How Best to Deal with Upcoming Prospects for Japanese Tourism to USA? Try Prozac.
Delegates to NAJ’s recent RTO Summit West in Marina del Rey, Calif. who have worked the Japanese market at any point during the past two decades are either familiar with, or have been told about, the halcyon days of the 1990s when Japan was the number one overseas source market for inbound tourism to the USA. There were several years in which the market generated more than 5 million visitors to the United States—it peaked at 5.368 million in 1997—with that level last reached in 2000. The market has aged to the point that the peak travel ready population is not being replaced because of the nation’s shrinking birth rate. And most recently—for the past couple of years—the slumping market has been hit by government economic recovery policies that have resulted in a 40 percent decline of the yen against the dollar.
Against this backdrop, an expert panel addressed the question: “Will this Market Ever Bounce Back?” Panelists included: Ko Ueno (moderator), executive director, Japanese Tour Operators Association, who moderated the session; Ryoko Baba, manager of groups Kintetsu International; Shinsuke Takahashi, manager, West Coast Tour planning division, West Coast Hotel, reservation division, H.I.S. International Tours (NY) Inc.; and Katsuhisa Seki, general manager, JTB USA.
The Long Slide: Arrivals from Japan to USA
|Year||Arrivals (millions)||Change, Year-over-Year (%)*|
* Total Decline, 2000-2014: -28.5%
Source: U.S. Department of Commerce, International Trade Administration, National Travel and Tourism Office
Ko Ueno, the moderator, needs no special effects. Though he turns 80 in August, he captivated delegates with his high energy level—he is an vide skier and golfer who likes karaoke—and made the simplest factoid come across like an exciting find, even if the news was less than upbeat. He quickly ran through the following, which could be characterized as good news (+) or challenging news (-).
(-) In 2013, outbound traffic from Japan to the USA was down every month except May
(+) However, inbound travel to Japan record breaking growth because of the weak yen
(-) From 2013 to 2015, the yen dropped 49 percent against the U.S. dollar
(+) Most Japanese have several weeks of vacation for their travel
(-) Japanese have a language problem when visiting other countries.
(-) Japanese tend to fly Japanese airlines, eat Japanese food, use Japanese products
(-) Oil surcharges automatically imposed on the price of airline tickets by Japanese carriers are major problem.
(-) In Japan, consumer protection regulations for the travel industry are very strict–travel companies -have to put up a large bond to protect the customer.
(+ and -) Four out of five (80 percent) of all travel agency sales are made by the top 10 companies.
(-) With the yen down against the dollar, how does one increase the number of customers? Target the senior market; 25 percent of the Japanese market is comprised of seniors (60-plus). Target the retirees in this market.
Ryoko Baba, explained to delegates that Kintetsu’s strength in U.S. product lies in group tours, packages that include key cities (such as Las Vegas) and series tours to established attractions, especially U.S. national parks. A fair portion of Japanese group travel is actually business travel, as profitable Japanese companies will pay for these trips.
Shinsuke Takahashi of H.I.S. spoke of the challenges confronting travel sellers in Japan, pointing to the many requirements confronting them such as one requiring that air passengers stay at least three nights at a destination.
Japanese consumers are not as flexible as those from China, he said, noting that the lack of flexibility is a problem. ”Hopefully, things will get more flexible,” he observed, while pointing out that, despite the fact that Japan is a long-established source market for the U.S., the language barrier is still a problem.
Currently, the U.S. West Coast remains a favored region for Japanese overseas travelers, and H.I.S. is constantly changing and updating its brochures with new deals for its customers.
Katsuhisa Seki gave delegates a quick run through of the four major product lines of JTB, Japan’s largest travel company: Look JTB
- Tabi Monogatari by JTB Media Retailing
- Royal Road by Royal Road Ginza, with tours designed for high-end customers only
- JTB Grand Tour, a niche market product that includes packages to the North Pole, South Pole and Africa.
And while it could not be described as a tone of optimism, Seki told delegates that American packages are still very popular among the Japanese
Rate Parity—Myth or Reality?
On the side of the argument that it is a myth is Bill Chambers, regional vice president of product development, Tourico Holidays. “Rate parity is a myth,” he told delegates to NAJ’s recent RTO Summit West in Marina del Rey, Calif., when the question was put to him in a one-on-one discussion with Jeff Hentz, NAJ’s chief advisor.
