Covering the Inbound Tourism Industry Since 1996
It is going to be a lost year—again: Yes, for the third year in a row, the professionals who market and promote the U.S. travel product abroad are going to have to work very hard simply to stay in the same place. Despite new waves of visitors from China and other points in Asia, the United States inbound tourism industry is struggling simply to maintain the current level of travelers from other country markets to the United States …
Germany has taken over the top spot of the Anholt-GfK Nations Brand IndexSM study, which is based on six indices, from the United States. The U.S. was the only country among the 50 nations surveyed whose overall brand declined in 2017. The survey’s ranking relies on measurements in the following categories: exports, governance, culture, people, tourism and immigration/investment (more on the categories below).
“The USA’s fall in the governance category suggests that we are witnessing a ‘Trump effect’, following President Trump’s focused political message of ‘America First,’” said Professor Simon Anholt, who created the study in 2005. “However, Americans’ assessment of their own country is notably more positive this year than last.”
Anholt pointed out that the United States suffered a similar drop after the 2000 election of George W. Bush, when its ranking declined to seventh. However, the setback was only temporary. “Previously, America has never stayed outside the top ranking for more than a year at a time,” he noted. “It will be interesting to see whether this holds true in the 2018 ranking.”
Germany moved into the top spot even thought it did not rank first in any individual category but did make the top five in all categories save tourism. The United States placed in the top five in exports, culture and immigration/investment.
More on the Index: The Anholt-GfK Nation Brands IndexSM—it helps governments, organizations and businesses understand, measure and ultimately build a strong national image and reputation—measures the power and quality of each country‘s “brand image” by combining the following six categories:
—Public opinion about national government competency and fairness, as well as its perceived commitment to global issues.
—The public’s image of products and services from each country.
—The level of interesting in visiting a country and the draw of natural and man-made tourist attractions.
—The power to attract people to live, work or study in each country and how people perceive a country’s quality of life and business environment.
—Global perceptions of each nation’s heritage and its appreciation for its contemporary culture.
—The population’s reputation for competence, openness and friendliness and other qualities such as tolerance.
Following are the 50 nations measured in 2017:
—North America: Canada, the U.S.
— Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Holland, Ireland, Italy, Northern Ireland, Norway*, Scotland, Spain, Sweden, Switzerland, UK
—Central/Eastern Europe: Czech Republic, Hungary, Poland, Russia, Turkey, Ukraine*
— Asia-Pacific: Australia, China, India, Indonesia, Japan, New Zealand, Singapore, South Korea, Taiwan, Thailand
—Latin America: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru
—Middle East/Africa: Botswana*, Egypt, Kenya, Nigeria, Qatar, Saudi Arabia, South Africa, United Arab Emirates.
* Indicates the three nations newly added into the NBI in 2017. Also, three nations (Cuba, Iran, and Kazakhstan) were measured in 2016 but not in 2017.
The Results: Western market economies, along with Japan, continue to dominate the top 10 countries as ranked in the Nation Brands IndexSM. In the wake of a substantial drop in global perception of the USA, Germany retakes the top overall ranking, while France climbs to second place. The UK has regained the ground lost last year after the Brexit vote to hold onto third place, while Japan jumps into the top five for the first time since 2011, standing fourth-equal with Canada.
“The number of older Germans going on holidays and other leisure trips will rise significantly in the coming years, making them more important to the travel industry than ever before,” reports the German travel trade publication FVW, citing data in the just released results of the annual FUR Reiseanalyse market survey.
For those who have been following trends in the German population for the past decade, the development comes as no surprise and it signals to travel suppliers worldwide who have sold to the German market—this includes the United States, for whom Germany is the Number 4 overseas source market—that they will have to dig deeper into the base of traveling Germans, whose overall numbers are stuck in a “no growth-slow growth” path, as the following data suggest.
Now, here is the population of Germany that overlaps the same period. It has remained essentially unchanged.
