What’s Next For the Euro?
Confusion and concern over the stabilization of the Euro vs. other global currencies exists even after a third EU bailout program seems to have prevented Greece from falling into bankruptcy and exiting from the EU. Shortly before the July 13th bailout was announced, news reports gave mixed signals on the situation.† Regardless, the tour and travel industry still faces one near-term certainty: the Euro remains nearly 20 percent below what it was a year ago. As of July 15, it was pegged at $1.10, down a little more than 20 percent from the first week of May 2014. Its average level for 2015 is $1.11. And while some Eurozone tour operators were able for a while to avoid paying more for (and charging their clients more for) U.S. product through advance purchases and hedges late last year, they can no longer do so.
This is hardly good news. Already, the latest (June) semi-annual long-term arrivals forecast issued by the U.S. National Travel and Tourism Office (NTTO) had relatively modest expectations this year for the key Euro-based overseas source markets: Germany, 0 percent change vs. 2014; France, up 4 percent; Italy, up 5 percent; and Spain, up 3 percent. (A report last week from the German trade publication, FVW, indicated that year-to-date demand for USA product at TUI, one of Germany’s largest tour operator, was up 45 percent, year-on-year. We should note that the U.S. is not, however, a top-tier international destination for TUI customers, who generally opt for holidays in neighboring European countries, North Africa, Turkey and the Middle East. Industry experts in Germany believe this demand was due to an expansion of their U.S. product offering for this summer and the favorable pricing they were able to offer by hedging to lock in more favorable exchange rates.)
Here are tables on the changes in the value of the Euro vs. the U.S. dollar.
Decline in Euro vs. Dollar, 2014
Euro vs. Dollar, 2015
|Month||Euro = U.S. Dollars|
|Mean/Median mid-month rate Year-to-date||$1.11/$1.13|
Note: Rate is mid-day, 15th of each month
Source: Prepared by Inbound Report, per xe.com
† Here is a sample of actual news headlines that have appeared since July 1, 2015
For Europe’s Sake, Keep Greece in the Eurozone
(Opinion-New York Times)
Germans tout plans for five-year temporary Grexit …
Eurozone economy in best health for four years – despite Greece
And Now … The Winner of the First Annual IPW Photo Contest!
This year’s contest is the result of a decision made last month midst the sturm und drang of ipw in Orlando, when we saw nearly every single delegate equipped with a smartphone or easy-to-carry point-and-shoot camera that enabled them to record images of the event at any time and in any place. So, we were short on detail and long on our expectations as we announced the First Annual IPW Photo Contest.
Unanswered questions abounded. How do we distinguish between photos that were mementos and those that celebrated a new product announcement? How do we compute innovation in a shot taken in an exhibit booth versus one taken in the setting of one of Orlando’s famous attractions or theme parks with their built-in optical special effects? How do we select one image over another when one is a presentation or announcement that is formal in tone versus the whimsical shot of celebrants at a social function?
Answer: We don’t.
So, in order to judge entries that were different in substance, purpose and quality, we used the formula that film and theatre critics use to rate different, and sometimes unique, films and stage works: We ask ourselves the question, “What was the director trying to accomplish and how well did s/he accomplish it?” And then we answer the question.
We will tackle the challenge of developing categories and other standards for next year’s Second Annual IPW Photo Contest. For now, here are the Top Photos of IPW 2015, as we made our selections by answering the question: “What was the photographer try to accomplish and how well did s/he accomplish it.” Our selections and comments follow.
The Winners—The Top Three Photos of IPW 2015
Disney’s Pluto helping the Flagstaff CVB celebrate Lowell Observatory’s “Year of Pluto.” With (left to right) Heather Ainardi, PR & marketing manager, and Joyce Lingenfelter, travel industry sales manager; Pluto, Ryan Kennedy, Little America Hotel Flagstaff; and Gina Leingang Courtyard and Springhill Suites Flagstaff. The Lowell Observatory is a well-known tour bus attraction in Flagstaff and is widely known and regarded worldwide by scientists in the field of astronomy.
