The Brazil Market—Is it Hot, Hot, Hot? Or Not, Not, Not?
Introduction: A nation of more than 201 million people, Brazil’s population makes it the second largest international inbound source market, second only to China. One of the principal factors contributing to the nation’s growth as a travel market is the size of its “travel ready” middle class, which has grown from about 15 percent of the nation’s population in the 1980s to the more than 50 percent that it is now.
The economy has also been on a non-stop path of expansion for more than a decade until now. In fact, it almost contracted in 2014, growing by just 0.1 percent, and early analyses posted by some economists are projecting more of the same for 2015. As well, credit card charges were significantly down, year-over-year, in the first two months of the year—a potentially important factor in a country where most people purchase their vacations on parcelized payment plans.
Mirroring the economic data, arrivals to the U.S.—the favorite international destination for Brazilians—have increased nearly five-fold in the past decade, from 385 thousand visitors in 2004 to 2.264 million in 2014 and about 10 percent from 2013 to 2014. But the overheated rate of increase in arrivals cooled off somewhat in 2014, increasing in single digits for the first time in years—by just under 10 percent. And the last semi-annual forecast issued by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) projected that a total of 2.359 Brazilians would visit the USA in 2015—an increase of 4.2 percent.
The USA Profile in Brazil: At the recent meeting of the board of directors of Brand USA, Carroll Rheem, vice president of research and analytics, offered a look at some of the agency’s current numbers that pertain to Brazil. Some key tables include the following.
The U.S. share of the long haul market from Brazil is 29 percent –more than it is for the key overseas markets of the UK, Germany, China, France and others.
The USA is, and should remain, the most popular international destination for Brazilian travelers for some time to come.
One challenge will be to encourage Brazilians to go beyond the gateways (a key theme of Brand USA’s marketing plan for 2015 and beyond) because Brazilians are mostly visiting the same group of cities in Miami and Orlando in Florida, and New York City. However, Los Angeles and San Francisco have recently begun to show some growth.
Digital communication with the market is important, if not crucial. Internet penetration in the Brazil has been higher, in recent years, than it has been in the other major growth markets of China and India.
A Portuguese language portal would not only help U.S. travel suppliers and destinations hoping to tap into the market; it is necessary. At the moment, the top travel-related website among Brazilians is Hotel Urbano, an OTA established in 2013 that offers airline tickets as well as complete travel packages.
The Brazil market will be featured in the upcoming Inbound Symposium on May 6 at the Wyndham New Yorker hotel in New York City. There, Celyta Jackson, a partner in Miami-based Alban Communications—will provide a candid assessment of the leading tour operators in the country. Jackson, who speaks English, Portuguese, Spanish, Italian and German, and was once (1998-2002) vice president of tourism for New York City & Company, has had extensive experience in the market. The Symposium will open NAJ’s RTO Summit-East, which takes place May 6-7. For more information, visit www.rtosummit.com.
Japan’s Agent and Operator Survey—Senior Market Outlook is Bleak
The latest quarterly report and forecast by the Japan Association of Travel Agents (JATA) for outbound overseas travel for the first quarter and second quarters of 2015 is dismal overall. From the last quarter of 2014 to the first quarter of this year, the JATA Survey of Travel Market Trends, which conducts online interviews with travel agents and operators shows that, overall, the confident factor based on bookings and prospective bookings fell by more than 40 percent (although it actually improved for the USA and Canada).
The report said that the depreciation of the yen, fear of terrorism, and other concerns have acted as negative factors influencing customers’ willingness to travel. However, it added, the decreased fuel surcharges resulting from the lower crude oil prices have left the travel companies hopeful about an increase in demand in the future. Still, even with the surcharge news, the overall outlook is about the same for the second quarter.
Outbound Overseas Travel Trend for Past Two Years,
Using the JATA Diffusion Index†
|Destination||1 year ago.||9 mos. ago||6 mos. ago||3 mos. ago||Jan-Mar||3 mos. out|
† See explanation at end of article
Q2 Should See Minimal, if any, Increase for North America: Compared to the previous three months (October – December), Europe and Hawaii dropped by 9 and 2 points respectively for a second consecutive term. With the exception of Micronesia which dropped by 4 points, Oceania grew by 6 points, America and Canada by 3 points, China by 2 points and South Korea by 1 point, all four destinations showing a gradual recovery. Demand for Asia remained unchanged. During the next three months (April – June), demand for Europe and Oceania will not change, and the market in general is not expected to show much activity. South Korea, however is expected to stand out by improving by 9 points. China will grow by 2 points, America and Canada by 1 point, Micronesia by 1 point as all four destinations will improve. Demand for Hawaii and Asia though growing by 1 point each will decrease
Trends in Overseas Travel Demand
(by destination segment)
|Destination||1 year ago.||9 mos. ago||6 mos. ago||3 mos. ago||Jan-Mar||3 mos. out|
SOURCE: Japan Association of Travel Agents
Senior Market Outlook down Six Consecutive Quarters: Echoing reports that have come from other quarters, the JATA survey indicates that agents and operators have become increasingly pessimistic about the performance of the senior market, whose numbers have declined steadily since the last quarter of 2013.
