Ctrip Partners with L&L (now Universal Vision) and Two Other U.S. Receptives … Move Will Give it Dominant U.S. Market Share
Company also Expands Reach at other End, Acquiring 5,000 Agency Stores in China
Last July, the Inbound Report cited a report in ChinaMoneyNetwork.com, which said, “Ctrip is now the absolute monopolistic force in online travel in China. One anonymous analyst jokingly describes it as holding a 100 percent market share.” According to data on one research site, as of mid-December 2015, the company had a 43.1 percent share of the online travel market in China.
And now, Ctrip has moved into the USA in a major way. Last week, on Oct. 26 in New York City, the company signed a strategic partnership agreement with two USA-based receptive tour operators in an effort to increase Chinese tourism to the United States. The receptives are:
Ctour, (formerly Seagull Holiday), which is also based in Los Angeles and offers a wide range of USA product and has the largest Visit USA market share on the West Coast; and
Universal Vision, (formerly L&L Travel Enterprises) a New York-based receptive tour operator with a strong presence in mid-Atlantic states and the U.S. East Coast in general.
Combined, the two companies account for more than half the market share of travel packages sold to Chinese visiting the U.S. They will now have access to C-trip’s estimated 250 million-plus users.
Also included in the partnership last week is Tours for Fun, a Los Angeles-based OTA that caters predominantly to Chinese visitors to the USA. It was acquired by Ctrip in December 2013. Tours for Fun doesn’t book direct; it books through Ctrip.
The announcement overheated the smartphones of tour and travel industry professionals as text messages and e-mails bounced back and forth, with rampant speculation as to the impact the arrangement will have on the inbound travel from the China market. (The Inbound Report will do an in-depth report on the impact of the arrangement in our next issue).
The New York City announcement came a little more than a week after Ctrip and Chongqing-based Overseas Tourist Group, operator of online and mobile travel booking platform Traveling Bestone, jointly announced the signing of a strategic investment partnership agreement, under which Ctrip will acquire a controlling stake of Traveling Bestone.
With the move, Ctrip and Traveling Bestone will fully partner on vacation travel services, and Ctrip will gain access to more than 5,000 offline storefronts located in second- and third-tier mainland Chinese cities. Ctrip and Traveling Bestone will also partner on product development, resource purchasing, sales channels, and travel consultant cultivation.
WTM Countdown—Armed Cops to Ride the Tube … Government Releases Economic Data
With the World Travel Market (WTM) set to convene next week (Nov. 7-9) in London, U.S.-based receptive tour operators, U.S. travel suppliers and the sales and marketing teams promoting U.S. destinations are anxious to find out through their face-to-face meetings with British travel buyers what the real outlook is—an outlook shrouded by the reality of a 20 percent decline in the value of the British pound sterling vs. the U.S. dollar since last year’s WTM.
First, last week, in a move that seemed to bring the reality of global strife and tension close to the exhibit floor of London’s ExCeL complex, government officials announced that armed police will be on the Underground’s network. The move came in the wake of an Oct. 20th bomb alert at a station near the O2 entertainment venue, a site used for various WTM-related functions.
Armed police, who are regularly deployed at mainline stations of the Underground system, will use the Tube to travel between jobs. Armed officers were first deployed on the London Underground following the July 7, 2005 series of bombings in the system that killed 52 people and injured more than 700 others. British Transport Police said that seeing armed officers on the Tube on a daily basis should reassure the public that they would be able to respond to any threats.
The move was announced after a suspect package was spotted on a Jubilee Line underground train by two members of the public. The train was stopped at North Greenwich station, close to the O2, where police carried out a controlled explosion of the package. A suspect in the incident, Damon Smith, a 19-year-old London Metropolitan University student, has been charged with making an explosive substance with intent to endanger life or injure property.
Also Last Week: The UK’s Office for National Statistics (ONS) released a report covering several key measures of the condition of the UK economy, including the rate of exchange between the British pound sterling and other currencies, as well as its impact on travel abroad by UK. Below, we’ve highlighted key portions of the report, quoting the ONS report directly.
