Are Europe’s Two Largest Tour Operators Having a Nervous Breakdown?
It is at ITB (Internationale Tourismus Börse) in Berlin every year that the tour and travel industry gets together to conduct business and, almost as important, exchange face-to-face gossip and intelligence with others as to just what the outlook for the remainder of the year is, as well as what prices and product for the next year (in this case, 2020) might be. This year, delegates to ITB, which runs from March 6 to March 10, have been besieged by multiple reports of just how bad things are for TUI, which is the number one tour operator in all of Europe and, of course, the market leader in Germany. Number two in Germany is Thomas Cook, which is number one in the UK (where TUI is number two).
What triggered wave of bad news revolving about the two operators, according to most accounts, were the following:
—There was a long and particularly brutal heat wave that struck in mid-summer then returned at the end of the summer, with daytime highs will likely be as high as 30°C (86° Fahrenheit) as far north as northern Germany. Parts of France, Italy and parts of central Europe climbed well above the 30°C mark.
—Soccer’s 2018 World Cup, which took place in Russia from 14 June 14 to July 15 in Russia, meant that many Europeans held off traveling until after the event. And some decided to forego long-haul travel in favor of holidays in country or within the Eurozone.
—Holidaymakers from the UK traveled to the continent less than expected, due in part to the nervousness over the effects of Brexit on the British economy; the British pound was trading at 120 euros in April 2017, dropped to 109 in August 17 and has stayed at or below 115 since then.
The causes notwithstanding, the cumulative impact was enough for Thomas Cook to issue two profit warnings as the 2017-18 financial year came to a close at the end of September. Shares in the company fell to their lowest price level since 2012 and no dividend was issue.
Thomas Cook—the after effect: As of this week, according to Reuters, Thomas Cook has recruited Credit Suisse, Morgan Stanley and Bank of America Merrill Lynch to explore the possible sale of its airline business, a source familiar with the situation said. Thomas Cook indicated last month that it was prepared to sell its profitable airline business—the airline and its partners fly to more than 100 U.S. destinations—to finance what it hopes will be a comeback from the losses racked up in 2018.
TUI—the after effect: During a call-in to discuss the company’s performance in the first quarter of the 2018-19 finance year, the company’s chief executive, Fritz Joussen, announced that it had experienced doubling in seasonal losses to 83.6 million euros ($94,4 million). Shares in TUI fell by almost a third. In a dramatic move apparently aimed at bolstering confidence in the business, company, invested some 1 million euros ($1.13 million) of his own funds in the company.
The industry will have a better feel for the outlook for 2019 and 2020 once ITB gets underway. Somewhere, midst the 180,000 total attendees, including 10,000 exhibitors from all over the world, is an answer.
Rafael Villanueva is NAJ’s RTO Summit Person of the Year
The senior director of tourism development strategy for the Las Vegas Convention and Visitors Authority (CVA), and for more than 20 years a key figure in the destination’s international tourism sales and marketing effort, Rafael Villanueva was honored last week at NAJ’s RTO Tourism Summit in Marina del Rey, California as the Tourism Summit’s Person of the Year in recognition of his contribution to tourism development for the Las Vegas CVA.
Prior to honoring Villanueva at the opening luncheon of the RTO Summit, Jake Steinman, CEO of the NAJ Group, which operates the RTO Summit Series, sat down with Rafael Villanueva and spoke with him about his experience with the Las Vegas CVB. Following are excerpts from their conversation.
JS: When did you begin the LVCVA and what was your first position?
RV: I started April 6, 1998 as a Sales Executive working the domestic market. Eight months later, I took over Latin America when they only had 60,000 visitors from Mexico. In 2017, they have 1,150,000 from Mexico.
JS: What was international visitation that year and what is it today?
RV: Unfortunately, I cannot find the numbers from back then, other than Mexico, which was just over 60,000 visitors. In 2017, we had 1,150,000 visitors from Mexico. The big change came in 2008 when we started out International initiative. At that time, international accounted for 12% of the 37.4 million, approx. 4.5 million visitors. In 2017 international visitation was slightly over 6.9 million. They tell me I will be very happy with 2018 numbers. They are just confirming certain numbers.
