As OTAs boost spending, hotels continue online booking fight: Travel Weekly

As OTAs boost spending, hotels continue online booking fight: Travel Weekly.

Expedia logoThe world’s two largest OTAs are boosting spending on marketing while hotel lobbyists are calling for federal regulators to stop the proposed merger of two of the most popular OTAs in the U.S., reflecting a heightened battle between suppliers and intermediaries for a greater share of travel spending.

Expedia Inc. and Priceline Group each ratcheted up second-quarter marketing costs. Expedia did so as it made preparations for its pending acquisition of smaller competitor Orbitz Worldwide, a deal that is still being reviewed by the Justice Department. Orbitz also recorded higher second-quarter costs.

The Expedia-Orbitz deal has drawn fire from the American Hotel & Lodging Association (AH&LA). Earlier this month, the trade group publicly opposed the $1.34 billion deal, first announced in February, citing factors such as a narrowing choice of booking channels, higher costs for smaller hotel chains and the higher probability of deceptive practices from “rogue” OTAs.

A combined Expedia-Orbitz would control almost three-quarters of the U.S. online market, while the AH&LA estimated that Expedia, Orbitz and Priceline combines account for more than 95% of the OTA market.

Meanwhile, some hoteliers are drawing their own fire for their efforts to secure more bookings through direct channels.

Marriott International earlier this month launched a marketing campaign promoting Marriott’s website as having the best rates on the hotelier’s rooms. Ads concluded with the tagline “It pays to book direct.”

While that effort was likely geared to pull prospective guests away from OTAs, ASTA last week termed the language “misleading” and called for the hotelier to discontinue the campaign “immediately.”

Suppliers and their channels continue to battle over their respective shares of the U.S. online hotel sector, where annual spending is predicted to jump 55% between 2012 and 2016, to $58.1 billion, according to a Phocuswright report released in November. OTAs have been gradually pulling some of that spending away from hoteliers’ websites. Last year, OTAs accounted for 48% of online hotel spending in the U.S., up from 46% in 2012.

Hoteliers fear that a combined Expedia and Orbitz will result in a further loss of booking dollars.

“We believe this transaction and the resulting consolidation of the online travel marketplace will result in significant negative consequences, particularly for consumers, but also for the large number of our members who are small business owners and franchised properties,” AH&LA CEO Katherine Lugar wrote in an Aug. 6 statement.

Meanwhile, Priceline and Expedia continue to ramp up spending in their competition with each other, and those higher expenses were reflected in both companies’ second-quarter financial results.

Expedia’s second-quarter selling and marketing costs jumped 19% from a year earlier, while general and administrative expenses surged 38%. The company, which in May sold its 62.5% stake in China-based OTA eLong, also reported that gross bookings excluding eLong rose 20% to $15.1 billion, while room-night growth excluding eLong rose 35%.

Net income quadrupled from a year earlier, to $449.6 million, though that increase was largely the result of its $508.8 million gain on the eLong sales. Revenue increased 11%, to $1.66 billion.

Priceline’s online advertising spend rose 21%, while sales and marketing costs were up 26%, outpacing the company’s 7.4% revenue growth to $2.09 billion. Gross bookings advanced 11%, to $15 billion, with international bookings rising 30% while U.S. bookings remained flat.

Orbitz took a $4.25 million loss, compared with year-earlier net income of $6.88 million. Revenue fell 3.4%, to $239.6 million. The cost of revenue surged 34%, largely as a result of higher costs related to implementing systems to stem fraudulent transactions. Gross bookings fell 8%, to $3.09 billion, as standalone air and vacation-package revenue were both down 14%.

Financial analysts appeared to be unconcerned about Expedia’s higher spending, noting that it was appropriate for a company whose recent acquisitions included Travelocity and Australia-based Wotif.

In an Aug. 9 note to clients, Deutsche Bank analyst Lloyd Walmsley wrote, “We see a long runway for the company to continue to improve its operations across its legacy assets and acquired businesses, with better website conversion, increased hotel supply, deeper penetration of existing hotel partners and improved marketing optimization.” Walmsley maintained his “buy” rating on the stock.