Trends in Overseas Travel Demand
(by Market Segment)
|April-June 2015 (3 months out)||-37|
* Senior: Customers aged 60 or older
** Incentive: Travel offered as an incentive to business and organization employees
SOURCE: Japan Association of Travel Agents
†A Note on the Methodology and the DI (Diffusion Index): TThe JATA Survey of Travel Market Trends is designed to grasp trends in the travel market based on responses to questions on current conditions and those anticipated over the next three months. The survey asks participating companies to rate their sales results for each destination and customer segment by choosing from three categories: “good,” “average,” and “poor.” For items outside their business scope, respondents select “do not handle.” Each share of “good,” “average,” and “poor” is then divided respectively by the denominator, which is equal to the total number of responses minus the “do not handle” (including “no reply”) responses. Finally, each share is processed into the Diffusion Index (DI) by subtracting the percentage of “poor” from the percentage of “good.” The highest possible index figure is +100, and the lowest is -100. Survey period—Feb. 9-25, 2015; Registered companies—595; Responding companies—325; Response rate—54.6%.
Mexican Carrier Volaris Sharply Increases Lift Capacity to USA
With the launch of its service from Guadalajara, Mexico to Houston-Intercontinental Airport on March 26, the relatively new low-cost carrier, Volaris airlines, has increased the number of destinations it reaches in the U.S. from locations in Mexico by a third in a six month period:
—Service to Portland from Guadalajara began on October 6, 2014.
—Volaris began non-stop flights between Reno/Lake Tahoe and Guadalajara on December 16, 2014.
—Volaris began its second destination in Florida, Fort Lauderdale International Airport from Mexico City on December 1, 2014 and from Guadalajara on December 4, 2014.
—Volaris will launch service to Dallas-Fort Worth from Guadalajara on April 29th.
On July 15, the carrier will launch service from Guadalajara to JFK New York, which will be Volaris’ 20th U.S. destination.
Though no firm data are readily available, industry analysts credit the success of Volaris and its expanding route structure with helping to increase Mexican arrivals into the U.S. interior. Volaris, which began operations in 2006 as a domestic carrier in Mexico, expanded its entry into the USA with the 2010 shutdown of Mexicana airlines.
In addition to the shutdown and subsequent bankruptcy of Mexicana, the carrier’s expansion was also driven by its price structure, which put the cost of a flight into the U.S. at about the same cost as some bus tickets, making air travel an attractive alternative to ground transportation. For instance, the new Guadalajara-JFK flight will launch with one-way fares starting at $204 using the carrier’s pay-per-service plan, in which travelers select only those services they need for their trips.
Volaris now flies from locations in Mexico to 15 U.S. destinations—all with significant Mexican American communities—that also include San Diego, Sacramento, Denver, Phoenix, Las Vegas, Ontario (Calif.), Chicago Midway, Los Angeles, Oakland, Orlando, San Antonio, San Jose, and Fresno-Yosemite.
Should U.S. Destinations & Attractions Have Chinese Names?
Will destinations in the U.S. take up the example of Visit Britain, which recently announced the publication and release of its GREAT Names for GREAT Britain campaign, in which 101 of its most popular attractions (and some not-so-popular) had been renamed by Chinese fans and followers on its microsite and social media pages with the ostensible goal of having them travel to the country and taking photos of themselves against the landmarks that they had named.
Some examples: Here are some places and activities have already been renamed, including the following:
—The Shard in London is now called Zhai Xing Ta, meaning “the tower that allows us to pluck stars from the sky”
—The Highland Games are referred to as Qun Ying Hui or “the strong-man skirt party”
—The Beatles have been renamed Pi Tou Shior, or “the gentlemen with long hair”
—The Gherkin building in London has been called Xiao Huang Gua, which translates as “the pickled little cucumber”
Unable to readily locate any U.S. destinations that are doing something similar, Inbound turned to Evan Saunders, CEO of Attract China, which helps U.S. businesses and destinations in understanding and working the China market, and asked him what he knew about this phenomenon.
He noted, however, that “private companies are doing this proactively … not just with the names of places, but in their taglines.” For some, Saunders explained, the company tagline does not make sense in Chinese, because such phrases are often very colloquial and idiomatic and don’t translate well. So, he said, the companies will change their name in Chinese in order to be more China-friendly. Saunders emphasized the point that “the goal is to be true to yourself –changing you name without changing who you are.”
