Tourico Strikes Deal to Book Hotels for Virgin Holidays
A little more than four months after it announced that it would to become a purely direct-sell tour operator after 30 years of selling through the trade, Virgin Holidays has announced a partnership with Orlando-based Tourico Holidays in which the latter will open up Tourico’s inventory of hotels throughout the world.
Virgin Holidays, which bills itself as “the largest, most successful transatlantic tour operator, and market leader for travel to the USA,” provoked a strong negative reaction from travel agents as well as other UK tour operators when it announced late last October (just weeks before the World Travel Market convened in London) that it was circumventing the trade by selling directly to consumers through its website and national network of retail stores in the UK.
At a news conference during WTM held early last November in London, Mark Anderson, managing director of Virgin Holidays, said that the decision “has not won me any popularity awards with agents,” but emphasized that there would not be any reversal of the move. “Owning the customer experience end-to-end is really important to us as it helps us enhance the overall experience for the customer, particularly pre-departure,” he said. He added that the company would be securing even more leisure flying from its sister airline, Virgin Atlantic, going forward.
For Tourico, the venture is about more than just the UK outbound market to the USA. The company also plans to grow inbound travel to the UK by adding to its partner support team on the ground, increasing the number of hotel partners in the market, securing deals at hotels in London, and by leveraging its network of tour operators and other distributors in primary source markets—including Canada, the United States, China, and the Middle East. Tourico has also committed to opening an office in downtown London, which will house nearly 100 team members by 2018.
Good News and Better News: In UK, Family Travel Bounces Back—So Does Number of Operators
Two new reports tell us that the UK tour and travel industry is returning to levels of business not seen since the prior to the trough period of the 2008-09 economic recession:
First, the elimination of the Air Passenger Duty (APD) has led to a double digit increase over two years in departures to Florida, according to ABTA.
Second, the number of tour operators, travel agencies, travel agents and travel business volume has grown dramatically—almost reaching pre-2008 levels. More detail follows:
1. Elimination of the APD: Beginning May 1, 2015, the British government eliminated the APR for children under 12 years of age ABTA said figures from GfK‘s Leisure Travel Monitor show sales for the Caribbean are up 29 percent for this summer and bookings for Florida are up 13 percent over two years. Both destinations, especially Florida, are sold as family destinations in the UK.
ABA said the increase was “perhaps partly boosted” by the abolition of APD for children. Now, beginning this week (March 1st), families with teenage children will fly for less with the removal of APD on economy flights for children under 16. The effective result of this is to lower the cost to a long-haul destination such as Florida by some $400 in airfare.
Originally, when it was first implemented in 1994, the APD was a flat £5 charge on flights within the UK or elsewhere in the EU, and a £10 charge on all other flights. It was aimed at raising revenue to fund environmental programs, but soon grew to cover more individuals and increased in size as it was found to provide substantial revenue for the government’s general fund. In recent years, the travel and tourism industry had been waging a vigorous campaign to have it eliminated or reduced. The exemption of children under 12 (and later 16) was first announced in the fall of 2014.
2. Business and Businesses are Back for UK Trade: It was revealed last week that combined travel agency and tour operator turnover in the UK increased for a sixth successive year in 2015 to almost £32 billion ($44.4 billion). The 12 percent year-on-year rise, said an analysis of the UK’s Office for National Statistics (ONS) data by the UK’sTravel Weekly’s sister publication, Travolution, was the second-highest annual increase since 2008.
ONS data also showed the number of agencies surpassed 4,000 in 2015 and the number of travel agents in the UK will recover to near pre-recession levels next year. The data analysis for the 2016 Travolution Innovation Report shows there were 66,224 agents in the UK last year. This figure is forecast to increase to 68,514 in 2016, close to the 69,471 recorded in 2008 at the start of the downturn, and sizable increase over the nine-year low in 2013 of 59,289.
The data show tour operator numbers and employment fared even better than agents during the recession, weathering the downturn better and recovering earlier.
—In 2008 there were 1,590 tour operators with 18,757 staff.
—By 2011, after two successive years of decreases, there were 1,615, with 19,090 employees.
—In 2015, there were 1,920 tour operators and 22,215 employees.