And while Guggenheim Partners analyst Jake Fuller in an Aug. 6 note to clients classified Orbitz’s second-quarter performance as “weak,” he maintained that many of the challenges were short term and typical for a company on the verge of being acquired. He added that the recent performance of Travelocity could hint at a better future for Orbitz, as well.

“We note that Travelocity appears to be ramping revenue post acquisition as it benefits from a higher converting platform, access to more hotel inventory and better marketing support,” Fuller wrote. “A weak performance [by Orbitz] probably does not change the prospects for the deal.”

 

International tourist arrivals up 4% in the first four months of 2015 | World Tourism Organization UNWTO

International tourist arrivals up 4% in the first four months of 2015 | World Tourism Organization UNWTO.

UNWTO logoInternational tourism demand continued to be robust between January and April 2015 with tourist arrivals increasing 4% worldwide according to the latest UNWTO World Tourism Barometer. Almost all regions enjoyed strong growth. Prospects for the May-August period remain upbeat, with close to 500 million tourists expected to travel abroad during these four months.

Destinations worldwide received some 332 million international tourists (overnight visitors) between January and April 2015, 14 million more than the same period last year, corresponding to an increase of 4%.

This result follows an increase of 4.3% in 2014 and consolidates the upwards trend of international tourism in recent years (+4.5% international tourist arrivals a year on average since 2010).

By region, the Americas (+6%) led growth, followed by Europe, Asia and the Pacific and the Middle East, all recording 4% to 5% more arrivals. By subregion, Oceania and South America boasted the strongest increase (both +8%), followed by the Caribbean and Central and Eastern Europe (both +7%), the latter rebounding from last year’s decline. In Africa, demand weakened in 2014 after years of solid growth, affected mainly by the Ebola outbreak among other challenges. Limited data currently available for January-April 2015 points to a 6% decline, as African destinations struggle to recover from the misperceptions affecting the continent.

“It is encouraging to see the tourism sector consolidating its excellent results despite security concerns and unrest in many parts of our world”, said UNWTO Secretary-General, Taleb Rifai. “This underscores that tourism is a surprisingly resilient economic sector which increasingly contributes to development in many countries around the globe. For national governments, it is a reminder that tourism can be part of the solution to foster socio-economic development and job creation”, he added.

Strong results across many destinations with a rebound in Central and Eastern Europe

In the Americas (+6%) all four subregions continued to enjoy significant growth in January-April 2015, led by South America (+8%) and the Caribbean (+7%). Strong outbound demand from the United States fuelled results as 20 million US tourists travelled abroad through April, 7% more than during the same period last year.

Asia and the Pacific (+4%) consolidated its growth of recent years, with Oceania (+8%) and North-East Asia (+5%) in the lead. South-East Asia (+3%) recorded moderate results this four-month period as the rebound in Thailand (+25%) was offset by declines in other destinations.

Europe, the world’s most visited region, enjoyed continued strength with international tourist arrivals growing by 5% through April. Arrivals in Central and Eastern Europe increased by 7%, rebounding on the poor results of 2014 following the conflict in Ukraine and the slowdown of the Russian economy. Southern Mediterranean Europe (+5%) maintained strong growth, though for many destinations these are low season months. Western Europe and Northern Europe both enjoyed a solid 4% increase in arrivals, partly due to good results in traditional winter sports destinations.

International tourist arrivals in the Middle East are estimated to be up by 4% through April, further continuing the region’s recovery which started in 2014 after three consecutive years of declines. Africa’s international tourist numbers, on the other hand, declined by an estimated 6% as a consequence of the decrease in arrivals to North Africa (-7%) as well as to sub-Saharan Africa (-5%). Figures for both Africa and the Middle East should be read with caution, as they are based on limited available data for these regions.

“The Ebola crisis in West Africa and the security concerns are serious challenges for Africa’s tourism and for the international community as a whole. We must work together in managing and overcoming these challenges and in supporting destinations for a prompt recovery. It is important to remember that tourism is the lifeline of many communities around the world and that we face today a global threat that affects all our societies”, said Mr. Rifai.

Optimistic prospects for the coming months

Close to 500 million tourists are estimated to travel abroad between May and August 2015, the Northern Hemisphere holiday peak season, a total that accounts for some 41% of all international tourist arrivals registered in a year.

According to the latest results of the UNWTO Tourism Confidence Index, prospects for this period continue to be bullish and are the highest for this period since the pre-crisis year 2007. The sentiment is positive among all regions and areas of activity.

