Trends & Insights from Visits to 52 Tour Operators in Seven Key European Countries
Stefan Merkl Schools Delegates to RTO Summit in Orlando on Current Trends: A long-time veteran of the tour and travel industry who heads up the Explore Marketing firm, which represents a number of DMOs and travel suppliers, Stefan Merkl shared with delegates to NAJ’s RTO Summit last week in Orlando insights gleaned from his meetings spread over four months with tour operators and OTAs in key European source markets for the U.S. inbound tour and travel industry.
The multilingual Merkl recently concluded a series of sales missions that took him to 7 countries, meeting with a total of 52 operators in Germany, Austria, Switzerland, The Netherlands, Belgium, France and the UK. Operators visited included: DER Touristik; Kuoni, Booking.com; fairflight.de; Jetset; TUI; USA Travel and Jan Doets (America Tours).
With occasional quotes included, INBOUND has digested is presentation in outline form. (For additional information, contact Merkl at [email protected].
- TREND: New flights have been launched between Europe and the U.S. by Aer Lingus, LEVEL, XL Airways France, IcelandAir, Primera Air, WOW, American Airlines, British Airways and United. During the same period, however, American Airlines cancelled flights serving Munich and Frankfurt; American Airlines dropped flights from Philadelphia to Glasgow, JFK to Dublin and Edinburgh, and Chicago to Manchester. Also, airberlin went out of business late in 2017, affecting the volume of flight routes available in the peak 2018 travel season.
- TRENDS: The top USA destinations for 2018 among the trade in Europe have been: Hawaii, California, Alaska, Nevada, and New York. Destinations that are the USA’s main competitors are Canada, Australia and South Africa. And Florida is facing some hurdles in its key source markets.
- TRENDS: Growth opportunities are presenting themselves through an increase in fly-drive options when visiting the USA, with some Europeans booking RVs as well as rental cars. Groups from high-end consumer segments are smaller up to 16 passengers), and there is a shift to booking direct. Maybe it’s part of a global shift: some established European operators are setting up shop in the USA, acting as their own receptives.
- TRENDS—Technology and OTAS:
—Sourcing done by OTAs now includes attractions and sightseeing tickets, with Expedia, Get Your Guide and Ceetiz active in this area.
—Acquisitions in this sector include the TUI Group’s purchase of Musement and Booking.com’s acquisition of Fareharbor.
—Technology is now providing tools for, and helping agents handle, tailor-made travel.
—XML and API connectivity for latest pricing and product availability reflect the trade’s need for real-time data.
—When it comes to promotion, OTAs have greater budgets for marketing and promotion. And one will find the OTAs engaged in competitive pricing.
- MARKET UPDATE—UK
—Operators reported a successful 2018
—The year got off to a slow start, and bookings came in later than usual.
—Bookings for 2019 are strong and are up year-on-year.
—However, Brexit negotiations continue to cloud the market.
—The contracting of Virgin Holidays has shifted to the UK.
—Expat Explore expands group series into the USA.
—Southhall Travel expands into the USA.
—Leisure Pass Group is introducing the LPOS system to the USA to allow DMOs to launch their own attraction passes.
—There is attraction contracting by the Thomas Cook Orlando office.
RTOs and Wholesalers frequently mentioned
—Hotelbeds, Bonotel, ATI, Destination America
- MARKET UPDATE—FRANCE
—2018 was described as a good year for France, with elections being over.
—The market still focuses heavily on group series for more mature travelers.
—Younger travelers come as FIT and use OTAs to make their own arrangements.
—For New York, clients tend to make their own arrangements, while for the West Cost, the help of tour operators is being requested more frequently.
—France is a very price sensitive market, with base packages being offered.
—Rise of B2B platforms such as Worldia, Amerigo and Marco Vasco.
RTOs and Wholesalers frequently mentioned:
—Go West Tours, New World Travel, Meting Point, Bonjour USA, Hotelbeds, Cali Fun, American Holidays, AmericanTours International, Ceetiz.
- MARKET UPDATE—ITALY
—This has been the best year ever for inbound traffic to the USA from Italy. Total visitation for Italian travelers to the U.S. surpassed 1 million for the first time in 2015, and then again in 2017. Through April of this year, according to the U.S. National Travel and Tourism Office, it was up more than 1 percent vs. 2017.
—It is the 4th largest source market from Europe, and 12th largest international market overall.
—It faces internal political and economic challenges that could result in market volatility.
—Attraction contracting with TUI’s Musement.
RTOs and Wholesalers frequently mentioned:
—TeamAmerica, Go West Tours, Gastaldi USA, Opentours.
(Merkl’s caution: “I think they’re going to face some challenges this year because it of economy was downgraded in terms of credit worthiness.”)
- MARKET UPDATE—BELGIUM
—A mature market with a heavy focus on FIT and fly-drive travel.