JS: How many in-country reps did you have then and how many do you have today?
RV: In 1998 we had three offices—Japan, which was our first, the UK and Germany. Today we have 14 international offices representing us in 34 countries.
JS: What about international air service—then and now?
RV: The number of direct international flights and number of flights today? I do know in 1998 we only had three to five charter flights per week from Mexico. Today we have 48 weekly schedule non-sop flights.
JS: What do you feel has been your biggest career accomplishment?
RV: That’s a tough one. (Here’s a quick recap of what he said) Helped develop and grow a strong international team. We’ve grown the Latin America Market, especially Mexico and Brazil. The first eight years we had no offices in either country. Then, there was that crazy year, between 2007/08, when we RFP’d all our international offices, we traveled around the world as we added six new offices, changed four and kept three. All this, while also organizing Pow Wow 2008 in Las Vegas.
JS: What are your favorite activities in your spare time?
RV: As I travel so much and I’m away from home for long periods of time, my spare time is dedicated to whatever my wife wants me to do. Also, I love spending time with my family. And if there is time after that, l love watching movies.
From OAG: Cooling Off Period – Mixed Messages in the U.S. and China Air Traffic Market
The U.S.-China aviation market has stagnated: For the first time in years growth will have come to a halt as of March 2019. The 12-month rolling average of capacity between the two nations will have stopped growing, according to OAG data. Capacity may have stagnated but airlines are still adding routes. There were 48 routes between the US and China being operated by direct scheduled air services in January, four more than January last year. New were Atlanta-Shanghai, Las Vegas-Shanghai Pudong, Los Angeles-Shenyang, Los Angeles-Xi’an, and Honolulu-Hangzhou, while San Jose-Shanghai was dropped. For the complete article, read here.
Five Ways to Stay Productive on the Road as An Entrepreneur
You simply must stay productive while on the road.”
President CEO of Bonotel Exclusive Travel
As the CEO of an international travel and hospitality company, I travel more than most would care to. Over the years, it’s become increasingly clear to me that, even when you’re traveling for business, it’s very easy to lose sight of your greater business goals and fall behind — whether that’s due to jet-lag, being out of pocket on a plane, in meetings abroad, entertaining clients or just plain carelessness. Due to improvements in technology and changes in workplace environments, recent studies have shown that you can be far more productive in your job while in a remote location away from your office. A 2016 survey of 509 Americans who work outside an office found that about 91 percent of them felt more productive while away from their office.
You simply must stay productive while on the road, because what are your other options? Stop traveling and watch your entire business fall behind? No way. It’s something of a catch-22: The core of my success has been mixing exploratory passions and finding ways to expand a global network. I want to get out to the far corners of the world that others are too hesitant, or perhaps too lazy, to reach. But, I know that in order to do that and grow my business, I need to stay incredibly focused, healthy and disciplined while on the move. I need to push myself.
Here are five techniques I’ve picked up over the years that have helped me stay productive and ahead of the curve while traveling.
1.Accept the power of your phone.
It honestly makes me chuckle that I have a laptop I never use, mainly because I’m barely ever at my desk. I’ve come to realize and accept that I do 95 percent of my business on my phone. Yes, that even means the occasional multimillion-dollar deal, where I’ll sign the digital dotted line using my SignNow app. Check that one out.
A lot of people these days will urge you to take time away from your phone, and I’ll agree that every now and then it’s healthy to do a digital detox, but you need to accept how important your smartphone is to streamlining your work and staying connected across time zones when you’re traveling. A study by Salesforce even found that 86 percent of the 1,400 surveyed corporate executives and employees say that ineffective communication is a large reason for failures in the workplace.
If you do international business, I can’t stress enough how important WhatsApp is for communicating with your clients, customers and partners quickly and efficiently. Emails will always be a part of business, but having the opportunity to send a WhatsApp message to a customer saying, “Hey, we’re looking for your feedback here,” or “I’m seeing this problem,” offers the kind of immediate connectivity you can’t find anywhere else. Organize your phone like you would any other part of your business, and don’t just see it as a distraction. You’ll be far more productive in the long run.