Business intelligence tool ForwardKeys also shows healthy growth in international air travel reservations for May-August 2015. Overall bookings are up 5% thanks to strong demand for domestic air travel (+7%) and continued growth in international travel (+4%). By region, air reservations increased most in Asia and the Pacific, the Americas and Europe, while reservations to and from Africa and the Middle East are weaker.

According to the forecast issued by UNWTO in January this year, international tourist arrivals are expected to increase by 3% to 4% for the full year 2015, in line with UNWTO’s long-term forecast of 3.8% a year for the period 2010 to 2020.

Please note that results presented here reflect preliminary data reported to date and are subject to revision.

Relevant links:

UNWTO World Tourism Barometer, including excerpt with tables on international tourism arrivals per world region for free download

UNWTO Tourism Highlights, 2015 Edition (free download)

Infographic: International Tourism in 2014 (International Tourist Arrivals and International Tourism Receipts) (pdf)

Infographic: Why Tourism Matters (pdf)

The Week in Travel Stats: Learn Where Your Clients Could Be Headed Next | Travel Agent Central

The Week in Travel Stats: Learn Where Your Clients Could Be Headed Next | Travel Agent Central.

From last-minute summer road trips to a look at which destinations are trending right now, the week in travel stats provided a good glimpse into what’s hot in travel for the rest of the year.

U.S., Spain Top Most-Searched Destinations in Q2

This week travel marketing platform Sojern released a look at the most-searched destinations of the second quarter of 2015, an indicator of where travelers are looking to book at the moment.

The United States and Spain were the most-searched destinations, followed by Italy, the United Kingdom, Germany, France, Portugal, Turkey, Greece and Russia. The latter re-entered the list after a quarter’s hiatus, replacing Thailand.

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Beyond the top 10, here are the destinations that captured the most traveler interest by region since summer 2014:

In North America, Haiti moved up 34 ranks since summer 2014, after experiencing a dramatic decline in tourism in the aftermath of the 2010 earthquake, followed by Iceland, up 11 spots.

For travelers from Western Europe, Cuba pushed up 12 places to position 41, thanks to a lot of media attention and the detente with the U.S. Czech Republic, Iceland and Romania each moved seven places up in the ranking.

In Latin America, Aruba’s appeal increased over last year, pushing it up 11 spots, followed, by Hungary, up 10 spots. The latter is one of the more affordable European destinations, as a non-Eurozone country.

In Southeast Asia, Bangladesh moved up eight spots and Qatar seven since summer 2014.

For travelers from the Middle East, Sudan gained the most popularity (up 24 spots), followed closely by Bosnia and Herzegovina (21 spots), a country which the World Tourism Organization estimates will have the third highest tourism growth rate in the world by 2020.

Read more

Top Restaurants for Last-Minute Summer Road Trips

Even as we head into August, clients could still be looking to take one last summer road trip. OpenTable has released its 2015 Summer Road Trip Restaurant Guide highlighting top eateries for your clients to visit.

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Compiled by OpenTable insiders across the nation, the guide highlights culinary destinations along some of the country’s most popular road trip routes.

The OpenTable 2015 Summer Road Trip Restaurant Guide includes more than 100 restaurants, from Grace in Portland, Maine, to Meriwether’s Restaurant & Skyline Farm in Portland, Oregon. OpenTable’s regional teams around the United States curated the guide.

Source: OpenTable

1 in 4 Business Travelers Can’t Use Ride Share Services

This week also saw a flurry of research into the world of business travel from the Global Business Travel Association (GBTA) Convention 2015.

As part of a panel discussion at the event, the GBTA Foundation released a new report on the future of ground transportation in the sharing economy. Key takeaway: With one in four business travelers barred from using new ride share services, rental cars and taxis remain the most commonly used methods of ground transportation among business travelers.

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“Our research shows one in four (24 percent) travel buyers say their company does not allow their business travelers to use ride-sharing companies, by far the highest percentage for any form of ground transportation,” said GBTA Executive Director and COO Michael W. McCormick. “In addition, a large number of companies still have not adopted policies around ride-sharing companies, revealing a need for education about the benefits and the risks. GBTA hopes this study is the start to closing that knowledge gap and we welcome an open and constructive dialogue on this topic.”

