DERTOUR Parent Company Acquires Kuoni-branded Travel Companies across Europe
Months in the making since the announcement last January that Zurich-based Kuoni was selling off its tour operator and agency locations in Europe, the announcement came last week that the REWE Group, which is headquartered in Cologne, Germany, is acquiring the block of businesses, which include 34 Kuoni-branded agencies and assorted specialist travel entities in the UK alone. The transaction also includes tour operations in Switzerland, Scandinavia and the Benelux region. The Kuoni brand in Switzerland will still be owned by the Kuoni Group, which continues to look for a buyer for its remaining tour operating activities in India, Hong Kong and China by the end of 2015.
Kuoni is the oldest tour operator in continental Europe—it was established more than a century ago—and the company’s holdings still include some well-known brands and operations such as NYC-based AlliedTPro, one of the largest receptive tour operators in the U.S. The REWE group is better known in Europe as owner of a supermarket conglomerate: According to Supermarket News, it is among the Top 25 Worldwide Food Retailers, with 2014 sales of $67.2 billion at its more than 11,000 stores in Germany, Austria, Bulgaria, Croatia, Czech Republic, Hungary, Italy, Romania, Russia, Slovakia and Ukraine. Its travel brands include some of the Germany’s best known: Dertour, Meier’s Weltreisen, ITS and Jahn Reisen.
It is anticipated that the acquisition, which is subject to the approval of the competition authorities in the EU and Switzerland, should be completed by the end of Q3 this year.
The Five-Year INBOUND Forecast: Will it Hold up?
A closer look at the latest U.S. National Travel and Tourism Office (NTTO) semi-annual five year forecast for international travel to the U.S. from key international markets shows that, indeed, it is all about China for the next five years (2015-2020), when the number of visitors from the country will more than double, making it the number one overseas source market for the United States.
Just as encouraging as the news for those U.S. travel destinations and suppliers who are “China Ready” and are building product to tap into the market of nearly six million Chinese travelers is the outlook for some traditional, mature overseas markets, especially Europe, whose projected growth is—while not as spectacular as that of China—reassuring and, indeed, promising to those who have product that is familiar and favored by their travelers. Some highlights from the NTTO forecast underscore the point:
Europe—By 2020, arrivals from Europe are projected to be 16.7 million, or 21 percent higher than in 2014. The largest growth from Europe will come from the U.K. (+724,000), France (372,000), Italy (271,000), and Germany (+205,000). These growth forecasts reflect low-growth rates based on large traveler volume bases. For perspective, Western European countries are expected to produce 2.4 million additional travelers in 2020 versus 2014, compared to 548,000 additional travelers from Eastern Europe countries.
Asia-Pacific: Apart from China, this world region is expected to produce a big percent increase in visitors by 2020. While Japan, currently the largest Asian market and second-largest overseas market, is forecast to increase by less than 1 percent each year of the forecast on average to produce total growth of 105,000 additional travelers by the end of 2020. High growth rates and large growth volumes are also expected in 2015 for India (8 percent), Taiwan (7 percent), and South Korea (5 percent). Similarly, these four countries are expected to have among the largest total visitor volume growth of any country through 2020.
South America: South America will remain a top producer of additional travelers for the next several years. By 2020, South America will generate nearly 1.9 million more visitors, a 34 percent increase compared to 2014. Brazil, the largest source market in the region, is expected to build on its 2014 record-breaking performance and increase 5 percent in 2015. By 2020 the United States could host 3.1 million Brazilian visitors, a 38 percent increase from 2014. Argentina, and Colombia, which in 2013 ranked 12th, and 13th, respectively, among overseas markets, offer reassuring numbers through 20202. Colombia should continue its recent growth performances and produce the greatest growth of 478,000 visitors (+54 percent). Argentina’s recent strong growth will turn to declines for the first three years of the forecast period before returning to a growth mode to end the forecast with a higher volume by 70,000 travelers (10 percent).
The Five-Year Outlook—Is it All about China?
