As Managers are Jettisoned, a Restructured Hotelbeds Sells Division back to TUI
It’s what private equity firms do. Cinven, the London-based private equity firm which, along the Canada Pension Plan Investment Board, purchased Hotelbeds from TUI in April 2016 months ago, announced on March 28 that it had sold its receptive division, Destination Services, Intercruises & Port Services and Pacific World, back to TUI for €110 million ($135.5 million). The timing benefited Cinven/CPPIB as the euro has appreciated in value nearly nine percent since the investors first bought Hotelbeds and its component parts from Hannover, Germany-based TUI.
The destination management division was directed by Jordi Cerdó and had 150 offices around the world. It was a B2B provider of receptive services for tour operators that offered circuits and transfers in Europe, America, India, Indian Ocean and Asia-Pacific.
The move came as the restructuring of Hotelbeds following its acquisition last year of Tourico and GTA plays out midst reports of scores of employees losing their jobs, with reports indicating that Hotelbeds has dismissed up to 40 management-level staff after absorbing Tourico and GTA.
According to a report in the Mexican travel trade news site, REPORTUR, following the firing of the 40 managers Hotelbeds completed are structure of 350 second- and third-level management posts after several weeks analyzing each situation case-by-case and studying the needs of the company after the absorption of Tourico Holidays and GTA.
In a statement, Joan Vila, executive chairman of the Hotelbeds Group, said: “In many cases the increased size of our newly-combined business has meant that we have been able to appoint people into exciting and fulfilling new roles within our organization.
“However, sadly in some cases there have not been appropriate roles for every single person due to the strong talent pool available. The appointments followed a rigorous and robust review process, supported by external experts. Factors such as geography or new skill set requirements played a significant part in the difficult decisions taken. We recognise the contributions of these people and wish them all the best for the future.”
“The Mobile Phone is at the Core of E-Commerce in China”
While most delegates to the NAJ Group’s recent Active America China (AAC) Summit in Atlanta were already aware of the singular importance of mobile/digital marketing, they were not quite aware to hear Lian Liu tell them that operators and travel companies in China are beginning to forgo the website—deemed by nearly everyone to be the foundation of e-marketing—and interact with potential customers and clients using smartphone platforms, especially WeChat.
While Liu’s opening remark, “The mobile phone is at the core of e-commerce in China,” did not surprise the delegates who attended AAC, few had heard its dimensions described in the way that Liu, managing director of Hippo International, a globally connecting marketing firm and formerly a marketing executive at New York City & Company, presented it.
Some Dimensions—a Preface: One of the reasons that Chinese are more acclimated to smartphone use is that the generation(s) before today never really had access to desktop computers and towers or to large laptop computers. For most, the cell phone/smartphone was and is the only computer they have used. And to illustrate the breadth of use, consider WeChat. The WeChat app was released in 2011 by Tencent (China’s largest technology company) and has grown to the point that there are more than 900 million daily active users. The average number of messages sent on WeChat is near 40 billion.
Subscribers use WeChat to book travel, manicure appointments, to order meals and delivery of packages, to pay bills and … to chat—as many delegates were during AAC.
For traveler consumers from China, there is a tendency to go to the meta-search engines (Kayak, Skyscanner—which is owned by Ctrip—and Baidu) and to other sites; Ctrip is the dominant online travel agency.
The Chinese Traveler—a Statistical Palette: Liu showed AAC delegates a series of charts and tables that helped to assay the Chinese travel market. First presented were the following numbers:
—67 percent: the number of travelers surveyed who have traveled more than once in the past 12 months.
—55 percent: the percentage of travelers who name Japan as the most popular destination for China’s international travelers (followed by Hong Kong at 35 percent and South Korea at 27 percent).
—82 percent: the percentage of Chinese travelers who user their smartphones abroad.
—73 percent: the percentage of traveling Chinese smartphone users who make shopping-related searches.
—2.3: the average number of destinations visited by Chinese travelers
—$2,449: the average spend of outbound travelers from China’s Tier 2 cities, which have become the growth engine for international outbound tourists (vs. $2,330 spend from travelers from Tier 1 cities)
—220 million: the number of seniors in China, who now comprise a quarter (24 percent) of all Chinese outbound travelers.