The reason for the static population is that the birth rate among Germans is the lowest among the world’s developed countries. Two years ago, Germany’s birth rate fell below that of Japan, the previous holder of the distinction of having the lowest birth rate. In Germany, an average of 8.2 children were born per 1,000 inhabitants during the five year period of 2010-2015, according to a study by German auditing firm BDO with the Hamburg Institute of International Economics. It said Japan saw 8.4 children born per 1,000 inhabitants over the same time period.
And, according to the CIA’s World Factbook, in 2016, Germany had the world’s third-highest median age (46.8 years), just behind that of Japan (46.9 years) and Monaco (52.4 years) among 227 countries.
The Growing Silver Travel Market: As a consequence of its aging population, more German seniors are traveling more. Here are some highlights from the FUR Reiseanalyse:
—Germans aged between 65 and 74 went on 8.65 million trips last year. In comparison, working people aged 55 to 64 undertook 7.1 million vacation trips last year.
—By 2025, 60-69 year-olds will account for 17 percent (vs. 14 percent now) of travelers.
—By 2025, people aged 70 over will account for 19 percent (vs. 16 percent now) of all holiday trips.
—Put another way, older travelers will comprise well over one third of the German travel market by 2025.
At the same time, the FUR Reiseanalyse predicted a decline in the share of all other age groups, except for 30-39 year-olds whose share could rise slightly to 14 percent.
What Does This Say About German Seniors? The managing director of the Institute for Tourism and Spa Research in Northern Europe (NIT), and FUR’s lead researcher, Martin Lohmann, told FVW: “The importance of pensioners will increase in the coming years due to demographic trends … Older people today are more flexible, fitter and more accustomed to traveling than they used to be.”
And other Info-bytes and Statistical Nuggets from New Research: Travelport’s just-released “The Global Digital Traveler Research” contains a well of information on key international country markets that contains findings on everything from the percentage of travelers globally who voice search their travel information to the percentage of global travelers who say they would feel lost without their smartphone. Travelport also designated India as the “world champions” of digital travel. (And, by the way, China’s travelers topped the charts for being the biggest app-users with an average of 20 such services used during each trip.}
First, a note on the sample. The findings are based on an online survey that utilized Toluna Research’s* sample of travelers in August 2017. The research covered 19 countries globally and was restricted to people who had taken at least one return flight last year. In total, there were 11,000 respondents from the 19 countries. Australia Brazil Canada China Colombia France Germany India Indonesia Italy Japan Mexico Russia Saudi Arabia South Africa Spain UAE UK US www.travelport.com/info (Add to all tables that follow: © 2017 Travelport. All rights reserved. Travelport, Apollo, Galileo, Worldspan and the Travelport logo are trademarks of Travelport. All other marks are the property of their respective owners. *Toluna Research: www.toluna-group.com)
National and Demographic Highlights: The Travelport study covered travelers in 19 countries. The responses from the varied collection of country markets, regions and demographic groups were able to provide some interesting findings, which are highlighted below.
The Digital Traveler League Table: By combining the main indicators of digital usage by travelers in each country, the Travelport research team was able to create a league table to show who are the most and the least digitally-dependent among the nations surveyed. The findings reflect overall smartphone, fixed-line and mobile internet penetration levels locally. There are some striking differences in digital travel behavior between the countries in the survey. Some people are heavily reliant on mobile technology while others are less digitally dependent when planning and making their journeys.
Top of the League—India: According to the report, Indian travelers would tell us: “Most of us would feel lost without our smartphones, though we might not use them for all the phases of a trip, but the Indians are the world champions of digital travel. They clearly love the convenience of their smartphones and use them from booking a trip to boarding a plane with a digital boarding pass.”
by Jake Steinman
Editor-in-Chief
With the UK probably America’s most mature inbound market, the value proposition for World Travel Market held every November in London seems to be trade public relations and networking and schmoozing at the 4:00 p.m. receptions.
During the day, appointments with buyers often include, as they have for the past 10 years, a pitch for marketing support that travel suppliers view as a shake-down—openly wondering how they can justify the expense of attending an event where the line between buyers and sellers is so blurred. One person we encountered at WTM openly mused about other ways she could have spent her marketing dollars for a digital marketing campaign that can precisely target her most likely prospects. Instead, she and those like her believe that the same expenditure makes them feel as if they are on the proverbial hamster wheel–running hard but going nowhere.