Arrivals from Top 15 Overseas Source Marketsᶠ
2020 vs. 2015
|Market, Projected 2020 Rank||2020 Arrivalsᶠ||2015 Arrivalsᶠ||Change in Arrivals||% Change|
|7. South Korea||1,870||1,522||348||29%|
Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Office
A note here about the disappearance of Venezuela from the above list of Top 15 Overseas Markets. To those who have been following economic and political developments in the country, it is no surprise. Record inflation and its impact on the real-world value of the Venezuelan bolivar vs. the U.S. dollar and other major global currencies has been dramatic. The cost of travel to the USA is much, much higher than it was five years ago. Also, all major international carriers serving the market have cut back or eliminated service to Venezuela because the government has been unable and/or unwilling to pay the carriers the dollar rate for the bolivares held by the carriers—and for which they were paid for flights to and from the country.
Chicago in Denial? CMO Shana Lee Gone as Fewer Overseas Visitors Choose Chicago
The falloff in the number of international visitors from 2013 to 2014 for Chicago did not cause much of a ripple in the tour and travel industry when the U.S. National Travel and Tourism Office released its report on overseas visitors numbers to U.S. states and cities during ipw in Orlando (see following article), but interest in the city itself was high, especially when a subsequent item in the Chicago Business Journal seemed to link it to the earlier, quiet departure from Choose Chicago of the agency’s chief marketing officer, Shana Lee, after less than a year-and-a-half on the job. Lee had joined Choose Chicago from Travelport.
From 2013 to 2014, overseas visitor arrivals to Chicago dropped by 5 percent, and its share of the overseas visitors market also fell by a half percentage point. To be fair, Chicago could not have done anything to change the brutal 2013-2014 winter that might have had something to do with the numbers. Still, the departure of Lee—she has not been replaced—and the apparent move by Don Welsh, the agency’s president and CEO, to assume a greater role in the marketing aspect of Choose Chicago’s international program, has caused others in the city to take notice.
Among them, the Business Journal suggested, is Mayor Rahm Emanuel, who “started tightening the screws a couple years ago and demanding ever-higher tourism counts to burnish his reputation and generate more income for a severely cash-strapped city.”
Inbound tried to see if Welsh had any response to the Journal article by leaving a message with Meghan Risch, vice president, corporate communications for Choose Chicago, but received no response. So we asked Lewis Lazare, the reporter who wrote the Business Journal article, if Welsh had any response to the item. “Are you kidding!?” he told us, adding, “Welsh and his crew have been in denial for years — that’s on orders from Rahm Emanuel of course!”
(Inbound Insight: Last fall, just a few months following what was a considered by most a successful ipw 2014 performance, Choose Chicago restructured their international department by laying off four key veteran sales executives and reducing their European representation groups to focus on building China. That reduction occurred too late in the year to have an effect on 2014 international arrivals; however, the polar vortex and extreme weather conditions and/or the downtown properties refocus on corporate and convention business over leisure may have reduced travel to the destination.)
Which States and Cities Are Gaining or Losing Share of International Market?
One has to be cautious about making any definitive statement regarding increases or decreases in percentage year-over-year gains or losses in travel volume or declines in market share when reviewing the U.S. National Travel and Tourism Office report, Overseas Visitation Estimates for U.S. States, Cities and Census Regions: 2014. There are always exogenous factors, such as calamitous weather or a loss of airline service, that might explain the arrivals number. And market share changes are deceptive, too. For instance, in the second table below, one will see that New York City’s share in the total overseas visitors market declined, even though its number of visitor arrivals increased. The latter could mean that additional destinations are beginning to enjoy a share of the growing overall market.
There are some signs that travelers to the U.S. from overseas are beginning, ever so slightly, to go beyond the gateways in the destinations they are choosing to visit. Here are some notes on the tables that follow.