The Chinese Traveler—Trends: The principal takeaway that one had from this part of Liu’s presentation was that there are definitely some substantive changes in the way in which the Chinese are traveling vs. the way they were traveling a decade ago. Some of Liu’s observations included the following”
—A now-established trend is that of student travelers to bring family members with them when they go to register for school (there are more students from China than from any other country now studying in the U.S.); families will often visit a student son, daughter or relative when they are attending school. The favorite destinations for students are Los Angeles, New York San Francisco, Miami and Boston,
—For China market researchers, it is now the era of big data, as China’s UnionPay (it now has 900 million card holders vs. 100 million Visa cardholders) has a treasure lode of spend data that is available, at a cost, to analyze.
—Millennials will drive 55 percent of expansion in China’s consumption spending over the next five years.
—FITs also have a growing appetite for a holistic experiential vacation and are willing to pay more to stay at upscale hotels and at high-end restaurants.
Changing Role of the Travel Agent: In just one year, from 2015 to 2016, data show that Chinese travelers are, more and more, planning their vacations on their own—with their smartphones—as shown by the following survey results. The following table helps to underscore Lu’s assertion that “the mobile phone is at the core of e-commerce in China.”
Curating for Operators and Agents (and Consumers): Nowadays, with tour operators and agents having joined consumers in displaying and/or searching for information on screen displays that are only 4-5½ inches, how does a travel seller curate content? Liu told delegates that there are four ways one can differentiate its product from that of other travel sites and WeChat displays:
- Curate with content uniqueness. She pointed a New York City client. She and her team studied all tour providers in the NYC area and added an exclamation point to its name, making its material makes the company stand out in searches.
- Curate the product. Travel sellers have to get to the essence of their product in as few words, characters or images as possible.
- Curate by consumer preferences. Does your research show what travel consumers want? Make your content trigger the move along the path to purchase (by consumer or wholesale travel buyers), using words and characters that research shows that they are interested in.
- Curate by brand. Have a brand that registers with consumers, operators and agents? Then make your content all about the brand.
Asked by one delegate how travel sellers make their business appointments at trade shows, Liu recommended that they present their information as a “gathering of services”—that is, showing the operator what you can do for the operator’s groups. And second, give your information a context: show how it configures into an itinerary and fits into a program that uses other products. Don’t promote just one product because no single product is really stands (or sells) alone.
Of “Mama Jane” … and other Notes from NAJ’s Active America China Summit
When one speaker last week asked an Active America China meeting room packed with travel suppliers for a report how many of them were attending their first AAC event, more than half of them raised their hands. Also, two-thirds of the attendees were from DMOs or tourism promotion offices, making clear some key realities about the market:
—There seems to be an almost inexhaustible supply of potential Chinese travelers who will be making long-haul trips to the USA in the foreseeable future, made possible by a steadily growing increase in the airlift between China and the United States.
—Further driving the increase is an official policy of the Chinese government is to encourage travel within and outside of the country in order to sustain its demand-driven economic growth
—The travel infrastructure is growing in dramatic numbers as more than 60 new airports are scheduled to be completed by 2021, raising the number of airports in mainland China from 206 to 272. This includes three in the major city of Shenzen (est. population is well over 10 million), just north of Hong Kong. More airports with more flights will increase connectivity to long-haul destinations.
“Crossing the River Alone” Midst an environment partially explained by the above, the buzz and back-and-forth at AAC, which was celebrating its 10th Anniversary in the city (Atlanta) where it was first staged, included some varied points of interest that INBOUND picked up during our conversations and coverage of the event:
—Out of nowhere, it seems, China is now a top market for many DMOs. Ron Kuhlman, vice president of tourism marketing and sales for the Virginia Beach CVB, told us that China is now the destination’s number three market, behind only Canada and the UK, but ahead of (in order) Germany, France and India. Interest in Virginia Beach began to kick into high gear about two years ago, added Kuhlman, who had been among the early pioneers in going after the market, positioning his destination as a place that arriving visitors could connect to from international flights and itineraries out of Washington Dulles Airport and other points of entry.
—The corps of red-shirted students and mostly young interns who did translating duties for the one-on-one business appointments at AAC were constantly busy—a reflection of the fact that, when it comes to the language barrier, many U.S. destinations still have work to do. For some, it has meant hiring Chinese-speaking staff or, at least, retaining someone on a regular basis to translate during sales calls and business meetings.