Read more

Business Travel Spending to Hit Record High of $1.25 Trillion in 2015

Another report from the GBTA Convention brought some good news for business travel. Driven by a surge in China, business travel spending is expected to hit a record high of $1.25 trillion in 2015.

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Despite recent economic turbulence, China business travel will increase by 61 percent over the next five years, from $261 billion in 2014 to $420 billion in 2019. That increase is greater than the increases in business travel growth in the next 8 largest countries combined, including the U.S., Germany, India, U.K., Indonesia, France, Turkey and Japan.

“Despite recent economic speedbumps, China will pull away as the global leader in business travel over the next five years,” said McCormick. “On the horizon, we’ve identified five nations that are also seeing extraordinary growth and could very well turn into the business travel markets of the future. Another market to watch is India, which is statistically where China was 15 years ago.”

Marketing strategies for tourism destinations: A competitive analysis: Travel Daily News

european travel commissionThe new European Travel Commission project focuses on six high potential markets, namely Brazil, Canada, China, Japan, Russia and the United States. This fact-finding research offers a bird’s-eye view of the competitive environment in the global tourism marketplace, and a portrait of the tourism strategy and marketing activities of competing destinations in each market.

In an increasingly vibrant landscape, marked by new players, technological innovation and rapidly changing consumers, the need arises for European destinations to closely monitor others’ effort to win market shares in the global tourism market.

This report is meant to support private and public organisations in the tourism sector to achieve a better understanding of the environment in which they operate. Its aim is to provide meaningful knowledge about best prospect markets, and the tourism strategies destinations worldwide have implemented in these key markets.

This report is part of a broader study tailor made for European tourism destinations in general and ETC members in particular.This project focuses on six high potential markets, namely Brazil, Canada, China, Japan, Russia and the United States. This fact-finding research offers a bird’s-eye view of the competitive environment in the global tourism marketplace, and a portrait of the tourism strategy and marketing activities of competing destinations in each market.

Information has been gathered through publicly available documents, and eventually enriched with first-hand information gathered through personal interviews with NTOs marketing directors, representatives of the travel trade and experts. Key results are presented in this executive summary, conceived for dissemination to the public at large. In this analysis, Europe is defined as the 33 countries which are members of the European Travel Commission plus France, the Netherlands and the United Kingdom.

via Marketing strategies for tourism destinations: A competitive analysis.

The Travel Market Digest February 2015

The Travel Marketing Digest 11th February 2015 – Volume V, issue 2

Welcome to the latest edition of The Travel Marketing Digest and some of the top travel marketing stories over the last few weeks.

In this edition….

  • ReboundTAG’s innovative microchip baggage tracking solution: and a cool corporate giveaway…
  • Marriott’s GoPro marketing campaign
  • Hotelplan to buy Kuoni Switzerland?
  • City visitor rankings report by Euromonitor
  • How Google Now is improving travelUNWTO reports a 4.7% growth in travellers, 1,138 million arrivals in 2014
  • The survival of travel agents
  • World Marketing Group to promote Destination Asia in North America
  • Expedia acquires Travelocity
  • Marketing travel to US Affluent
  • iBeacon technology and travel marketing

The Travel Marketing Digest

New City Destination Ranking Released by Euromonitor International

EuromonitorMarket Research Company Euromonitor International released today a new ranking of the top 100 city destinations in terms of international tourist arrivals for 2013.

The top three cities on the list remained unchanged from 2012: Hong Kong, Singapore and Bangkok. These Asian mega-cities benefited from their locations in heavily populated areas, large economies and proximity to China.

While outbound travel from China is heavily influential for many of the cities listed, inbound tourism to China remains sluggish. China does remain the leading country for the number of cities featured in the top 100 with a total of eight. However, with the exceptions of Suzhou and Guilin, these cities experienced a decline in arrivals for 2013 due to an uncertain economic outlook, pollution concerns and tensions with Japan—a key source market.

Looking forward, city destinations may want to turn to the US market, the second largest source for outbound travel in 2013. The US has been a relatively mature market with outbound travel peaking in 2007, followed by yearly declines until recovery began in 2012. But a better economic environment, a stronger dollar and lower gas prices will likely boost outbound travel from the US.

