A REMINDER: The INBOUND Report will not publish next week due to the Thanksgiving Holiday in the U.S. It will resume publishing the following week, with the Nov. 29, 2018 issue.
Is Perfect Storm on the Way? US Travel Says Clouds Are Gathering
In language that is unusually sober and gloomy for an official release from the nation’s number one association for the U.S. tour and travel industry, the U.S. Travel Association’s senior vice president for research, David Huether on Election Day issued the organization’s monthly Travel Trends Index (TTI), which contained this warning: “We’re seeing something of a perfect storm of factors that could suppress international demand for travel to the U.S. The U.S. dollar has been on another very robust strengthening trend since April of this year, while the global economy has been cooling off considerably overall. That, coupled with political uncertainty in Europe and rising trade tensions, is a bad-news recipe for inbound travel.”
“It would also be easy to misconstrue the international component of the latest TTI, which showed 4.4 percent year-over-year growth. But with inbound having posted a sharp 2.2 percent drop in September of 2017, any year-over-year improvement at all is liable to appear overinflated,” the TTI news release stated, adding, “Furthermore, the international Leading Travel Index (LTI) predicts that market will not expand any further at all in the next six months.” (The 4.4 percent increase tracks closely with the latest data from the U.S. National Travel and Tourism Office, which reported a 4.6 percent increase in overseas travel to the USA through May 2018.)
* Average outlook reading for October 2018 to December 2019
** Average outlook reading for October 2018 to March 2019
The TTI is prepared for US Travel by the research firm Oxford Economics. The TTI is based on public and private sector source data which are subject to revision by the source agency. Click here to read the full report.
The Big Picture: Following are the latest data on overseas travel and tourism to the USA from the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO). Five of the top overseas source markets (China, Japan, Germany, South Korea and Australia) registered negative to flat growth through the first five months of 2018.
The Good News? The German Market is Stable. The Bad News? The German Market is Stable
This week, we take a look at what our colleagues at the authoritative German travel trade publication, FVW, have to say. In the most recent issue of the INBOUND report, we discussed the 2019 outlook for the German market, along with an assessment of the country’s expected performance as a source market for the U.S. in the current year—from the perspective of two major German tour operators: FTI and America Unlimited. While both anticipated just fair results for 2018 and next year, neither anticipated any fall-off, which is good news, considering the fact that Germany is the fourth largest overseas source market for inbound travel to the U.S., behind only the UK, Japan and China.
One factor influencing the long-term forecast for visitors from Germany to the USA is a fundamental one: the number of Germans has remained the same for some time. It’s population in 2018 isn’t much different than what it was 10 years ago, which means that, as the population ages, the size of the ideal travel market segments—25 to 54 years old—is getting smaller.
The major reason for the static population is that the country’s birth rate is lower than the average for European countries, although it has ticked up a bit recently due to an increase in the number of non-German born women giving birth. Even with a higher birth rate, it will take years for such a number to be a factor in near-term growth of Germany’s outbound, long-haul travel market. Following are segments from what FVW has to say in its recent Destination Ranking 2018 as it relates to North America.
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The USA is way ahead of all other destinations in North and South America despite stagnating German visitor numbers last year. Canada grew well and Brazil was also more popular. The graphic shows total German visitor numbers last year and percentage changes compared to 2016. The German market appears relatively stable. Based on the figures up to August, a slight drop to about two million guests appears likely for 2017. (The official figure put out by the U.S. National Travel and Tourism Offices is 2,080,425.) This would still be the fourth-best result ever, though.
Slowdown in slump of German visitor numbers to the USA: To recall: after the attacks of September 11, 2001, and the economic and financial crises, it took more than a decade to beat the former records from the end of 1990s. In 2014, the two million visitor barrier was broken for the first time; and in 2015 a new record was set with nearly 2.3 million German visitors. Under the effects of the weak euro, which made travel spending in the USA significantly more expensive, there was even a double-digit (-10.4 per cent) fall in 2016. With only a slight decline in 2017, an end of the downturn therefore looks in sight. In addition, the exchange rate situation has calmed down. In the first quarter, the euro has risen significantly to over $1.20. This will also have an effect on tour operator package prices in the medium-term. They are relatively relaxed about the situation and expect for 2018 at least a stable year for the USA.