—Translating involves some perils, however, as one young man, who recently earned his MBA from the University of Illinois at Urbana-Champaign (which has about 3,000 students from China) and is interning at the Georgia Department of Economic Development in Atlanta, said “it was like walking across a river alone” when he got his first call to interpret for a buyer and seller. He seemed to enjoy the challenge, as well as Atlanta, which he preferred to northern Illinois and its cold winters.
—Several other student interpreters told us that they were not prepared to translate such words as “product” in the tour and travel sense, indicating that the word “product,” to them, means something tangible—something that might one cut with a knife. Another word combination that confused them, at first, was “receptive tour operator.” (It should be noted that the expression is sometimes confusing to Americans within the industry itself.)
“Mama Jane”—Personal Relationships Still Matter: As one speaker said, “What does say about the nature of our industry that we have someone we call ‘Mama Jane”?” Indeed. A venerable figure in the tour and travel industry “Mama” Jane Chang, who is especially well-known in southern California and had experienced an unwanted leave from the industry, had only recently become global account director, Asian market specialist, Millennium Hotels and Resorts—based in Los Angeles. “So great to have you back, Mama Jane,” INBOUND heard one AAC delegate to Chang as they passed in the lobby of the Hilton Atlanta.
A Look Back at Active America China 2018 in Atlanta – Part One
Here are some images from the 10th anniversary edition of the NAJ Group’s unique, boutique conference and business appointment program designed to serve the Chinese market. On Sunday, the first day of the three-day event, the program went from an afternoon of educational programs, including a “How to WeChat” session and an enjoyed an evening reception hosted by the Shops of Buckhead.
Monday morning featured a breakfast featuring the Atlanta and Georgia officials who worked to make this year’s Active America a success, as well as a morning program highlighted by a “smackdown” in which agencies that market to China were asked to explain and defend themselves.
(More images from Active America China in the next issue of INBOUND)
Say What? 14 Million International Visitors to US Face Social Media Screening
New Air Service
The end of March marks the beginning of the peak airline travel season (S18) and a number of carriers last month began new international services—some of which had been announced before. Some of the new routes include the following:
- Southwest Airlinesbegan new flights from Sacramento, to o San Jose del Cabo, Mexico; Fort Lauderdale to Aruba; Indianapolis to Cancún; and San Diego to Puerto Vallarta.
- Aer Lingus began its much=heralded non-stop service between Philadelphia International Airport and Dublin Airport on March 25, 2018. Service will be operated four times weekly from Dublin, which offers pre-clearance for U.S. Customs and Immigration.
- Also, on March 25, American Airlines began year-round, non-stop service between Zurich and Philadelphia International Airport.
- Hong Kong Airlinesbegan service on March 25 to from Hong Kong to San Francisco. This is the airline’s third destination in North America, following the successful launch of services to Vancouver and Los Angeles in 2017.
- Lufthansahas begun service from its Frankfurthub to San Diego.
- Norwegianhas introduced a route from London Gatwick Airport to Chicago O’Hare (ORD). The new service will operate daily.
- Spirit Airlineshas begun daily flights between Fort Lauderdaleand Guayaquil, Ecuador
- United Airlinesbegan flights between Denver and London HeathrowMarch 24, marking a return to the route for which has not served the connection since October 2010. This is currently the carrier’s only direct link to Europe from its Colorado hub.
(The above are from anna.aero and other sources)
Celebrating IPW 50 Years: What Was Your Most Memorable Moment?
As we head toward Denver, May 19th, and the 50th iteration of IPW—the most important event on the inbound tour and travel industry’s calendar—the INBOUND Report shares recollections of and about the event from those who have been a part of IPW (formerly Pow Wow) over the years.
This week, we feature two tour and travel industry professionals—each of whom attended more than 20 IPWs: Robert Graff, vice president, sales and marketing, Papillon group; and Audrey Bialas, director of sales, Visit Hershey & Harrisburg.
