IPW 2017—The Vibe
- Which is the best to describe traffic on the trade show floor? A. Subdued. B. Low energy. C. Deceptively productive. Answer: All of the above. While the aisles at the Washington DC Convention Center seemed empty, the chairs in each of the booths were consistently occupied by buyers reuniting for their annual ritual with their USA contacts. The show has attained the rarified status of ITB or WTM where it’s the most convenient venue to meet to conduct old business and new.
- How many ways can we say, regardless of what you read, see and hear, “You Are Welcome ” to the USA? To counteract the symbolic messaging coming out of the Trump Administration, states, CVBs, Brand USA and US Travel were all parading their welcome messages in different forms—overt and subliminal. There were the messages such as “We Welcome the World.” There were “dog whistle” style messages such as “We love travelers no matter where they’re from” as well as the old standby, “we are open for business.”
- IPW 2017, at times, took on the feel of a Brand USA campaign rally –and just in time. The existential threat to Brand USA rendered much of the nit-picking about internal politics and staff exits that some of their stakeholders have expressed to INBOUND in private, seem trivial by comparison. As everyone realizes, without their efforts we are defenseless to counter any of the damage messaging that our political policies may communicate to the international community. At the very minimum, the boots-on-the-ground network that they have built throughout the world is our best defense where proposals and policies that can easily be lost in translation can be clarified.
- IPW continues to become a “Reunion Show”, where buyers and sellers reunite each year and reconnect. For new buyers tell us it’s difficult to connect as sellers prioritize existing contacts over those who are unproven and new products tend to get lost in the sea of exhibit booths.
- It’s also an international Media Show. The IPW International Media Marketplace on the first day of the show continues to be tremendously productive and an IPW highlight, as public relations is the only marketing that most suppliers and DMOs can afford. Once they get back to their booths on the trade show floor, however, many complained to us that theirs meetings with consumer and trade publications revolved around pay-to-play quid pro quo advertising to editorial options. Some suppliers and DMO’s said they were being strong-armed by tour operators selling them advertising in brochures in exchange for inclusion in next year’s programs.
- Commerce Secretary Wilbur Ross opened his Monday luncheon keynote by telling the audience that he was glad to appear before an audience that wouldn’t be heckling him. It was a good thing the conversational decibel level was high and the lights were dimmed so he could many members of the audience cackling as he announced the “America is open for business. America is open for travel. America is open for international travelers.” At the very moment Ross was speaking, President Trump was Tweeting: “That’s right. We need a TRAVEL BAN for certain DANGEROUS countries, not some politically correct term that won’t help us protect our people!”
At that point was clear that most of those heading for the exits early were not leaving due to calls of nature. They were expecting at least a scintilla of candor and were sorely disappointed to find nothing from the octogenarian billionaire by tired platitudes without a hint of authenticity.
Why US Travel Rallies the Troops to Save Brand USA
By about the fourth time he led a public chant during IPW 2017 in Washington, D.C.—“Brand USA is here to say”—it was clear that Roger Dow, president and CEO of the U.S. Travel Association, meant it: US Travel and the U.S. travel and tourism industry are determined to prevent the implementation of budget plans by the Trump Administration that call for the elimination of Brand USA, the private-public sector organization that promotes the Visit USA travel product abroad.
He was especially emphatic in making the point during a Tuesday morning press conference at IPW during which he was peppered with questions by journalists who were critical of the impact of Trump on the inbound tourism industry and dubious about the industry’s prospects for a healthy future under him.
After beginning with a reference to new data from U.S. Travel’s Travel Trends Index showing that travel to the USA was actually up by one percent in April 2017 (vs. April 2016), Dow seemed intent on speaking about matters other than the “Trump effect,” such as the impact of the strong U.S. dollar on travel to the USA; problems with visa rules reciprocity with Europe; and the need for airport infrastructure improvement in the United States
But, as journalists kept sticking to questions that focused on President Trump, the president and CEO of US Travel stressed that he and his organization were determined to work with the White House to advance the industry’s agenda, including the preservation of Brand USA. He earned applause from the more than 250 journalists by the end of the news conference.
Dow has usually been reticent in discussing US Travel’s productive record in lobbying the U.S. Congress and official Washington, choosing to allow others to take credit, and leaving no fingerprints on his organization’s successful efforts, such as those that led to the passage of the Travel Promotion Act of 2010 and its reauthorization at the end of 2014. His assiduously bi-partisan approach to lobbying—US Travel’s PAC has distributed its contributions to both Democrats and Republicans and the legislation it supports has sponsors from both parties—has yielded good results for the industry.
The Long Game: The first question asked Dow was typical: “Have you accepted the fact that you have at least three and a half years of problems with the Trump Administration ahead of you?” asked the journalist.
