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Talking with the Travel CorporationMay 7, 2010 By: Jena Tesse Fox
It’s not often that we get to hear from the heads of seven major tour operators all at once, but recently, we had the good fortune to be visited by several representatives of The Travel Corporation: Marc Kazlauskas, president of Insight Vacations; Greg Fischbein, president of Contiki Vacations; Arnelle Kendall, vice president of public relations, The Travel Corporation; Paul Wiseman, president of Trafalgar Tours; Whitney Ramirez, executive vice president of Brendan Vacations; Richard Launder, president of The Travel Corporation; Dave Herbert, managing director of African Travel; and Guy Young, president of Uniworld. Over the course of an hour, they talked about their own business, the business in general, the hottest destinations and what agents need to know.
Front Row, left to right: Marc Kazlauskas, president of Insight Vacations; Greg Fischbein, president of Contiki Vacations; Arnelle Kendall, vice president of public relations, The Travel Corporation; Paul Wiseman, president of Trafalgar Tours.
Back row: Whitney Ramirez, executive vice president of Brendan Vacations; Richard Launder, president of The Travel Corporation; Dave Herbert, managing director of African Travel and Guy Young, president of Uniworld.
Paul Wiseman said that Trafalgar’s year “started very, very well. In fact, we just passed the 2009 year-end sales number so for the entire year,” he added. “Last year we sold what we have sold up until March of this year…Sales are up around 55 percent, and very consistent. We are seeing an interesting booking pattern. When we first started in October-November, we had some very good A- deals in the market, which all of the brands participated in. It was a British Airways-based product and it did exceptionally well.”
The deal pushed bookings up, and significantly helped the company’s business. “The A-deals have largely come and gone, and now we are just concentrating on the land product, whose booking pattern is also quite close-in,” Wiseman added, noting that tighter booking patterns doesn’t necessarily mean bad business.
For example, an operator can sell travel for June and July in April, and then sell July and August in May. “That’s fantastic for us,” he said. Ultimately, he believes the company will reach 2008’s numbers, and might even match 2007’s.
Dave Herbert echoed Wiseman’s sentiments, but noted that Africa Travel’s demographic is somewhat different. “This year has started off extremely well,” he said, “but we weren’t as devastated last year in the luxury space. Africa is a very special destination; it's not a mass destination, of course, from the U.S., so we weren’t as impacted as many of the other brands were, but this year has gotten off to a great start.”
Like Wiseman, Herbert has noticed a trend of close-in booking: “About 40-45 percent of our business is booked for travel within 90 days, which is amazing,” he said. He has also seen a notable increase in bookings for the year. “We are running ahead on bookings and sales compared with 2008, which was one of our better years,” he said. “I think what it means is that clients are planning to do a trip. I have never met a person in the U.S., never, who doesn’t want to go to Africa. Everyone says 'Ooh Africa?, I have read about it, I want to go, it's my dream trip!' That’s why our tagline is 'Live your dream.' It's a case of how they are going to do it.”
Like African Travel, Insight Vacations caters to a “premium” crowd—which Marc Kazlauskas says has “roared back” thanks to increased confidence. “We are up more than 70 percent over 2009,” he said, “and we are actually doing better than 2008. Our best year was 2007 and we may beat that if the trend continues.”
And the trend, he believes, seems poised to do just that. “Our business has gone through the roof and call volume is up across the board again,” Kazlauskas said happily. “So, we had the early-bookers. By December 31, we normally will have 30-35 percent of our business, we would have had if we stuck to the original goal, we would have been over 40 percent at that point. That’s how good and strong the early bookings were but we are taking bookings now for April, so hopefully it will continue.”
Kendall, who also represents Red Carnation Hotels, said that the hotel business has been “exceptionally good,” especially thanks to value-add options like complimentary breakfasts or even dinners. Even with luxury, she notes, "there are good deals," and clients want in. As for destinations, Kendall said, “London has always been popular,” but specializations are increasingly important. "Agents want to get clients interested in a specialist like, say, Lion World or African Travel, where they only need to pick up the phone and they know they can have it done." Working with specialists, she added, has helped create a 30 percent return rate.
Ramirez also said that 2010 has been good for Brendan. "When we set our goals for 2010, we based them off our 2009 results, but we find that we are exceeding those goals, so we are looking at 2008," she said.
Like the others, she noted that 75 percent of the bookings is for travel within 90 days, especially with FITs. "What's been really popular for us lately is the pre- and post- cruises," she said. "We find that travel agents are coming to us for pre- and post- cruise groups. Even our group business is booking at the last minute."
Destination-wise, she said, "China is really hot for us this year; so is South and Central America." The company will also be launching tours to New Zealand, Fiji and Tahiti.
Guy Young of Uniworld said that river cruising is a "very strong sector" of the travel industry and, as such, the company's business has fared well even during the worst of the recession. 2008 was the best year in Uniworld’s history, he said, but even 2009 was "okay—we actually maintained passenger numbers in 2009 versus 2008 in Europe. We were down substantially in some of the other destinations like China, Egypt, etc., but this year the numbers are really quite phenomenal."