“Cities in neighbouring countries to the US such as Central America, Mexico and the Caribbean will most likely see growth in US travellers,” according to Euromonitor’s Head of Travel and Tourism, Caroline Bremner. “Western European cities will likely benefit too, thanks to strong cultural positioning and historical ties to the US.”

Top Five Cities Destination Rankings Listed Below:

  • Hong Kong, Hong Kong (25,587.3 arrivals)
  • Singapore, Singapore (22,455.4 arrivals)
  • Bangkok, Thailand (17,467.8 arrivals)
  • London, United Kingdom (16,784.1 arrivals)
  • Paris, France (15,200.0 arrivals)

via New City Destination Ranking Released by Euromonitor International.

Asian cities account for a third of the most visited cities

Over a third of all destinations are located in the Asian Pacific region, illustrating strong regional travel trends within Asia, as well as the growing connections throughout the region. Within the top 10, six of the leading cities are from Asia, with the top three remaining unchanged from last year – Hong Kong, Singapore and Bangkok. These three Asian mega-cities serve as some of the top destinations for Chinese travellers as well as being air network hubs. Bangkok showed the strongest growth among the top 10 cities, up 10.4% from 2012 to reach 17.4 million arrivals, despite political unrest breaking out at the end of the year. Chinese visitors are key to Thailand’s booming arrivals, with close links between the countries as well as efficient and short transport connections. A new Asian arrival on the list is the South Korean city of Jeju with 1.77 million visitors, growing 46.3% in 2013.

Chinese visitors replaced Japanese arrivals as the most important source market for South Korea in 2013. About 70% of international visitors to Jeju Island are Chinese, aided by the no-visa policy as well as improved cruise facilities, direct flights from the Chinese mainland, and a plethora of duty-free shopping opportunities. While outbound Chinese tourism is hugely influential in many of the cities listed, inbound tourism remains sluggish. China does remain the leading country for the number of cities featured in the top 100, with a total of eight cities. However, with the exceptions of Suzhou and Guilin, all these cities experienced a decline in arrivals for 2013. Beijing in particular continues to be affected by the slowdown in the Chinese economy as well as pollution.

India’s leading cities, Delhi and Mumbai, though, experienced growth of 27% and 22%, respectively, in 2013, with both of them receiving around 3.6 million visitors.  The depreciation of the rupee against the US dollar made it much cheaper to travel to India in comparison to previous years, aiding inbound tourism.

GCC countries are the shining stars of the Middle East

The GCC counties are well represented by four countries, Bahrain, Qatar, Saudi Arabia and the United Arab Emirates, all having cities in the top 100. The latter is home to Dubai, the region’s starTweet-This city for arrivals with a total of 10.5 million visitors, up 7% on the previous year. The United Arab Emirates government has worked hard in recent years promoting the country as a safe family tourism destination, which has benefitted Dubai, and also neighbouring emirates Abu Dhabi and Sharjah, which also feature in the top 100. These cities have also picked up a lot of arrivals who previously would have opted for destinations such as Egypt before its recent instability.

Saudi Arabia features three cities in the top 100: Mecca, East Province and Riyadh. 2013 was a strong year for inbound tourists visiting Mecca for religious pilgrimage, with arrivals reaching 7.5 million due to massive expansions at the holy mosques as well as a growing number of hotels. This is in spite of concerns about the MERS virus, which was first reported in Saudi Arabia in 2012.

Doha, in Qatar, was the Middle Eastern city showing the best growth in 2013, reaching 3.8 million arrivals, up by 21.2%. Business tourism is the mainstay of arrivals, due to Qatar’s substantial oil and gas industry, but leisure tourism is growing slowly with the country focusing largely on cultural and sporting attractions to entice visitors.

Europe courting Russian and Chinese visitors

London and Paris remain Western Europe’s leading cities for arrivals with 16.8 million and 15.2 million, respectively, in 2013. Turkey features strongly in the list, with Antalya, Istanbul and Artvin all showing good growth for the year. Russian arrivals were key to this growth, with Antalya hosting 75% of all visitors from Russia to Turkey. Visas are not required for Russians staying less than 60 days in Turkey, and Antalya provides beach locations such as Kemer, Alanya, Belek, Kas, and Side, which are popular with Russian tourists. Zurich in Switzerland has one of the highest growth rates for arrivals in Europe, at 23.6%, and it welcomed 2.26 million arrivals in 2013. Increasing numbers of tourists from China and Russia are visiting the city, aided by the fact that Switzerland is within the Schengen visa zone, and offers excellent transportation links and air connections.