—There were changes beneficial to the industry made recently in laws regulating marketing; operators can re-introduce catalogs with pricing.
—TUI Belgium has introduced a new tool for tailor-made itineraries.
—Vayamundo is adding Florida as a destination.
—Company is working with TUI and Euram on furnishing their tailor-made tools.
RTOs and Wholesalers frequently mentioned:
—AmericanTours International, Hotelbeds, Travalco, American Ring, Rocky Mountain Holidays, AlliedTPro, Cali Fun.
- MARKET UPDATE—THE NETHERLANDS
—Operators seemed content with the performance of the U.S. as a destination.
—American Ring Travel is leaving the FIT space, and s focusing purely on groups.
—Travalco was mentioned repeatedly as one of the leading RTOs for FITs.
—“Wide open spaces” of the Western USA are popular among Dutch travelers.
—FTI just launched new product, and the market Is happy with it.
—Booking.com is starting to sell attractions.*
—When it comes to selling US, Booking said, Germany, UK and France form the top tier
—Booking.com says “vacation rentals are picking up in popularity, “because it’s all about the local experience.”
—Tiqets is a fairly new OTA for cultural experiences.
RTOs and Wholesalers
—Travalco, AmericanTours International, American Ring, AlliedTPro.
* Merkl said, “Booking.com is starting to sell attractions … In a meeting with them, they told us they’re five times the size of Expedia and they basically have 1.5 million room nights sold every 24 hours. To me, that’s pretty interesting.” Inbound Note: Of course, that probably doesn’t include Expedia’s other brands: Orbitz, Travelocity, Hotels.com and Hotwire, but there’s no doubt that Booking.com has a quantum advantage over Expedia from Europe where they were originally formed.
- MARKET UPDATE—GERMANY, SWITZERLAND/AUSTRIA
—Overall, numbers are almost flat compared to 2017.
—This year, there was a slow start before things started picking up again in July.
—Some operators were down 20 percent from the previous year until June.
—They’re now experiencing more last-minute bookings.
—There has been an increase in fly-drive.
—Coach tours are challenging, and slowly recovering.
—The coming year, 2019, looks promising. Forecast is 10 percent ahead of 2018.
—Travelers are using OTAs for travel experiences.
RTOs and Wholesalers
—New World Travel, Meeting Point, AmericanTours International, Rocky Mountain Holiday Tours, Tour Mappers, America 4 You, AlliedTPro.
Here are some action items for travel suppliers and DMO to take note of:
—Ensure that your offerings are contracted with key RTOs
—Have all your marketing collateral readily available, as well as clearly identify booking and cancellation procedures in order to simplify purchasing.
—Distribution is key … make sure you have e-ticket programs available.
—API/XML connectivity isn’t just important for hotels.
—Work with international tour operators on marketing your service.
—Education RTOs and wholesalers on ow you service fits group/FIT needs.
—Encourage your members to contract their properties with RTOs and OTAs.
—Ensure that your members have in place asset libraries to market their offerings.
—Educate trade buyers about how to integrate your destination with existing itineraries.
—Clearly identify unique selling points for your destination, and ways to support trade.
—Most print collateral for the 2019/20 season is done, so focus on online at this point.
From the German operator FTI: “A lot of CVBs want to do marketing campaigns with them, and they’re happy to do so. The problem is, if your members aren’t willing to contract their accommodations or travel experiences–or simply are not responsive—any kind of marketing campaign is not going to help you drive more numbers.
Say Cheese Please: NAJ’s RTO Summit Orlando Photo Gallery
INBOUND’s photographer was on hand for two days during last week’s RTO Summit in Orlando, where more than 50 receptive tour operator companies met and did business with U.S. travel suppliers. Most of the important companies in the business were on hand. We were able to get a many of those who were there to pause long enough to give us a smile. Following is a two-day sampler.
The Brazilian Roller Coaster Continues its Wild Ride
After the panel at NAJ’s RTO Summit last week in Kissimmee, Florida that discussed the outlook for South America’s largest overseas source market for inbound U.S. travel, one sensed that the roller coaster that is Brazil’s economy, as well as the performance of it, regardless of who was elected this past Sunday as the country’s new president, would continue.
(Editor’s note: this account was written just as Brazilians were prepared to go to the polls on Sunday, Oct. 28, in a runoff election pitting the two top challengers left from the first round of voting on Oct. 7th: The far-right Jair Bolsonaro and the left-of-center Fernando Haddad. Bolsonaro emerged as the victor and new president of Brazil.)
Although the nation’s economy began earlier this year to pull out of its worst economic recession in a century, its condition is fragile and the recovery is tentative, due in part to a massive buildup of government debt.
