IPW Denver Report —Part 1
By Jake Steinman, Editor in Chief
The sun wasn’t the only thing shining at IPW last week. Denver and the entire state of Colorado were a refreshing change from the familiar cast of destinations that have hosted the event before and it was clear that the city and region had a great deal to offer. If we wore hats, we would take them off to Jane Buck, Lisa Breuning and the entire tour and travel team at Visit Denver and Colorado Tourism for staging a truly spectacular event.
From conversations with over 40 suppliers, operators, media and receptives, the general consensus seemed to be that the industry has recovered from its own strain of PTSD (Post Trump Stress Disorder) and buyers seemed resigned that our political environment isn’t going to change anytime soon, and they need to focus on new product for their customer base.
There were 45 private events competing for tour operators on Tuesday night. Gone are the days of the glitzy gatherings, when San Francisco would invest over $400,000 for its after-party, which featured an elaborate security system that involved, through various different years, bouncers, secret codes, apps and queues that rivaled a TSA security line on a Monday morning—with a Studio 54 vibe. This year Tuesday night hosts were hustling for buyers, media and even extending invitations to industry colleagues indiscriminately in order to avoid the ignominy of looking unpopular.
Many experienced the Rocky Mountain High for the first time: IPW Denver was the first time the event has been hosted in state that has legalized marijuana and reports abounded of both operators and suppliers appearing at events and even at appointments with glassy-eyed stares and unexplained pangs of hunger as they trolled booths for complimentary snacks or candy.
What follows are observations, trends and tidbits from the trade show floor.
Will Melania Trump be the face of travel promotion to the USA? Noel Irwin Hentchel, CEO of AmericanTours International and one of the newest Brand USA board members, has offered to use her connections to the Trump family which, according to comments during an on-stage interview conducted at the RTO Summit West this past February, go back decades. Her support of Trump during the campaign, she said, was because she felt, as a hotelier and businessman, he would be good for the travel industry. As the first receptive operator invited to be part of Brand USA’s board of directors, she will surely be a forceful advocate for programs that will benefit international tour operators. She comes with a willingness not only to engage her political connections in a way that no one else had, but also with an out-of-the-box mindset towards promotion.
Is Brand USA developing its own Media Outlets ? Brand USA seems to be nudging into the media business with Go USA TV, a channel to be available on Over the Top (Roku, Apple TV, etc.) set box TVs, where it plans to distribute the stockpile of video assets they’ve accumulated over the last five years from industry partners. Its ability to achieve distribution through international markets and measure viewership will determine Brand USA’s ultimate success, but it is certainly a boon for their partners who’ve invested in multi-language content over the years.
Also laudable is Brand USA’s industry education initiatives to work with countries like China, where visa rejections have skyrocketed, to train tour operators and travel agents about properly preparing applications for their clients traveling to the U.S.
Receptive Operators Moving into Thought Leadership marketing. While Faisal Sublaban, CEO of Bonotel Exclusive Travel, became the first receptive operator to spend heavily on social media marketing with his “Hotelboss” persona dispensing pearls of business wisdom on LinkedIn and offering his hotels nearly $1 million in brand promotion through social media in key international markets. Meanwhile, Hotelbeds Group, perhaps in a prelude to a public offering in the future, has developed a frisky blog focusing on the cities hosting trade shows. The blog has produced stories such as “WTM Latin America: Has the future finally arrived for Brazil?” or “What type of traveler has time to attend all of the travel industry’s many conferences?”
18 Professional Sports Teams Suit up for IPW. For the first time ever eighteen professional sports teams covering baseball (7 teams), football (6), basketball (2) and hockey (1) exhibited at IPW seeking international visitors to fill empty seats and buy tours of their parks. Baseball, with over 160 regular season games, has plenty of capacity, especially when teams are out of playoff contention, and promoting the Great American Pastime could be a viable new product category if someone could explain to them the intricacies of the infield fly rule.
Airfare Wars Driving New U.S. Arrivals.
- According to Official Airline Guide, international enplanements to the USA totaled 5 million in 2017.
- Tourism from Australia is growing for the South and Midwest due to increased air lift and lower fares to Chicago and Dallas/ Ft. Worth.
- The collapse of low cost carrier Monarch Airlines last October may have left 110,000 passengers stranded in beach destinations throughout Europe, but Florida destinations noted a surge in UK visitor bookings, partially because there are fewer low cost air options rendering Florida more competitive.