A reshuffling of future source markets

The long-heralded rise of the Chinese outbound traveller is set to continue with China overtaking Germany as the number one source of outbound international travel in 2017. Nearby Asian cities, especially those located in countries with relaxed or no visa requirements, will benefit immensely. However, Chinese travellers are becoming more adventurous – travelling farther afield and exploring on their own as opposed to in a tour group. It is important for cities to understand the changing Chinese travellers’ desires and build a strong marketing message to court them.

The outlook for Russian travellers was equally bright just a year ago, but the deteriorating economic situation and the rapid decline of the rouble now call into question how strong a source market Russia will be, especially for city destinations in important sun destinations such as Turkey, Egypt and Thailand.

However, city destinations may want to turn their eyes to the US market, which was the second largest source market in 2013. The US has been a relatively mature market, with outbound travel peaking in 2007, followed by yearly declines until a recovery began in 2012. But a better economic environment, a stronger dollar and lower gas prices will likely boost outbound travel from the US. According to the Office of Travel and Tourism Industries, outbound travel from the US was up by Tweet-This9.6% year-to-date in October 2014 – a significant increase for a mature market. The benefit, though, may mostly accrue in cities in neighbouring countries in Central America (including Mexico) and the Caribbean, but Western European cities will likely benefit too thanks to strong cultural positioning and historical ties.

Uncertainty is the only certainty

The shift towards a more connected world is both a positive and a negative for international travel. The opportunities to attract visitors from new source markets are vast, but can quickly turn into challenges, whether it is due to geopolitical unrest, economic decline or natural disasters. It is important for city destinations to be prepared to quickly respond to the constantly evolving global landscape to have their tourism industries thrive.

 

Tourism delivers 4.7% growth: 1,138 million arrivals recorded for 2014, UNWTO

UNWTO logoInternational tourist arrivals reached 1,138 million in 2014, a 4.7% increase over the previous year, according to the latest UNWTO World Tourism Barometer. For 2015, UNWTO forecasts international tourism to grow by 3% to 4%, further contributing to the global economic recovery.

The number of international tourists (overnight visitors) reached 1,138 million in 2014, 51 million more than in 2013. With an increase of 4.7%, this is the fifth consecutive year of above average growth since the 2009 economic crisis.

“Over the past years, tourism has proven to be a surprisingly strong and resilient economic activity and a fundamental contributor to the economic recovery by generating billions of dollars in exports and creating millions of jobs. This has been true for destinations all around the world, but particularly for Europe, as the region struggles to consolidate its way out of one of the worst economic periods in its history,” said UNWTO Secretary-General, Taleb Rifai, opening the Spain Global Tourism Forum in Madrid.

By region, the Americas (+7%) and Asia and the Pacific (+5%) registered the strongest growth, while Europe (+4%), the Middle East (+4%) and Africa (+2%) grew at a slightly more modest pace. By subregion, North America (+8%) saw the best results, followed by North-East Asia, South Asia, Southern and Mediterranean Europe, Northern Europe and the Caribbean, all increasing by 7%.

As in recent years, the growth in international tourism receipts in 2014 is expected to have followed that of arrivals fairly close (the 2014 results for international tourism receipts will be released in April 2015). In 2013, international tourism receipts reached US$ 1,197 billion, US$ 230 billion more than in the pre-crisis year of 2008.

Positive outlook for 2015

For 2015, UNWTO forecasts international tourist arrivals to grow between 3% and 4%. By region, growth is expected to be stronger in Asia and the Pacific (+4% to +5%) and the Americas (+4% to +5%), followed by  Europe (+3% to +4%). Arrivals are expected to increase by +3% to +5% in Africa and by +2% to +5% in the Middle East.

“We expect demand to continue growing in 2015 as the global economic situation improves even though there are still plenty of challenges ahead. On the positive side, oil prices have declined to a level not seen since 2009. This will lower transport costs and boost economic growth by lifting purchasing power and private demand in oil importing economies. Yet, it could also negatively impact some of the oil exporting countries which have emerged as strong tourism source markets,” added Mr Rifai.