“Although the value of the pound has been falling for some time, the vote to leave the European Union has had a big effect in recent months. The pound fell in value against many other foreign currencies on June 24 when the referendum result was announced and fell again in the beginning of October, following further announcements about Brexit.”
How the Value of the Pound Compares to its Value on the Day the Date
That the “Brexit” Referendum was Announced
January 2016 to October 2016
“Since the referendum there have been falls in demand for the pound influenced by:
—A cut in interest rates–all else being equal, this could cause investors to move their money into other countries that may pay them a higher return
—Expectations from some commentators for lower growth and higher inflation in the UK – which could make investing here less attractive
“But what does this mean for people in the UK? If you’ve been on an overseas holiday this year you will have probably noticed that your money didn’t go as far as it may have done in the past, but, aside from this, how else could the fall in the pound affect the UK economy and therefore, (UK residents)?”
A Fall in the Value of the Pound Will Increase the Price of Goods and Services Imported into the UK: “In recent weeks there have been reports of iPhones, Microsoft Office and even model trains going up in price as a result of the fall in the pound.
“Even so, it is difficult to predict how changes in the value of the pound will feed through to the overall price level. There are many factors that could delay the effect (such as supermarkets buying stock in advance) and some businesses may choose to absorb the higher costs rather than pass them onto consumers.
“In the most recent data we published, inflation (as measured by the Consumer Prices Index) rose by 1.0 percent in the year to September 2016. However, inflation has been on an upward trend since late-2015 and when analyzing the cause of this month’s rise, (ONS) Head of Inflation Mike Prestwood said: ‘There is no explicit evidence the pound is pushing up the prices of everyday consumer goods.’ ”
UK Headline Rate of Inflation (as Measured by the Consumer Prices Index),
January 2008 to May 2016 (12 month percentage change)
Will there be More Visitors to the UK and a Rise in the Staycation? “Nothing yet suggests that ‘staycations’ have risen in popularity. The number of UK residents travelling abroad has continued to rise in line with the trend seen since the economic downturn in 2008. This may be because there is no evidence (at this stage), to show a fall in the pound has had an effect on air fares or the prices of package holidays.”
Source: ONS Travel Trends
Finally, the following graph shows the value of the UK pound vs. the U.S. dollar from Nov. 1, 2015 to Nov. 1, 2016.
WTM Countdown II—Tui Launches European “Power Brand” Campaign
Next week’s World Travel Market (WTM) in London will mark the first showing during a major tour and travel industry function of what has been described as a “TUI Power Brand” across Europe, marking the elimination of Tui’s national brands throughout continental Europe, with the sun setting by next year’s WTM of the UK’s venerable Thomson and First Choice brands—the last two operators not yet folded into the single brand.
Tui—it is the largest travel company in Europe—announced in May 2015 that it was going to consolidate the national brands that it owned into one brand. At the time, Tui’s CEO, Fritz Joussen, said the goal of the “power brand” was to offer a harmonized brand experience to customers of the integrated travel group.
The process started in September 2015 when the Dutch brand Arke was replaced by Tui. Shortly thereafter, the Belgian brand Jetair was phased out. And in France, the company introduced the Tui brand before other national brands subsequentlyexperienced the same treatment.
In related actions taken this year, the company sold off Hotelbeds as well as its 50 or so specialist operators.
And then, last month, Tui began its first Europe-wide advertising campaign for the repositioned Tui brand with a mix of TV, digital, print and other advertising measures. The campaign features a wide range of people in different holiday situations, based on global travel and lifestyle trends. It launched in Belgium and will continue in November in Sweden, Finland, Denmark and Norway in November 2016, followed by the Netherlands and France. And at the end of December 2016, it will be launched in Germany. In the UK and Ireland, brand migration from Thomson to Tui will take place next year.
Thomson is one of the UK’s older travel companies. Originally named Thomson Tour Operations (TTO), and renamed in 1997, was founded in 1965 as part of the Thomson Travel Group following the acquisition of four tour operators, Skytours, Riviera, Luxitours, Gaytours and the airline Britannia Airways by Baron Roy Thomson (1894-1976). Tui acquired the operator in 2002.
First Choice was founded in 1973 as Owners Abroad, changing its name, following other acquisitions, to First Choice. It then merged with TUI AG in 2007 to create TUI Travel, with the First Choice brand still operating.