“This is a long game,” Dow replied, noting that, as of the day of the press conference, the Trump Administration had been in office 149 days, while his full term runs 1,460 days. He pointed to President Barack Obama’s first month in office in February 2009, when he sparked furor in the travel and tourism industry while in the midst of remarks on the need to economize in the midst of an economic recession not to go to Las Vegas. (Obama said, “You don’t go buying a boat when you can barely pay your mortgage. You don’t blow a bunch of cash on Vegas when you’re trying to save for college. You prioritize. You make tough choices.”)
With US Travel working through back channels, Obama then agreed to meet face-to-face in March 2009 at the White House with Dow and a dozen industry leaders. It was the first time in US Travel’s history (it was founded in 1941) that a sitting President had met in the White House with travel and tourism industry leaders. Dow told reporters that Obama, who eventually met three times in the White House with industry leaders during his tenure in office, went on to be “one of our best presidents for travel and tourism”
Trump? “He’s a hotelier … He understands this.” In explaining his organization’s approach to the Trump, Dow said of Trump, “He’s a hotelier. He should understand this. He does understand this.”
US travel has actually held off on trying to meet with Trump in person, Dow said, explaining, “We’ve actually put off getting together with him face-to-face. There are so many things happening.” Industry leaders are making contact with White House officials, but will wait before trying to arrange a meeting with the President.
After reminding the press conference of the positive points he had stressed in his presentation, Dow seemed to close the dialogue with reporters over Trump with this: “We are concerned about the rhetoric. We’re going to get to him and we are going to work with him. He’s a businessman. He’s smart. And we’ll help bring him around.”
Lindsay Sutton, an award-winning travel writer from the UK known for his barbed questions at IPW press conferences, seemed to capture the mood of most of the journalists when he commented, as the session came to an end: “We know that visitors have a great admiration for what America stands for—its openness, immigration, its positiveness—the fact that you can make it,” he said. “People love that energy and ‘can do.’ I applaud you for getting back to that point. It’s unusual for me to sit down without a stinging, critical remark.” And others applauded as well.
It was clear that US Travel had already had some impact on the Administration’s thinking. U.S. Secretary of Commerce Wilbur Ross, who delivered keynote remarks to the IPW opening luncheon on the day before, sprinkled his speech with familiar phrases praising the industry’s work and even used the current buzz expression of Brand USA/US Travel: “But let me be clear: America is open for business. America is open for travel. America is open for international travelers.”
Tourico Founder Retires Following Sale of Company to Hotelbeds
Following the acquisition of his company, Tourico Holidays, by Hotelbeds, founder Uri Argov has retired from the organization. He will, however, remain a shareholder of the combined company. Argov founded the Orlando-based Tourico in 1994, overseeing its growth in the next 23 years to the point at which it was one of the largest bedbanks in the world, as well as one of the largest receptive tour operators in North America. With an inauspicious beginning as a fax spammer selling hotels that were not under contract—(and to which he admitted under a question posed at the RTO Summit in New York in 2008, “we did some things I’m not proud of in order to survive”) the company grew to over 50,000 hotels and over $1.5 billion in annual sales turnover. Argov, whose computer science background earned him a position in Israeli intelligence writing algorithms that predicted locations of suicide bombings, invested heavily in state of the art technology that was the envy of the industry. He also oversaw an aggressive team culture that ruffled a few feathers along the way while it produced surprisingly strong results.
BUSA: Numbers Show that Industry is Resilient and Staving off Impact of “Trump Effect”
As if the proximity of the White House—it was less than a mile away from the Walter E. Washington Convention Center in Washington, D.C. and IPW 2017—made the Trump Administration’s presence palpable, Carroll Rheem, vice president of research and analytics for Brand USA, opened the session by saying, “First, I want to talk about the elephant in the room. There’s no way you get around it. Politics.” (There were very few references by officials from Brand USA or the U.S. Travel Association to “President Trump,” Instead, the word “politics” was employed.)
Rheem went on to say that, yes, it’s had an impact on those who decided not to come to the U.S. in Brand USA’s most recent proprietary survey: 30 percent of those choosing not to come to the U.S. cited politics as their reason for not coming. However, she questioned results of some surveys that showed double-digit declines in arrivals to the U.S. as a result of Trump-related proposals and rhetoric.
(Rheem’s mention of “double-digit” numbers was a not-so-subtle reference to a recent survey report put out by Foursquare, an app used primarily by younger travelers, claiming a decline in U.S. market share of 11 percent from the fourth quarter of 2016 through the first quarter of 2017.)
Yet, when it comes to actual bookings to the U.S. in the near-term future, Sabre had just reported a year-on-year increase of 3 percent and Global Agency Pro reported an increase of 4 percent. Yes, she said, politics is having an impact on intent-to-travel, but not in the ranges of 8 or 11 percent that some sources have reported.