The positive outlook for 2015 is confirmed by the UNWTO Confidence Index. According to the 300 tourism experts consulted worldwide for the Index, tourism performance is expected to improve in 2015, though expectations are less upbeat than a year ago.

Europe consolidates its position as the most visited region in the world

Europe (+4%), the most visited region with over half of the world’s international tourists, saw an increase of 22 million arrivals in 2014, reaching a total of 588 million. Thanks to these results, tourism has been a major contributor to the European economic recovery. Northern Europe and Southern and Mediterranean Europe led growth (both +7%), while results were more modest in Western Europe (+2%). Arrivals in Central and Eastern Europe (0%) stagnated after three years of strong growth.

International tourist arrivals in Asia and the Pacific (+5%) increased by 13 million to 263 million. The best performance was recorded in North-East Asia and South Asia (both +7%). Arrivals in Oceania grew by 6%, while growth slowed down in South-East Asia (+2%) as compared to previous years.

The Americas was the best performing region in relative terms with growth of 7%, welcoming an additional 13 million international tourists and raising the total to 181 million. Growth was driven by North America (+8%), where Mexico posted a double-digit increase, and the Caribbean (+7%). Arrivals to Central America and South America (both +6%) grew at double the rate recorded in 2013 and well above the world average.

International tourism in the Middle East (+4%) shows signs of rebound with good results in most destinations. The region attracted an additional 2 million arrivals, bringing the total to 50 million. Africa’s international tourist numbers grew by an estimated 2%, equivalent to an increase of one million arrivals. The region reached 56 million tourists. While arrivals to North Africa were weak (+1%), Sub-Saharan Africa saw international tourist numbers rise by 3% despite the Ebola Virus Disease outbreak in a few West African countries. Data for Africa and the Middle East should be read with caution as it is based on limited and volatile data.

Demand from traditional source markets picks up

A pickup in expenditure on international tourism from traditional source markets compensated for the slowdown of the large emerging markets, which had been driving tourism growth in previous years.

The total number of trips abroad from China is estimated to have increased by 11 million to 109 million in 2014. Expenditure was up by 17% in the first three quarters of 2014, a strong result but slower than in previous years (40% in 2012 and 26% in 2013, respectively). China is the world’s largest outbound market since 2012 with a total expenditure of US$ 129 billion in 2013.

Among the other two main emerging markets, the Russian Federation (-6%) clearly lost strength in 2014, while Brazil still grew by 2%, despite the appreciation of the US dollar against the Brazilian real and slower economic growth. Beyond the top ten, some smaller emerging markets saw expenditure grow substantially, with Saudi Arabia, India, the Philippines and Qatar all reporting increases of 30% or over.

A pickup in demand from traditional source markets compensated for the slowdown of the large emerging markets. Expenditure from the United States, the second largest outbound market in the world, grew by 6%. Noteworthy is also the rebound of France (+11%), Italy (+6%) and the United Kingdom (+4%).

 

Affluent Travelers Tougher For Marketers To Reach

by Tanya Gazdik Irwin

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This year will be challenging for travel marketers hoping to appeal to affluent consumers, according to a study from Unity Marketing.

Changes in affluent travellers’ attitudes and behaviour call for marketers to develop new strategies to capture some of the roughly $8,000 they plan to spend on their next vacation.

The demographic will be looking for new luxury travel experiences, all the while scrimping and saving on experiences that don’t mean as much to them (such as how they get to their destination) and splurging once they arrive. They will delay making plans till the last minute and will be less loyal to their travel rewards programs, as they search out promotions that offer more meaningful and motivating rewards, according to the study, “Affluents Will Travel in New Luxury Style in 2015,”

Affluents plan to take an average of three vacations in 2015, but they are waiting until the last minute to book. This works in their favour, as they carefully research all the available options, compare the many promotional offers received, and tap the Internet and social media for reviews and recommendations.

For travel planning, they are more DIY this year, using travel professionals less than in 2013. Furthermore, due to growing global unrest and the Department of State “worldwide caution” warning issued on Jan. 9, it only makes sense to wait until the window of opportunity is right.