WTM Countdown III … Is a “Perfect Storm” on the Way?
Holiday bookings for the just concluded half-term breaks for most UK schools (the break took place Oct. 24-28) were stable, according to results of the Travelzoo® Autumn 2016 Travel Trends Survey.
Said Richard Singer, president, Europe, for Travelzoo, “Speaking to the many travel companies Travelzoo works with, we know October half-term bookings have been fairly stable. However there is definitely concern in the market about Christmas and February half term, where we expect to see the true impact of Brexit and other global events.”
Familiar holiday hotspots such as Spain and France continue to be the favored destinations in spite of the weakened pound, the reported noted, with Spain continuing to be the top overseas destination this half term–with the Canaries in particular performing strongly with the British outbound leisure traveler. Other key trends from the survey show the growing popularity of long-haul holidays, with Canada and Australia named joint second along with France as the most popular destinations.
“However,” said Singer, “there is definitely concern in the market about Christmas and February half term, where we expect to see the true impact of Brexit and other global events. Highlighted results of the survey follow.
Singer was less positive about the outlook beyond the immediate future, saying, “As we approach the last few months of 2016, we can see that there are many factors impacting the desire to travel to what, just two years ago, were some of the top autumn and winter destinations. The situation right now could be described as a perfect storm. We have increased pressure on the price of European holidays, caused by the falling value of the pound, combined with two of the key affordable destinations (Sharm el Sheikh and Tunisia) continuing to be off the menu for British holidaymakers. Looking outside Europe, destinations popular with Britons continue to suffer from the impact of Zika virus.”
I Chat, You Chat We all Chat for WeChat
International tourism marketing professionals who need to build their digital skills in order to sell better and sell more—especially to China, the world’s largest outbound source market—will have the opportunity to do just that at the upcoming International Digital Day, which convenes on the first day of the NAJ Group’s RTO Summit Orlando, Nov. 15-16 at the B Resort in Orlando.
Speaking on the subject—in person, not digitally—will be David Becker, CEO of Attract China, a company with offices in both the USA and China that works with U.S. businesses seeking to tap into the Chinese market, will focus on how to expand their business through the use of WeChat.
“The sheer volume of people who communicate, research travel and make bookings through the WeChat app is staggering,” explains Jake Steinman, CEO of the NAJ Group, pointing out that WeChat, which is loosely compared to Facebook, which is not available in China, has 810 million users—more than two-and-half-times the entire population of the United States.
WeChat, which is owned by the Shenzen-based conglomerate Tencent Holdings Ltd., has spread to the point that it has some 200 million users outside China, although most of its activity originates in the country. “Some U.S. destinations and hotels are beginning to use the social media site, but it is still a little-used medium by U.S. travel suppliers,” said Steinman, adding, “Its potential is enormous.”
Becker’s presentation is just a part of the full International Digital Day Program. Following is the complete schedule for International Digital Day. A limited number of registration slots are still available. For more information, visit: http://www.rtosummit.com/rto-summit-mice/rto-summit-mice-supplier-fees-registration-policy/
Tuesday, Nov. 15, 2016:
RTO Summit Orlando “International Digital Day”
Online media marketing ideas for International Tour and Travel Professionals.
In Partnership with Destination Academy by TripAdvisor (DATA)
9:00-9:30 am: How We Use Online Tools to Generate Demand to Tour Operators? While relationships with buyers continue to be important, there are new online tools and tactics that can be “bolted on” to help drive demand to tour operators’ websites in a measureable way. Presenter: Florian Herrmann, CEO, HMS-Global
9:30-10:00 am: Q: Where’s the Best Place to Hide a Dead Body? A: The Second page of Google? How to Use Google Predictive Analytics to Forecast International Intent to Travel to Specific Destinations from a Variety of Source Countries. Presenter: Laszlo Horvath, CEO, Active Media. Horvath is a worldwide authority on international Search Marketing techniques and will demonstrate the process in real time.