Chambers’ answer should come as no surprise given the environment at Tourico. His boss, Tourico founder and CEO Uri Argov, told another RTO Summit less than three months beforehand in Orlando, that price parity was “the worst violator of human rights in the world,” and had more to say later on (see below). Chambers came to the question ready for the question and armed with data gleaned from the information grid at Tourico, overseen by probably the most sophisticated IT team in the travel industry, and by posing questions himself that begged an answer from hoteliers and hotel chains.
Rate Parity—Why it is: Chambers granted the position of hotels who want to protect their rates. For some, the issue is not a dominant one, but branded hotels, he said “live, eat and sleep parity.”
The practice began in the wake of the 9/11 terrorist attacks on the U.S. as big brands wanted to stabilized their business. (“That’s the only thing it did good at the beginning,” observed Chambers.)
After this initial phase, it really served RTOs, who spend billions of dollars on hotel companies—the commissions hoteliers are paying are allowing them to grow.
(Inbound Note: There is a difference between rate parity as it involves receptives and for OTAs. For RTOs, the hotels are trying to prevent them from selling to B2B clients, who then sell below the stated Best Available Rate (BAR)—something RTOs cannot easily control. For OTAs, the hotels began rate parity as the lowest rate on their own sites in an attempt to drive direct bookings. But with Booking.com and Expedia (which owns Travelocity, Hotwire, Hotels.com, Trivago and now Orbitz, if the sale of the company to Expedia is approved by regulatory agencies) spending over $1.5 billion in consumer advertising, it is the OTAs that are asking for rate parity in their contracts with language that requires hotels not sell to anyone below the rates the OTAs receive.)
Chambers’ major point is that rate parity is not a good practice, especially for a company like Tourico, because 72 percent of business is packaged and does not involve parity, while 28 percent does. As for the future of parity, the issue is very important to branded hotel chains, but many properties are operated by management companies and, said Chambers, “most management companies are not that interested” in protecting rate parity.
For additional insight into the issue, Inbound contacted Argov, who told us: “Parity is becoming an epidemic. Some hotel chains are asking bed banks to stop offering B2B channels and password protected websites rates below parity. The recent events in Starwood are the outcome—in my opinion—of a very wrong direction the hotel chains are taking. On one side they are selling all their assets (buildings). On the other side, while becoming another distribution channel, they still believe that hotel owners should and will follow their directions. Owners like to work with companies such as ours because we are offering a unique and cheaper distribution; a real add-on … a service which is not offered to the Sam’s Club /Walmart distribution or to the American Express loyalty members or to the 100 thousand daily passengers of Emirates Airlines or to the Formosa Tours consumers in Taiwan; such service is unknown to these distribution channels or, in other words, it does not exist. In recent years hotel chains that enforced parity simply pushed away certain distribution channels from the hotel owners. At times it became irreversible. Many of those are left now with the two OTA giants and these two know to be aggressive when needed. In 2014 there was a decrease in number of overall franchisees and 2015 shows even stronger increase of independent hotels.”
What Global Market Had the Steepest Hotel Rate Increases in 2014?
The average price paid for a hotel room around the world rose by 3 percent during 2014, compared with 2013, according to the latest Hotels.com® Hotel Price Index™ (HPI®). For North America the price increased by 5 percent. And the average price paid by U.S. travelers domestically rose 5 percent to $137, with prices rising in all but two of HPI’s Top 50 most popular destinations in the country. Some highlights from the HPI report for 2014:
- New York City was the most expensive among Top 50 domestic destinations with an average price paid of $271–a slight increase of 1 percent. Occupancy levels in the city remained high, but an increase in hotel room supply put pressure on rates, which minimized price increases.
- At the other end of the spectrum, the average price paid in Reno remained flat at $83–less than one-third of the cost of an average stay in New York. Reno was one of only four Top 50 domestic destinations with an average price paid under $100, in spite of increases.
- Albuquerque on $89, Jacksonville on $95 and Pigeon Forge on $97 rose by 2 percent, 8 percent and 3 percent, respectively.
- There were several significant price increases across the country with the highest being in Nashville, where the average price paid rose 15 percent to $164.
- The average rate in Seattle rose 12 percent to $183,
- Denver experienced an 11 percent average price increase ($136).