Lingenfelter explained to the Inbound Report, why it was important to seek out Pluto: “2015 is the ‘Year of Pluto’ at the Lowell Observatory in Flagstaff, Arizona where the (now dwarf) planet was first discovered in 1930. This year NASA’s New Horizons spacecraft, launched in 2006 arrived for a Pluto fly-by on July 14th. In planning for IPW, and knowing that we had a night at the Magic Kingdom, finding and shooting a photo with our planet’s Disney namesake seemed like a fun opportunity for the Flagstaff CVB delegation, and Pluto was happy to join in our celebration creating this shot when we shared our mission. It is thought that ‘Pluto the Pup’ was named by Disney, also in 1930, to connect to the excitement of the new planet’s discovery.”
In a queue at the ipw social function at Disney’s Magic Kingdom, the Flagstaff contingent spotted Pluto, set up the photo and had another individual (a delegate they did not know) in the queue take the photo on a smartphone. Only at ipw would such a promotional opportunity ever have a chance of presenting itself.
Michael Parra, partner services rep, Brand USA (left) and Brand USA partnership manager Philip Joseph (right) pose with Frank Sinatra at the Hudson County Tourism booth. Hudson County Tourism held a contest to win a stay in the area in celebration of Frank Sinatra’s centennial celebration (Sinatra was a native of Hoboken).
The photo was submitted by Alessia Aron, director of marketing, Hudson County Office of Cultural Affairs and Tourism, who explained to us the story behind the photo: “We asked every appointment we had at ipw to take part in the contest. The more creative each person was, the better! The picture that was selected included two representatives from Brand USA, who we actually ended up doing business with! I was the one who snapped the shot. The winner of the contest ended up being a very funny tour operator from Japan. He said he had never won anything and we look forward to his visit to Hudson County in November.”
Eunice Juliasz, of Brazil’s Viagem e Turismo (Travel and Tourism) magazine and friend at Madame Tussauds, submitted by Eunice Juliasz.
“Who could resist?” said Marjorie Magnusson, public relations manager and calendar editor at the Arizona Office of Tourism, in commenting on this entry after it appeared in the list of 10 finalists in the July 2 issue of the Inbound Report. And we could not. Taken on Sunday morning at ipw, following the press reception at Orlando’s I 360 attraction—it includes a branch of Madame Tussauds—the Brazilian journalist featured here captures the whimsy, the irreverence and the simple joy of the moment that one finds all about the social functions at ipw. Asked for a quote about the photo and why she had it taken, Ms. Juliasz told us only, “Eu sou o verdadeiro Einstein!” (“I’m the real Einstein!”)
(Editor’s Note: Feel free to submit your industry-related photos for consideration for publication in the Inbound Report)
Technical Glitch in I-94 arrival data Delays Arrival Statistics for First Half of 2015.
NAJ Shares What’s New for 2015 RTO Summit Orlando
Looking ahead to November 16-17 in Orlando, we want to keep you informed. We’re currently in the planning stages for this year’s RTO Summit and INBOUND Symposium—the later is the new name for all of the Summit’s first-day educational seminars and panel discussions. We’re updating the SYMPOSIUM program content as well as the mix of receptive operators invited to the one-on-one appointments to reflect the latest trends in the marketplace, including:
-New direct service from Emirates into Orlando means more lift and better access from India and Middle East to Florida and Deep South destinations. Forty percent of the passengers on Gulf airlines (Emirates, Qatar Airways, Turkish Air and Etihad) arriving in the USA are from India.
-Chinese tour operators, driven by the FIT and MICE market, are now expanding programs in Florida, and the Southeast
-Colombia is emerging as one of Latin America’s surprising new growth markets and little is known about this market.
Updates To RTO Summit Orlando—Inbound Symposium Topics:
-First, theRTO Symposium-Orlando has been rebranded as the INBOUND Symposium in order to leverage the INBOUND Report newsletter, which now has over 1,800 weekly readers.