2.Articulate your vision.
One of the more difficult challenges when it comes to being a leader, especially one who travels all the time, is articulating a consistent vision to your team. Don’t ever be afraid to rely on your employees to keep everything in motion. For myself, this often gets distilled down into what each person on your team’s area of focus and expertise is. Once you know that, you can gauge who to assign items to and design a process around that.
One of the things that I’ve had to learn over the years is to never assume people know what’s in your head, and instead be very clear and crisp around what the expectations are from the onset. When you fail to do this, people start to deviate. That’s when things can get messy when you’re not around the office for days or weeks on end.
Also, make sure you have strong leadership beneath you. Trust that those people are going to execute on your vision and what you put in front of them. Trust is lost not earned! Ensure you don’t leave an open feedback loop that two months later will leave projects half-finished. Communication is everything in both life and business. Lastly, empower your team to make decisions, and be there to help them learn and improve along the way.
Traveling, especially when overseas, is undoubtedly exhausting. Don’t let this slow you down when you need to be on top of your game. What I like to do first thing in the morning is get up, get in a workout and then, while I’m having breakfast and coffee, I start catching up on everything. When you’re traveling, by the end of the day a deep mental fatigue often sets in.
Sometimes you’re in a different time zone, entertaining clients or running 12 hours straight in back-to-back meetings. In these instances, it’s often difficult to be fully engaged. If you have that steady cadence every morning of dialing in on your goals and deliverables, you’re going to buy yourself a lot of valuable time. This might mean just clearing out a massive chunk of your inbox so you can stay ahead of your office, depending on what time zone you’re in. Conversely, you may have to delegate to your team and prioritize what is critical to your business and necessitates your involvement.
4.Leverage your downtime.
Getting the most out of your downtime is incredibly valuable — whether it be 20 minutes in a cab or an hour in your hotel room. Georgetown University professor and author Cal Newport has a theory of “deep work,” where peak productivity boils down to the time spent working multiplied by the intensity of focus.
Take your downtime to intently catch up on emails or take important calls; these are the windows where you can “gain back” moments lost in the mix of traveling. If you try to do everything at once and push the limits of multi-tasking, you’re going to get hit with email fatigue and, eventually, pure and utter exhaustion.
I like to look at things in threes: What are three things I need to get done today? When can I slot them into my schedule when I will be most clear-headed and efficient? Answering these questions will alleviate a lot of stress and make you feel less overwhelmed.
5.Water is your friend.
People ask me a lot about tricks to kicking jet-lag, and time and time again it comes down to staying hydrated. I don’t drink alcohol on long flights anymore, but instead ask the flight attendants to bring me a liter of water that I have them refill constantly. Maybe I look silly, but in the end, I feel ten times better when I get to my destination.
Second, the minute you leave your initial destination, you have to put your mind in the time zone you’re going to. So, if you’re going on a 10-hour flight from Europe back to Los Angeles, for example, try not to sleep the entire 10 hours, or when you land you’ll never be able to sleep. I sleep a maximum of four hours on the flight when coming back from Europe to the U.S. On the contrary, if you’re going to Europe, force yourself to sleep as much as you can so when you land you’re awake and refreshed. When you get to your destination, you need to stay awake. Don’t listen to people who try to sneak in little naps — it doesn’t work. Also, try to work up a sweat in the gym or on a run around a new city. And eat healthy! It all helps. In fact, studies have shown that workers who exercise before or between meetings and other tasks boost their productivity up to 15 percent.
This isn’t rocket science, but I’ve seen so many people on trips do the opposite and become a total wreck. Don’t be that person.