Chinese visitors are still going to come to the U.S., he told us, but U.S. travel businesses and DMOs should be pro-active in accommodating them. Asked which U.S. destinations he could cite as being pro-active in better accommodating the Chinese visitor (online and otherwise), he mentioned Visit Seattle, the Boston Convention and Visitors Bureau, the San Francisco Travel Association and the Los Angeles Tourism and Convention Board as “great city tourism bureaus that have been and are being proactive.”
But, he emphasized, no matter how well a DMO or travel supplier is doing through its website, its social media presence and with its presentation in the U.S., one really needs an in-country presence or representation to get their message across: “You have to have boots on the ground in both the western world and in China in terms of your knowledge of the culture.”
Saunders had a caution, too, for destinations and businesses that have turned to hiring Chinese students in the USA—there are about 300,000 attending U.S. colleges and schools in the current 2014-2015 school year—as interpreters and tour guides. “It is a source” he acknowledged, but pointed out, “but they are not professionals … and it doesn’t mean that they know how to translate.”
The nature of the translation challenge came when Inbound’s editor prefaced a question with “Off the top of my head …” when Saunders politely explained with a chuckle, “that doesn’t translate at all into Chinese.”
(Evan Saunders will be a featured presenter at next week’s Attract America-China Summit at the Bellagio hotel in Las Vegas, discussing “The Hot New Market for FITs and How to Access Repeat Visitors.”)
Q1 Ctrip Sales Projected to Go through the Roof
In an announcement that surprised most analysts, Ctrip, the largest online travel company in China, China’s largest online travel provider, has said it expects that first-quarter sales will grow as much as 50 percent to about $390 million. Founded in 1999 and listed four years later on NASDAQ, the company said its international travel business is expanding as more Chinese can afford overseas trips. The revenue forecast shows that the travel and tourism industry in China is continuing to grow at a healthy rate, even as the Chinese economy has slowed down. Read more at:
New Partnership Addresses Desire for More Diverse Product that Can 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 protected].
*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.
Is There any Merit to Yahoo’s Stereotypes?
Venturing into the funny and not-so-funny business of attributing stereotypes of the people of each U.S. state, Yahoo Travel asserts that, “We’ve all heard them, and we’ve all done it. Even the most politically correct among us has thought at least one of the stereotypes on this list.”
With this preface, the Internet service provider has published its list of The Worst Stereotypes about Every U.S. State. “Not all stereotypes are necessarily bad. They’re really just generalizations about a group of people based on assumed shared qualities or behaviors,” adding, “as travelers, stereotypes can sometimes be helpful, but more often than not, they’re a hindrance to really getting to know the locals. Still, they’re good to know, at the very least so that you can avoid making a serious faux pas next time you land somewhere new and completely foreign to you.” The list is based on a poll of “experts, Yahoo Travel readers and residents” in order to “find out the worst misconception that the natives want you to know just isn’t true.”
List of Worst State Stereotypes
Source: Yahoo! Travel
Todd Davidson, president and CEO of Travel Oregon (Oregon Tourism Commission) has officially taken over as the new national chair of the U.S. Travel Association as the association began its membership year with a new board of directors. Davidson, who has moved up the ladder of the board’s executive committee, is one of the longest serving state tourism directors in the USA—he started with Travel Oregon in 1996 after serving for two years as international program manager for the Oregon Tourism Commission. Davidson has also chaired the U.S. Travel and Tourism Advisory Board; he has served on the board since December 2011.
A member of the NAJ Strategic Advisory Council and long-time travel and tourism industry leader, Bob Gilbert has been appointed vice president of sales and marketing for Exotics Racing the world’s largest and highest rated racing school experience, which currently has locations in Las Vegas, California and growing. Gilbert, who has headed the consulting firm Captivation Marketing, previously held senior positions at several different travel and tourism companies including: a tenure as vice president of sales and marketing for Delaware North Companies; executive vice president, international, Helms Briscoe; and publisher of Travel Agent magazine.
Jennifer Barbee has been named senior vice president, digital, for North Star Destination Strategies, a Nashville-based firm specializing in destination marketing, communications and branding. She comes to the post after heading up her own marketing and tourism consulting firm for eight years. Previously, she served for six years as president of USDM.net.
Lesley Kane, has left her post as head of corporate travel and groups at Ryanair and has joined Canada-based carrier Air Transat as director of sales for Britain and Ireland. Transat flies to a number of U.S. destinations, selling both flights and packages.
Brand USA has announced the appointment of David Whitaker as its new chief marketing officer. A veteran of nearly three decades in the travel and tourism industry, Whitaker comes to the position from Tourism Toronto, where he has served as president and CEO for almost eight years. Prior to his tenure in Toronto, Whitaker spent 17 years with the Greater Miami CVB, lastly as executive vice president and chief marketing officer.