- Boston (Manchester) experienced a 5 percent increase to $189.
- Seattle-Tacoma had the biggest increase among top markets (up 9 percent to $149),
- San Francisco-Oakland-San Jose (up 8 percent to $183).
- The average price paid in Miami-Fort Lauderdale increased by 6 percent to $178.
- The only one of Top 20 markets (See below) to experience a price decrease was Panama City, Florida, which slipped 1 percent to $151.
Average Hotel Prices Paid by U.S. Travelers in Domestic Market Areas in 2014 Compared with 2013
|2. New York||New York||$226||$222||2%|
|3. Boston (Manchester)||Mass||$189||$180||5%|
|4. San Francisco-Oakland-San Jose||California||$183||$170||8%|
|5. Miami-Fort Lauderdale||Florida||$178||$169||6%|
|7. New Orleans||Louisiana||$170||$166||3%|
|8. Santa Barbara-Santa Maria-San Luis Obispo||California||$164||$159||3%|
|10. Panama City||Florida||$151||$152||-1%|
|13. Providence-New Bedford||Rhode Island/Mass||$150||$142||6%|
|14. Washington, D.C. (Hagerstown)||DC/Maryland||$144||$141||2%|
|16. Los Angeles||California||$147||$139||5%|
|17. San Diego||California||$145||$138||5%|
|18. Palm Springs||California||$145||$137||5%|
Source: Hotel Price Index (HPI™)
The Worldwide Snapshot: The global HPI stood at 113 at the end of 2014, 13 points higher than at its launch in 2004 and on a par with its 2008 level but still four points lower than its peak at 117 in 2007.
Average Percentage Price Rises in Actual Prices Paid For Hotel Rooms In 2014
|Europe & the Middle East||4%||108|
Source: Hotel Price Index (HPI™)
About the HPI™ The HPI is a biannual report that looks at hotel prices in cities all around the world. The data is based on bookings made through the Hotels.com website and the prices listed are the actual prices paid—not advertised rates. The HPI started in 2004 and was set at 100. It tracks all bookings across all star ratings from 1-star to 5-star.
Measure Elusive ROI from Attending Travel Trade Shows?
The answer to the question, while not definitive enough to satisfy some CEOs or board of directors, is more quantifiable and less anecdotal than it used to be. At least, this was the consensus wisdom that came out of an interactive seminar at NAJ’s recent RTO Summit West in Marina del Rey, California.
The discussion benefited from a panel of travel industry sales and marketing professionals who have years of experience—both in working travel trade shows and in developing measurable ROI for those who want to see the benefit from attending a trade show: Dan O’Neill, vice president of strategy and sales at Destination Bloomington (Minn.); Sally Davis Berry, tourism sales and marketing manager, Corning Museum of Glass; Liz Gilbert, director, national accounts and travel industry sales, Entertainment Cruises; and Robert Graff, vice president of marketing and international sales, Papillon Group.
Key Take-Away Points Were:
- sales and marketing professionals should keep their CEO involved in the process of deciding which shows to attend and evaluating them afterwards;
- a full appointment book is not a true measure—remember the 80-20 principal and key on the most productive appointments at a trade show;
- for every trade show attended, track everything that is measurable; be pro-active with clients and prospective clients—call regularly to find out where you stand with them
- develop personal relationships where you can, as a relationship is “all we have moving forward.”
Dan O’Neill: For Bloomington, Minnesota—its featured draw is the Mall of America, the largest in the USA with its 520 stores and more than a handful of ticketed attractions, many with their own sales staff—the credo is “keep it simple.”
- He considers the sales managers he works with as “growth catalysts,” who are not only growing their own business, but also that of surrounding businesses in the Mall.
- International visitors comprise a quality market, but not a real big one.
- Track everything … earned media placement. Click-through inquiries. Visitor spend. Everything.
- For destinations, there are software programs available to carry out CRM, CMS , SEM programs so that all activity, not just trade show participation, can be broken down and into measurable data.
- Make the marketing and tradeshow process an activity in which others are involved; i.e., one that brings the CEO into the selling process.
Sally Berry, who has been successful in making the Corning Museum of Glass in Corning, N.Y.—once primarily a regional destination in the U.S. Northeast—into a product included on the itineraries of numerous international markets, had these points to make:
- Apply the 80/20 rule to everything (Parato’s Principle, which generically stated, says that 20 percent of something always are responsible for 80 percent of the results) that helps target ROI.