Rheem said that BUSA’s own numbers show that, for the key markets of Germany, Australia and Canada, intent-to-travel is more like 2-3 percent down. And, for Mexico, which one would expect to be the most impacted, intent-to-travel was less than 10 percent.
The following day, Roger Dow, president and CEO of US Travel, pointed out that its Travel Trends Index showed that the estimate of international arrivals for the month of April—which would have been the first month to shown the impact of bookings made in the first months of the Trump Administration—were up one percent over the previous year.
Meanwhile, Christopher Thompson, Brand USA’s president and CEO, pointed to the fact that, according to its research, the organization’s promotional activities had generated 4.3 million incremental visitors over four years.
Meanwhile, Heard on the Floor at IPW 2017…
- The final count: US Travel President and CEO Roger Dow told a Tuesday press conference at IPW the following: More than 6,300 people attended; of these 1,607 were international delegates. Top four countries for sending delegates (100 or more) were: UK, 189; China, 138; Canada, 105 and Brazil, 100.
- NTTO looks to more than double its survey research budget. Buried deep in the recesses of the Trump Administration’s Fiscal Year 2018 budget is a half sentence which indicates that the International Trade Administration (ITA)—the U.S. National Travel and Tourism Office (NTTO) is a part of it—is calling for the elimination of $7.4 million in activity, including the $2 million it uses for the Survey of International Air Travelers (SIAT), which is the basis for NTT0’s numbers. However, ITA is also asking for a transfer of $5 million in Trade Promotion Act fee revenue from the Department of Homeland Security, U.S. Customs and Border Protection to administer SIAT. The procedure would allow for funding that would not be available in a year during which there will be no new appropriates for ITA.
- Muriel Samama, the president of New York City-based Harlem Spirituals for most of its 36-year history who has shepherded its growth from a single product—tours of Harlem with a visit to a church and some of its gospel music—to an expansive portfolio of many different activities in different parts of New York, has established Maven American Journeys & Events. The new company features product for the MICE market. For more information, visit: www.maven-dmc.com.
- “I can say honestly that I was not expecting that question,” said Brand USA President & CEO Christopher Thompson when asked by Spud Hilton of the San Francisco Chronicle what the agency was doing to promote “Pot” tourism to the USA. Thompson said it was “up to our destinations to tell their welcoming story.”
- Elizabeth, New Jersey (est. population of 128,000), which is about 20 miles south/southwest of Manhattan, has a new tourism promotion organization. The Elizabeth Destination Marketing Organization, created less than two years ago, made it to IPW this year. Lauren Ferrigno, marketing coordinator for the agency and half of its two-person operation (the other is its director, Jennifer M. Costa), told Inbound that it aims to promote the city’s proximity to NYC (a half-hour by commuter train), along with its less costly hotel product, and arts, shopping and foodie scene. Visit www.goelizabethnj.com.
- The Virginia Beach CVB’s Ron Kuhlman (vice president of tourism marketing & sales) and Kelli Norman (director of tourism marketing and sales international) said that the staging of IPW in Washington, D.C., which is just about 210 miles from Virginia Beach, helped to illustrate to operators just how close the resort destination is to our nation’s capital. The bureau gave every delegate who showed up at Wednesday night’s closing event at Nationals Park a free pair of flip-flops in a small, tie-on backpack. The backpacks were visible everywhere.
- Visitor traffic to the USA from Colombia, now the Number 11 overseas source market for the U.S., is on a steady path to exceed one million, and it could probably exceed that estimate, according to
- Rafael Torres, president of Boston-based Don Quijote Tours of New England, who specializes in the market. Increased lift capacity in the past three years received an even bigger boost with the launch this month of direct Bogota-to-Boston service by Avianca, using Airbus A-319 aircraft, which translates into 960 additional passenger seats weekly.
- Svetlana Yazovskikh, executive director of tourism, Philadelphia Convention & Visitors Bureau, is looking for a new tourism marketing professional for the bureau. For more information, click on this link: https://www.appone.com/MainInfoReq.asp?R_ID=1596990
- Any bytes or nibbles you want to pass along? Send them to email@example.com
2017 Chairman’s Circle Honors Top International Tour Operators
In a special ceremony on Saturday night at IPW, the U.S. Travel Association and Brand USA recognized the top international buyers at the third annual inaugural chairman’s circle honors ceremony held this year at the Washington National Cathedral.
The awards event honored 53 of the world’s highest volume tour operators and buyers of the U.S. travel product from 16 different countries. Honorees were nominated by members of the US Travel’s Chairman’s Circle level, which includes some of the largest U.S. travel companies and top U.S. destinations. Following is the list of honorees.
