“A Brief Snapshot of Major Source Market Trends & Updates” was the official title of Stefan Merkl’s presentation at the NAJ Group’s recent RTO Summit West in Los Angeles. Judging by the enthusiastic response received by those in attendance, for those not familiar with his deep knowledge of, and experience in, the tour and travel industry, it very well might have been called something like “All you need to know about the state of the inbound tour and travel industry in the USA in 40 minutes.”

The Florida-based Merkl, a German expatriate and founder of Explore Marketing who has considerable experience in the industry, spoke from authority. His analysis was gleaned, in part, from meetings with 496 companies—including international tour operators and U.S.-based receptive tour operators he met over the course of the past year during a dozen roadshows, trade shows and sales missions in 13 countries. This provided the basis for a report that covered seven out of the Top Ten overseas source markets for tourism to the United States—seven markets that account for more than 40 percent of all overseas travel to the USA.

With a delivery that had the rapt attention of RTO Summit delegates, Merkl discussed overall trends, followed by a market-by-market assessment that touched up key developments in seven of them. INBOUND’s synopsis of his remarks follows.

 

Overall Trends. Across the inbound marketplace, Merkl said, there has been growth in:

—Fly-drive travel, especially in RV and rental car use;

—A higher-end market that is characterized by small group sizes (up to a maximum of 16 travelers);

—The inclusion of personalized local experiences into leisure group itineraries;

—A generational move from leisure group travel to FIT travel;

—More “off-the-beaten-path” experiences and food tours, such as those that feature home cooking classes;

—Wellness and medical tourism; and

—Education-related and educational travel.

 

Overall Trends. Destination Interests of Overseas Travelers

—The 2018 top destinations in the USA: Hawaii, California, Alaska, Nevada and New York.

—The USA’s current main competitors in 2018: Canada, Australia and South Africa.

 

Overall Trends. Growth of Technology and OTAs

—“Info & Bookings on the Go.” Part of a mobile society, travel consumers are accessing information via apps instead of web browsers, and are shifting from booking through travel agencies to booking direct.

—Sourcing from OTAs. Tour operators are buying accommodations and auxiliary services from OTAs for real time data and dynamic pricing

—Acquisitions. We’ve witnessed the TUI Group’s purchasing of Musement; Booking.com’s acquisition of Fareharbor; and the merger of GTA and Tourico into Hotelbds, which created an opening for European bedbanks in the USA (WORLD2MEET, OTS Globe); and Webjet’s takeover of Destinations of the World

—Tools for Tailor-Made Travel. Technology is guiding travel agents, and CRMs for tour guides to identify traveler/customer needs and wants.

—There is a need for real-time data, and tour and travel entities are using XML and API connectivity for latest pricing and product availability.

—Promotion. OTAs have more budget for marketing and promotion than others and competitive pricing is evident across the tour and travel industry.

(In the last issue of the INBOUND report, Stefan Merkl covered markets that included the UK, China, South Korea, India and others. This week, he covers a half-dozen other markets.)

 

Country Market Updates

France

—2018 was described as a good year for France, with elections being over.

—Still, the yellow vest protests have shaken up the market somewhat at this time.

—The market still heavily focuses on group series for more mature travelers, and on the Western USA. —Younger travelers come as FIT and use OTAs to make their arrangements.

—Very price sensitive market, with no-thrills base packages being offered.

—For New York, the most popular U.S. destination, clients tend to make their own arrangements while,  for the West, the help of tour operators is being requested more frequently.

 

RTOs and Wholesalers:

Go West Tours, New World Travel, Meeting Point, Bonjour USA, Hotelbeds, Bonotel, Cali’Fun, American Holidays, ATI, Ceetiz.

Trends

—A decline in guided tours.

—Growth in auto-tours and a-la-carte tours,

—Top U.S. destinations are: New York, West Coast and Florida. Hawaii and Oregon are starting to make their mark, alongside Colorado, Nevada and Louisiana,

—OTAs have impressive marketing spend.

—Consumers are increasingly using the internet.

—Tour Operators need to focus more on service.

Opportunities

—A Rise of B2B platforms such as Worldia, Amerigo, Evaneos and Marco Vasco.

 

Germany/Switzerland/Austria

—Overall numbers for 2018 were almost flat compared to 2017.

—There was a slow start before things started picking up again in July.

—Some operators were down 20 percent vs. last year vs. previous year until June.

—There were more last minute bookings, as well as an increase in fly/drive.

—Coach tours are challenging and slowly recovering.

—2019 looks promising, with a forecast that places the market 10 percent ahead of 2018.

—Travelers are using of OTAs for travel experiences.

Key Sellers of U.S. Travel:

TUI, DER Touristik, Meiers Weltreisen, FTI, Canusa, America Unlimited, USAreisen.de, Explorer Fernreise

RTOs and Wholesalers:

New World Travel, Meeting Point, ATI, Hotelbeds, Rocky Mountain, Tour Mappers, America 4 You, AlliedTPro.

Millennials and a-la-carte travel:

—Millennials are booking holidays and trips online and as separate products instead of packages from tour operators.

—Traditional tour operators decline in popularity among millennials

—Meanwhile, Booking.com’s share was up to 28 percent in share (up from 25 percent); Airbnb up to 19 percent (up from 15 percent)

Germans LOVE to travel:

—Last year Germans took 71 million holidays (up 2 percent, year-on-year) and spent a total of €75 billion, or $85.2 billion (+3 percent), according to Reiseanalyse.

—Possible Slow-down in Economy? The Number of short trips (2-4 days) increased by one percent to 92 million.

—Travelers plan to keep a closer eye on costs in 2019. Twenty-nine percent of respondents in the Reiseanalyse survey want to spend more on their holiday (down 1 percent from last year) while 14 percent plan to reduce holiday spending compared to 13 percent last year.

New Destinations:

—German travelers want to go places that no other Germans have been before vs the reality of logistics and marketability of destinations.

 

Belgium

—A mature market with heavy focus on FIT and fly-drive travel.

—Changes in Belgium’s laws regulating marketing will be beneficial to tour and travel industry.

—Operators can re-introduce product catalogs with pricing.

—TUI Belgium introduces a new tool for creating tailor-made itineraries.

—New technology is designed to help travel agents create tailor-made trips.

Opportunities:

—Vayamundo is adding Florida as a destination.

—TUI and Euram will be furnishing their tailor-made tool.

RTOs and Wholesalers:

—ATI, Bonotel, Hotelbeds, Travalco, American Ring, Rocky Mountain Holiday, AlliedTPro, Cali’Fun.

 

The Netherlands

—In visits to operators, they seemed content with the performance of the U.S. as a destination.

—Young Travelers prefer FITs, while the older generation often travels in groups.

—The operator American Ring Travel will leave the FIT space and purely focus on groups.

—The receptive Travalco was mentioned as one of the leading RTOs for FITs.

—Wide open spaces of the Western USA are popular amongst Dutch travelers.

—FTI just launched a group product for 2018 and the market is happy with the selection of the product; so the start in the Dutch market was successful for the operator.

Opportunities:

—Booking.com reinventing its approach to selling attractions.

—Tiqets is a fairly new OTA for cultural experiences.

 RTOs and Wholesalers:

—Travalco, ATI, Hotelbeds, American Ring, AlliedTPro.

Want to know more? Contact Stefan Merkl at stefan@explore-marketing.com