How phenomenal? In terms of their year-end bookings goal, he says, the company is "90 percent there," even with short-term bookings. "A lot of our cruises through June are pretty much sold out," he noted. "So we filled out the early part of the season but still have capacity July through November—and we still have time to sell it."
Another notable trend, he said, is the strength of the U.S. market. "We sell in UK, Australia, New Zealand, etc., but the U.S. is our fastest- growing market this year. The U.S. business is up about 65 percent." As for destinations, he said, "Europe is obviously where we have most of our capacity and we are doing very well there. China is still slightly behind 2007, which was our best year ever there, but we are ahead of 2009 and 2008. And, of course, Egypt is a big destination for us because we have got a new ship, the River Tosca, and we are seeing some very strong sales in Egypt."
Fischbein had a different experience with Contiki Travel, however, since his demograpic caters to travelers between 18 and 35 years old. "With no property, portfolio or pension, 19 to 35s had no problem," he said. "So we did actually quite well through most of 2009, only seeing a little bit of suffering when those parents finally said 'that’s enough of that' and closed their wallets. That’s when we noticed the decline specifically for our 18- to 22-year-olds that were still in college. The 25- year-olds who make up the bulk of our travelers did well as they will swipe credit cards together to go, so it was pretty interesting to see how they work. As far as 2010 is concerned, since we were the last ones affected by the economy, we are also the last ones to recover. So as we came into 2010 slower than we thought, but still ahead of pace over 2009."
On the whole, Launder said, The Travel Corporation's comeback has been "amazing" over the last 12 months. "We seeks the No.1 or No.2 market position in each of the product categories that we have companies in, and where we already have that, we defend it. It does mean that we are strong brands, and we have weathered the storm as well as, if not better than, a number of our competitors and some other product categories."
The last-minute trend, Herbert noted, is burning some clients—and agents—as demand for travel increases. "We all started with these incredible offers but, right now, it’s not even about the offer, it’s about the date and the availability," he said. "We didn’t anticipate our numbers at the beginning of the year. So, the product we have available is based on what we thought we would have, and it’s doing far better."
Wiseman agreed. "The Trafalgar Family Program in U.S. will sell out this year," he predicted. "And we have increased capacity this year because it’s been selling well for three or four years...You don’t ever like to stop selling something, but there is the reality of the market. If it’s Europe on the rise, you wouldn’t recommend too many people to hold back on their travel plans for too long."
As an example, he pointed out car-rental programs in Ireland. "Last year, we sold out the car hires and we had to bring on a secondary vendor this year, and reports say that cars hires will be sold out soon. So, people need to book their car hires, their self-drive vacations soon."
Launder, however, pointed out the importance of increasing capacity to meet demand. "All of the operating regions obviously are aware of the sale surge, and so wherever they have been able to add capacity, they have very proactively gone and done that," he said. "So on the one hand, we want people to understand that you do need to book early, but I don’t want people thinking either that they have no chance if they leave it for too late. The operation departments are adding capacity wherever they can and wherever it’s practical to accommodate the surge."
Another on-the-rise trend is local experiences at a destination. "For the 18 to 35s, there is a huge emphasis on a locals-only experience; it’s bragging rights that last a lifetime," Fischbein said. "They want a soft adventure—'Great, that’s the Eiffel Tower; can we do something just a little bit different?'"
Ramirez agrees, pointing out a program Brendan has to give visitors a taste of a destination while giving them plenty of time to explore on their own, calling it "in-between an FIT and an escorted [tour]," with just enough structure. "It's really hot, especially for Italy," she said. "They have the local connoisseur if they need help with anything, be it shopping recommendations or restaurants. But then they have the hotel nights planned; they have private transfers and rail in between each destination. The Rome-Florence-Venice program is selling really well."
Destinations can be trends as well—Egypt and Greece have been on the rise, the operators agreed, as have Portugal, Croatia and even the Amazon for river cruises.
“We are very travel agency-centric," Herbert said about African Travel. "Ninety percent of our business comes from less than 10 percent of the travel agents. So we have got a huge challenge to train agents to sell tours and destinations. I think the big challenge we face is that when a client walks into a travel agency or calls, 90 percent of travel agents are thinking 'which cruise I can sell this client on?' If they say they want to go to Italy, they are thinking, 'which Adriatic cruise is out?' If they want to go to South America, they are thinking cruising.
"I think the cruise companies have done a tremendous job of brainwashing travel agents," he added. "Our job as an organization is to train travel agents to think of all travel options other than cruises. We say a safari is like a cruise—everything is included; it's a fully inclusive experience and I think we would like to lobby Washington to make it mandatory for all travelers above 40 to go to Africa."
Kazlauskas agreed. “The agents were so burned last year with such low cruise-pricing and low profit that they are looking for our product," he said.
That, he added, has served Insight well. "We are all benefiting with such a phenomenal year, because they are reaching out to high-yield, high-commission, good customer satisfaction products, and that’s what we provide."