- Iceland’s WOW airlines now offers one-stop service from Europe to 13 US destinations for $350.
- Citing weak demand, American Airlines has slashed airfares from both Frankfurt and Munich in Germany, as well as several Latin America destinations.
UK Tour Operators Worry new European Privacy Regulations will severely impact sales.Several UK tour operators that have amassed extensive direct mail e-mail lists via years of sweepstakes promotions that offer free trips, expressed real concern the new GDPR (General Data Protection Regulation) privacy regulations will decimate their e-mail marketing capabilities. One operator told INBOUND that, as they interpreted the rules, any consumer contact-obtained from contests now had to opt-in to provide express permission to receive further e-mails from the company. Of the 300,000 e-mail contacts to which opt-in requests were sent, only 17 opted in to receive further promotional contact from the company.
Quick Market Notes …
Argentina: Tour operators from Argentina were seeking additional deals in Denver as the government announced another 25 percent currency devaluation two weeks before the show. On the plus side, marketing and travel for missions are now extremely affordable.
Germany: Germans are reluctant to travel to the U.S. this year because the general feeling is they can’t support our politics of the current administration. Especially onerous, was the fact that within 24 hours of being sworn in as the new Ambassador to Germany, Richard Grenell, a former Fox News commentator, made the situation even worse by threatening German business to immediately cease doing business with Iran or else face the consequences with US trade.
While German Retailers Enjoy a Boom, Some Tour Operators Say USA Business is Going Bust
While the latest monthly Travel Insights by the Nuremberg market research firm GfK (Gesellschaft für Konsumforschung, or Society for Consumer Research) tells us that April generated the highest monthly growth for summer bookings so far this year, major German tour operators who attended last week’s IPW in Denver indicated that Visit USA business has been negative-to-flat, with a few optimistic
According to the German travel trade publication fvw, the Travel Insights reports that, overall, sales revenues for holidays between May and October 2018 were 15 percent ahead of the same period last year, and that 75 percent of summer 2017 revenues have already been realized.
At the same time, fvw’s interviews with German tour operators in Denver for IPW showed that the 2018 is proving to be a disappointing year—despite the fact that the Euro is about 4.5 percent higher against the U.S. dollar from the time of last year’s IPW in Washington, D.C. and this year’s event in Denver. The following come from fvw:
—At ITB Berlin in March, U.S. tourism officials were hopeful of an improvement in 2018, but the country is facing another difficult year on the German travel market, tour operators told fvw. Large tour operators and smaller specialists alike have varying sales trends for the country as a whole and for different regions, including lower bookings for Florida but good demand for California and Hawaii.
—DER Touristik has a double-digit drop in US bookings. “Unfortunately, it is a very difficult USA year. We have a double-digit drop compared to last year,” said Per Illian, product manager. “Florida is unfortunately doing worse than average. This is due to the aftermath of Hurricane Irma and the loss of Air Berlin.”
—From TUI product manager Robin Brückner: “The bookings for North America cannot yet match the very strong previous year. However, we are optimistic that they will still rise. Local costs are favorable this year due to the very good exchange rate, which benefits touring guests and campervan holidaymakers above all.”
—Thomas Cook‘s Gerrit Seefeld: “Demand is somewhat reserved, and bookings have come in fairly late. Hawaii is very popular in summer and winter, and New York City and the national parks are stable. Florida is still subdued in summer, but has already recovered for winter 2018/19. Prices are quite stable compared to last year, as the US dollar is still quite strong and hotel prices have remained almost unchanged.”
—FTI product manager Fabio Negro: “The USA is well booked, depending on the destination, and we can report strong growth for the last four weeks … Hawaii and California are up, Las Vegas even in a high double-digit range. Florida still has some catching up to do due to hurricanes and the Air Berlin insolvency. Nevertheless, the demand for campers, rental cars and bikes is going very well.”
—Tilo Krause-Dünow, owner of Canusa Touristik: “The USA has recorded double-digit growth since January, meaning there is only a very slight single-digit year-on-year decline …Ski USA was weak, we’re starting to recover with Florida, Hawaii is strong, just like California, but we’re behind for Alaska.”
—Timo Kohlenberg, president and CEO of America Unlimited: “We have recorded a 5% increase in sales and are very positive about the destination’s development … The ‘Trump effect’ of early 2017 is no longer noticeable.”