How Gulf air carriers Emirates, Etihad and Qatar, are driving growth from India and the Middle East
– “In Conversation” with leading receptive tour operators about their business and perceptions of the industry
-Open Skies or Bust: While the three US legacy carriers try to limit competition from the Gulf airlines, inbound tourism will be the biggest casualty
-What Do Tour Operators Want? A selection of RTOs discuss their needs and answer questions.
-The state of MICE. What incentive operators are looking for in 2016 and 2017.
-Latin America updates from operators who sell in Colombia, Brazil and Mexico.
-How to manage international and PR reps.
-PLUS: MICE presentations to a panel of three tour operators, a la “Shark Tank.”
Updates to RTO-Orlando Marketplace:
-New! “Hosted-Buyer.” This outreach program will include LA- and NYC-based Chinese and India receptive operators interested in developing more product in Florida and the Southern USA.
-New! “Idea Factory.” In addition to their normal sales pitches, DMOs will be encouraged to provide operators with three new ideas for one-on-one appointments.
-New! “New Product Outreach.” Without receptive operator distribution, 95 percent of suppliers have no chance to sell their products through international wholesale channels, so we will initiate an outreach program for new attractions and hotels interested in expanding their worldwide reach.
“Our new approach for the INBOUND Symposium is to fill the void of international inbound information with the most current, up-to-date data and to educate the market about new opportunities by providing market intelligence with research and real time insights fom operators who have the most current information,” explained Jake Steinman, CEO of the NAJ Group. “In interviewing receptive operators, we’ve learned that they’re looking for creative ideas to sell aroud, so this eemed like the best direction to evolve the RTO Marketplace. After all, the best DMOs are actually the creative directors for their destinations and, in this competitive environment, it’s great ideas that sell.”
Merger of Kuoni into DER Will Take 2-3 Years
When one reviews the 98-year history of Germany’s second largest travel company, DER Touristik, one sees a growth path that is deliberate and measured. And more of the same seems to be in order following the company’s acquisition of Kuoni’s European tour operator and travel agency business. In an interview published in the German travel trade publication, FVW, Sören Hartmann, the company’s chief executive, said that the full integration of the Kuoni units—it includes nearly 40 locations in the UK alone—will take two to three years.
Hartman said that his company will begin its strategic process of integration once the acquisition is formally completed; this is expected to take place in September—following a review by the competition authorities in the UK and the affected European countries. “Then we will start intensive talks with the management and start to develop the strategy,” he told FVW.
“We want to be fast but there won’t be any harakiri,” he said. “I wouldn’t describe it as an integration in all cases. We will see where the Kuoni tour operators can use our platforms. But we can learn as well, for example from the Kuoni specialists and the travel agencies in Switzerland and the UK, which successfully sell high-value holidays.”
He indicated that DER Touristik—it is a part of the REWE group—does not want to create a centrally managed European group and will “keep what makes Kuoni strong” while seeking operational and production synergies. “Sales and brands are local and have to stay like that,” Hartman said, “we won’t force everything on to common platforms.” Hartmann suggested that the Kuoni tour operators can become more profitable within the DER Touristik operation.
Following the acquisition, Germany will remain the largest market for DER Touristik, with revenues of some $5.415 billion, including $3.756 billion in tour operating (and including Austria revenues of $276 million). Switzerland will be the second-largest market with revenues of $860 million, ahead of Scandinavia ($785 million), UK ($387 million), Eastern Europe ($321 million) and Benelux ($39 million).
(For a brief sketch-history of DER Touristik, visit: http://www.dertouristik.com/en/group/history/
For Japan, No Bad News is Good News—Almost as good as Denial
For a moment, nothing happened. Then…nothing continued to happen,” wrote the late British author Douglas Adams, in an appraisal that seems so sum up the outbound travel market for Japan in the second quarter of 2015, although some retail travel agents believe, that for July through September, the outlook for the U.S. is up a tick.
The latest quarterly travel trade survey conducted by the Japan Association of Travel Agents (JATA) indicates that, overall, demand for outbound travel will increase (see table below) by nine points on JATA’s diffusion index scale as customers are gradually returning to Europe, France and Britain, but still lagging behind. Asian beaches remain, according to some travel agents.