In comparison with other source markets, Germany – which, by the way, has the highest proportion of business travelers among visitor numbers at 24 per cent – has performed relatively well. Among the top ten source markets for the USA, only Canada, South Korea and France have reported growth; all others are showing declines, and quite substantial in some cases. Overall, the USA is therefore likely to close 2017 with another decline, after the slight fall in the previous year, and drop significantly below the level of 75 million visitors.
Foreign visitors spend four times more than domestic travelers: High-volume cities such as New York and Los Angeles have reported record figures despite the weaker foreign visitor numbers. But Chris Heywood, from the marketing organization NYC & Co, points out that on average a foreign tourist spends four times more than a domestic traveler.
The consequences of the downturn are serious. In the USA as a whole, tourism industry revenues declined by as much as 3.3 per cent to $4.6 billion up to the end of November. “If as a country we want to even out the trade deficit with abroad, then we need foreign tourists,” emphasizes US Travel CEO Roger Dow. At present, the US travel industry is setting up a lobby group that would press the government to support incoming tourism more.
Canada continues its upswing in its anniversary year: While the interest of Germans in the USA is stagnating at present, Canada has been shining with unbroken growth for years. In 2013 a total of 311,000 German guests were counted in the country. In 2017 it was already about 389,000. This was growth of 25 per cent. However, in contrast to the USA, the maple-tree country still remains well below the previous record of more than 450,000 German visitors in 1996.
In 2017, the increase compared to the previous 12 months lay at 5.4 per cent. Canada benefitted from several aces during the year. The 150th anniversary of the country’s foundation generated media coverage with countless events and presented all visitors with free entry to the national parks. The low Canadian dollar and moderate flight prices thanks to a substantial rise in capacity compensated for the former price disadvantage compared to the USA.
And in contrast to its large neighbor, Canada’s government under the young charismatic prime minister Justin Trudeau scored sympathy points around the world. The total number of international visitors also rose by more than four per cent to 20.8 million arrivals in 2017. “We have a strong tailwind,” says a delighted David Goldstein, head of Destination Canada, “and we are profiting from the positive image that the international travelling public has of our country.”
Lengthening the season and promoting lesser-known regions: For Canada’s tourism officials, this upturn is far from over. For Germany, Destination Canada has set the ambitious target of half a million guests in 2020. This would be annual growth of more than 8 per cent. This is no easy task for the local Destination Canada team under the new management of Barbara Ackermann, who in the spring replaces Germany chief Karl-Heinz Limberg, who has served in the post for over 25 years.
A lot will depend on whether Canada can succeed in finding solutions for the already emerging bottlenecks in hotspots such as Vancouver, Banff and Jasper. These popular destinations offer hardly any scope for expanding capacity. Therefore, it is more a question of extending the relatively short season. Hoteliers, attractions and other suppliers will have to work together and keep their businesses open longer in the spring and autumn. The fleets of the motorhome rental companies also quickly reach their limits in the main season. Whoever wants to secure a vehicle is well-advised to book early.
Apart from lengthening the season, Destination Canada is also promoting regions that are visited less often. They are convinced that the Atlantic and prairie provinces offer plenty of potential. The next challenge will be to get holidaymakers away from the prejudice of ‘Canada = cold’ and to excite them for the off-season and niche destinations. The digital marketing strategy started in 2015 is designed to achieve this. It is not uncontroversial among tour operators but appears to be working so far.”
What are the Best (and Worst) Countries where English Speakers will be Understood?