—Pia Hambrock, product/marketing manager for CRD International:“The USA is recovering only slowly from a relatively weak year 2017, although the US dollar has weakened again somewhat so that travel to the USA is no longer quite as expensive. Our customers are still being negatively influenced by the political mood in the USA, an increasing isolation from international goals in climate and environmental protection, a protectionist economic policy and the goals of an ‘America First’ agenda.”
With its Size, Growth and Strength, Could Hotelbeds be Headed for an IPO?
On the weekend that IPW opened in Denver, Hotelbeds issued a report showing that the company that used to belong to TUI before it was acquired two years ago by the London-based private equity group Cinven and the Canada Pension Plan Investment Board in 2016 for €1.65 billion ($1.92 billion) has grown strong enough that it could be a candidate for an Initial Public Offering (IPO) to investors.
Hotelbeds’ executive chairman Joan Vilà told Travel Weekly UK that the company’s focus was on growing its business and completing the integration of GTA and Tourico Holidays—two companies that it acquired in the first half of last year—current shareholders are likely to seek a return on their investment, and announcement of an intention to float could be an option.
“In three years they may like to sell. I think we are a perfect business for an IPO (Initial Public Offering of shares). I think there’s a big chance that this might happen,” he said, adding that, despite Hotelbeds’ considerable scale, it still had significant scope to grow organically as it only has around a 14 percent market share. As market leader it will grow faster than its rivals and be able to take more market share, Vilà told TW.
Asked by the publication if he saw Hotelbeds driving further consolidation in the industry, he replied, “At this moment in time our priority is clearly on the integration because our teams really want to be working in the new organization. We will be looking at similar companies to ours with B2B distribution and also some companies that are complementary to us.”
While Vila was making waves with remarks from the company’s headquarters in Palma de Mallorca, Spain, the company also issued a news released timed to the opening of IPW in Denver, boasting of its “success story in the United States.”
“As a source market the United States has now become the group’s second largest market worldwide for hotel bookings in the wholesale channel, up from third place and overtaking Spain in the last year,” the statement said, adding that Hotelbeds “has continued its success in increasing inbound sales of hotel reservations of the United States as a destination. This has been achieved via leveraging the Group’s leading position as the largest B2B bedbank globally.”
It noted, for example, “in the 2017 calendar year the Group’s room nights for Chinese travelers into the U.S. market represented 2.3 percent of all Chinese inbound hotel bookings across the nation.”
Also, the Hotelbed Group’s Great Britain, South America, and the Middle East source markets have increased bookings to Denver by 25 percent, 40 percent, and 40 percent, respectively, during the current financial calendar year.
Said Lauren Volcheff, head of wholesale sales in the Americas at Hotelbeds Group: “We are really thrilled to confirm that the US source market has now become the number two for our Group globally in the wholesale channel, overtaking Spain – with Orlando, New York, Paris, Rome and London occupying the top slots, in descending order. This comes from strong sales growth generated by the addition of new clients, in particular, in the airline and point redemption space.”
With last year’s acquisition of GTA and Tourico, Hotelbeds’ product portfolio has now expanded to over 170,000 hotels and over 60,000 travel-selling clients now use the platform.
Operating mainly under the Hotelbeds, Bedsonline, Tourico Holidays and GTA brands, the company connects over 60,000 travel intermediaries across more than 185 source markets globally with travel providers in over 200 countries representing more than 170,000 hotels, 22,000 transfer routes and 16,000 activities.
IPW 2018 Photo Album: Part One
The first half of this year’s photo album highlights a special event for the NAJ Group, which publishes the INBOUND Report: an appreciation luncheon held for its TourOperatorland clients and receptive tour operators. Then, we work our way through the weekend and end with the opening night festivities at Denver’s Performing Arts Center. And, of course, there are other moments …
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Watch for PART TWO of IPW 2018 Photo Album next week.
Industry Scrambles to Help Victims as Ohio Student Tour Operator Files Bankruptcy
After a well-known student tour operator in northern Ohio recently closed its doors and declared bankruptcy, the tour and travel industry banded together to compensate victims and to convince parents and school boards that such an action was an isolated one and would not spread to other parts of the state. In addition, the operator has been tossed out of the Student and Youth Travel Association (SYTA).
The operator in question is Discovery Tours, which has offices in Mayfield Village, a small suburb (less than 4,000 people) just east of Cleveland. The company’s owner, Alfred Cipolletti was apparently resourceful enough in advance to set up another company, New Destination, last December. It appears that two other family members are involved with him.