Meanwhile, family travel to Hawaii and other resort destinations is expected to grow. Travel to the USA., described by the report as “a relatively safe destination in terms of terrorism threats,” will grow, according to some travel trade respondents to the survey that serves as the basis for the quarterly report, which shows that, overall, the current market condition is still less healthy than it was two years ago.
Overall Outbound Overseas Travel Trend for Past Two Years,
Using the JATA Diffusion Index†
† See explanation at end of article
SOURCE: Japan Association of Travel Agents
Outbound Overseas Travel Trend by Destination
Using the JATA Diffusion Index†
† See explanation at end of article
SOURCE: Japan Association of Travel Agents
Encouraging is the news, based on the JATA report, that, during Q3, demand for overseas travel will increase in all major market segment: family (+12); working women (+9); students (+8); seniors (+7); incentive (+6); business/technical visits (+5); and honeymooners (+3).
Outbound Overseas Travel Trend by Market Segment
Using the JATA Diffusion Index†
|Female office worker||-40||-39||-47||-46||-47||-38|
† See explanation at end of article
* 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): The 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—May 19-June 3, 2015; Registered companies—611; Responding companies—351; Response rate—57.4%.
Data Snapshot, Australia—Demand for Outbound Holding up Despite Weak Aussie Dollar
The latest month report from the Australian Bureau of Statistics (ABS) shows that, even though the value of the Australian dollar vs. the U.S. dollar has plummeted 20 percent in the past year, Australians do not seem to have abandoned the U.S. as a travel destination. (Historical data show that the USA is the number one long-haul destination for Australian overseas travelers.) While the U.S. National Travel and Tourism Office (NTTO) has been unable to provide 2015 monthly arrivals data for country markets, the ABS data for outbound travel in April seems to be stable vs. 2014.
Short-Term Resident Departures from Australia
- Trend estimates: Short-term resident departures during April 2015 (784,200 movements) increased 0.3 percent compared with March 2015 (781,900 movements). This followed monthly increases of 0.6 percent n February 2015 and 0.5 percent in March 2015. The current trend estimate for departures is 4.2 percent higher than in April 2014.
- Seasonally adjusted† estimates: During April 2015, short-term resident departures (776,500 movements) decreased 2.0 percent compared with March 2015 (792,400 movements). This followed monthly increases of 0.1 percent in February 2015 and 2.1 percent in March 2015.
|Apr-15||March-April 2015 change||Apr 2014-2015 change|
|Seasonally adjusted||776,500||-2.00%||- -*|
* Not Applicable
† “Seasonally adjusted” is the process whereby normal seasonal changes are removed or discounted from monthly data. For example, analysts know that some months show large fluctuations in travel data because data history show that people travel more or less certain times
Which Countries are Least Satisfied with their Allotted Vacation Time?
Recently released results of a study by the GfK, the global research firm headquartered in Nuremburg, Germany, leaves U.S. tour and travel industry professionals searching for generalizations that might fit into their marketing programs for the future, but there is no search for the most obvious conclusion: Americans are happy with the amount of vacation time that they get; this is a finding that seems to sync with the studies prepared by the U.S.Travel Association that American are notoriously generous to their employers by neglecting to use their vacation or leave time—more so than employees in any other developed nation.
The GfK study shows that 69 percent of US consumers consider themselves at least “fairly satisfied” with their leisure time, beating the global average by 11 percentage points. These results place the U.S. on the top of the satisfaction scale, with Canada trailing at 67 percent, and Sweden in third at 57 percent.
GfK also found that 25 percent in the U.S. say they are “completely satisfied” with their amount of time off – nine points above the global average.
The countries where people are least likely to be happy with their leisure time are led by Russia, where nearly a third (31 percent) are “not at all satisfied” or “not too satisfied.” Russia is closely followed by Japan (30 percent) and Brazil (28 percent).
