The Inbound Report

Covering the Inbound Tourism Industry Since 1996

Women from Germany, China Comprise Prime Market for Solo Female Travelers 

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Prompted by anecdotal accounts on the subject, British Airways decided to commission a study on solo travelers and, as a result, has released its Global Solo Travel Study which focuses on the phenomenon of the independent female passenger. A study of almost 9,000 18-to-64-year-olds across the UK, US, Brazil, France, Germany, Italy, India, and China, it found that over 50 per cent of women have taken a holiday by themselves, with 75 per cent of women planning a solo trip in the next few years.

Elsewhere, the results of this first-ever study provide some interesting details and facts:

—The most adventurous female travelers are from Italy, with 63 per cent of Italian women aged 18-65 have explored another country alone, followed by Germany at 60 per cent.

—More British women and men (14 per cent) were over 50 on their first solo trip compared to any other country.

—However, 60 per cent of UK women are planning a trip in the next few years, with 16 per cent of them jetting off solo in the next two to three months.

—The least inclined to venture overseas with only 16 per cent, were women from the US. However, this looks to change with 62 per cent currently planning their getaway in the next few years.

—Most of those in this travel segment take trips that last for one week, with over 50 per cent globally choosing a short-haul trip overseas. However, more than 30.5 million women in the surveyed markets have headed off on long trips of over six months.

—German travelers go solo the most often, with one in five having treated themselves to a solo trip over 10 times.

—The nation most willing to travel long distance is China, with almost 50 per cent flying over 11 hours for their last international experience.

—Two-thirds (67 percent) of solo travelers worldwide choose to explore their own continent. India’s travelers skip between continents the most, with 37 per cent having travelled solo to Europe and 33 per cent exploring the UAE and Middle East.

—More than 51 per cent of the travelers in both the U.S. and China had also toured Europe solo.

 

The British Airways Solo Travel Study also unpacked the reasons why passengers were choosing to head out alone:

—More than half of the global respondents (55 per cent) choose to travel alone due to the feeling of freedom and independence, being able to choose your destination, what you eat and what you do.

—Holidaymakers from Germany are the most open, with over 50 per cent also prioritizing meeting new people and having unique experiences.  Ten per cent of UK travelers confessed they had taken off solo to get over a break up.

—The U.S. has the lowest number of female solo travelers, with only 17 per cent having taken a solo holiday, compared to 46 per cent of US men, however those that do travel are the most likely to travel for over six months

—In China, more women than men have made a solo trip abroad over 10 times

USA Drops to #11 (from #5 in 2017) Among Popular Destinations for Chinese

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What the U.S.-based tour and travel industry has picked up anecdotally, or if you’re a receptive tour operator that sells the Chinese market and you’ve learned it from your in-China trade partners, is true: inbound traffic from China is down. And it’s probably going to be down once the final numbers for 2018 are in. No doubt, this is probably because of the tension between the governments of the two nations over trade policies and tariffs. The proof is already in, by way of the some of the reports that came out during the month of October:

  1. The U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) released its latest monthly report on Oct. 31, containing arrivals data for the first five months of 2018, and the numbers showed that, year-to-date, the number of Chinese visitors to the U.S. had dropped by 1.4 percent vs. 2017.

 

  1. A Washington Post article cited data and other testimonials which indicated that the number of Chinese visitors to the U.S. this year is down, and that the outlook for the near-term future is not bright.

 

  1. Year-over-year travel to the USA during the week-long Golden Week holiday showed that bookings to the U.S. were down by 40 percent.

Here is more detail on these three developments:

First, the release last week of NTTO data for the first five months of 2018 suggest that, unless there is some miraculous turnaround in the trend line, inbound traffic to the U.S. from China will decline for the first time—ever—since China became a serious source market for the United States.

Second, as the Washington Post put it, “The nascent decline — visible in visa approvals and airline bookings — isn’t the result of official action by Beijing. But it highlights a potent weapon that China could use if the trade war persists: slashing the $60 billion that Chinese consumers spend each year on American services such as travel and tourism. Already, 102,000 fewer Chinese people received business, leisure and educational visas from May through September of this year compared with the same period last year, a 13 percent drop, according to State Department statistics.”

Third, consider Golden Week, which was the first week of October. (Along with the Chinese New Year, the Oct. 1 National Day, which celebrates the founding of the People’s Republic of China and which kicked off Golden Week, is one of China’s two biggest holidays.). According to the Ctrip-owned search engine Skyscanner, the U.S. saw a sharp decline in Chinese visitors with this year’s Golden Week, with flight bookings to the country down 41 percent compared with last year’s Golden Week. This year, seven million Chinese were expected to go abroad for Golden Week. The 7 million number represents more than 5 percent of all overseas travelers who leave from China annually. In fact, the popularity of the U.S. as a destination dropped to No. 11—down from No. 5 last year.

