INBOUND INTERVIEW: San Francisco Travel’s Tom Kiely Discusses Recent Brazil and Argentina Sales Mission
We recently sat down with Tom Kiely, executive vice president, tourism, for the San Francisco Travel Association, who just returned from sales mission to Brazil and Argentina accompanied by 10 of his members and two board members, to get an update on how the two key South American source markets to the U.S. are faring. Excerpts from our conversation follow.
INBOUND: The Brazilian market in 2013 and 2014 was robust. What do you see from your trip?
Kiely: In Brazil the currency is somewhat deflated from last year and the US is more expensive, but the leading buyers told us that would mostly affect the middle (C) class—in Brazil they divide the socioeconomic classes into A,B and C—who are buying least expensive trips and for the US that’s Orlando and Miami. The “A” and “B” class travelers who have resources are exploring new destinations and California has been promoting heavily at shows and with representation. We also have our own representation.
INBOUND: What Makes Brazilians so valuable as tourists?
Kiely: In 2014, we had 100,000 Brazilian tourists and we expect a 10% increase. Unlike other source markets that usually visit only the most iconic attractions such as the Golden Gate Bridge or Fisherman’s Wharf, the Brazilians are 3 times as likely to explore new neighborhoods, dine at new restaurants and visit many out of the way attractions. They are explorers and big time shoppers.
INBOUND: What about Argentina?
Kiely: Argentina right now is a very difficult place to do business, especially in today’s business climate. Tour operators in Argentina told us everyone is waiting for the Presidential election that will take place later this year as they hope that a new president will be more open to economic improvements. Right now they a prohibited from take money in or out of the country, there are surcharges on credit card purchases outside the country, so the visitor are trying to game the system by pre-paying for everything.
The regulations were so restrictive we even had problems shipping our brochures to Buenos Aires and had to carry very heavy boxes of brochure that were to be handed out at events.
INBOUND: How were the missions structured?
Kiely: We conducted sales calls to the key buyers and media during the day and held dinners and networking functions for them in the evening. We had our president and CEO, Joe D’Allessandro, with us and his presence was critical for attracting major media coverage, which we received.
New Attraction Products
New “Times Square-Like” Attraction to Open in Southern California:
Located about a mile away from the long-standing and popular Knotts Berry Farm along Beach Boulevard in Buena Park, California is The Source, opening some time in 2015. The Source is a 450,000 square-foot urban center featuring shopping, dining options and cutting edge technology. The space is designed to reflect “the digital energy of Times Square, the visual energy of Tokyo and the avant-garde of Seoul.” In addition, visitors will have the opportunity to see some of their favorite musical artists at the 2,000 seat performance venue presented by YG Entertainment. In 2016, phase two of the project will see the construction of a 150 all-suite hotel that will feature meeting space, dining and a roof-top pool and bar. For more information, visit: www.sourceatbeach.com, or call 714.994.4300
New Florida Theme Park Targets Off-the-Road Vehicle Drivers, Paintballers:
The newest ticketed attraction in Florida—the rack rate for out-of-state visitors is $45—is a 1,000 acre site that caters to paintball enthusiasts and off-the-road (OTR) vehicles opens this month east of Punta Gorda, which is about 55 miles south of Sarasota. The park, which opens this month, contains 22 miles of off-road-vehicle trails; four motocross tracks; 80 acres of paintball fields; a 12-acre, freshwater beach and lake; and a 56-acre events grounds, which will play host to concerts, rodeos and more. There are seven paintball courses, including one that resembles a war village with six tiki huts and a crash zone, featuring airplane debris. The new facility will be open on weekends only during 2015, and hopes to expand to daily operations next year. For more information, visit: www.floridatracksandtrails.com , or call 844.743.3388.
“The License Plate Game: Do you Recognize These State Tourism Slogans?”
Many states still use their license plates as movable ads for their state’s brand or slogan. Some now add a state website instead. As we try to sort out which is which, here is a list of the 50 states in America, along with their slogans.
New Partnership Tries To Lower The Overall Cost Of An East Coast Itinerary
NAJ Events and Media is partnering with Wine, Water and Wonders of Upstate New York (WWW), a suggested itinerary of routings, attractions and activities designed specifically for inbound overseas travelers. The partnership is designed to motivate receptive operators (RTOs) to include a WWW program in 2015-16. In return, the WWW organization and thetouroperator.com will actively promote the receptive operators carrying the program to overseas tour operators at IPW and through NAJ’s media properties: www.thetouroperator.com, Inbound Report and THE TOUR OPERATOR magazine, which will be distributed to everyone at IPW.