—in 2016 the figure is forecast to top the 2,000 mark, with employees rising to 23,364.
NAJ’s RTO Summit West Photo Gallery—Part 2
The peripatetic Laszlo Horvath, CEO, Active Media, moves from the podium and then table to table during his presentation, How to Use Google Predictive Analytics to Forecast International Intent to Travel to Specific Destinations from a Variety of Source Countries.
Evan Saunders, founder of Attract China and a regular featured speaker at NAJ’s RTO Summit series, furnishes delegates with an update on the overall condition of the travel market from China.
Gary Oldfield, travel industry sales manager, Greater Palm Springs CVB, closely follows the opening “State of the Industry” presentation by Jake Steinman, founder and CEO of the NAJ Group.
Just finished with their discussion of what social media techniques suppliers should consider when dealing with receptive tour operators are: Patrick Swen, marketing director, Lassen Tours; Roselle Masse, product director, TeamAmerica; and Aniseh Dalju, co-founder of Onward, a new Anaheim-based receptive tour operator.
Sharing a moment together during the Summit’s morning coffee break period, are Robert Graff, corporate vice president of marketing and international sales, Papillon Group-Papillon Helicopters/Scenic Airlines; and Elaine Kellogg, executive director, business development/international marketing, Grayline-City Sightseeing New York.
Could you please get serious? Remarks off-camera by Ko Ueno, executive director of Agent Kai (the Japanese Tour Operators Association of California) prompted this candid moment of laughter among the operators attending following a group luncheon program that had a presentation featuring NAJ’s new website, TourOperatorland.com.
Front row (left-to-right): Betsy Cooper, tour operator community manager/marketing, NAJ Group; Katsuhisa Seki, JTB USA; Osuke Ishiguro, JTB USA; Jake Steinman, founder and CEO Group; Michelle Kariyone, Kintetsu; and Shigekazu Kuwamura, Kintetsu.
Second row (left-to-row): Shinsuke Takahashi, HIS; Bobby Valenciano, HIS; Mike Miura, TTA; Ko, Shota Tsukamoto, HIS; Tomomi Soliz, Meitetsu; Hiromi Huaman, TTA; and Erika Mason (Kintetsu).
At his table preparing to give one-on-one advice to Summit delegates during the closing program’s “Genius Bar” feature is Florian Herrmann, president, HMS International.
Pepe Avila, director of tourism development, Visit Anaheim, listens as Elena Ferranto, director of strategy, Sparkloft, explains some of the finer points of using social media to connect with international travel buyers.
Jake Steinman (right), founder and CEO of the NAJ Group, works at the laptop of Brian Jemison, director of sales and marketing, Legends OUE Skyspace Los Angeles, as he explains some of the unique features of NAJ’s new website, TourOperatorLand.com.
A close-knit collection of Pennsylvanians made the trip to Marina del Rey. From the group at the Summit’s closing reception are (left-to-right): Ann M. Pilcher, tourism sales manager, Pocono Mountains CVB; Anni Jirapatnakul, tourism supervisor, Philadelphia CVB; Greg Edevane, director of sales, Chester County Conference & Visitors Bureau; Nathan A. Claycomb, business development manager, Sight & Sound Theatres; Peggy Nana-Sinkam, group manager, The Amish Farm and House; Jennifer L. Buchter, managing director of hospitality and sales, Amish View Inn & Suites; Jenny McConnell, director of sales, Destination Gettysburg; and Mara Sultan convention and international sales manager, Discover Lancaster.
Brazilians Spending Overseas Dwindled Down by 32% Last Year
A recent report from Brazil’s Central Bank for the year 2015 confirmed what travel suppliers in the United States and in other key international destinations favored by travelers from Brazil have reported for the past year to the Inbound Report: They cut their overseas spending dramatically. The nation’s Central Bank said that Brazilians spent 32.1 percent less overseas (the USA is the number one destination for Brazilians traveling overseas) in 2015, for a total of $17.357 billion, the lowest volume since 2010.
And unless the Brazilian Congress takes action to reverse a measure implemented last month by the central government—it applied a 25 percent tax on tourism services paid abroad, meaning that tour operators and travel agents booking hotels and packages overseas will have to charge their clients an additional 25 percent levy—the situation will likely get worse.