Country Switches Ranks with 2017 Number One, The Netherlands: The people of Sweden are better at speaking English than any other non-English speaking nation, according to the 8th edition of the EF English Proficiency Index (EPI) eking out the residents of The Netherland, who held the distinction in last year’s rankings. The EF EPI, which tests, measures and ranks 88 nations on their English proficiency, is based on test data from more than 1,300,000 test takers around the world who took the EF Standard English Test (EF SET) in 2017.
12 Things to Know about Chinese Luxury Travelers
Nearly half have bought vacation homes: In a report that provides the tour and travel industry professional with a wealth of information about the wealthy—wealthy travelers, the Hurun Report and the International Luxury Travel Market (ILTM) China issued their annual Chinese Luxury Travel Report during ILTM China held earlier this month in Shanghai. Both the Hurun Report and ILTM study the high net worth individual (HNWI) traveler.
A Dozen Things to Know about Chinese Luxury Travelers: Highlights from the Luxury Travel Report include the following:
- Destinations:In the past year, the top 5 most popular overseas destinations for Chinese high-end travelers were Europe (39 percent), the Americas(36 percent), Africa (29 percent), Southeast & South Asia (23 percent) and Japan and South Korea (22 percent). Africa rose fastest, breaking into the top three as it increased from 15 percent last year to 29 percent. The Americas increased by 5 percent, rising to second. Top-placed Europe fell 6 percent compared with last year.
- Travel themes: the surprise vacation theme last year was Islands and Beaches. Its popularity seems to have peaked, however, with the selection rate dropping to 13 percent this year. Travel around the Worldsaw the fastest rate of growth, establishing itself in pole position with an increase from 13 percent last year to 37 percent. Polar Exploration,the most popular theme last year, fell by 8.5 percent and takes second place with a rate of 22 percent. Hoogewerf said “Travel around the world ranks at the top, indicating that people are travelling while learning.” A prominent new travel theme in recent years, parent-child travel enters the top three with 19 percent.
- Vacation destinations for 2019 Chinese New Year: Almost two-thirds (64 percent) of respondents have chosen to take an outbound trip during Chinese New Year next year. The top three destinations are Australia (20 percent), Thailand(18 percent) andNew Zealand (17 percent). Twenty-nine percent of respondents will stay in China. The most popular choice is to return to one’s hometown, with 10 percent, followed by trips to Sanya and Yunnan close behind with 8 percent and 6 percent, respectively.
- Travel times:the proportion of travelers choosing not to travel at fixed times throughout the year increases by 8 percent compared with the previous year, up to 45 percent. With regards to Travel duringPublic Holidays, the Chinese New Year is the top choice, taking up 23 percent; the National Day holiday (19 percent) comes second, while the Labor Day holiday (8 percent) and Mid-Autumn Festival (6 percent) are the next most popular. Travelling during the summer holiday season increased once again by 4 percent, up to 19 percent.
- Main travel concerns: the biggest travel worries are Traffic Safety, with 42 percent, followed by Natural disasters (25 percent),Robbery and Theft (22 percent), being ripped off (12 percent), dietary hygiene (11 percent) and travel facility safety (11 percent). It is clear that safety issues are the biggest concerns for travelers.
- Travel agency selection:over half of high-end travelers opt for personalized serviceas the key consideration when a selecting a travel agency, with half choosing a well-planned itinerary. Forty-five percent of travelers prioritize problem-solving capacity. Creative itineraries and hard-to-find resources are among the top five factors for consideration, having been chosen by nearly 30 percent of travelers.
- Transport:when it comes to domestic airlines, Air China is the carrier of choice among high-end travelers by a considerable margin with 50 percent; China Eastern comes second, with its selection rate increasing by 7 percent to 28 percent; China Southern ranks third with 23 percent. Among international airlines, Emirates remains in the top spot.
- Hotel/Accommodation:Ritz-Carlton is the most popular luxury hotel brand once again. With regards to hotel membership, the Hyattscheme is the most popular, being preferred by 26 percent of high-end travelers, up from a mere 3 percent last year.