- Know the difference between hard data and soft data in measuring ROI. Hard ROI is specific, while soft ROI is earning the trust of others
- Hard ROI is specific
- Soft ROI – “can you give us some ideas” – now they trust me
Liz Gilbert, whose portfolio includes Entertainment Cruises’ vessels and product in eight locations (Baltimore, Boston, Chicago, New Jersey and New York, Norfolk, Philadelphia, South Florida and Washington, D.C.) has to work with 40 different managers in her company.
- Before committing to a trade show, do your work in advance, check the organizer’s website and know where you’re going.
- Set out expectations about what you should get out of a show beyond just appointments.
- While at the trade show, look at everything—everything. Analyze and process what you observe later.
Brian Said, VP Tourism for Philadelphia CVB, received a spontaneous smattering of applause when he told the audience that it isn’t the destination’s job to serve as the receptive operator, especially when many operators ask them to become involved in creating and pricing packages. The DMO’s position is to create demand for the destination. His year-end reports are built around interactions with the trade. i.e. number of p.r. appointments, number of tour operators met with at various trade show; leads forwarded to hotels.
Robert Graff, whose Las Vegas-based tour company features helicopter and small airplane tours, particularly those that highlight the Grand Canyon and its environs, Helicopters and Airplanes–said he has one principal objective: “get people in seats.”
- It has been a challenging working with a number of international companies because, in a matter of several years, half of them have merged or changed in some structural way.
- For ROI purposes, first categorize your clients so that you can measure them.(OTA, walk-ins, etc.)
- Make sure you maximize your time at trade shows.
- While the 80/20 rule is important, always be looking for new opportunities.
- Papillon is has been working with China, and “we’re working on India now, as we diversify … don’t put all your eggs in one basket. Economic situations change, so diversity is good.”
- Getting the information for leads and for measuring is critical–this is where relationships come in.
- Listen, build relationships, and make sure to follow up (after the trade show).
- “All we have is our relationships moving forward.
The New Profile of the Changing Chinese Traveler
In less than a decade, the understanding of U.S. travel suppliers and DMOs regarding travelers from China has dramatically shifted from one that was perceived to comprise low-cost group tours that went after souvenirs and tchotchkes at discount shopping malls to one of independent travelers in search of experiences that they’ve fully researched online and who expect luxury goods to be available for purchase.
In fact, Evan Saunders, founder of Attract China, told delegates to NAJ’s recently convened RTO Summit West in Marina del Rey, Calif. that, in two-and-a-half years, two thirds of Chinese visitors are now independent travelers—a stunning turnaround from a decade ago, in 2005, when the segment was “next to nothing.”
Before a packed house, Saunders led off a panel session staged under the rubric, China! China! China! The Year of the Repeater!, that also included Sheena Yu, director, China Services, Los Angeles Tourism & Convention Board; Sherman Liu, president, DTE Travel, El Monte, Calif.; Jane Chang, general manager, Best Western Plus Executive Inn, Rowland Heights, Calif. Jeff Hentz, chief advisor for the NAJ Group, moderated the session. Following are excerpts from the Saunders presentation, and then the panel discussion.
- Chinese travelers are “spending a huge amount of money,” said Saunders—there was a 20 percent increase, year-over-year, in 2014, when they spent nearly $170 billion, which is larger than the GDP of some two-thirds of the world’s nations.
- Chinese travelers are unique. They have their own approach to the process. They have their own Internet channels because many channels, such as YouTube, are blocked by the Chinese government.
- “You need to get on Chinese channels!” This is important, because, for instance, 70 percent of Chinese travelers find hotels using the Internet and, as of 2013, 55 percent of adults online use messaging site Weibo—vs. only 8 percent of online adults in the U.S. who use Twitter. (BTW, if u want 2 C if ur site is banned, go 2 GreatFireWallofChina.org + C if ur site loads. If not, u need help.)
- A key trend is how they spend. The trend is toward independent, exotic, experiential and luxury—the Chinese consumer/traveler is the world’s number one luxury consumer. They like “super-luxury tours,” i.e., “no one else can get to these destinations.”
- Independent travelers are younger, educated, Internet-savvy, wealthier, stay longer in cities, spend more and, when in the U.S., want to eat what Chinese cannot eat at home.