A Picture is Worth …
Day One: The start of IPW in Washington, D.C. had Inbound’s photographer making stops at the registration areas for journalists, suppliers and buyers in the Walter E. Washington Convention Center, and at a Tourism Cares cleanup project on the National Mall. The photo log of IPW’s people, places and events starts in the convention center.
Day Two: The Newseum hosts the Press Brunch, Brand USA presents its updates for key markets, tours take delegates all over the Washington, D.C. area and the Smithsonian’s National Air and Space Museum hosts a big opening night party—both inside and outside.
Extensive Report Profiles Chinese Luxury Traveler—PART ONE
(This is the first of two parts covering the just-released Chinese Luxury Traveler 2017. Part Two will run in the next issue of the INBOUND report.) The United States placed second—behind only Antarctica and France—as one the Most Memorable Travel Destinations for Chinese luxury travelers according to the Hurun Report and International Luxury Travel Market Asia (ILTM Asia) and their just released report, The Chinese Luxury Traveler 2017. We’ve tried to consolidate the information in the 26-page report on the travel model, retail and trend of the Chinese luxury high net worth individuals, but kept most of the material and its supporting tables so that what you read is, in essence, a complete report. For those concerned about the U.S. slip to third place, you may be able to take solace in the outlook for the next three years, in which The Americas place second behind Europe as a destination that luxury travels plan to visit. The report follows.
Eight Key Findings
- Travelers prefer adventure tourism, it will be the luxury travel trend in the next three years. Around the world travel, polar exploration, and outdoor adventures are themes for the Chinese luxury traveler in the next three years. Compared to the dominance of travelling for leisure in the past few years, this year, there is a marked increase in the Chinese luxury travelling for adventure. It should be noted that the Post-80s generation has displayed an increased interest in Africa and the Polar Regions, with numbers rising from 23 percent and 17 percent last year to 36 percent and 32 percent, respectively, this year.
- The seasons significantly influence traveler’s choice of destination. The time of year has a large bearing on the choice of location. In summer and autumn, the Post-80s luxury travelers possess a marked preference for island-hopping, with Phuket (27 percent), Maldives (18 percent) and Fiji (16 percent) and China’s Sanya (16 percent) are the most popular choices. In winter and spring, Australia (16 percent) and Phuket (18 percent) are popular among sun-worshippers, while ski enthusiasts flock to Japan (32 percent), Canada (8 percent) and Switzerland (7 percent) also are the traveler’s most likely destination.
- Island with Beach was the dark horse of vacation themes last year. Although Leisure at 41 percent was still the most popular vacation theme, polar exploration and outdoor adventures have continued their momentum from the past two years and rank second (31 percent) and fourth (20 percent) respectively. As a new option in this year’s study, island holidays were the dark horse of vacation themes and surpass both cruises (13 percent) and self-drive holidays (14 percent) and other traditional modes of travel to rank third. Island holidays are especially popular among the Post-80s generation and rank first with almost fifty percent (46 percent).
- Europe and Southeast Asia are theoutbound destination of choice.
Last year, Europe and Southeast Asia have grown in popularity as a destination accounting for 45 percent and 44 percent of respondents respectively. In just two years, Southeast Asia has successfully surpassed the Americas become the Chinese luxury traveler’s new choice, displaying a shocking 34% increase in millennial favor and jumping from last year’s fourth place to take the crown this year.
(a) Luxury hotels are still the first choice for China’s luxury travelers. Ritz-Carlton and Four Seasons hotels are the most popular choices, ranking first and third. Boutique hotels are increasingly favored, with Banyan Tree jumping from sixth place last year to fourth place this year, while Aman entered the top ten in seventh place. Hilton wins the “Most Popular Luxury Business Hotel” title, with Shangri-La, Sheraton, and top ten newcomer Marriott following closely after. The hotel of the most luxury traveler members is also The Ritz-Carlton, with the popularity of the brand experiencing a 19 percent increase over the last two years, taking the crown from Hilton. In the same two years however, Marriott drop from second to sixth.
(b) At 81 percent, resorts are overwhelmingly popular among luxury travelers and are their favorite type of luxury accommodation. Business hotels (18 percent), bed and breakfasts (9 percent), and apartment hotels (6 percent) are also preferred, but by a much smaller margin of travelers.
(c) 60 percent outbound luxury travelers spend more than 3,000 yuan ($440) per night. Thirty-two percent of luxury travelers have accommodation budgets of over 5,000R ($735) per night. Humanized Service is the most important consideration, followed by a good view of the room.
(d) At 56 percent, local cuisine is the most popular hotel restaurant cuisine option for Chinese luxury travelers. Japanese and Cantonese cuisine follow after by 32 percent and 31 percent respectively. French cuisine, Italian cuisine and Sichuan cuisine are all topped the list ten, while the Korean cuisine and hot pot did not in top ten.
(e) Private dining room is receiving more attention as venues for private banquets and business dinners.