*This article first appeared on Entrepreneur.com on Jan. 31, 2019
Acquisitions & Mergers
—Ant Financial, Parent of Alipay, Acquires UK Payments Company: Upping the ante in its battle with Tencent and its WeChat payment service, Ant Financial, the financial tech division of Alibaba Group has expanded its global footprint through its acquisition of the UK digital payments company WorldFirst. Published accounts have put the price of the move at about $700 million. In a letter to customers, WorldFirst Chief Executive Jonathan Quin said, “We believe that becoming a part of the Ant Financial group and of the wider Alibaba ecosystem will create opportunities for us to grow our existing relationship with you.” Quin will stay on as chief executive after the acquisition is complete. The action follows Ant Financial’s attempted acquisition of the U.S. -based transfer company MoneyGram, which was blocked by the U.S. government last year. Ant Financial’s Alipay, which is one of China’s largest e-payment platforms. Alipay has more than 700 million users in China and more than 200 million users abroad. Its major competitor is the payment app of WeChat, which is owned by Tencent Holdings Limited, a Chinese multinational investment holding conglomerate, whose subsidiaries specialize in various Internet-related services and products. Over the last few years, Ant Financial has pursued partnerships with numerous merchants in Europe which now accept payment from Chinese tourists and online shoppers through Alipay. WeChat Pay launched in Europe in 2017. That year Tencent worked with SafeCharge, a British payment technology company, to make WeChat Pay available at point-of-sale locations in the UK for the first time.
—Abercrombie & Kent Bought back by its Founder and a Familiar Partner: Geoffrey Kent, the founder of one of the best known luxury tour operator brands in the world—Abercrombie & Kent—has joined with Manfredi Lefebvre d’Ovidio, executive chairman of Silverseas Cruises, and has acquired a majority stake in the company from its previous owner, Chinese firm Zhonghong Holdings Group, along with Kent. The transaction has Kent increasing his stake in A&K to 15 percent, with the remaining 85 percent now belonging to Lefebvre d’Ovidio’s Heritage Group, which also owns his remaining shares in Silverseas Cruises.
Kent described the deal as “meant to be”. He said several “big name” companies and private equity firms had been interested in buying Zhonghong Holdings Group’s shares, but during the process for the right buyer—apparently Lefebvre d’Ovidio—sold a majority share (66 percent) in Silverseas Cruises, giving him the capital to buy A&K. Kent and Lefebvre d’Ovidio told Travel Weekly UK that they would work together to “greatly accelerate” A&K’s growth, believing the brand could double or triple in size. Kent said: “Abercrombie & Kent will continue as it is but with accelerated growth. Instead of establishing one, two or three DMCs a year, we can do five or 10.”
—Australian tour operator Flight Centre Travel Group (FLT) has said that it has formally completed its acquisition of Casto Travel Inc. (CTI), a Silicon Valley-based corporate travel business. FLT announced plans to acquire Casto’s U.S.-based operations last December, with company officials saying that the deal would enhance FLT’s overall corporate travel footprint. Established in 1974, CTI is an independent travel management company in the San Francisco Bay Area with 85 employees and a total transaction volume of $120 million. It has three offices in San Jose, San Francisco and Tiburon. Outgoing CEO Marc Casto told the publication Luxury Travel Advisor that the company has an approximately 75 percent – 20 percent corporate – leisure mix, with the remaining 5 percent of business coming from passport and visa processing.
FLT Managing Director Graham Turner said that the acquisition would strengthen the company’s overall operations in the United States, which includes corporate travel, leisure travel and the wholesaler GOGO Vacations. He said the deal would also give the company greater scale in Silicon Valley and the West Coast market. Flight Centre Travel Group, which is based in Brisbane, Australia, entered the U.S. market in late 2007-early 2008 with the purchase of GOGO and Liberty Travel. The company has since launched a new brand for independent travel agents, Independent by Liberty Travel, and continued to expand worldwide.
India Office to Head up JTB’s Strategic Meetings Management Business in Asia Pacific
As it works to increase its global presence in all sectors of the tour and travel business, and in the wake of a restructuring initiative it launched at the beginning of 2019, Japan’s JTB Group has decided to place responsibility to drive its fairly new business vertical, Strategic Meetings Management (SMM), in the Asia Pacific region, including Japan, to their India subsidiary, JTB India. Its office is located in Gurgaon is a city just southwest of New Delhi in northern India. The move is could result in an increase in outbound MICE traffic to the U.S.