—States Increasing share: Florida, Massachusetts, Arizona, Georgia, Washington, Utah, Colorado, North Carolina, Virginia
—States Losing Share: New York, California, Hawaii, Nevada, Texas, Illinois, Guam, New Jersey, Pennsylvania, Ohio, Maryland
—States Maintaining Share at Same Level: Louisiana
—Cities/Population Centers increasing share: Miami, Los Angeles, Orlando, Washington DC, Boston, San Diego, Flagstaff-Grand Canyon-Sedona, Ariz., Atlanta, Anaheim, Seattle, Tampa-St. Pete
—Cities/Population Centers Losing Share: New York City, San Francisco, Las Vegas, Honolulu, Chicago, Houston, Fort Lauderdale, Philadelphia, Dallas, San Jose, Calif.
Note: Not included are cities, population areas or states for which there was an inadequate sample size per the standards of the U.S. National Travel and Tourism Office
The Top Ten Revealed! The 10 Best Photos Submitted in the First Inbound Report ipw Photo Contest …
Following are the top ten photos submitted for the First Annual Inbound Report ipw Photo Contest. We’ve arranged them and tagged them in no particular order. If you have a comment or insight on any of the selections, please let us know by contacting [email protected], and letting us know by identifying the photo in question by its letter. Your comments and observations will help us as we make our selections and announce the first, second and third place winners in our next issue.
A note: when we planned this contest, we did so with no strict guidelines or categories—we were looking for the best ipw photo. Period. We now realize that:
—Orlando, with the backdrop of its famed attractions, has an overwhelming advantage for outdoor shots.
—No matter what the setting, the inevitable “grip-and-grin” formula for photos within, or in front of, exhibit, is limiting. So, in making our selections, we looked for the quirky, the offbeat or that with a different “signature.”
—And no matter what the setting, we valued authenticity: the whimsical expression, the element of surprise and/or that particular something that differentiates the photo from others.
We will work to improve the contest and its guidelines for entering and competing for ipw 2016 in New Orleans. In the interim, let us know what you think about this year’s Top Ten. Send your comments to: [email protected].
NYC Starts Move to Being One Huge WiFi Hot Spot for Visitors
New York City will soon be taking the first steps toward becoming one huge WiFi hotspot for visitors as contracted crews will begin sometime this fall the process of dismantling and/or retrofitting some 10,000 telephone booth shells throughout the city’s five boroughs and turning them into Wi-Fi hotspots that have a range of about 45 meters. This reach is enough so that a visitor who sees one of the stations will be able to connect from the other side of New York’s widest streets or avenues.
The massive project—Link NYC—will take several years to complete, Fred Dixon, president and CEO of New York City & Company, told delegates to NAJ’s just concluded DigMe conference on travel technology at the Affinia Manhattan hotel, with about 100 converted booth spaces finished by the end of this year. The high-speed service will outstrip anything the visitor is used to in his or her travel experience, Dixon added.
As for the phone equipment in the booths, he said that they will all be replaced with devices that will enable users to plug in their ear buds and make free long-distance phone calls to anywhere in the USA.
But what about people who want to see those once-familiar telephone booths for reasons of nostalgia? Dixon, who explained that some people may recall that the Superman character of comic book, movie and television fame used to go into a phone booth to change from his street suit to his blue-and-red Superman costume, told delegates that a few booths in key location will be maintained as “antiques” for the curious and/or nostalgic visitor.
How I Got My Start in the Travel Trade
“How I Got My Start” is a regular segment in which we cull a couple of selections from our interviews with international operators, domestic operators, receptive operators, destinations, hotels and attractions to explore the path that led one to a career in the travel trade industry. One thing we have learned: the road to where they are is almost never the same. In this issue, we feature Malcolm Smith, senior vice president of business development & general manager, ipw, U.S. Travel Association; and Mary Saunders De Hoyos, senior director of business development, Beverly Hills Conference & Visitors Bureau.