After observing three days of WTM, it dawned on me that shows such as WTM, ITB, IPW and others are gathering places for the industry to engage in networking, public relations and learning about trends as much as they are about sales. And then there are those who worry that their very absence may have buyers asking about their whereabouts, not to mention that they could be opening a door for a competitor. When actor-writer-director Woody Allen once said “85 percent of success is just showing up,” he could have easily been thinking about the tour and travel industry.
But while the environment has changed dramatically in the past five years, the UK industry has not. In the worlds of one destination marketer, “the industry lacks evolution.” It has stayed in place.
The Tour and Travel Industry Distribution Chain: In conventional product marketing, there are distributors who take the product to a retail network that sells to consumers. The travel trade’s version of these distributors is a chain that usually involves receptive tour operators who sell to in-country wholesalers who, in turn, sell to travel agencies who reach the end consumer. Major retailers such as supermarkets or department stores usually add “slotting fees “or additional margin for products that don’t sell themselves. Our industry’s answer to this is the offer or, in some cases, the demand for funds to cover brochure support or ad programs on their websites–funds that are nothing more than subsidies which contribute little to generating demand for the product needed to help the “sell-through” phase.
Major brands (i.e. Disney, Universal, Florida, California), invest millions in marketing while niche brands use online marketing tools to find the most likely targets to buy their products. Imagine—if the Russians can spend $150, 000 to reach 126 million Americans on Facebook by sending posts so precise that they reach only those in your neighborhood who may be disposed to dislike Hillary Clinton—just what can be done with a modest budget to reach prospective visitors by structuring a digital marketing campaign using some of the over 1,000 targeting options on Facebook or Google.
While international consumer budgets are limited, the UK is an extremely mature market in which consumer marketing is the best way to achieve the demand that will sell through product. Yet, we found at WTM that tourism marketers remain mired in the sell-in phase and still try to use conventional FAM trips by journalists (and now bloggers and self-professed “influencers”), and travel agent training which, considering the extremely high turnover rate, becomes a task that lives somewhere between Sisyphean and whack-a-mole.
A New Vision: We spoke with Billie Moser, vice president of marketing for Travel Portland, a forward thinking and highly respected industry professional with a different grasp on mature markets and a vision for international marketing that goes beyond in-country representation and Brand USA’s off-the-shelf programs.
For example, after much analysis, in 2013, Travel Portland’s China strategy began with a five year sell-in effort targeting Chinese tour operators and receptive operators positioning Portland as a hip, young destination that was safe, affordable and well located between San Francisco and Seattle gateways. As more direct airline connections began serving the Seattle gateway, Portland became part of an integral part of any Pacific Northwest package. Sometimes a destination’s product can evolve faster than tour operators are willing to recognize.
In its analysis prior to hosting the Active America China Summit (AACS) and its 60 Chinese tour operators last spring, Travel Portland found that operators were selling their city as a tax-free shopping destination for fashion apparel. Realizing that many destinations offer similar shopping products, she used the AACS, including its FAM day, to define Portland and the surrounding regions as a nature-and-outdoor wonderland. This primary message is key to a strategy that involved direct-to-consumer content marketing.
The pivot to a content strategy to help create demand that will help operators sell-through the product began by hiring a local Chinese “influencer” to record life in Portland through blog posts and videos and images that would be pushed out through Chinese social media channels in the hope that operators begin to offer more nature product in the coming year. Said Moser: “We do, however, know that the messages we are putting out there are resonating as we can see from our Online Audit.”
What does Moser recommend with markets such as the UK and Germany? “I’m hands-on with the entire international budget and select the best programs from Brand USA that meet the individual markets’ strategies,” she told us. “I work with them as though they’re another one of our agencies and try to mold their existing programs to fit our needs.” And what advice would she have for tourism marketers with limited resources? “Find two or three operators who ‘get’ your destination and work to help them sell your product to their customer base.”
When that happens, you’re no longer running hard just to stay in place.