It was only at the beginning of 2018 that the company started looking at the SMM program seriously as a business vertical, reports the TravelBizMonitor. “It’s a fairly established business in the U.S. and Europe, but SMM is a new concept in Japan and APAC. We want to strengthen our hold in the SMM business in APAC, including Japan through India,” Norio Nakamura, managing director of JTB India, told the publication.
Globally, JTB has restructured its travel business by bringing the entire outbound MICE business under the Global Business Solutions division. SMM is a major focus vertical under the Global Business Solutions, Anil Srinivasan, executive director of JTB India said.
As part of strengthening their hold in the SMM business, JTB India has signed up with Cvent, an integrated technology provider for the events industry globally—it is headquartered in McLean, Virginia—for its “Gold Partnership” to provide advanced technology solutions to customers. JTB India has been working closely with Cvent since 2014, but decided to take it to newer heights by signing for the “Gold Partnership” from January 1, 2019 with some “exclusivity.” This partnership will give JTB India support in terms of technology tools ranging from venue sourcing to event registration to mobile apps, data analytics, etc.
Asked about the outbound MICE business from India, Srinivasan said that 2018 has been quite good for the company with 70 percent growth in the top line. While 30 percent of the business revenue is contributed by high-value Japanese corporate clients, he said that the rest is Indian corporate business.
When asked about the prospects for 2019, Srinivasan said that despite the upcoming elections, the MICE pipeline for the first half of the year is robust, he added.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Michael Goldsmith Launches Las Vegas-Based Marketing and Management Firm
A veteran of more than three decades in the tour and travel industry in the USA, Michael Goldsmith, most recently vice president of marketing, Las Vegas Convention and Visitors Authority (CVA), has launched Magellan Marketing. The new venture specializes in destination marketing and management, sports and special event marketing, international business development, strategic counsel, digital marketing, publicity and media relations.
Prior to joining the Las Vegas CVA, Goldsmith gained operations, sales and management experience serving in senior positions at The Riviera Hotel and Casino; The Mirage; and the Aladdin Resort and Casino, as well as other organizations.
For more information about Magellan Marketing, visit MagellanUnlimited.com or call 702.249.2977
Patricia Rojas Unger recently left her position at the U.S. Travel Association. Rojas-Unger, well-known in the industry as a speaker, panelist and presenter, was vice president of public affairs at US Travel, and was with the association for 11 years. She has taken on the post of vice president of government affairs at the Outdoor Industry Association. It is difficult for me, at the moment, to determine who replaced her, as so many titles at U.S. travel look the same.
Alexandre Mesquita has joined the sales and business development team at GAP travel, which is headquartered in São Paulo, Brazil. Previously, Mesquita has served in sales management positions at several Brazilian tour operators, including Hostway Travel and MMT Gapnet.
Richard Yeager has been named director of USA Sales for CHR Travel LLP. A veteran of more than 20 years in the tour and travel industry in New York City, Yeager has served as director of sales at CTN Tours, and in sales management positions for several hotel properties in the New York area.
Jill Pongonis has been appointed media public relations manager at the Greater Williamsburg Chamber & Tourism Alliance. She joins the attraction with nearly 30 years of experience in the tour and travel industry, including tenures with Busch Gardens Williamsburg and the Jamestown-Yorktown Foundation.
Rachel Coffey has joined The Travel Corporation (TTC) as director of sales and business development for its four guided holiday brands—Trafalgar, Insight Vacations, Costsaver and Luxury Gold—in the UK and Irish market. She will lead a sales and marketing team of ten. Coffey comes to TTC from G Adventures, where she served for nearly a year-and-a-half as director of sales, UK and Ireland. Prior to that, Coffey spent 14 years at Virgin Atlantic.
*In an early edition of INBOUND, we reported that Tresie Benoit has left her position with World2Meet, where she was senior contracts manager, USA, for more than two-and-a-half years. This report was incorrect. We apologize to Ms. Benoit for having posted this information.
Cheryl Richards for 31 years at VisitDallas
Fred Walker for 16 years at North Dakota Tourism
Russ Ferguson for 15 years at Key Travel
Teresa Oneill for 14 years at Travel Oregon
Danielle Hollander for 12 years at Visit Orlando