“It’s not Rocket Science.” For much of last year, especially at last June’s IPW in Orlando (there, we visited two major shopping mall favorites of Brazilian travelers and spoke with tour operators and journalists who covered the market), last September’s La Cita de Las Americas trade show in Boca Raton, Fla. and last November at NAJ’s RTO Summit East in Orlando, the Inbound Report has heard report after report of how Brazilians are spending less on shopping. One receptive tour operator told us that, while travelers from Brazil were still shopping, “they’re only putting one shopping bag in the overhead bins instead of two.”
Actually, from the perspective of Brazilians, they are spending the same amount of Brazilian reais—it’s just that the currency is worth much less. As one reader wrote in a Rio Times article on the decline in spending: “To put it another way, Brazilian tourists are spending the same amount abroad, but their money is worth 50% less so they have the same number of reais available to spend, but it buys half the dollars/Euros/Pounds or whatever that it did a year ago. It’s not rocket science.”
Here is a table cataloging the decline of the real against the U.S. dollar over the past year-and-a-half.
The Dwindling Power of the Real
Brazilian Real : U.S. Dollar
Last 18 Months, by Quarter
|Value of Real
| Rate recorded on 15th of each month
|Source: Xe.com; prepared by Inbound Report
For a table showing a two-year history of the real-dollar currency exchange rate, visit:
Outlook Remains Bleak: In addition to the 25 percent tax on international tour products, the Brazilian economy is in the midst of a recession. In December, economic activity fell 0.5 percent over the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity. This compares to November’s revised 0.6 percent decline. This print marked the tenth consecutive month of decline as the economy remains in recession.
I chat, You Chat, We all Chat for We Chat!—China’s Most Powerful Platform
In the first few years following the December 2007 Memorandum of Understanding between China and the U.S. that authorized the marketing and promotion of Visit USA leisure travel in the country, the phrase “China Ready” meant that U.S. hotels and travel suppliers should furnish their guests with in-room tea kettles and slippers; provide Chinese language menus and brochures and have Mandarin-speaking staff and tour guides.
Clearly, the tour and travel industry has upgraded (or should have upgraded) to “China Ready 2.0,” which integrates the earlier features with readily available and free Wi-Fi everywhere and platforms for digital devices and apps that accommodate the 659 million Chinese consumers who rely on their smartphones to use WeChat in order to conduct all of their travel-related conversations, exchange messages and photos, conduct research and make and pay for their bookings. This is what Brian Chuan, the newly minted director of travel trade development at South Coast Plaza in Newport Beach, California—he joined recently from Macy’s—made clear to delegates at NAJ’s recent RTO Summit in Marina del Rey, California.
In keeping with the spirit of Digital Day—the first day of the RTO Summit dedicated to familiarizing international tour and travel professionals with digital techniques and applications—Chuan focused on the importance of WeChat as an international marketing tool that will help enable (or enhance the ability of) U.S. travel suppliers to penetrate the Chinese market. While there is an international version of WeChat, that version does not have the numbers or in-country possibilities that a Chinese hosted account does.