The program takes advantage of New York City as the predominant gateway into the United States and of Niagara Falls as a major international tourism destination. “This marketing partnership grew out of a timing opportunity.” said Jake Steinman, founder and CEO of NAJ Events and Media. “With currency exchange rates making travel to U.S. more expensive from Europe, we saw this as a chance for RTO’s to offer unique experiences between these two iconic destinations in a way that will reduce to the overall cost by including less expensive product by overnighting in Niagara Falls and one other destination in between.”
This program will be promoted via a feature article The TOUR OPERATOR Magazine, a portal presence on www.thetouroperator.com, an article in the INBOUND REPORT and at thetouroperator.com booth at IPW. “All this promotion,” stated Steinman, “is designed to refer buyers who attend IPW or who express interest through Inbound or The Tour Operator to the RTOs who carry WWW product. Chris Guidone, a seasoned tour and travel professional, will be representing WWW at Thetouroperator.com IPW booth (#855)explaining the program to overseas operators and referring them to RTOs who can help them sell it.
The only requirement is that operators must include at least two nights within the destinations specified on the WWW itinerary. For more information, contact email@example.com.
*WWW partners include Niagara Falls USA, Corning Museum of Glass, Finger Lakes Tourism Alliance, VisitRochester, DestinyUSA, Waterloo Premium Outlets, Fashion Outlets of Niagara Falls, Kay Jewelers and Finger Lakes Hotels.
Airline Log … New Route News … Delta and Aeromexico to Partner in Big Way
- Delta Air Lines and Grupo Aeromexico have filed an application with the U.S. Department of Transportation seeking antitrust immunity for a new joint venture on flights between the USA and Mexico. Through the proposed joint venture, the airlines will offer an expanded network within Mexico and connections to U.S. business centers in Los Angeles and New York. Aeromexico’s hubs – Mexico City, Monterrey, Guadalajara and Hermosillo – will give Delta customers greater access to cities throughout Mexico. Delta will provide Aeromexico with its North American network via Delta’s key hubs, including Atlanta, Detroit, Los Angeles, Minneapolis, New York, Salt Lake City and Seattle. The request to launch the partnership is also being submitted to Mexican antitrust authorities.
- Delta Air Lines is expanding its service to Colombia late this year. Beginning December 19 it will initiate service from its Atlanta to Medellin and Cartagena., Colombia. Service between Medellin and Cartagena will be every day. For Cartagena, flights will operate on Wednesday and Saturday.
- Low cost carrier Norwegian has launched service from London Gatwick to Orlando International Airport. Norwegian already flies between Orlando and Oslo. As well, the carrier is adding once-a-week nonstop service to and from Copenhagen.
- Aeromexico added new direct flights from Mexico City to Ontario and Sacramento, California, beginning April 5 and April 6, respectively. There are four flights per week to Ontario and three flights to Sacramento. Also, Aeromexico recently added to its USA routes a flight from Monterey to Miami. Aeromexico now serves a total of 29 routes between Mexico and the United States.
- Turkish Airlines has added regular flights from Istanbul to San Francisco to its global network. The flights operate five times a week—on Mondays, Tuesdays, Thursdays, Fridays and Sundays in both directions. Other North American cities now served by the carrier are Chicago, Houston, Los Angeles, New York, Washington, Boston, Toronto and Montreal.
Active America China Report Part One
The Jig Is Up: It’s Visa Processing, not Marketing, That’s Driving Increase in Chinese Visitors. This rhetorical bookend—it came across, almost, as a throwaway line—came at the close of a presentation rich in new insights into what is driving the increase in numbers of Chinese visitors to the United States, where they’re coming from in China and the importance of shopping in their itineraries (it is critical) from Dennis Suo, manager of travel industry marketing for the DSG Group.
For Suo, whose title is marketing manager and whose MBA comes from the Asian Institute of Management, the comment was less a critique of marketing; rather, it was an acknowledgement that the impact of last November’s agreement between the governments of China and the USA to extend the term of tourist visas to each other’s countries from one to ten years will have tremendous impact on the arrivals of Chinese visitors to America; they will now be able to make repeat trips, staying longer in each destination and, most important, increase the overall amount of shopping they do because about two-thirds of their travel budget goes toward shopping and the cost of a tour package.