- Students in the U.S. are a market of their own. More than 300,000 Chinese now study in colleges in America. In Boston, where Active America is headquartered, Chinese students there want to go to New York, Washington D.C. and other cities
- Some of their holiday travel coincides with their holiday calendar. For instance, Saunders pointed out, while the Chinese New Year holiday (Feb. 19th this year) might be acknowledged in the U.S., it is huge in China. The new traveling Chinese population like to visit family—even in the U.S.—during holiday periods. It’s easy enough to search for Chinese holidays and fine tune your marketing efforts accordingly.
- The ease and cost of traveling to the U.S. is something mentioned by all panelists, Saunders included. The most significant factor in this regard was the decision last November by the Chinese and U.S. governments to extend the period of validity of visas from one to ten years for tourists and from one to five years for students.
- The visa validity deal, along with additional consular staff to review visa applications is already leading to record numbers of visa holders who will use—and now re-use—their visas to travel to the U.S. And because Chinese have smaller families than do other nationalities, they are more flexible in their ability to travel; i.e., they are likely to be repeat visitors if they have a good travel experience.
- Airlift to and from China has increased dramatically. The number of non-stop, direct daily flights to the U.S. from China has nearly quadrupled (from 16 to 44) since 2011—not to mention the increase in connecting flights through points such as South Korea, Japan and Canada. And the cost of flights is inexpensive. Saunders cited a Boston t0 Beijing flight priced at $750.
- For payment settlements, there is nothing like UnionPay. Known as a cash payment culture—even into the 21st century—China’s consumers now overwhelmingly use the UnionPay card, which was created in 2002. It has become the largest credit card/debit card in the world, and now has 95 percent of the Chinese market. Make sure your business or your destination accepts UnionPay, and let Chinese tour operators and their customers know that you accept it.
- The social network participation in China is huge, far greater that it is in the United States—both in percentage of the population involved, as well as in hard numbers. And this takes place in the absence of Facebook, Twitter and other social network sites known well in the U.S. and other parts of the world. Instead, China has its own network. It’s worth the help to learn how to promote yourself or your destination through this channel.
- While Saunders also had tips as to how to host your Chinese customers and guests, he closed with a simple encomium of advice: “They don’t want you to ‘Chinesify,’ they want an authentic experience.”
Stressed that, even though most Chinese visitors are emerging as an independent traveler market, there “is still a huge market for group tours.” U.S. travel suppliers and receptive, he explained, have to diversify their range of products and services, and promote unique features that will attract Chinese travelers by offering “ things individuals can’t do alone – like summer camps, trading programs, training programs, lectures, medical tourism …”
A hotelier, Chang focused on specialized aspects of serving and pleasing Chinese visitors: make sure every room hosting a Chinese guest has tea bags, a hot water pot, real Chinese food and slippers. Hotels should “create an experience” for the visitor and, she explained in language that needed no interpretation, make it such that “even a bird won’t ****in the place.” Catering to the well-known desire of Chinese visitors to shop till exhaustion, she makes sure that Chinese guests can go to a nearby Costco warehouse for items that they won’t find at home. Also, she advised delegates that they should give Chinese visitors an opportunity to do some shopping on their last day—their day of departure—because Chinese travelers “always fly at midnight” and, so, have lots of free time on their last day in the U.S.
Yu gave a fairly detailed presentation on what the Los Angeles Convention and Tourism Board—it is essentially the “home town” tourism bureau for Marina del Rey, the host community for the Summit—has been undertaking to accommodate the growing influx of visitors from China, which surged from nowhere to become the number one overseas source market for Los Angeles in 2013. And since then, she noted, traffic has increased another 20 percent. Yu gave delegates a glimpse into her bureau’s China Ready program, an explanation of its Chinese language website and its promotional activities both in China, among the numerous receptive tour operators based in Los Angeles and through U.S. and international travel trade channels.
- Asked by Julie Johnson, chair, Heritage Corridor CVB in Illinois how small hotels are handling the increase in Chinese travelers, the panel offered up the following: Saunders said that small hotels are benefiting from Chinese travelers and the BnB properties, in particular, offer a unique American experience; Hentz suggested that BnBs and vacation rentals fare well among travelers making their second visit to the USA; and Liu also indicated that his Chinese clients look for BnBs and smaller, more intimate resorts and are willing to pay a lot of money for the latter.