10:00-10:25 am: Key Travel Trends from UK, Germany and France: Our partners at TripAdvisor will be releasing the most recent version of their European Travel Monitor research including how inbound hotel bookings have been affected by Brexit and the Euro. Presenter: Steven Paganelli, Head of Destination Marketing and Latin America, TripAdvisor
10:25-10:45 am: Should you use YouTube and Facebook Videos to Market to International Audiences. The Role of YouTube and Facebook has grown l to two major media channels that are ideal for converting sales. With a sharp rise in search for travel content, management of a channels and quality video content allow you to create, own and control video that can easily be presented in multiple languages.
Presenter: Robyn Levin, CEO, R Levin Marketing
10:45-11:00 am: Tricks of the Trade Part 1: Tricks and Tips to help traditional tourism sales professionals use the latest digital tools to access new media in key overseas markets. How tour and travel sales professionals can work with media, bloggers and influencers at international trade shows.
11:00-11:10 am: Tricks of the Trade Part 2: What Do You Do When You’re Approached to Buy Advertising at Trade Shows. Presenter: Susan Wilson, President, Susan Wilson Marketing |TravMedia Brand Ambassador, who has over a decade of experience conducting international outreach for tourism DMOs and attractions and whose current and former clients include Grand Canyon National Park Lodges, CityPASS, Westfield Shopping Centers, TravMedia, Tuolumne County/Yosemite.
11:10-11:30 am: Coffee Break sponsored by TourOperatorLand.com
11:30-11:50 am: How to Increase your Website and Social Media Traffic from key International Markets by understanding the media landscape. Presenter: Frank Vertolli, Co-founder of Net Conversion which he founded in 2007 with long-time colleague Ryan Fitzgerald. Under their travel industry leadership and experience, Net Conversion provides results-oriented paid digital marketing and comprehensive analytics services to a focused list of long-term, primarily Travel & Hospitality clients including Universal Studios. Blue Man Group, the Orlando Magic and Nassau Paradise Island.
11:50-12:10 pm: The Power of TripAdvisor for International Online Marketing. More than a review site, TripAdvisor has data-driven options that can help international inbound travel marketers isolate targeted source countries for tactical advertising programs that are surprisingly affordable. Presenter: Steven Paganelli, Head of Destination Marketing and Latin America, TripAdvisor
12:10-1:50 pm: Enjoy Lunch on Own
1:50-2:10 pm: I Chat, You Chat We all Chat for We Chat. How tourism professionals can use the power of We Chat, a Chinese App with 810 million users that is a cross between What’s App, Twitter and Tinder. Presenter: David Becker, CEO, Attract China.
2:10-3:10 pm: How will Brexit, the Strong US Dollar, Brazil’s bumpy economy and Terrorism affect international arrivals in 2017-18. A panel of receptive operators discuss the exchange rate’s impact for 2H 2016 and their insights beyond. Moderator:Florian Herrmann, NAJ Group; Invited tour operators: Uri Argov, CEO, Tourico Holidays (i); Jay Santos, Managing Director USA,TrendTravel USA; Pabs Raghava, CEO, Tours Limited (i); Gisa Kuserow Hansen, GM Florida, AlliedTPro (i)
3:15-3:30 pm: Coffee Break sponsored by TourOperatorLand.com
3:30-4:30 pm: Collaborative Product Development Ideation Roundtables. Attendees will be divided into roundtables, each of which will feature product development discussions among participants and the receptive assigned to that table. Receptives will then be asked to rotate to a different roundtable after 30 minutes. A facilitator from NAJ will be designated for each roundtable.
4:30-5:30 pm: 3-Minute MICE Presentations by Suppliers. (For suppliers who signed up for this feature.)
Despite Growth of FITs, China has “nearly bottomless reservoir of first-time travelers” for Groups
A new Citi report indicates that, even though travelers in China are shifting from group travel to personalized travel, the number of new and potential travelers in the nation of more than 1.3 billion people is so large that there will be an abundant supply of first-time travelers willing to travel in groups internationally for some time to come. The Citi report, which covers both domestic and international travel—short-haul as well as long-haul—is filled with useful data for the U.S. travel trade interested in the Chinese market. Following are some of its highlights, as well as observations on the report:
—Mass tour groups are becoming less popular for domestic tourists, as demand continues to grow for more personalized trips.