The share of affluents who are undecided about their travel plans this year more than doubled from Unity Marketing’s 2013 luxury travel study, says Pam Danziger, president of Unity Marketing and author of the new study.

“Further, the projected budgets for their next vacation is lower than we’ve tracked since 2009,” she says. “Consumer uncertainty and lack of confidence is never a good sign for marketers and that is the environment that travel marketers face this year.”

Travel marketers’ mantra this year should be “hope for the best, but plan for the worst,” she adds.

“Given all the factors that can impact people’s willingness to travel, especially overseas, travel marketers need to recognize that their customers will be harder to commit to proposed trips this year,” she says. “Those customers will be more demanding when it comes to getting the most for their investment and may look more aggressively to cut expenditures wherever they can. Further, this may be an especially good year for the travel insurance business.”

Rewards programs are less motivating for affluents in 2015 than two years ago. A growing share of affluents have no plans or are undecided if they will redeem rewards for travel this year. Affluents report being less influenced in their choice of travel provider by the opportunity to collect rewards points.

“Since travel marketers rely heavily on rewards programs to market their services, this is an important call to action,” Danziger says. “It points to the need for travel providers to focus their marketing and rewards programs toward rewards that are more meaningful and motivating to affluent travelers.”

via Affluent Travelers Tougher For Marketers To Reach 01/23/2015.

Why investors in online travel need to be picky about China in 2015 | Sally White EyeforTravel

Silvana ComugneroThere can be no doubt that China is a crucial market for travel brands but it may not be for everybody, writes Sally White

Fast growing China’s foreign travel market may be, but investors should be very picky about buying into this story. Certainly, the market is eye-wateringly large – 100 million outbound trips were made in 2014, according to the China National Tourist Administration (CNTA). Adding to its allure for companies wanting a growth story to woo shareholders, this figure could reach 1.4 billion by 2030 with a spend of $1.8 trillion. Also, the number of countries Chinese travellers can visit easily rises this year as more governments and tourism boards are offering them visa-free access.

But these numbers could be a snare and delusion for foreign corporates not already well established. Most of these travellers keep to their own turf, with 90% staying within Asia according to the CNTA. Not only are local giants already well established, spending heavily and growing fast in all areas of online travel trading! The international heavy-weights are there, too, with the necessarily thick wallets to help their Chinese partners and subsidiaries.

via Why investors in online travel need to be picky about China in 2015 | Travel Industry News & Conferences – EyeforTravel.

US Jet-Setters: Their Travel Preferences

MMGY Global, a travel and hospitality marketing communications firm, conducted a survey of 1,250 affluent, leisure travelers in February of this year in an effort to gauge expectations for the upcoming year. Those who participated in the survey were adults living in the United States who had a household income of at least $125,000. Half of the respondents had a household income of $250,000 or more and all had traveled somewhere for an overnight stay at least 75 miles away during the past year. Below is a summary of some of the findings in their 2014 Portrait of Affluent Travelers report.

The affluent expect to take more trips in the year ahead. This yields a net nine percent (9%) increase for those in households with an annual income in excess of $250,000, and four percent (4%) more for individuals in households with an income between $125,000 to $249,999 annually.

Affluent travelers cited relaxation and enrichment as the most desirable attributes when they travel:

  • 75% cite the desire to have enough time to relax and unwind
  • 64% want to explore new cities and attractions
  • 59% wish to experience different cultures
  • 54% want to enhance their relationships

During the next two years, half of affluent travelers indicated that they are interested in visiting (in descending order of preference): the Hawaiian Neighbor Islands (63%), national parks throughout the country (61%), Honolulu (55%), New York City (52%), San Francisco (51%), Florida Keys (49%) and Napa Valley (47%).

Sixty percent of affluent travelers are interested in travel to Europe during the next two years. The countries that rise to the top of this list include Italy (41%), England (40%) and France (38%).

Fifty percent of affluent travelers are interested in visiting the Caribbean, specifically the U.S. Virgin Islands (27%); the Bahamas (25%); and the Cayman Islands, St. Maarten and Aruba (each at 23%).

More than 30% of affluent travelers are interested in visiting Oceana, especially Australia (32%), New Zealand (29%) and Fiji (18%). Twenty five percent (25%) would like to visit South America and Mexico.

via Jet-Setters: Their Travel Preferences 12/24/2014.