Perhaps the situation was best put by panelist Oswaldo Freitas, regional sales director-Latin America, TPI Global (a division of JTB, which is the U.S.-based ground operator for CVC groups) who said that, in the past several years, “We’ve had a good challenge politically, combined with a challenging economic situation. The current election that we’re having puts us in kind of a roller coaster right now.”
—the other panelists were Jay Santos, Orlando station manager, GOL airlines, and Tereza Reis, president, Personal RGE Tours—
Business this year has been good—so far—he told Summit delegates, characterizing the first half of 2018 as “good,” while the second half is “very challenging, but better than the first half.” He added, we’ve had a challenge politically, combined with the economic situation. It’s kind of a roller coaster that we’re in right now.
Reis agreed, it seemed, as she described a beleaguered national population that has lost confidence in itself. “The problem is getting confidence back,” she said, “back into its people …. confidence in spending—people are not buying homes, not buying cars, not buying anything.”
The nation’s people are so sharply divided at the moment, “as it is in the United States, that somebody could win by a single vote.” While not necessarily disagreeing with Reis, Santos said that “Brazil does deserve a kick in the butt” in order to “wake up” and get things moving again.
Among the panelists and in the coverage of the Brazilian election, there seemed to be a consensus that the administration of former president Luiz Inácio Lula da Silva (2003-2011) did much to grow the size of Brazil’s middle class, expanding the size of Brazil’s population that could afford international travel.
But now, the economic recession experienced by Brazil has left the government weakened, with insufficient resources to pay for the social programs launched by Lula da Silva, or the nation’s disproportionately large debt.
Complicating matters, suggested Freitas, is that “we’ve become so global that something that happens in Turkey can quickly affect everyone.”
As they discussed current hot-button issues in the Brazilian market, some familiar refrains were sounded.
—Santos said that his carrier, GOL, has been able to grow into its just-achieved position of the top airline in Brazil by being flexible in its approach. A budget carrier, it has no plans to encroach into the market segment served by its partner, Delta Air Lines. “You have to be (country) specific as to what you are doing. What we do in Brazil we cannot do in Mexico.”
—Reis pointed to the starchy relationship that receptive operators have with hotels. Hoteliers, she believed, don’t take operators seriously at times. “Sometimes, they take a week to respond to a request for a quote—if they respond. They don’t even both to send us a quote anymore.”
—Freitas said that, in a new development, CVC, which is trying to increase the size of its footprint in international markets, has developed a group series for Europe—the same as they are doing in the United States.
Who Are This year’s Top 50 UK Tour Operators?
Jet2holidays has increased the number of passengers the operator is licensed to carry by nearly 30 percent—to more than a million more passengers from a year ago, according to new Atol figures recently published by the Civil Aviation Authority (CAA).
Now, the UK’s second largest Atol holder—behind only TUI UK, now has a license for 3,810,320 passengers, up from 2,936,420 at the same point last year. It was a year ago that Jet2holidays took over the Number 2 spot on list of Top 50 Atol license holders from Thomas Cook, which increased its license to 2,471,042 passengers—a year—on-year increase of 3.4 percent.
The CAA released the list of Atol holders after the latest deadline for renewals passed on Oct. 1. While they provided no specific information about destinations to be served, the Atol data are regarded as a reliable barometer on the health of the overall tour and travel industry in the UK.
To compare the difference in the number of passengers between the Top 50 Tour Operators now and a year-and-a-half ago, click on the link for this INBOUND Report article from April 2017.
Hit Me with Your Best Shot!
Have a good fall foliage photo that you would like to share with the readers of INBOUND? Then enter it in our “Hit Me with Your Best Shot” fall foliage photo contest. If it wins, we’ll share it with the readers of INBOUND in two weeks.
NEW AIR SERVICE
—On Oct. 16 and 17th, Hainan Airlines has expanded its flight routes with new service that links Chongqing with Chicago O’Hare three times weekly and Toronto Pierson four times weekly. Both routes have been added as tag-on services to the carrier’s existing flights to the U.S. and Canadian airports from Beijing
—Viva Aerobus has become the sixth airline to offer regular service from Mexico City to New York, joining Aeroméxico, Interjet, Volaris, Delta and United. The latter flies to Newark instead of JFK. Juan Carlos Zuazua, CEO of the low-cost Viva Aerobus, said the new route will make available 135 thousand seats in the first year of operations.
—Beginning next spring, Canada’s WestJet is expanding its transatlantic network with three new transatlantic routes from Calgary. New non-stop services will connect the city with London Gatwick, Paris and Dublin. London service starts on April 28, 2019, followed by Paris in mid-May and Dublin from June 1.
—American Airlines has announced a new daily flight from Guadalajara International Airport, Miguel Hidalgo y Costilla (GDL) to the Charlotte-Douglas International Airport (CLT) in North Carolina that will start operating seasonally beginning January 6, 2019.