Robert Graff: “IPW? Oh my gosh, when I flash back, it’s to the days when we called it Pow Wow. I’ll never forget first getting involved in the industry, attending ipw, PowWow then, in Dallas (1988). They brought in Tony Orlando to perform. And here you have in a ballroom all guests sitting down there, all the various buyers and operators and Tony Orlando started singing ‘Tie a Yellow Ribbon.’ And every person sitting in the audience took their napkins and tied them together and you had over 700-800 napkins all tied up on every table, connecting every table there as he sang ‘Tie a Yellow Ribbon.’ And I thought ‘Wow, if this is my introduction into the industry, this is a part I really want to be tied to.’”
Audrey Bialas: “I’ve been to twenty, twenty-five—lot, and I think my most memorable moment was the White Party in Miami Beach. Everyone was dressed in white and we were on the sand when the sun setting and it was just one of those ‘wow’ moments.”
Some New York Eateries & Bars Now Have “Pay to Pee” Apps
As reported by the New York Post, restaurants and bars in New York City have developed new ways (and apps) to generate incremental revenue, including: an app that helps users connect with a place to go to the bathroom; a service that enables restaurants and hotel lobbies to rent out table-top “office space” during off-hours so that individuals can work with their laptops or notebooks; and another service that enables individuals passing through, or waiting to leave, the city a place to temporarily store their bags or luggage. Some providers are looking to realize thousands of dollars weekly or monthly by signing up to provide one or more with of the different services. One startup in the field offers commissions to tour operators, Airbnb hosts and hotels for suggesting its services to their guests. Read more here:
Panel of Receptive Operator CEOs Highlights First Day Program of RTO Summit East
At a Glance: New York City
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HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Luisa Mendoza has been named the first global director of tourism development for Brooklyn Sports & Entertainment where she will be responsible for representing and promoting primarily the NBA’s Brooklyn Nets, Barclays Center, NHL’s New York Islanders and more. She leaves her post as senior director, tourism market development, Latin America & USA Hispanic market for New York City & Company after three-and-a-half years with the organization.
Ingo Burmester has been appointed as Thomas Cook’s chief of the UK source market. He takes over from Chris Mottershead. Burmester is currently chief of Thomas Cook’s hotels and resorts business having joined the company in 2017. He’ll also continue in his role as chief of hotels and resorts for the time being. Chris Mottershead will focus on his group-wide role as chief of product and operations.Thomas Cook started its search for a new UK boss in February after Andrew Flintham’s surprise turnaround. Flintham was due to start his new role as managing director on March 1 having left his post at TUI, where he was commercial director, in October last year. But last month TUI named him as its new UK & Ireland managing director, following the departure of Nick Longman.
American Express has chosen one of its veteran executives, Audrey Hendley, as president of American Express Travel. Hendley’s appointment marks her return to American Express Travel where, earlier in her career, she served as vice president of marketing and strategic partnerships. With over two decades at American Express, she has served in multiple executive roles since 1992. Most recently, since 2015 she led American Express’ Global Commercial Payments and Consulting Services group as senior vice president and general manager.
Sven Schikarsky has been named to take over as head of capacity and revenue management at DER Touristik. He will be responsible for capacity planning and revenue management for all six brands: Dertour, ITS, Jahn Reisen, Meiers Weltreisen, ADAC Reisen and Travelix. Schikarsky was formerly with FTI where he had been Managing Director Tour Operating Package since 2015.
Richard Brodrecht, formerly head of flight procurement at Alltours, is moving to FTI to take over revenue and yield management for the main tour operator brand.
Okay Yilderim has been appointed as commercial director for Meeting Point, the group’s destination management company. He was formerly with Anex Tour and previously worked in Turkey and Russia.
Abercrombie & Kent has restructured its trade sales team as current UK sales manager Rachel Healey departs the operator. The role of Healey, who has been with the luxury operator for almost five years, will be geographically split in two to give each of its managers “a stronger focus with agents in their respective regions.” Healey will be taking up a new role in the river cruise sector. A&K has recently announced a new agent area of its website with assets for agents to use including a destination video, images for social media and digital versions of the print marketing materials.
DMC Brazil has announced the hiring of Anderson Boareto as new Incentive travel advisor. With 18 years of experience in the Tourism segment, with the last 10 years dedicated to incentive travel, Boareto has worked for companies such as Top Service, Case Imagine and Renase.
Ana Lucia Gama has been appointed by BWT Operadora as a new executive for its Porto Velho unit. Gama has 14 years of experience in the Tourism industry.