Last week, the NAJ Group convened its RTO Summit West, one of three symposia held annually in the U.S. Gateway destinations (Los Angeles, New York and Orlando) that feature the market insights and outlook of receptive tour operators (RTOs), who bring to the discussion both a point of view and the most current information gleaned from their day-to-day updates of their sales data and personal contacts with other travel professionals. The RTO Summit symposia comprise the only conference series that focus on the USA’s international inbound tourism industry from the point of view of the RTO sector.
As ITB Convenes, Not Everyone is Upbeat about the Outlook for Europe: Officials from two of the largest RTO companies with operations in North America who spoke about the outlook for inbound tourism from Europe during the NAJ’s recently convened RTO Summit West in Marina del Rey, Calif. were hesitant to sound the same tone of optimism found in the data-driven reports of various government-sponsored research organizations and necessarily optimistic reports of the European travel trade, particularly that of Germany (See “In Germany, Consumers, Travel Trade in Buoyant Mood for ITB 2015”).
While acknowledging that the sales numbers for 2014 were better than they were for 2013, both Sanya Hamilton, head of leisure groups for Kuoni-owned AlliedTPro, and Sevil Arnavutoglu-Le, regional director, USA West, Hotelbeds (its parent company is Tui) reminded Summit delegates that a significant portion of the 28 EU nations have been slow to a recover from a recession that peaked in 2012 and had an especially damaging impact on the economies of Italy and Spain, both Top 15 overseas source markets for the U.S.
Hamilton said that 2014 was a better year for AlliedTPro, especially in key markets such as Italy, as it experienced a 20 percent year-over-year increase in sales volume; however, key markets were still only slowly emerging from recession. Hamilton should know: her key markets, which she monitors daily, include Italy, Denmark and Belgium, followed by the South American market of Brazil. For Hotelbeds, Arnavutoglu-Le noted, 2013 was a good year, and 2014 was even better, with a 25 percent increase in room nights sold last year. Such a spike has not necessarily translated across the range of Tui brands, as the company, overall, reported a relatively flat year.
Asked about the impact on business of the recent decline of the euro† versus the U.S. dollar Arnavutoglu-Le pointed out that, since Hotelbeds is a European company (it is headquartered in Palma de Mallorca, Spain) a decline in value of the euro has an effect. (Over the course of the last six months, the euro’s value, on a year-over-year basis, has declined by 12 to 20 percent against the U.S. dollar). She seemed more concerned, however, with the situation in Argentina and Brazil—both key source markets for Hotelbeds—where the national economies have experienced higher-than-usual rates of inflation and slowdowns in the growth. She added, however, that room night booking levels for 2015 from the two markets were already running at more than 60 percent of 2014 levels.
In addition to coping with changing economic forces, Hamilton reminded Summit delegates that her company is “going through a lot of changes,” an oblique reference to the news earlier this year that AlliedTPro’s owner, Zurich-based Kuoni, has put its tour operator division up for sale. Overall, she said, “there are many indications that things are getting better,” explaining that the company’s group bookings ahead of last year and key markets are rebounding.
Where is the Group Market Trending? In response to this question Hamilton first explained that AlliedTPro has gone after groups more aggressively in the past two years and is generating more MICE groups, with many coming from Latin America and Europe. Hotelbeds, meanwhile, had earlier developed a separate division within its structure just for groups, because the company believes in group business.
What are the Emerging Secondary Markets in U.S. for Group and FIT? Referring to her company’s market of Spain Arnavutoglu-Le answered this question by telling delegates. “It’s difficult to educate the Spanish people to come to Fresno and Chattanooga.” She was quick to add, however, that Hotelbeds will be sending clients beyond gateway because (she San Francisco as example) “there are no new hotels in San Francisco, so we’re shifting the focus to secondary markets.”
† (The euro is the sole currency of 19 of the 28 European member nations, most notably the key source markets of Germany, Franc, Italy, Spain and The Netherlands. Overall, the countries that use the euro have a population (2013) of more than 330 million, a little larger than the U.S. popular of nearly 320 million.)