The German travel trade publication, fvw, recently interviewed Jake Steinman, founder and CEO of the NAJ Group, which publishes the INBOUND Report, for a feature on U.S. receptive tour operators (See above). Following is a translation of the Q&A session.
FVW: How would you characterize the receptive tour operator market in the US?
Jake Steinman: Healthy but fragile because of these factors: a.With Tourico and GTA consolidating into Hotelbeds new booking companies are entering the market from Europe based on the hope that no one wants to work with a monopoly. So we now have G2, World2Meet, OTS Globe as new booking companies who have hired former Tourico and GTA contracting staff to build product. B.Meanwhile, several of those who were part of downsizing over the past three years have formed their own companies focusing on groups. Operating out of their apartments or lower rent areas, they leverage the trusted relationships they had with overseas buyers and suppliers built over the years to form new companies. So the number of small companies have grown. c. Also, in recent years, RTO’s—with their international contacts and contracts with suppliers have become DMC’s for international MICE and incentive groups. d. And finally, suppliers and DMO’s are realizing that the RTO’s represent bottom of the b2b sales funnel—or actual point of sale– as operators that cannot provide volume necessary to get favorable rates are buying through the RTO channel.
FVW: How do smaller receptives position themselves successfully against the “big boys“such as ATI, New World Travel or Hotelbeds?
JS: They operate either in regional niches, or they specialize in a specific areas of expertise, or they work with source countries where they have deep historical relationships. Ten years ago international operators worked with one RTO, today many have contracts with between 6-8 RTOs to ensure availability and/or specific services or regional knowledge. Additionally, smaller international operators feel more comfortable doing business with companies their own size.
FVW: Inbound travel to the US has been down for 2 years now – how does that effect smaller incoming agencies?
JS: While business is down they are in some cases reducing staff, while others diversify into new source countries, new niche markets or even creating outbound divisions. Also, the smaller operators, some of whom operate from their kitchen tables, are working with very low fixed overhead.
FVW:What does TourOperatorLand.com offer receptives to make their business easier?
JS:In addition to over 100 itineraries that are auto-translated into 60 languages, touroperatorland.com has built many new tools specifically requested by travel buyers including: 3000 royalty-free high resolution photos for over 200 US destinations that have been curated and are constantly updated. This year we also added a g
Group Dining page, dining that allows them to book group dining four different ways and we have built a Receptivefinder that enables international buyers to search for RTO’s by languages spoken in their office or by destination. They can also find marketing tools such as videos as well as the destination and attraction contacts.
FVW:What’s the main advantage of smaller inbound operators in comparison to major receptives?
JS: They are more nimble and flexible and are more likely to offer personalized, more attentive service like their lives depend on it because in a way, it does.
FVW: Are there other challengers besides the traditional receptives, e.g. the large online travel agencies (OTAs)?
JS: The biggest challenges are: the fact that they no longer can compete for the best deals for hotel inventory (in some cases they need to buy from their bed bank competitors) for FIT’s, which comprise upwards of 80 percent of the inbound travelers; they also complete for group business quotes with chain hotel’s GSAs or overseas corporate sales staff. Additionally, the big bed banks now compete with Expedia’s new wholesaler division which offers over 700,000 hotels.
FVW: Generally spoken, how do smaller receptives keep up with the high speed of digitalization?
JS: The smaller ones can’t really compete for FIT’s market as they cannot afford to invest in enterprise booking technology, but there are now several tech providers that are beginning to offer pay-as-you-go solutions with smaller investments. There also have access to “Channel Managers,” technology intermediaries that automate independent hotel properties and attractions using a transactional payment model.
FVW: Is this a pretty much stable market, or do you see a lot of start-ups. mergers and bankruptcies?
JS: The last one to close their doors was CTN, which happened in late 2016, but many more have opened up as the barriers to entry are quite low if one plans to focus on group business.
FVW: Are there any major challenges for the inbound industry, or do you see any coming up in the near future?
JS:Trump’s travel ban and other actions seems to have dampened enthusiasm for travel to the US from almost all of Western Europe. The positive aspects include more baby boomers retiring who want to travel to the US and Millennials are more DIY than ever and now have new sharing economy tools such as Evanoes and High Guides (China) that can open up many second and third tier destinations than ever before.
FVW: Do you have any recommendation for me – a US receptive with a unique product, an innovative idea or a great success story?
JS: Regional specialists: Rocky Mountain Holiday Tours (Western USA), and Rey Royal (South); TourMappers (began in New England and now expanded their product North America wide with innovative self-driving product- (Julie Katz); TeamAmerica (very innovative with offering a variety of product; Bonotel (upscale and the CEO, Faisal Sublaban, has become a social media maven supplying hotels with international social media marketing through his “Hotelboss” persona; America and Beyond, (Yves Fore) former AlliedTPro/Tourico/ATI groups person who left Tourico three years ago and struck out on his own.