The Five Takeaways: Suo’s presentation drew heavily from data developed by Hong Kong-based DFS, which sells upscale and luxury brands to some 200 million well-to-do travelers each year. It is known principally for its Duty Free Shopping outlets in airports worldwide—with a particular strength in the Asian market. It has 16 airport locations in Asia and 5 in the USA (Los Angeles, New York City, San Francisco and two in Hawaii) as well 14 Galleria brands in downtown locations in major cities worldwide. One was able to leave Suo’s presentation with these five takeaways:
Asian Travelers will continue to make markets all over the world. In a point that has been made by international travel organizations, the growth of the traveling population in Asia—especially in China and India, the world’s two most populous nations—is largely benefitting APAC destinations. Now, with improved visa processing procedures by the U.S. government, as well as the visa agreement between China and the USA,
- Predicting where travelers come from and where they will go, especially those from China, is becoming a complex matter. In the case of China, the challenge has been to connect development outside of urban China with travel. The researchers at DSG have been able to predict the growth of a country’s travel market (through its Travel Forecast Model) by looking at factors that include employment, age, head of household income, expenditures; disposable income and urban and non-urban location. After weighting all of the factors, and constructed this formula …
… and has found that urban expenditure is the key factor that drives (or predicts) travel growth. This will be key in expanding outbound travel from unfamiliar (new) markets in China, which has 160 cities with populations of 1 million or more.
- Chinese outbound travel is huge, and the growth has only just begun. The number of Chinese travelers. Suo alluded to a World Tourism Organization report in 2006 which predicted that the number of outbound Chinese travelers would reach 100 million by the year 2020. In fact, he noted, Chinese travelers passed that number in 2014. The total should reach 120 million this year and exceed 200 million in 2020.
- China is more like a continent than a country. Even people somewhat knowledgeable about China know little about the distinct qualities of its 23 provinces. Most people might be aware of several major cities, such as Beijing, Shanghai and Chengdu, but not of the fact that there are 160 cities within China with a population of more than 1 million. As China’s middle class of potential travelers has grown, it travel-ready population is growing outward from the eastern and southeastern regions of the country to its western, southwestern and northern provinces.
- Travel retail will be the growth engine of the retail industry in the future. Suo made several key points regarding the well-known propensity for Chinese travelers and shopping.
- Next year, Chinese travelers will spend $160 billion outside China—60 percent of this will be on shopping
- Chinese luxury travelers will spend three times shopping abroad what they spend shopping locally
|Will spend more||56%|
|Will spend the same||41%|
|Will spend less||3%|
Source: DFS Group
- The reasons that Chinese luxury travelers plan to spend more has to do with: increases in traveling budges (78 percent); the chance to buy luxury items abroad (57 percent); gifts for friends (51 percent); gifts for friends/relatives (47 percent).
NOTE: It was no coincidence that Las Vegas, host city for Active America, launched this year’s event with a three-hour reception at the Fashion Show Mall about 7-8 minutes away from the host hotel, the Bellagio, on the same side of the Las Vegas Strip. The musical entertainment and fashion show held specifically for the Chinese tour operators who attended the event, was jammed, and security personnel had to check badges closely in order to prevent curious mall patrons from crashing the reception.
Suppliers Make High Energy Pitches to Chinese Operators
The intensity level was high as more than two dozen U.S. travel suppliers and destinations who had signed up beforehand for the opportunity took turns during a two-and-a-half hour session at NAJ’s Active America Summit at the Bellagio hotel in Las Vegas making six-minute Pecha Kucha presentations highlighting their destination or product to a conference room full of Chinese tour operators. At times, the atmosphere was part revival, part Bingo game or part pep rally as Mandarin-speaking U.S. sales and marketing professionals connected with the operators. Some stepped down from the podium and walked about with a hand-held microphone; some told quick jokes and some exhorted the operators to meet up with them later to discuss business. At the end of each presentation, an operator’s name was drawn from a bowlful of business cards and a prize was awarded. Some of the presenters included: (Photos)
Vive les Etats-Unis! French Travelers Say USA is Their No. 1 Destination
Travelers from France, the No. 6 overseas inbound source market for the United States, have voted the USA their top dream destination. This is the key finding from a survey that included a query of those surveyed recently by the Paris-based global market research company Ipsos and asked to name their dream destinations. The rankings for dream destinations were decided on the basis of a total of 44,000 votes cast by French respondents, comprising both the general public and tourism-related operators. The results were as follows.
Top Five Dream Destinations for French Travelers
|Destination||Percentage of votes cast|
|3. New Zealand||22%|
Also from the survey,
- 32 per cent of the French respondents will increase their travel budget in 2015 (of these, 52 per cent cited more savings) while another
- 24 per cent may reduce their travel budget.
•This year, the average travel budget of the French travelers is expected to return to the same level as 2013 at €4,900 ($5,200) per couple per year, after dropping to €4,800 ($5,100) in 2014, according to Ipsos.