI clients, Bayless told us, “No, Las Vegas is still very important as one of the top destinations for overseas travelers, but we now have diversified to a full product range with key cities such as Los Angeles, New York, Orlando and Miami, as well as National Parks and soft adventure. The main reason for the focus on Las Vegas and Orlando was that those happened to be the destinations where our hotel partners really realized the importance of education to the overseas client. Other key destinations that saw this importance as a destination were New Orleans, St. Petersburg Beaches and Portland/Oregon.”

Along with MI’s focus on the VIP market, there is a strategic plan for the company’s future that involves more multilingual staff and, of course, China. “China is definitely a part of our strategic plan for the future,” said Bayless. In the meantime, the company will continue to enhance its presentation and its online magazine. The magazine is a B2B tool. Specifically, Bayless noted, MI wants to get itself before reservation agents. When an agent is searching for, or about to book for, a VIP client, the agent looks for compatible product. Bayless explained that “many international operators now have VIP departments or the y will have someone who has been VIP-designated.”

So, when it comes to the matter of which destination to search, this is where the MI magazine speaks to the agent though the destination. The magazine is arranged by destination. Said Bayless, “What we wanted to do was give each destination to talk about itself.  Tell the reader what they should know … the goal is to drive a longer stay because of the knowledge they’ve developed beforehand.” In the case of the USA—for many travelers who received their product through MI—the destination is a repeat destination. It’s no longer see a dozen places in 15 days. Instead, they’re staying longer in the destinations. It is because of clients who are discerning, clients who are repeat travelers, Bayless emphasize on several occasions during our conversation that. with the VIP product, “You’re not really selling an itinerary. You’re selling an experience.” (You can contact Sean Bayliess at sbayliss@tmtcintl.com)

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†Here is some basic information on their upscale product and concierge services.

Team America: “Our selected Elite Team will satisfy the needs of the most demanding VIP clients by booking Penthouses, Suites, Villas and special services starting from Private Jets, Rolls Royce, Bentleys, Yachts all the way to Butlers, Bodyguards, Personal shopper and any other request they might have.”

113-page brochure:  http://dream.teamamericany.com/elite/Elite2015.pdf

 

AlliedtPro: Première by Kuoni—A VIP Concierge Experience

140-page brochure:  http://valtech.ipapercms.dk/Kuoni/KuoniDESTMGM/KDMHO/ATPLifestyles/

 

Bonotel Exclusive Travel

207-page brochure: https://www.bonotel.com/onlineBrochure/2015/BonotelBrochure_2015.pdf

 

Where are They Now? Eric Thomas Goes Back to the Future

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Eric ThomasFrustrated by a tour and travel marketplace that hasn’t been a good match for his skills in recent years, Eric Thomas, the one-time executive vice president of the northern New Jersey-based, family-held City Tours USA, one of the largest privately held receptive tour operators in the United States, borrowed a page from the history of his father, Albert Thomas Sr., who came to the United States from Argentina in the early 1970s and, then in his fifties, launched what became City Tours with the purchase of a single limousine.

Eric made somewhat the same move earlier this year after leaving Tour Hero, a travel company that had hired him in the spring of 2014, and, after taking on a job as a driver at a limousine service. He soon got the idea to start his own business and purchased his own specially equipped Cadillac Escalade to get things going. One of his first customers: City Tours, which signed him up to handle the transportation of arriving international VIP clients. Then came August, when a cluster of City Tours employees took their own vacations. So the company/family asked Eric if he couldn’t handle the shuttle bus detail temporarily.

Then, at 4:36 a.m. on August 8, he posted a photo of part of a City Tours shuttle bus with this comment: “Life offers some strange twists. I started driving for this company at 17 and here it is 35 years later and a 4:15 am starting my first pickup of the day!” When asked by one friend what this meant, Eric wrote: “Doing work for the family.”

They Liked It: The message must have touched a chord. By mid-day, some 70 friends “liked” the post and another 25 made comments, in English and in Spanish that were sometimes funny, sometimes incredulous. But most of them were supportive or laudatory: “Keep on truckin, brother!” wrote Tony Alvarado. “It is in your blood and mine too! I remember when we all started behind the wheel. I started with the airport shuttle from the Doral Hotel and have many good memories of connecting with the passengers.”

Wrote Patricia Garcia Aristizabal from Washington DC: “If one day you need a driver for you to take holidays, I offer to help you and have an American license.”  And Hernan Betancourt commented, “I lived great moments with great partners in this great company. Greetings to you, your parents and the rest of the family of City Tours!”

City Tours VanHow This All Came to Be: Eric is one of five sons of Albert Thomas who became the success story that is City Tours: Besides Eric, the others are Ray Thomas, president of the company; Albert Thomas Jr.; Andrew Thomas, who works out of Miami; and Gus Thomas, who died at the age of 54 in January 2011 after a lengthy battle with cancer.