—As disposable incomes grow and consumers get more destinations under their belts, Chinese travelers are tending to move towards customized experiences.
—More than nine out of 10 domestic tourists last year opted to travel independently, rather than taking a tour, a proportion that has been slowly moving upwards.
—“Chinese travel has entered a stage of leisure travel, from sightseeing travel,” said Lydia Ling, Citi’s vice president, equity research, consumer sector, who prepared the report, adding “Standardized group tours cannot satisfy rising demand for depth, personalization and local experiences by increasingly experienced Chinese travelers.”
—Chinese people in their 20s, and those over 50, have been the key drivers behind China’s booming tourism sector, Citi found, with a 17 per cent compound annual growth rate for outbound.
—Outbound tourism by elderly Chinese grew by a whopping 217 per cent last year, faster than domestic tourism’s 95 per cent.
—Mainlanders now make an average of three trips a year, and by 2020 that number is forecast to grow to six.
—Travelers were motivated by added freedom in how their time is managed and a desire for more in-depth experiences, and this trend should increase, thanks to a wider range of customized products and as more become seasoned travelers.
—But the individualized travel trend doesn’t mean tourists want to make things difficult for themselves. Instead, there’s a rising preference for one-stop-shop platforms such as Ctrip that can help travelers book flights, choose hotels, and arrange local transport.
—The trend of people travelling independently overseas has been growing—but so has the number of people traveling in a group, Hunter Williams, a partner at the international management consultant firm Oliver Wyman, told the South China Morning Post. (Headquartered in New York, the firm also has offices in Beijing, Shanghai and Hong Kong.)
—“Both groups are growing, and there’s still a nearly bottomless reservoir of first-time travelers in China,” Williams said, noting that those who hadn’t traveled before were more likely to opt for group travel.
—Group travel internationally will continue to be a significant segment for a while yet, and Williams didn’t expect domestic group travel to disappear entirely.
—A dissatisfaction with over-commercialized tours that promoted regular shopping stops, and the growing ease of doing your own travel research were two other reasons Chinese tourists might be opting to go it alone, he said.
—“The split between the group and independent travelers [overseas] is likely to remain fairly balanced as travelers gain experience and greater independence, at the same time as numerous newcomers begin traveling, often in groups,” said Williams.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Gisel Vidals has a new job at Big Bus Tours. She recently became head of global sales. Previously, she was head of national trade sales USA/head of sales & marketing, New York City. Vidals joined Big Bus Tours in the summer of 2014. Before that move, she had served in senior sales positions at Skyline Sightseeing NYC, Super Shuttle and Liberty Helicopter.
Amsterdam-based Travix, a global online travel company operating in 29 countries from offices in the Netherlands, the USA, Germany, India and Singapore, has announced the appointment of Rick van der Wurf as sales director Europe, responsible for markets in Germany, Switzerland, Austria, France, Spain, Italy, the UK and Ireland for the online sale of group tickets.
Travix also announced the appointment of Gulce Karsli as a commercial director for France, Spain and Italy. Karsli, who has been with Travix for two years, began her career with the company as a market analyst
The Monterey (Calif.) CVB has appointed Mark McMinn as the new vice president of sales. Prior to his appointment, McMinn, a 25-year veteran of the tour and travel industry, was the director of sales and destination services at Team San Jose where he led a team of group, leisure, and catering and services professionals. McMinn has also worked with Marriott, Wyndham and Doubletree hotel brands as well as the Detroit and Tempe DMOs.
Jeff Poole has joined Visit Spokane in the newly created position of senior director of sales and national accounts, Mid Atlantic and Eastern Region. A veteran of more than 30 years in the tour and travel industry, Poole’s CV includes tenures in senior positions at the Los Angeles Convention & Tourism Board, Omni Hotels and the Washington Hilton Hotel & Towers.
In the UK, Andrea Clayton-Norris has been named business development director at AffordableXtras, a new division of Affordable Car Hire. Previously, Clayton-Norris had worked for a competitor, Holiday Extras, for more than 20 years, serving in number of roles over 21 years, including head of partnerships, looking after key accounts such as Thomas Cook and TUI. She left Holiday Extras a year ago to join an insurance broker outside the industry but said she missed the travel industry.