
The people at the German travel trade publication FVW wondered just how much the best paid tourism industry executives in Europe receive in salary. So, they did some research and the result, which we share with you, is the table below.
Covering the Inbound Tourism Industry Since 1996
by Tom Berrigan
by Tom Berrigan
While it should be noted up front that first quarter results on outbound travel from Europe are not a reliable barometer for what to expect for a whole calendar year, the results on Q1 U.S. international inbound tourism to the U.S. recently released by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) are not encouraging reading, as they tend to confirm what international and U.S.-based receptive tour operators were telling INBOUND during IPW earlier this month: Europe is experiencing some “soft spots,” China is down, and Argentina has cratered.
Moreover, the sluggish performance of the international inbound market for Q1 may not be an anomaly for all of 2019. While the U.S. Travel Association has released an April 2019 Travel Trends Index which showed that international inbound traffic expanded 5.6 percent in April, rallying after two months of contraction, US Travel’s Leading Travel Index (LTI) continues to project that “inbound travel growth will be positive, albeit slower, over the next six months, registering at or just below 1.0 percent.”
Below are the tables showing the performance of the top inbound markets for the United States for the first quarter of 2019.
by Tom Berrigan
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.
by Tom Berrigan
It Was a Terrible, Horrible, No Good, Very Bad Year: In the wake of an anemic first quarter of the 2018-2019 financial year in which its losses increased by £14 million ($18.1 million) to £60 million ($77.6 million) year-on-year, Thomas Cook Group has launched a strategic review of its airline divisions in Great Britain, Germany (it operates under the Condor brand), Scandinavia and Spain.
In a prepared statement, the company, which is the oldest largest tour operator in the UK, said the airline review process “which will consider all options to enhance value to shareholders and intensify our strategic focus,” adding, “our strategy for the airline has been to profitably grow as a leading European leisure airline with a reliable, customer-focused service.”
While group revenue for the quarter was largely unchanged, gross margins fell, suggesting a continuation of the “highly competitive” market conditions in the UK at the end of the summer, and weaker demand for winter holidays in Nordic markets.
Weak Performance by Tour Operator Sector: Leading the company’s seasonal loss was its tour operator businesses, where a weaker performance in the UK and northern Europe was partially offset by a good performance in continental Europe.
For 2019, the group reported, its summer program is 30 percent sold, slightly ahead of last year with bookings described as being are consistent with capacity cuts “to closely manage our risk capacity throughout the year,” the company said, noting that, “as a result, tour operator bookings are down 12 percent, helping to support pricing, which is up in all key segments, and 4 percent higher overall.”
The group’s airlines, with a fleet of 103 aircraft, carried more than 20 million passengers in 2018 and generated £3.5 billion ($4.53 billion) in revenue, with underlying operating profits growing 37 percent year-on-year to £129 million ($167 million).
An item in the trade publication International Flight Network suggested this: “An indirect reason to sell the airline is the uncertainty around the Summer 2019 business as more and more people tend to book their holiday last minute, which makes it hard to plan ahead for the airlines. As a result, the carriers will reduce capacity slightly to ensure that they won’t be forced to operate mostly empty aircraft.”
How important are the carriers to Visit USA business? INBOUND checked the websites of both Thomas Cook and Condor and found that Thomas Cook says it serves 133 U.S. destinations and Condor indicates that it has service to 101 U.S. destinations.
by Tom Berrigan
In what one French travel trade journal described as “a shock,” TUI France last week announced a restructuring of the French unit in which Pascal de Izaguirre is no longer CEO of the company. In a press release, the TUI Group—it is the largest tour operator in Europe—announced his departure “in agreement with the TUI Group.” De Izaguirre retains his role as head of Corsair International, a TUI airline subsidiary.
“I leave in total agreement with the TUI Group, without any acrimony and return to Corsair with passion,” he told the French trade travel publication tourmag. “I have a lot of regrets to leave here the teams with whom we worked for eight years. years, with results that could have been better but are not dishonorable.”
“But, I resigned, I was not dismissed,” emphasized de Izaguirre. “But it is with great regret, and I have a lot of compassion towards the Transat teams in particular. But that’s the life of a big group. ”
TUI France used to be Transat France, the French unit of Montreal-based Transat. TUI announced its acquisition of the company in May 2016. The process resulted in a messy reorganization in which scores of employees were let go—a process made all the lengthier because of France’s strict worker protection laws.”
The first to go in that process was First to go was Patrice Cardec, president and CEO of the company—it also includes the popular brand, Look Voyages—who was terminated in November 2016 and replaced by Pascal de Izaguirre, who was brought to Transat from his position at Corsair.
The Transat acquisition made TUI the market leader in both Germany and France, the top two U.S. source markets from continental Europe and the Number 5 and 7 overseas source markets overall.
The restructuring announced last week follows last month’s financial reports by the company, in which earnings were disappointing, saying in a statement that TUI described 2018 as a “challenging year, in particular for tour operators”.
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