The elder Albert Thomas is a colorful character. He was once a body guard for Juan Perón, who was twice the president of Argentina (1946-54 and 1973-74) and known by younger generations as the husband of Eva “Evita” Perón , the charismatic woman who has achieved in death an almost cult-like status. (Whatever you do, do not consider the musical or film “Evita” as a basis for any factual interpretation of Eva Perón.)

Though he left the business in the mid-1990s, the 92-year-old Albert Thomas Sr. is still quite active, Eric told us, as is his wife, Martha, who is 87. As the sons carried on and grew the enterprise, differences in the approach to business emerged between Eric and his brothers. Known to be the more voluble, animated and push-the-edge way-of-doing-things of the brothers, Eric eventually parted ways in 2006 and the following year, opened his own receptive tour operation, CANAM.

After a good first year came the 2008-09 great recession, which destroyed, gobbled up and wasted many tour and travel industry companies, including CANAM. Despite putting all his energy into keeping it afloat, the company folded in early 2011. His skill set well-known—particularly in IT solutions for B2B operations and in logistics—Thomas became, in short order, vice president, AmericanTours International South, working out of Orlando and establishing an ATI presence in the market. The experience lasted a little more than a year. Somewhat the same experience occurred with Accommodations Plus International, a New York City-based company trying to grow out of its crew-traffic market niche. There followed a similar tenure with Tour Hero, which he left, he told Inbound, “by mutual agreement.”

Reflecting upon his record at the different companies since his CANAM venture ended, Thomas told us wryly, “I guess I’ve done a pretty good job of setting things up and restructuring myself right out of a position.”

 

How Long Does it Take to Escape from New York? One wonders, following all of this, what would push someone to the point that, as their livelihood, they would want to negotiate Manhattan traffic every day—he said that he has to slot at least three-and-a-half hours for a pickup and/or drop-off at JFK Airport from midtown—but Thomas sees it as a challenge for which he can develop some logistical answer.  It is also something that, as a self-employed contractor, makes him the president, CEO, COO and chief sales and marketing officer of the business. He answers to himself.

But he’s not stopping there. He’s developing a platform through which the 150 freelancing limo operations in New York City can use to accept a call, or make a bid on, a pick up at one the New York area’s three major airports: JFK, La Guardia and Liberty International in Newark.

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In sum, this episode reminds one that much of the tour and travel industry in the U.S. is operated by families or is family-held. And in this instance, one family member still depended on other family members to … keep it in the family.

 

Kuoni’s Divestiture of Tour Operator Units Nears Completion

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Thomas Cook IndiaThe final chapter in the number one story of the year for the global tour operator industry—the divestiture by Zurich-based Kuoni of its tour operator businesses—is nearing completion with the just-announced selloff of Kuoni’s operations in India to Thomas Cook India. Two months ago, the Cologne-headquartered Rewe Group, which owns DER Touristik, acquired Kuoni UK together with Kuoni tour operations in Switzerland, Scandinavia and the Benelux region. (These actions follow the 2013 decision by Kuoni to sell off branded units, as well, in Italy, Spain, The Netherlands, Belgium and Russia.)

With the acquisition, Thomas Cook India is expanding its penetration in the travel business in the world’s second most populous country and the Number 9 overseas source market for the USA (it generated more than 960,000 USA visitors last year) by buying a 100 percent stake in one-time rival Kuoni group’s travel business in India and Hong Kong for 5.35 billion rupees ($84 million). Thomas Cook will take all the 1,800 employees of Kuoni’s travel business unit and run it as an “independent entity.”  Already, Thomas Cook India is present in over 232 locations across India, Mauritius and Sri Lanka.

Prem WatsaIn an Aug. 7 notice to stock exchanges, Thomas Cook India said the deal would be financed through a mix of funds from earlier “equity infusion, internal accruals, debt funds (for Hong Kong) and or other permissible modes.” The expansion of Thomas Cook India is not exactly a surprise to those who have followed the travel trade in India in recent years. Fairfax Financial Holdings, the Toronto-based financial services holding company, is the controlling shareholder of the company, which had originally acquired 77 per cent in Thomas Cook India from its UK-based parent for $171 million in 2012. Prem Watsa, chairman and CEO of Fairfax Holdings, is the controlling shareholder of Thomas Cook India.

The year began with Kuoni’s announcement that, as part of a strategic review, it would focus on its core business as a service provider to the global travel industry and governments and exit the tour operating businesses in Hong Kong/China, India, Scandinavia, Finland, the Benelux and the UK.