Holiday rentals: in addition to traditional hotel accommodation, 24 percent of travelers will consider Airbnb-style holiday home rentals, more or less the same proportion as the previous year. “Strong sense “of belonging and experience of local life,” ‘lower price,” and “family atmosphere” are their main rationale for taking this route. Said Hoogewerf, “the performance of the high-end short-stay holiday home market has been weak. However, as traveling as a family grows in popularity, the market is likely to see significant development in the future.”
- Home stay: Nearly a quarter (24 percent) of people would choose home stay, maintaining the same level as last year. “Better understanding the local life,” “reasonable prices,” “family atmosphere” are the main reasons for them to choose home stay.
- Popular cuisine: Local Cuisineis the most popular style of food when traveling. Other well-received cuisines among high-end travelers, ranked in order of popularity, include Japanese, Sichuan and Hunan, Cantonese, Italian, French and Southeast Asian.
- Holiday homes:nearly half of high-end travelers interviewed have purchased holiday homes, with 11 percent of them in Thailand, 10 percent in Australiaand 5 percent in both Switzerland and Japan; in China, Sanya is the location of choice, with a selection rate of 12 percent. The homes have an average floor space of 100 square meters. Apartments and villas are the favorite mode of residence. In terms of surrounding environs, homes with a sea view are the most popular.
- Future trends: demand forsmart accommodation experiences, including VR, house-viewing videos and AI services, is expected to rise.
Selected Tables from the Luxury Traveler Report:
Favorite Destinations
Source: Hurun Research Institute Chinese Luxury Travel and Lifestyle Survey 2018
↑ Ranking up ↓ Ranking down – No change *New to Top 10
Favorite Vacation Travel Themes
Source: Hurun Research Institute Chinese Luxury Travel and Lifestyle Survey 2018
↑ Ranking up ↓ Ranking down – No change *New to Top 10
Favored Travel Times
Source: Hurun Research Institute Chinese Luxury Travel and Lifestyle Survey 2018
↑ Ranking up ↓ Ranking down – No change *New to Top 10
Best International Luxury Travel Destinations
Source: Hurun Research Institute Chinese Luxury Travel and Lifestyle Survey 2018
↑ Ranking up ↓ Ranking down – No change *New to Top 10
The Latest Tour Operator Mergers & Acquisitions
Larger tour operators continued, in recent weeks, to divest, acquire and consolidate. Some of this activity—that which has been publicly announced—includes the following:
—Vision Travel, a Direct Travel Company, which is one of the 10 largest travel agencies doing business in the U.S., according to the 2018 Travel Weekly Power List, has announced that it has agreed to acquire UNIGLOBE One Travel, based in Vancouver, British Columbia. The company said that the acquisition continues Vision Travel’s strategy to expand in key markets throughout Canada. Brian Robertson, president of Vision Travel (Ontario-West) told the trade publication TravelPulse Canada that “We believe this acquisition of Uniglobe One Travel by Vision Travel, A Direct Travel Company, will be a significant game changer in the Canadian and North American travel space.”
—UK tour operator Cox & Kings has sold its schools and activity unit, PGL for £467million ($567 million) to A consortium of investors, led by Midlothian Capital Partners, has acquired HB Education Limited, the holding company for PGL. HB Education provides residential adventure and study trips for schools, youth organizations and young people through the PGL brand, as well as educational tours for schools and further or higher education students through a variety of brands, including NST, EST, Studylink and Travelplus. The company was founded by Peter Lawrence in the late 1950s, the company initially offered canoe trips on the River Wye. It was acquired by Holidaybreak in 2007 and merged with NST before Cox & Kings acquired it in 2011.