(f) Accommodation sharing is still in its early stages in the luxury market. Private home-stay options like Airbnb are selected by only 25 percent of respondents, trailing behind the boutique hotel (48 percent) and the cruise (45 percent). 69 percent of respondents remain neutral or will not explore home-stay in the next three years.
- China’s luxury travelers are placing a higher premium on comfort when they travel. Sixty-one percent of respondents, on their most memorable trips, travelled in business or first class. Air China has the most popular membership scheme among domestic airlines (54 percent), with China Southern Airlines(22.4 percent) and Cathay Pacific (21.9 percent) coming in after. Among foreign airlines, Emirates and Singapore Airlines both run ahead of the pack at 23 percent and 22 percent respectively, benefiting from their reputations for offering both cost-effective and high level services. The fact that Singapore and Dubai airports are such important hubs for flight transfers also contribute to their popularity.
- Customized travel services start to spread, with agencies placing a strong emphasis on the quality of travel itineraries to retain customers.
More than half of luxury travelers (58 percent) said that they have experienced customized travel services. They are partial to travel agencies that provide well-designed itineraries, personalized services, and are actively problem-solving, placing 59 percent, 55 percent, and 49 percent of emphasis on each aspect respectively. The emphasis placed on problem-solving ability of travel agencies has experienced an 11% increase in two years. Agencies in “Hurun Mainland China Outbound Luxury Travel Agencies 2017 Top 12” ranking include 8 Continents, Diadema, D-Lux Travel*, CITS Amex, HHtravel, My Tour, Magic Travel, Ctrip, Zanadu, CITS, CTS, and CYTS. Agencies in the “Hurun Hong Kong Outbound Luxury Travel Agencies 2017 Top 6” include Wincastle Travel Limited, Cathay Pacific Holidays, Charlotte Travel*, American Express, Swire Travel, and Westminster. Agencies in the “Hurun Taiwan Outbound Luxury Travel Agencies 2017 Top 6” include One Style Tour*, Seascape Escape, Let’s Travel*, American Express, International Travel Information Services, and Lion Travel. (In alphabetical order, *new to list).
- Travel retail. While on holiday, Chinese luxury travelers like to purchase cosmetics (45 percent), local produce (43 percent), bags and suitcases (39 percent), clothes and accessories (37 percent), and jewelry (34 percent). Other than local produce, the four other most popular purchase categories are all dominated by female consumers. Compared to numbers two years ago, there is a noticeable increase in the percentage of travelers who bought cosmetics. With regard to the purpose of the purchase, 76 percent of purchases are personal, while 47 percent of purchases are gifts, and 4 percent are purchased on the behalf of others.
Travel trends for the next three years: Around-the-world Travel and polar exploration are the most anticipated travel trends for Chinese luxury travelers in the next three years, accounting for 43 percent and 36 percent of respondents, while outdoor adventure (26 percent) follows immediately behind. In contrast with data from two years ago, luxury travelers are expanding their horizons, travelling not only for leisure but also to satisfy their individual tastes. This includes island-hopping and culinary tours or wine-tasting, both of which make an appearance in the top ten anticipated travel trends ranking.
Young luxury travelers still love Island with Beach, with 30 percent of respondents expecting to go on an Island with Beach travel in the next three years. As new additions to the list, culinary tours and wine-tasting trips along with art and culture tours are also well-received by the Post-80s generation, ranking fourth (27 percent) and seventh (16 percent) respectively. Last year’s favorite—cruise trips—drop out of favor by 14 percent and now rank eight.
↑ Ranking up ↓ Ranking down – no change * New to the Top 10
Travel destinations for the next three years: Europe, a classic destination, remains first at 49 percent with the Americas (38 percent) and Africa (37 percent) following in second and third place. For the Post-80s generation, Europe is still the most sought after destination (46 percent), but there has been a 19 percent fall in numbers from last year. In contrast, Africa (36 percent) and the Polar Regions (32 percent) have experienced a 13 percent and 15 percent surge in popularity, coming in at third and fourth place.
Activities respondents would like to try in the next three years: Horseback riding, surfing, and sailing are the top three activities high net-worth individuals would like to try the most in the next three years. Art collecting comes in at fourth place, paragliding in fifth, while other activities on the list include marathon running, rock climbing, bungee jumping, and fasting.
Source: Hurun Best of the Best – Chinese Luxury Consumer Survey 2017
↑ Ranking up ↓ Ranking down – no change
Popular travel destinations in the summer and fall: Many luxury travelers choose to beat the heat on Island with Beach, whether that is in Phuket (27 percent), the Maldives (18 percent), Bali (12 percent), Fiji (13 percent), Hawaii (10 percent), or Sanya (16 percent). The Post-80s generation seems to echo these sentiments, as all seven ranked destinations are islands, with the Maldives and Thailand’s Phuket in first and second place.