Sören Hartmann, the chief executive of DER Touristik, has said that the full integration of the Kuoni units—it includes nearly 40 locations in the UK alone—will take two to three years.

German Operators Reducing USA Product for 2015-16

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StudiosisIn an action that reflects the reality first conveyed to Inbound four months ago by U.S.-based receptive tour operators, Munich-based Studiosus, the top study tours and cultural tour operators in Europe, has said it expects a tough year for long-haul cultural trips next year due to the weak euro but, at the same time, expects a good year for European destinations. Studiosus, reported FVW, has reduced USA capacity by one-fifth in response to a 15 percent price increase and has revised its overall program to include additional product beyond Europe—but not America. Checking out the Studiosus website, one will notice no new USA product in the inventory.

Meanwhile, other tour operators who sell non-USA product are increasing capacity to destinations where the euro is not weak. Öger Tours—a Thomas Cook Germany brand that handles Turkey tours—is expanding its program for winter 2015/16 with 40,000 additional charter seats. The Turkey specialist will offer 10,000 more seats to Antalya, a Turkish resort destination on the Mediterranean and as many as 30,000 more to Hurghada, a beach resort town along Egypt’s Red Sea coast.

Olimar, which specializes in Southern Europe, is adding more hotels on the Canary Islands and more tours for the Cape Verde islands this coming winter alongside more than 100 hotels in its core destination of Portugal.

While the operators are juggling 2015-16 product offerings, German consumers seem to be turning away from the traditional travel agency, which has been more of a staple in the country than in other European markets. Consumers have been slow to go offline.

The results of a just-released study the study by VIR† (Verband Internet Reisevertrieb, or Internet Travel Sales Association) and market researchers FUR, noted that, in 2014, about 11.6 million Germans researched their next package holiday (of five days or more) on the internet. Of these, about 37 percent (roughly 4.3 million people) then also booked the holiday online while only about 33 percent booked offline, for example, in a travel agency.

When it comes to individual components of the travel product, the shift to online is even more marked: Over half of consumers (52 percent) are researching accommodations online, while 49 percent are doing so for flight bookings.

VIR president Michael Buller commented: “The study shows a very clear trend. Ten years ago the internet was mostly a research tool for countless customers but today bookings are increasingly taking place online as well. We expect that this trend will intensify significantly in the coming years.”

This trend could actually aid or stimulate more travel to the U.S. for, as Inbound experienced in its own (admittedly not very scientific) survey of German travel agencies in Berlin through in-person visits several years ago during ITB: None of the staff at the agencies were really familiar with the U.S. or had visited the country. By going online and increasingly foregoing the in-store “assistance” of a travel agent, the German travel consumer might find his/her way to the USA more quickly.

† VIR represents eight of the largest German online travel agencies: ebookers, Expedia, HolidayCheck, HRS, L’Tur, Lastminute.de, Travelchannel.de and Weg.de.

 

Merger of Kuoni into DER Will Take 2-3 Years

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Sören HartmannWhen one reviews the 98-year history of Germany’s second largest travel company, DER Touristik, one sees a growth path that is deliberate and measured. And more of the same seems to be in order following the company’s acquisition of Kuoni’s European tour operator and travel agency business. In an interview published in the German travel trade publication, FVW, Sören Hartmann, the company’s chief executive, said that the full integration of the Kuoni units—it includes nearly 40 locations in the UK alone—will take two to three years.

Hartman said that his company will begin its strategic process of integration once the acquisition is formally completed; this is expected to take place in September—following a review by the competition authorities in the UK and the affected European countries. “Then we will start intensive talks with the management and start to develop the strategy,” he told FVW.

“We want to be fast but there won’t be any harakiri,” he said. “I wouldn’t describe it as an integration in all cases. We will see where the Kuoni tour operators can use our platforms. But we can learn as well, for example from the Kuoni specialists and the travel agencies in Switzerland and the UK, which successfully sell high-value holidays.”

He indicated that DER Touristik—it is a part of the REWE group—does not want to create a centrally managed European group and will “keep what makes Kuoni strong” while seeking operational and production synergies. “Sales and brands are local and have to stay like that,” Hartman said, “we won’t force everything on to common platforms.” Hartmann suggested that the Kuoni tour operators can become more profitable within the DER Touristik operation.

Following the acquisition, Germany will remain the largest market for DER Touristik, with revenues of some $5.415 billion, including $3.756 billion in tour operating (and including Austria revenues of $276 million). Switzerland will be the second-largest market with revenues of $860 million, ahead of Scandinavia ($785 million), UK ($387 million), Eastern Europe ($321 million) and Benelux ($39 million).

(For a brief sketch-history of DER Touristik, visit: http://www.dertouristik.com/en/group/history/

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Tom Berrigan, Managing Editor/Producer
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