—Delta Air Lines and its joint venture partner, Virgin Atlantic, will launch a daily seasonal service linking Edinburgh with Boston starting May 24, 2019. The Boston route will be in addition to Delta’s existing daily service to New York JFK.
—Icelandic low-cost carrier WOW Air has announced a new seasonal route from the UK to Vancouver, Canada, starting in June 2019, becoming the first airline to offer low cost, long haul flights to Vancouver International Airport. The inaugural flight will depart from Gatwick to Vancouver via Reykjavík, on June 6 2019. Flights will operate six times per week until October.
—Singapore Airlines last month reinstated non-stop service between Singapore and New York Newark. The airline previously served the 9,525-mile route until Oct. 2013. The carrier operated three weekly flights during the first seven days of operation, increasing the frequency to a daily rotation in the following week. No other carrier presently operates non-stop service between Singapore and Newark, with this becoming the world’s longest flight, overtaking Qatar Airways’ Doha to Auckland route which spans 9,026 miles.
—Brazilian budget airline GOL has announced the launch of its first nonstop flight to the USA, starting Nov. 4th, when it starts flying from capital Brasília and Fortaleza to Miami and Orlando. The new flights are timed to offer easy onward connections to Atlanta, Salt Lake City, Cincinnati, New York LaGuardia, Detroit, Los Angeles, Indianapolis and Minneapolis via GOL’s existing partnership with Delta Air Lines.
At a Glance: The Beaches of Fort Myers & Sanibel, FL
For full information Click Here
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Tom Valley has been named travel industry sales director, North America, at Visit Orlando. He joins the organization from SeaWorld Parks & Entertainment, where he spent more than 14 years, serving in different managerial positions, lastly as corporate director, national sales and strategic alliances. Additionally, Freddy Bi has been named travel industry sales manager for Europe, the Middle East and Asa for Visit Orlando. His experience includes tenures at China Travel Service (USA) and the Pechanga Resort and Casino.
Darragh Flood has been appointed to G2 Travel’s Western U.S. team as destination manager, hotels. He will handle product development and contracting for central and northern California, the Pacific Northwest and Hawaii and Alaska. A 20-year veteran of the tour and travel industry, Flood joins the company from Destination America (The Travel Corporation), were he was product manager.
Scott Phelps has announced his retirement from his position as president and CEO of the Connecticut Convention & Sports Bureau. For, Phelps, 65, this is his second—and apparently last—retirement announcement. He first retired as CEO of the Greater Hartford CVB in 2010, after working at the organization since 1977. He had a change of heart, however, in 2012 when the relatively new Connecticut Convention & Sports Bureau sought him out to lead the bureau when then president Michael Van Parys retired.
Skyline‘s Belo Horizonte-based team has announced the appointment of a new commercial manager, André Dentzien. He will work in the branch in Minas Gerais, inaugurated in April 2014, aiming to strengthen the company’s relationship with customers and suppliers. He was previously manager of businesses and people Rio de Janeiro branch for Prime Consolidators.
Nikita Jankowski has been named marketing director for Destiny USA, one the largest shopping malls in the U.S. She joins the attraction from Visit Syracuse, where she was communications director for nearly five years.
Tobias Neumann has been appointed joint managing director of the TUI premium club Robinson. He will be responsible for sales and marketing, pricing and trading, and operations. Neumann has worked for TUI since 2004 in various positions and will assume the role alongside his existing responsibilities as director, distribution, TUI Hotels & Resorts, which mainly covers international distribution activities for the three brands Robinson, TUI Blue and TUI Magic Life.
TUI UK & Ireland has appointed Toby Horry to the newly-created role of director of brand marketing and content. Horry will take responsibility for the brand marketing and content teams when he starts on Nov. 19. He joins TUI UK & Ireland following three years at Tesco, where he was most recently customer propositions director and, before that, digital marketing director. Previously, Horry spent nine years at the agency Dare, where he was managing director and worked with notable global brands such as Vodafone and Barclays.
CORRECTION: In the Oct. 11, 2019 issue of the INBOUND report, we erred by mis-identifying the ownership of the receptive tour operator AlliedTPro. The owner is Thomas Cook India, which acquired AlliedTPro last year as part of a deal in which it announced its acquisition of the Kuoni Group’s destination management businesses worldwide. INBOUND regrets the error.
Anita Murphy for 22 years at Murphy’s Travel
Courtney Foste for 15 years at Expedia
Brett Stawar for 14 years at Great Rivers & Routes
Tony Lyle for 6 years at Lake Tahoe Visitors Authority
Amy Zeigler for 6 years at Iowa Economic Development Authority
Don Rogoski for 4 years at Experience the Ride
Stephen Morton for 2 years at e-Global Travel Exchange
Gene Quinn for 1 year at Open Travel Alliance
Rhonda Duggan for 1 year at Turnkey Vacation Rentals