Respondents have been to their destinations of choice an average of six times, and they plan to return to their favorite locations twice in the next three years. Respondents prefer to travel with family or friends, with an average of three people per trip. There is no strong preference for Economy (48 percent) or Business (45 percent) class, as ticket price is a concern in shorter excursions.
Popular travel destinations in the winter and spring: In the cool, drier spring and winter seasons, the Post-80s generation and other generations alike rank Japan, Thailand, and Australia in their top three. With high net-worth individuals recently displaying an increased interest in sports and outdoor adventures, skiing has become a favorite in the winter months. Japan (32 percent), South Korea (10 percent), Canada (8 percent), and Switzerland (7 percent) are all home to world-class ski resorts. For luxury travelers who do not enjoy extreme sports, escaping the cold remains an important reason for travel; Thailand (18 percent), Sanya (12 percent), Australia (16 percent), and New Zealand (9 percent) are all good choices for this purpose. Thailand’s Phuket is the only destination to be on both the Summer/Fall and Spring/Winter lists.
A higher percentage of travelers (20 percent) choose to travel First Class in the spring and winter as travel destinations tend to have longer flight times, thus comfort becomes a necessity instead of an option.
Preferred travel destination overall
—Maldives was crowned the preferred international luxury travel destination.
—Domestically, Sanya is still the number one preferred luxury travel destination for the seventh consecutive year.
Source: Hurun Best of the Best – Chinese Luxury Consumer Survey 2017
↑ Ranking up ↓ Ranking down – no change * New to the Top 15
Market for customized travel services expanding: The market for customized travel services will expand among Chinese luxury travelers in the future. 40 percent of respondents express their wish to use customized travel services in the next three years, while only 10% prefer the more traditional guided group tours.
In the next year, 59 percent of respondents still do not have pre-planned holidays. Those who plan to travel during the October National Holiday (22 percent), the summer (18 percent), and Chinese New Year (17 percent) are in the minority. For domestic luxury travelers, whether or not the destination is visa-free is not a primary concern (77 percent). The Post-80s generation hope to travel an average of 3.2 times in the next year.
Island with Beach became last year’s dark horse: Traveling for leisure at 41 percent remains the most common mode of travel for the Chinese luxury traveler. Polar exploration and outdoor adventures continue to grow in popularity and rank second (31 percent) and fourth (20 percent). As a newly added option this year, Island with Beach at 23 percent have become a dark horse in travel trends, surpassing cruise trips (13 percent), road trip (14 percent), and other traditional modes of travel to rank third. Island with Beach shows even more popularity with the Post-80s generation and rank first with 46 percent. According to the Hurun Institute survey, surfing is one of the activities that the high net worth people want to try in the next three years.
Enthusiasm for overseas travel continues, Europe and Southeast Asia favored: The 334 individuals surveyed take an average of 3.3 overseas trips annually, adding up to 27 days, of which tourism accounts for 69%. Compared with numbers from 2015 and 2016, respondents spent fewer days travelling abroad, but the proportion of time devoted to tourism increased by 5%, demonstrating its undiminished importance.
In the past year, Chinese luxury travelers show a strong bias towards Europe (45 percent) and Southeast Asia (44 percent). In just two years, Southeast Asia has successfully overtaken the Americas to become the new fan-favorite and is even more popular among the Post-80s generation, jumping from last year’s fourth place to this year’s first with a stunning 34 percent increase.
The Ritz-Carlton is the Best Luxury Hotel Brand and has the Most Popular Membership Scheme: In the past year, The Ritz-Carlton became the “Best Luxury Hotel Brand” while Banyan Tree follows in second. Newcomers to the top ten list include Fairmont, Aman, and other boutique hotels. Hilton wins the title of “Best Upscale Business Hotel Brand” while Shangri-La, Sheraton, and Marriott follow. Wanda Hotels & Resorts enters the top ten list for the first time.
The hotel with the most luxury traveler members is also The Ritz-Carlton. The Ritz-Carlton’s popularity has arisen by 19% from two years ago and steals the crown from Hilton. Marriott has fallen to sixth place from its place in second in 2015. There is no noticeable change in the way the Post-80s generation choose hotel memberships.
Resorts are the Most Popular Style of Luxury Hotel: With 81 percent of the vote, resorts are the most popular style of luxury hotel. Business hotels (18 percent), bed and breakfasts (9 percent) and apartment hotels (6 percent) received significantly lower preference rates.
(This concludes PART ONE of the Chinese Luxury Traveler 2017. Look for PART TWO in the next issue of the INBOUND report.