From Chuan’s notes …
—Known as Weixin, the largest messaging app in China
—Developed by Tencent, released in January 2011
—Mobile text and voice messaging communications service
Its key functions are:
-Others (includes photo, video, coupon, lucky money, GPS location, group chat)
WeChat by the Numbers
|Number of registered WeChat accounts
|1.1 billion (January 2015)
|How many people use WeChat
|650 million monthly active users (Nov. 2105)
|Number of WeChat users that access it on smartphone
|639 million (January 2016)
|Number of people who use WeChat outside China
|100 million (March 2014)
|Average amount of time Chinese adults spend on WeChat daily
|40 minutes (April 2015)
|Percentage of WeChat that use it more than 10 times a day
|55.2% (January 2015)
|Ave. number of times WeChat users visit it daily
|7.8 (September 2015)
|Percentage of WeChat users that purchase products online
|83% (August 2015)
|Percentage of population in Tier 1 cities in China that user WeChat
|93% (December 2015)
|Percentage of population in Tier 2 cities in China that user WeChat
|69% (December 2015)
|Number of offline stores that accept WeChat payment
|300,000 stores (February 2016)
|Percentage of WeChat usersmale : female
|64.3% male to 35.7% female (August 2015)
|Percentage of millennials that use WeChat globally
|60% (February 2015)
|Percentage of WeChat users that are between the ages of 18-36
|886.2% (January 2015)
|Source: South Coast Plaza
Comparison Monthly Active Users of Selected Sites
|Monthly Active Users
|Source: Statista 2016
How it Can and Will Work in the Future: To illustrate the latest application of WeChat, Chuan played a video explaining how Caesars Entertainment has partnered with WeChat with its “connected room” at its Linq hotel in Las Vegas. Everything from booking the room (from China) to setting the lighting, temperature and coffee timer for the room can be done through the app. There is more, which is explained in the three-minute video at https://www.youtube.com/watch?v=4CMDLPKWI1w
Merlin Entertainments Buys Share of Big Bus Tours To Expand Ticket Distribution Network
UK-based Merlin Entertainments last week announced that it had invested more than $34 million for a 15 percent share in Big Bus Tours. The arrangement will open up additional channels of distribution for both companies as they will now cross-promote product globally and sell each other’s tickets.
In the USA, Big Bus—founded in London in 1991, it is the largest operator of open-top sightseeing tours in the world, it has sightseeing tours in 18 cities across three continents—operates hop on-hop off tours in Philadelphia, Washington, DC, Miami, Las Vegas, New York, San Francisco and Los Angeles.
Headquartered about 110 miles southwest of London, Merlin Entertainments, whose portfolio makes it the second-largest operator of theme parks/attractions in the world—behind only Disney—owns such properties as Madame Tussauds, Legoland parks and Discovery Centers, the London Orlando Eye and the Dungeons attractions. Some of its USA properties include:
—Legoland parks and resorts near Orlando and north of San Diego
—Madame Tussauds in Washington DC, Las Vegas New York and San Francisco
—Legoland Discovery Centers in Atlanta, Boston, Chicago, Dallas-Fort Worth, Kansas City, suburban Detroit and Tempe, Arizona.
For more information, visit:
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Cathy Domanico joins Brand USA as vice president of global trade development (effective March 14) after serving the past 11 years as the vice president of tourism and leisure sales for Choose Chicago. Prior to joining Choose Chicago in 2005, Domanico served as the vice president of marketing and business development for the Notebaert Nature Museum in Chicago.
Sharon Siskie is the new senior vice president of sales for Walt Disney Parks and Resorts, U.S.
In this role, Siskie, who has been with Disney for more than 20 years, will be responsible for leisure and non-leisure sales channels within the domestic Walt Disney Parks and Resorts segment. A highly regarded industry veteran, she will also oversee the sales and marketing organizations for Canada and Latin America, as well as global in-bound receptive channels. A 21-year Disney veteran, Siskie most recently served as vice president, marketing and sales, international.
Crockatt takes over from Interim president & CEO Dick Brown who has filled in since June 2015.
He comes to the position from InterVISTAS Consulting, where he served as senior vice president, air service and business development. Previously, Crockatt served as vice president, business development & marketing with the Ottawa International Airport Authority for over eight years.
Tracy Lanza has joined Brand USA in the newly created position of vice president of Integrated marketing (effective March 7). Lanza has worked at Brand USA since 2012 as the vice president and global account director on behalf of J. Walter Thompson and JWT Action/Geometry Global (part of the WPP portfolio of agencies and Brand USA’s former agency of record). Lanza has spent more than 20 years in the advertising and marketing industry including the past 11 years with a wide variety of WPP portfolio holdings including Ogilvy & Mather, Young & Rubicam, Hill+Knowlton and Mediacom.
Helene Hall has left the lowcosttravelgroup where she was a marketing director and led global marketing teams in nine key European markets as well as the U.S., focusing on the UK and Ireland, and has joined the senior team of content marketing digital agency, Melt, as chief commercial officer. Previously she held director level roles at digital agency Gravytrain, where she was responsible for search and more recently for digital marketing. Before that she was global head of SEO at Holiday Autos.