Across all 22 countries surveyed, 16 percent of people aged 15 and over say they are “completely” satisfied with the amount of leisure time they have, while 42 percent are “fairly” satisfied. Only 18% are not satisfied to any degree, including 4 percent who are “not at all” satisfied. The remaining quarter (24 percent) consider themselves neutral.
Satisfaction with Amount of Leisure Time
|Country/Market||Completely||Fairly||Neither Satisfied nor||Not too||Not at all|
|20. S. Korea||8%||37%||36%||18%||4%|
|21. Hong Kong||6%||45%||30%||16%||3%|
Source: GfK survey among 27,000+ consumers (ages 15+) in 22 countries—rounded
GfK conducted an online survey (face-to-face in Ukraine) with over 27,000 people aged 15 or older in 22 countries. Fieldwork was carried out in 2014. In the countries surveyed online, the data have been weighted to reflect the demographic composition of the online population age 15+ in each market. In the country surveyed face-to-face, the study is representative of the top-tier urban population aged 15+ excluding the lowest SES levels. The countries included in this press release are Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, Italy, Japan, Mexico, Poland, Russia, South Korea, Spain, Sweden, Taiwan, Turkey, UK, Ukraine and USA.
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 Richard Hanson, managing director, Trek America Travel Limited; and Audrey Bialas, director of sales, Hershey Harrisburg Regional Visitors Bureau.
Richard Hanson: After spending a few years working the service industry in Florida, Colorado & Alaska, I was quite enjoying unemployment by my parent’s pool in Florida when my mother, who was a travel agent at the time, dropped a TrekAmerica brochure on my lap. Asking her how I could afford such an extravagance, she subtly suggested it may be time for me to get a job. So after starting as a tour leader in 1995 and working my way up through operations, sales and marketing, I will be celebrated 20 years with TrekAmerica this past May.
Audrey Bialas: I’m one of the few people in this industry that took a linear path from high school. I got my B.S. Degree in Travel/Tourism at Mansfield University. I completed my internship at the Pennsylvania Travel Marketing Office, fell in love with the industry and was officially hooked! I’ve worked for several DMOs in New Jersey and Pennsylvania, including the Hershey Harrisburg Regional Visitors Bureau, where I’m currently the Director of Sales. Obviously a love of travel in this industry is a must. I’ve met the most wonderful people, traveled to 32 states, 4 provinces and 7 countries with various jobs and can’t imagine doing anything else!
The FTI Group has reorganized management board responsibilities into five business areas following several recent personnel departures. Roula Jouny, head of the incoming agency Meeting Point and the Youtravel bedbank, has been appointed Chief Content Officer with responsibility for service, quality management and supplier relationships.
At DER Touristik, Gerd Christian Finck has been appointed as head of corporate development, with responsibility for market research, company strategy and portfolio management. In another appointment, former Condor and Traveltainment manager Frank Seedorff has joined the group as head of the DER.com website.
As it fills out its UK leadership team, Dubai-based dnata has announced the appointment of Andy Freeth as managing director of Travel 2 and Gold Medal. The announcement came from Andrew Botterill, European CEO for dnata Travel B2B; he indicated that it is selecting directors for its UK operations from existing management roles. Freeth will announce his own senior management team over the coming few weeks, with a further announcement to follow shortly. Freeth has served for more than eight years with the Stella Travel Group, also a part of the dnata portfolio.
Roshan Mendis has been appointed as Sabre Travel Network’s senior vice president for Asia Pacific. Mendis joins the team following 12 years with Travelocity.com, where he was most recently president of the Americas, until its 2015 sale to Expedia. He was also formally president of Zuji.
Benjamin Maddy has joined Discovery Times Square as director of sales and tourism. Maddy comes to the position from Dave & Busters, where he served for more than 10 years, lastly as national marketing and tourism sales manager.
Elizabeth Qian Hansen has notified her friends in an e-mail that, after a little more than two years as director, Chinese & Asian Leisure Market for the Venetian Palazzo in Las Vegas, the company has restructured its sales force and has eliminated her position as of July 8th. Before joining the Venetian Palazzo, she served for six years as director, China Market/international leisure sales manager, for Caesars Entertainment.