- When Hentz raised the notion of what Los Angeles might be doing regarding the large number of Chinese in the USA who depart use LAX, Yu pointed to her bureau’s Chinese website as well as Chinese websites that are opening their own brand to welcome U.S. visitors. Saunders expressed the opinion that “hopefully, the goal is that the Chinese want to come back to America.”
- After Hentz asked about dealing with the difference between Fully Independent Travelers (FITs) and Partially Independent Travelers (PITs), Yu said the key determinant for the partially independent travelers is the tour package and what it does or does not do. If a traveler can do a two-or-three day tour package that has the discounted rate associated with package product and still maintain flexibility for the traveler, there is no issue.
- Allison Raskansky, senior vice president, business development, Speed Vegas World Class Driving, asked the panel if Chinese travelers gather and share travel experiences heavily as travelers do on TripAdvisor and Yelp. Two of the panelists took note of the power of the review and discussion site WeChat.
Sherman Liu explained that China’s WeChat “is powerful” and it is a place where travelers “share experiences … good and bad.” They share pictures of hotels they stayed at, he noted, pointing out that Chinese travelers book hotels and restaurants based on comments on WeChat. Sheen Yu reminded delegates that WeChat is powerful if because of the fact that there are 800 million mobile users with Internet service in China –that’s 65 percent of the country’s population – and 80 percent of them use WeChat. (That’s twice as many WeChat users as there are people in the USA.) Last year, she said, 134 million products were purchased on Internet in China. And many are driven by the slogan: “I can’t live without WeChat.”
- When the matter of the reach of China’s UnionPay card came up, Hentz asked Saunders how complicated it was to get and use UnionPay. Saunders said it was easy enough that his firm sets up businesses to use UnionPay practically for free.
- Finally, when one delegate brought up the question of the best source for meeting Chinese tour operators and developing new business from China, Hentz recommended NAJ’s Active America-China Summit next month (April 7-9) at the Bellagio in Las Vegas. An annual product development show that brings together top Chinese tour operators with invited suppliers and destinations to develop new tour opportunities, it was begun in 2009. The problem is, Hentz explained, that the show is already sold out. However, NAJ is exploring the possibility of developing a portable “China Ready” program that it could move from city to city to educate and familiarize U.S. travel suppliers and DMOs with the China market.
Six Leading Travel Trends to Watch For in 2015
Midst the welter of reports that have come our way is Euromonitor International’s World Travel Market Global Trends Report 2014, which has plenty of data and trend information, including the following.
- Golfers evolving into cycling MAMILs in North America: The rise in popularity of cycling poses a threat to golf tourism as middle aged men swap their clubs for bikes, hence the rise of MAMILs (Middle-Aged-Men-In-Lycra).
- Stylish and cost-conscious Brits embrace “Poshtels”: Design-led hostels across the UK, or “poshtels”, are gaining in popularity, representing a viable accommodation option for different traveler segments.
- Peer-to-peer dining on the menu in Europe: Riding the success of the peer-to-peer trend, new European start-ups offer visitors in-home meals, cooking lessons and guided tours around foodie hotspots.
- WeChat, the second largest global messaging service after WhatsApp, has emerged as a viable sales channel for Chinese travel companies with customer service, bookings and payments.
- Hotel “Braggies”—the new selfies: Hotel chains are further developing their social media marketing strategies with reward schemes set up to encourage “braggies,” in which guests take photos in the hotel and upload the images to social media.
- Wearables to drive travel’s next phase of E-commerce: Wearable electronic technology will be mainstream by 2016, with travel brands embracing this trend as part of their customer service and distribution mix. To download your own copy of the full report, visit:
Do You Understand the Difference between the Three Programs for Accelerated Entry into North America?
For U.S. citizens and residents, Canadian citizens and citizens of South Korea, The Netherlands and Mexico, the Transportation Safety Administration (TSA) and U.S. Customs and Border Protection (CBP) have three different accelerated entry programs for those traveling to the U.S. They are: the TSA Pre-Check; CBP’s Global Entry; and Nexus, a joint venture of CBP and the Canada Border Services Agency (CBSA). All three involve registration and a fee that is valid for five years or more. For an easy-to-understand breakdown, check out this article: http://www.travelpulse.com/