—Adventure tour operator Exodus Travels has acquired its sister company, self-guided holiday specialist Headwater Holidays. Announcing the purchase, Exodus issued a statement noting “huge potential for growth within the self-guided market” that the deal represented. Founded in 1985, Headwater Holidays operates self-guided trips, predominantly to European destinations. Itineraries are for all levels of fitness, with walking, cycling, winter cross-country skiing and activity holidays available. Both Exodus Travels and Headwater are Association of Touring and Adventure Suppliers (ATAS) members and part of the Travelopia group, the collection of specialist travel brands once owned by travel industry giant TUI, which sold the group in February of last year to KKR (Kohlberg Kravis Roberts & Co L.P.) a New York City-based private equity firm.
—GTA’s TravelCube, a retail brand, is rebranding under the Bedsonline name and is shifting over to the Bedsonline booking platform. The move is part of the next phase of the integration of GTA and Tourico Holidays into Bedsonline parent group Hotelbeds. The shift is being communicated to the customers of both Bedsonline, as well as to those customers and those moving over from TravelCube. Bedsonline had already announced a brand refresh with a new logo and brand identity.
—Melbourne, Australia-based Webjet has announced that it is acquiring Dubai-based travel firm Destinations of the World (DOTW). Webjet is paying private equity firm Gulf Capital $173 million for the business, and DOTW will join its WebBeds division. The addition of B2B platform DOTW will take WebBed’s hotel portfolio to more than 250,000 and expand total sales volume to more than $2 billion. DOTW has a presence across Asia Pacific, the Middle East, Europe and the Americas. Webjet has operations in Australia, New Zealand, North America, Singapore and Hong Kong. Its registered office is located in Melbourne. The deal is expected to complete later this month and Gulf Capital will retain a stake in Webjet.
At a Glance: Minnesota
For full information click here.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Robert Graff has been named vice president of sales and marketing for Las Vegas-based Bindlestiff Tours. He was previously vice president of marketing and international sales for the Papillon Group-Papillon Grand Canyon Helicopters/Scenic Airlines, where he served for nearly 18 years. Prior to that, Graff was vice president of sales and marketing for Heli USA Airways.
Bruce Beckham received the Bob Everidge Lifetime Achievement Award at NTA’s Travel Exchange last week in Milwaukee. Currently vice president of the cruise & tour division at Quinwell Travel Service, Beckham was executive director of Tourism Cares, NTA’s official philanthropy wing, for 13 years (2000-2013). Prior to that he had his own tour company for 25 years and also worked as a professional speaker and workshop instructor working with DMOs and lodging companies. His first NTA convention was 1972 and he has since attended 48 consecutive meetings.
Luís Paulo Luppa, (left) who has headed the tour operator Grupo Trend since January 2010, is leaving the company soon, according to an announcement from its owner, CVC. Mauricio Favoretto,(right) formerly with Coca Cola, Campari and Nestle, will direct Trend after an orientation period during which Luppa will help prepare him for his new job. Luppa, known as a “Pitbull” salesman, was a Trend consultant for a few years and was invited by the then partners Jose Anjos and Washington Preti to take over the presidency in the new phase of the company in late 2009. The announcement of the purchase of Trend by CVC was made in May 2017, and the deal was completed at the end of last year.
Sonia Davies has been appointed CEO of luxury tour operator Scott Dunn. Former CEO Simon Russell will relocate to San Diego in the spring and take up the role of international director to further develop Scott Dunn’s global expansion. Davies joined the company as chief operating officer in January 2018 having previously worked in a number of different industries, including time at NetJets and Sysco. Most recently she managed the acquisition and integration of Asian-based tour operator Country Holidays, which now trades as Scott Dunn in Singapore and Hong Kong. In her new role, she is to continue the growth of the Scott Dunn and Imagine brands in the UK market and the accelerated growth of the Scott Dunn brand in the U.S. and Asia.