Malcolm Smith: “In 1994, my graduate advisor recommended an internship at the Texas Department of Commerce-Business Development Division. When I went for my interview, I noticed the Tourism Division on the organizational chart and thought, ‘That sounds much more interesting.’ I asked if I could meet with the director of travel industry sales and was offered an internship. I ended up staying at Texas Tourism for six years and remained in the industry since.”
Mary Saunders De Hoyos: “My start in travel trade came by way of a friend who said, ‘Have I got a job for you!’ That job was sales manager at the Santa Monica CVB. I had been with Delta Air Lines for many years as a flight attendant and decided to take the plunge across the jet bridge. Almost ten years later, I represent Beverly Hills globally and have met some of my closest friends through our industry.”
HODGE POPGE—Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Appointed to the post just last December, David West resigned abruptly on June 24th as vice president of Travel Michigan. The position is the de facto equivalent of state tourism director. No reason was given for the move. “He made the decision to resign his position. It was effective immediately,” said Travel Michigan spokesperson Michelle Grinnell, who would say nothing more to a journalist’s inquiry. Taking over as acting director of Travel Michigan is Dave Lorenz, who has served as manager of international marketing and industry relations for more than a decade. West came to Travel Michigan from the Pocono Mountains Visitors Bureau, where he had been vice president of marketing for five years. West succeeded George Zimmermann, who retired from the post at Travel Michigan after more than 12 years.
Sebastian Ebel has been appointed chief executive of Tui Deutschland, effective immediately—this is six months earlier than had been planned—as Christian Clemens, the former CEO, has stepped down early to return to Sweden with his family in order that his children are able to attend their new school in August. As a member of the Tui Group’s executive board, Ebel is in charge of the cruise and hotel business, as well as Tui Destination Services and IT.
Al White, the director of the Colorado Tourism Office, is shifting to the role of a senior adviser and lobbyist within the Colorado Office of Economic Development and International Trade, where he White will advise the tourism office, Colorado Brand and Marketing, the new Outdoor Recreation Industry Office. White has headed the state’s tourism office since January 2011. A Republican, he was appointed to the post by Gov. John Hickenlooper, a Democrat. Before taking the position, White was a member of the Colorado House of Representatives for eight years and the state Senate for two.
Jolanda Nazario as director of business development for Milwaukee-based Mark International. She joins the company from Kuoni Travel, where she worked for 11 years as director of sales for its AlliedTPro division, overseeing the international market, before relocating 12 months ago to their its GTA division overseeing the domestic market as director of sales for Travelbound. Previously, Mazario held positions at Hard Rock and Helmsley hotels in Orlando and New York City.
Keith Backsen is leaving his post as vice president of sales and services for Visit Spokane, and is taking over as president and CEO of the Omaha CVB. He succeeds Dana Markel, who held the position for more than 11 years. Markel recently took on the job of president of the in Overland Park (Kansas) CVB in order to be closer to her family. Prior to his tenure in Spokane, Backson served in several senior sales positions for Global Experience Specialists. He began his career in the travel and tourism industry in 1993 as a convention sales manager for Travel Portland.
Discover The Palm Beaches—the official tourism marketing agency for Palm Beach County, Florida—has appointed Ashley Svarney as director of public relations and communications. Svarney will oversee public relations for the hospitality, leisure, meetings and conventions, and travel markets targeted by the organization, and also manage contracts with the group’s public relations agencies and PR-related opportunities in South Florida and also in Brazil. Before joining Discover The Palm Beaches, Svarney was public relations manager at the Seminole Hard Rock Hotel & Casino in Hollywood, Fla.
Shannon Brooks has left her post as international public relations manager for Visit California, where she had served for more than four years, to open her own Los Angeles-based public relations and communications consulting firm, FORWØRD. Before her work for Visit California, Brooks had served for more than a decade as vice president of communications for the Santa Barbara CVB and Film Commission.
Gregg Gant has left his post as business development director at Travelzoo and joined Tourism New Zealand as senior trade manager. Before being a part of Travelzoo, Gant had been an account executive at Miles, working on partnership marketing/advertising sales for the Miles and Brand USA.