From NAJ’s TourOperatorLand IPW Magazine—Top Trends, Mid-Year 2017
Great Recession of 2008- 09, during which the overseas popularity of the United States and its President were at an all-time high driving international arrivals to record levels, the USA now has President Donald Trump’s travel ban, which is immensely unpopular in Western Europe, Middle East and other source markets. Destinations and travel suppliers will have to defend their market share by appealing to the loyalty of opera-tors and their clients, and in stressing how they welcome all visitors, regardless of race, nationality or religion.
Strong U.S. Dollar = Weaker Demand: On the currency exchange markets, the U.S. dollar will remain strong versus other major currencies. The U.S. Federal Reserve Board seems intent on keeping the dollar strong by pushing up the prime interest rate and allowing investors to earn slightly higher dividends on bonds and other financial instruments. This means that inbound travelers using euros, pounds, Canadian dollars and Mexican pesos will look elsewhere to holiday this year.
The One-Man Receptive Company: Acquisitions, consolidations and downsizing in recent years of receptive tour operators in key U.S. cities brought out the resourceful- ness in some of those who were downsized or RIFFED. There are a number of them who’ve leveraged their long-standing relationships with groups to launch their own one-person operation out of their apartments or in small or shared office space to save on overhead. With most business transactions now paperless, a sales call or sale is no further away than an e-mail, text, facetime phone call or a QR code.
Bedbank Receptive Consolidation: Consolidation in the receptive tour operator industry in order to compete with OTAs has continued apace and will likely go on as RTOs try to reinvent themselves or grow in size in order to create a scale of economy that enables them to compete with online travel agencies and group booking platforms. Last February, Hotelbeds acquired Tourico Holidays—one of the largest U.S. receptive tour operators with a huge hotel inventory. And then, two months later, Hotelbeds acquired the other remaining major global bedbank—GTA, a Kuoni brand based in London.
Canada is Hot: A strong dollar, a weak loonie and the yearning to travel brought international visitors to Canada in near record numbers in 2016, just four-tenths of a percent lower than 2002’s 20.6 million. The year also brought more than 4 million air travelers (a first) from the USA to Canada. With Europeans and Mexicans looking for an alternative to the USA because of a strong dollar or a President they do not like, Canada is poised to be a stronger North American destination than ever.
China and India Remain Strong: Midst declines or barely modest increases in the volume of visitors sent to the USA by most international source markets, the U.S. National Travel and Tourism Office (NTTO) forecasts that, from 2017 to 2021 visitation to the USA from China and India will increase by 65 percent and 42 percent, respectively. Both countries have burgeoning travel-ready populations, increased airlift with connections to the U.S. and currencies that have remained relatively stable vs. the U.S. dollar (although China’s yuan has declined by 10 percent in the past year). While “mature” markets such as Europe and Latin America are less likely to be targets of vigorous promotions by DMOs, U.S. travel suppliers, China and India are perceived as a safe bet for marketing investment.
Where Was Intercontinental Hotel Group? As more tour operators find themselves circumventing hotels’ leisure sales staff to a group booking platform or to the program of one of the major online travel agencies (OTAs) and, by doing so, eliminating the need for signed paper contracts, it is becoming a threat to devalue leisure sales and FIT. “It” is what happened earlier this year when the InterContinental Hotels Group eliminated its entire leisure sales department, relegating operators to director connections to the hotel booking system. This meant no IHG booths at this year’s IPW and at other trade shows. Other hotel chains may see this as a signal to follow suit.
Welcome to the South, Y’all: The eleven states that comprise the U.S. South (Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, Kentucky, South Carolina, Tennessee and West Virginia) have moved to the top of many new itineraries. They are becoming favorites for new FIT and self-drive tours—the result of increase international promotions, additional lift capacity, both direct and indirect—and price points that are lower than one finds in most U.S. cities. Repeat visitors to the U.S. are especially interested in the region for its food and music culture, as well as the swelling interest in Bourbon.