The Greater Palm Springs Convention & Visitors Bureau has announced a number of new appointments this week. Colleen Pace joins the CVB from Omni Rancho Las Palmas Resort & Spa as the organization’s new chief marketing officer. Dana Fury, who most recently worked for Universal Pictures, will serve as marketing manager, while Julie Sinclair, a former editor for a wide variety of lifestyle, travel and hospitality publications, will be the director of brand communications. Donna Sturgeon, a Palm Springs resident for over 20 years and former director of work-based learning for the Coachella Valley Economic Partnership, will serve as the CVB’s new manager of the Certified Tourism Ambassador (CTA) program, while Marissa Willman has been promoted to director of digital marketing. Also, Jean Paul Zapata has joined the CVB from Santa Monica PR agency Klick Communications as media relations manager.
In France, Claire Charrier has been appointed as a commercial manager for the tour operator National Tours. She’ll be responsible for overseeing activity at 18 different locations in the west of France. She joins the operator from Thomas Cook France.
Also from France, Christophe Silvin has been appointed director of operations at Travel Planet. He joins the company from France Cars, where he was director of operations from 2002 to 2010, when he became general director. The management of Travel Planet will now be organized around a management committee composed of, director of operations, Jean-Christophe Sabatier, business development and integration director and Cyprien Descheemaeker, R & D Director. The senior management will focus on the Group’s international development and new offerings.
After spending nearly 21 years with United Airlines in Brazil—the last four of them as country director, Lucimar Reis has moved on to the country’s largest tour operator/travel agent, CVC, where she has been named air supplier management director. Before her long career with United, Reis had been an account manager at VARIG, Brazil’s first airline, which shut down in 2006.
Terry Williamson has joined The Appointment Group as non-executive chairman of the board. A former CEO of JacTravel, Williamson has more than 30 years’ experience in travel and private equity, including senior roles at Thomas Cook, Cosmos and Monarch Travel Group, having started his career in finance.
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Klaus-Ulrich Sperl, a longtime manager at Thomas Cook, is switching to DER Touristik as head of destination management activities. Sperl, currently commercial director for the whole Thomas Cook Group, will leave the company at the end of 2018 after nearly 19 years in different management positions. He held various jobs in Germany, the UK and in Western Europe during his career with DER Touristik, which Europe’s second-largest tourism company. TUI is No. 1. As group commercial director, he is responsible for Thomas Cook’s own product portfolio and hotel contracting.
Mike Gallagher for 22 years at CITYPASS
Klaus Ritter for 14 years at Starline Tours of Hollywood
Dana Higgins for 7 years at Visit Oceanside Conference and Visitors Bureau
Lois Stoltzfus for 5 years at Groups Galore
Kristen Jarnagin for 3 years at Discover Long Island
Following what the German travel trade news media called the “Lost Year” of 2016, when outbound travel to the United States dropped by more than 10 percent over the previous year, the market began a recovery in 2017—as confirmed by the recent release of full-year figures for the year from the U.S. National Travel and Tourism Office—and, on the basis of the latest figures by German travel agencies through last month, sales for 2018-19 winter holidays (which usually have a sizable long-haul component) are outstripping those for last year.
After a six-month lag in time since it produced hard data on the number of UK residents who have visited North America (generally, about 90 percent of those visits are to the U.S.), the UK’s Office for National Statistics (ONS) has released preliminary data for the first quarter of 2018. They show that compared to Q1 2017, arrivals for the first quarter of were off by just eight-tenths of a percentage point. The figure tends to confirm what U.S. receptive tour operators were telling INBOUND last autumn as the last bookings by British travelers for the 2017-2018 winter season were being made.
Gisel Vidals
The board of directors of Visit KC has selected industry veteran 
Deana Ivey
Timothy Zahner
Sarah Schaffer
Wendy Haase
CVB veteran 
Terry Dale
Sara Otte Coleman
As of September 30, 
Marcelo Kaiser
Fanato Incentive, a Brazilian corporate-focused brand from tour operator Fanato, has just announced that it has hired
Specialist tour operator Hotelplan’s 
Kelli Hilliard
Sarah Willoughby
Oswaldo Freitas