 

U.S. Policies Now Affecting Japanese Inbound Tourism

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From the latest quarterly Survey of Travel Market Trends by the Japan Association of Travel Agents (JATA): “There are concerns that the political and economic policy of the U.S. government will impact overseas travel. If free trade and human exchange stagnate, this might influence overseas travel from Japan negatively.” This assessment came from an unidentified retailer cited in the JATA report, which went on to say that, although overseas travel has recovered from its lowest level of two years ago, the confidence of the Japanese travel trade that business will be good declines for the last quarter of 2018 and first quarter of 2019.

Though its information was processed in September, the Survey was not posted on the JATA website until late last month. Still, it remains an authoritative measure on how business it, and how the travel trade in Japan believes it will be during the next two business quarters.

In addition to the sobering note regarding the U.S., the Survey provides measures of how the trade sees certain segments in the Japanese performing. For instance, it notes that the demand for students travel during the summer holidays is 20 points stronger with educational tours showing a steady increase. And the outlook for both family travel and working women (office ladies) is up. The details of the above findings are in the tables below.

Before You Review the Tables: It is important to understand the methodology behind the compilation and preparation of the Survey of Travel Market Trends. JATA asks all member companies to register as survey monitors. It conducts the quarterly Survey of Travel Market Trends that involves 616 registered companies and publishes the results. The Survey of Travel Market Trends is designed to grasp trends in the travel market based on responses to questions on current conditions and those anticipated over the next three months. The survey asks participating companies to rate their sales results for each destination and customer segment by choosing from three categories: “good,” “average,” and “poor.” For items outside their business scope, respondents select “do not handle.” Each share of “good,” “average,” and “poor” is then divided respectively by the denominator, which is equal to the total number of responses minus the “do not handle” (including “no reply”) responses. Finally, each share is processed into a Diffusion Index (DI) by subtracting the percentage of “poor” from the percentage of “good. “The highest possible index figure is +100, and the lowest is -100.

A definition of each business classification and the number of survey respondents is shown below.

 

Trends & Insights from Visits to 52 Tour Operators in Seven Key European Countries

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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.”

For Inbound USA Traffic, Canada is Soft; Overall, Record Pace Continues

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In the latest monthly bulletin on the state of business from its Top Ten international source markets, year-to-date traffic from Canada’s two large English-speaking markets—the USA and UK—is down slightly, while overall inbound international arrivals are up one percent over last year, which was a record year, according to Destination Canada, the country’s official marketing organization. (See graphic below.)

We speculated at INBOUND as to why U.S. arrivals are down—if only slightly—and thought that it might have something to do with the exchange rate between the U.S. and Canadian dollars. We see that Canadian dollar rose from a low of 69 cents in mid-January 2016, trading at or about 75 cents through much of the year. It later peaked at 82 cents in September of last year before settling in at the $0.76-$0.78 level for most of 2018. In sum, Canada was not the bargain it was two-to-two-and-half years ago, with the cost of the components of a travel package about 10 percent more this year than they were in

  1. (Recall that, at the beginning of 2013, the Canadian dollar was trading at parity with the U.S. dollar.)

Here is Destination Canada’s travel infographic for July 2018, followed by some insights on the numbers.

 

 

—Year-to-date July 2018, overnight arrivals of visitors to Canada from Destination Canada’s ten international markets eased to +1 percent following a slight drop in July (-1 percent) caused by significant contractions in air arrivals via the U.S. in that month from all markets, except India. Global overnight arrivals to Canada year-to-date July 2018 surpassed the peak established in 2017, Canada’s best year ever.

—From January-July 2018, Canada had a record 11.8 million international visitors (+1 percent year-on-year).

—Year-to-date July 2018, the largest growth from our markets was from India (+8%), Germany (+7%), France (+6 percent), China (+5 percent) and Mexico (+3 percent), where increased direct air arrivals outpaced double-digit declines in air arrivals via the US.

In July 2018, Canada received a record number of visitors from France (94,000), Mexico (60,000), South Korea (41,000), and India (32,000).

 

The drop in U.S. auto arrivals (-1 percent) in July 2018 is linked to the timing of the Independence Day holiday in the U.S., and increased arrivals in 2017 in the midst of Canada’s 150th celebrations over the Canada Day weekend.

 

 

 

 

 

 

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