For your own copy of the TourOperatorLand magazine, described by one observer as the travel industry’s “Vanity Fair,” visit:
The Latest Long-haul Flights to the USA Announced during IPW:
- airberlinbegan a new long-haul service on May 16 from Berlin toLos Angeles (LAX). The airline now offers three connections per week between the two cities. And on May 29, airberlin launched service from Berlin to San Francisco. †
- Delta Air Lineshas begun several new European connections. Two of the new European routes are, in reality, resumptions, with the Atlanta-based carrier operating flights from New York JFK to Lisbon for the first time since the winter months of 1995, while a New York JFK to Berlin flight was last operate in the summer period of 2011. A new Portland-to-London Heathrowroute makes Portland Delta’s eighth city to be connected to Heathrow. †
- United Airlineshas launched seasonal daily flights between San Franciscoand Munich. (Its Star Alliance partner, Lufthansa, already operates a daily service between the two cities). This new seasonal service will operate until September 4th. United also serves Frankfurt in Germany with double-daily flights this summer. †
- LEVEL, the new low-cost long-haul entity set-up by IAG (it includes British Airways, Iberia, Aer Lingus and Vuelo), launched operations June 1st with service between its Barcelona hub and Los Angeles (LAX) over a route that will initially operate twice-weekly. Then, on June 2nd, it began service from Barcelona to Oakland, California. The latter will operate three times a week (Tuesdays, Fridays and Sundays). As a result, there will be a battle between LEVEL and rival low-cost, long-haul carrier Norwegian, which launched Barcelona–Los Angeles and Barcelona–Oakland service on June 5 and June 7, respectively. †
- On May, 30, Icelandair began service from its Reykjavik/Keflavik hub to Philadelphia—a 2,672-mile route that will operate four times a week and have no direct competition from other carriers. †
- Air Canada Rouge has added two new long-haul routes to its route structure. On June 1, it launched service between Vancouver and Nagoya, a 4,846-mile connection that will operate three times a week. And on June 3, it began service from Toronto Pearson four times a week to Berlin. The latter, a 4,024-mile flight, will operate four times weekly. On June 8, Air Canada Rouge began service from London Gatwick to Vancouver, and on June 21, it will launch a route from Vancouver to Reykjavik/Keflavik. †
- Air Canadahas begun twice-daily flights to Denver from Vancouver. Air Canada already serves Denver from Montreal and Toronto Pearson. Air Canada now links Vancouver to 15 U.S. airports in the US on 220 weekly flights. †
† Source: anna-aero
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Teresa O’Neill has been promoted to the position of vice president, global strategic partnerships, effective at Travel Oregon, effective July 1st. She leaves her post as vice president, global sales, to Petra Hackworth, who had been director, global sales. O’Neill, a member of NAJ’s Advisory Council, has been with the organization for 12½ years.
UK operator If Only has appointed Andy Freeth (left) as chief executive and Gordon McCreadie as sales and marketing director. Freeth was previously managing director of Travel 2 and Gold Medal, after joining Travel 2 in 2009. Gordon McCreadie was previously director of sales and marketing B2B dnata Travel UK at dnata Travel, after joining Travel 2 in 2010. If Only has also hired Matt Appleby as product and commercial director and Tracy Docherty as business development director. And David Irving has been named as head of specialist business. Appleby, Docherty, Irving and McCreadie will join If Only in early September 2017. Freeth will join the company in early December
Al Santos recently joined Sundance Helicopters as director of international and leisure sales. He had previously served as director of travel industry sales for Exotics Racing. Prior to that, Santos was leisure sales manager for The Cosmopolitan of Las Vegas.
Anna Karnowski has been named director of sales at the Spyscape Museum, which is slated to open later this year in New York City. She was previously vice president of sales for New York Water Taxi. Prior to her tenure with New York Water Taxi, Karnowski was North American sales manager for Top of the Rock.
Jenny Kurdle has been named senior vice president US, for BookingTek, the Richmond, England-based direct booking software provider to the hospitality industry. The company said Kurdle will be integral in leading the company’s US growth. Based in its Washington D.C. Metro Center office, Kurdle joins the company after 25 years with MICROS Systems (now Oracle Hospitality), where she was executive vice president, US & Canada.
Leah Garey has left her post as domestic sales manager for Visit Florida (three years+) and joined Expedia Media Solutions as senior account executive.
The Travel Corporation (TTC) has announced that, after 10 years on the job, Paul Wiseman, is leaving his position president of Trafalgar USA and Brendan Vacations in order to run his own training business focused on leadership and development. Succeeding Wiseman is Mellissa da Silva, who is giving up her post as president of Contiki Holidays USA. A veteran of more than two decades in the tour and travel industry da Silva helmed Contiki for four years.
Delta Air Lines has appointed Corneel Koster as senior vice president Europe, Middle East, Africa and India. He takes over from Nat Pieper who has become senior vice president global alliances. Based in London, Koster will report to Delta’s president – international & EVP – global sales Steve Sear. Prior to joining Delta, Koster was chief operating officer at Aeromexico since 2013. He was also previously Virgin Atlantic’s director of operations, safety and security and has held senior commercial roles at Air France KLM, KLM and KLM Cargo.
Keith Talbert has been named as associate director of sales for the Oklahoma City CVB. Before joining the bureau, Talbert held several sales positions with Visit Wichita and the Nashville CVC.
Sean Dixon has been promoted to the post of marketing director for the Springfield (Mo.) CVB. Dixon joined the organization in 2010 as its interactive media manager. He has served for the past year as assistant marketing director. Previously, he worked for Ozarks Public Broadcasting as a master control operator.
Talia Cass has been named director of marketing and communications for the Saratoga (N.Y.) CTB. Previously, she has worked as an account executive for the Schenectady County, N.Y. Tourism Promotion Agency.