It is not clear exactly how many school groups were affected by the action, as some chartered trips were scheduled for later dates, but published reports indicate that roughly 5,600 students across Ohio were impacted. None received more attention than the case of the more than 511 eighth-graders from Mentor. There, the Mentor Board of Education authorized reimbursing parents who paid nearly $455 apiece, nearly $235,000 in all, for a trip to Washington, D.C.—a popular destination for student groups during spring months.
It is unclear if other students or school districts affected by Discovery Tours’ shutdown were able to recover money they paid to the company, which declared bankruptcy on May 7. The company’s officials (mostly, members of the Cipolletti family) claimed in their filings in the bankruptcy case that they have about $1.4 million in assets but owe about $3.9 million.
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At a Glance: Montana
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HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
The U.S. Cultural & Heritage Tourism Marketing Council (USCHT) former Co-Founders Sheila Armstrong and Rosemary McCormick announce that Richard Peterson, president of San-Francisco-based S&P Consulting, based has purchased the organization. Peterson will serve as president & CEO of USCHT and publisher of The Cultural Traveler guide effective July 1, 2018. Peterson has more than thirty years of tourism industry expertise in executive leadership, marketing, sales and project management. As president & CEO of USCHT, he will continue to serve on the planning committee for ONE Travel Conference for Shopping, Dining and Cultural Tourism which is presented annually by Shop America Alliance.
Julie Calvert has been named president and CEO of the Cincinnati USA CVB. Calvert is actually returning to the bureau, where she held senior level positions for 15 years—from 2001 to 2015 , 46, was a senior executive at the convention and visitors bureau from 2001 through 2016. Since leaving the bureau, she was executive director of Source Sincinnati. Calvert succeeds Dan Lincoln, who retired last December after eight years in the position.
In the UK, the TUI Group has appointed Helen Caron as its new hotel purchasing director, replacing Garry Wilson who left the company after 21 years to take over as head of Easy Jet Holidays. Caron has responsibility for leading TUI Group’s commercial relationships with overseas third party hotel partners. She has been part of the TUI UK & I board since September 2015, as managing director of Thomson Cruises. She took on the additional responsibility of distribution in July 2016.
Peter Katz has been appointed global trade sales manager for the Leisure Pass Group. He joins the company from New York City & Company, where he was senior sales manager, tourism development. Katz was with NYC & Co. for more than 10 years.
Senior dnata Travel executives Andy Washington (left, chief executive of consumer facing brands in Europe) and Steve Barrass (senior vice president for new ventures/Europe) are leaving the company. A statement from dnata, based in Dubai and part of the Emirates Group, said Washington, is leaving “for personal reasons.” Barrass is leaving to “pursue other interests,” and will depart on July 3. Meanwhile, dnata Travel Europe B2B chief executive John Bevan, who joined the company at the end of 2017, will assume Washington’s responsibilities on an interim basis.
Managing directors of Attraction World and DayOutWithTheKids have traded jobs. Paul Stobbs (left) has returned to the role of managing director at Attraction World after spending the last two years integrating the attraction specialist’s subsidiary DayOutWithTheKids. Stobbs first joined Attraction World as managing director when the company was founded in 2006. Simon Applebaum (right), who had been managing director at Attraction World, has now taken the role of managing director at DayOutWithTheKids.
In Brazil, Gary Morrison is leaving his post as head of sales for Expedia to take over as CEO of Hostelworld. He replaces Feargal Mooney, who is leaving the company after 16 years—10 of them as CEO.
Copa Airlines has announced the appointment of Karina Bastos as its new corporate account executive. She will report to corporate manager Cassio Takano. Both are based in the company’s São Paulo office. Bastos has nearly 20 years experience in theindusry, having served in senior positions with Vasp, Varig, Carlson Wagonlit, Alitalia, Swiss and R11 Travel.
Happy Work Anniversaries:
Brandon Barnes for 18 years at Atlanta CVB
Cheryl Hargrove for four years at Georgia Department of Economic Development, Tourism Division.
Susan Seifried for 14 years at Visit Annapolis & Anne Arundel County, Maryland.
Michael Chapaloney for three years at the Pennsylvania Department of Community & Economic 
Development as executive director of tourism.
Tom Noonan for two years as president and CEO of the Austin Convention and Visitors Bureau.
Hakan Ugdur for seven years running Central Park Sightseeing
