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Special Report: Travel Industry Forecast for 2015December 29, 2014 By: David Moseder Travel Agent
Every January 1st represents a new beginning with new possibilities, and the industry appears to be ringing in 2015 with a genuine sense of optimism. For this special report, Travel Agent reached out to suppliers, consortia and tourism organizations to get a picture of what’s new and trending in the year ahead.
On the destination front, China, where new hotels seem to open on a regular basis, is also becoming a cruise hub, with Costa, Princess and Royal Caribbean all having ships homeported in Shanghai. Europe expects to finish 2014 on the plus-side of the visitor ledger and move onward and upward from there in 2015.
In the Caribbean, lesser-known islands such as Barbuda, Tobago and Saba are beginning to emerge from the shadow of their more famous bigger cousins (Antigua, Trinidad and St. Maarten, respectively). The Bahamas, meanwhile, is poised to maintain and build on its most-visited status with the opening this spring of the $3.5 billion, five-hotel Baha Mar resort complex. Another set of islands, known collectively as Hawaii, anticipates more business from two key demographics: multigenerational travelers and the LGBT market.
Things just couldn’t be any sunnier in Mexico, where demand is growing, interest is trending upward for the next two years, and hot new hotels keep opening apace. The cruise industry is sailing full speed ahead, with booming advanced bookings for 2015 following a solid 2014 sales.
By the Numbers
With all of this going on, travel agents are finding themselves in greater demand. According to the MMGY Global 2014 Portrait of American Travelers, nearly one in five travelers used the services of traditional travel agents in 2014 versus one in eight in 2013, representing a 50 percent increase. And that number is trending upward, with considerably more travelers in 2014 (21 percent) than in 2013 (17 percent) saying they intend to use the services of a traditional travel agent when planning a vacation during the next two years.
One factor contributing to this upswing is revealed in a new American Express Travel survey of its U.S. Representative Travel Network. Overwhelmed by online choices, more than 60 percent of travelers seek the personalized attention of travel agents. More specifically, travel counselors say:
* 74 percent say the guidance their customers are asking them for is the “whole package,” to shape their entire trip.
* 60 percent say guidance is needed to help find the best destination and experience that is right for their customers.
* 53 percent guide their customers who’ve done their research but need help in uncovering deals.
When it comes to “Services Considered When Selecting a Service Provider,” MMGY’s Portrait shows that the age demographic most likely to turn to traditional travel agents is Matures (27 percent). In fact for these consumers, agents top all other sources, including Internet search engine results, friends and family, and OTAs. Surprisingly, Millennials (18 percent) placed second in this regard, although they are more apt to seek out the sources mentioned above along with destination websites, travel service provider sites and supplier promotions.
Along with the rise in agent usage there are reports of increased bookings as well. Ensemble, for one, reports that nearly three out of four of its members responding to the annual Ensemble Insights survey expect 2014 to top 2013 when the final numbers are tallied and even more, better than five out of six, forecast increased sales in the year ahead. In a recent Travel Leaders Group survey, more than nine out of 10 respondents stated their luxury hotel and cruise bookings are equal to or better than this time last year.
When Nexion polled its agents, four out of five responded that bookings this year are higher than (58.9 percent) or equal to (28 percent) bookings compared to 2013. The host agency also revealed that the vast majority work full-time as independent travel experts. More than 75 percent stated that they work 30 or more hours a week, over 60 percent put that number at 40 or more hours, and nearly 20 percent stated they work 24/7. When asked, “Is your career as an IC/commissioned agent in addition to an existing career/job?” only one in four replied, “Yes.”
Overall, travel as industry continues to flourish. October was another record-setting jobs month for travel, which continues to pace the economy in a number of indicators as it emerges from the recession, according to the U.S. Travel Association. Travel employment reached 8,027,000, based on the first-Friday Labor Department report, and actually bested the eight million mark for the first time in September according to the upward revision of the previous report. Every $1 million in travel exports supports more than six U.S. jobs in the travel industry, which is three times more than the number of jobs supported by $1 million of agricultural exports.
More good news: Increasing numbers of North Americans, perhaps influenced by reports of airline strikes, natural disasters and the like, apparently want to be better prepared. A 2014 Vacation Confidence Index survey conducted by Allianz Global Assistance USA revealed that travel insurance is on the mind of many travelers. Half of those surveyed or 49 percent said recent global events have caused them to consider purchasing travel insurance for future foreign travel. One in three (34 percent) of those surveyed said they’ve already purchased travel insurance from a trip abroad.
Data from the MMGY Global 2014 Portrait of American Travelers reveals that traditional travel agents are wielding greater influence when it comes to clients purchasing travel insurance, climbing from 50 percent in 2012 to 55 percent last year to 63 percent in 2014.
On the inbound travel front, the recent agreement between the United States and China to extend the validity period for visas should elevate U.S. tourism—and the revenue and jobs the tourism industry generates—according to the National Tour Association (NTA). The agreement, announced November 10, lengthens the validity of tourist and business visas from one year to 10. With this change, Chinese travelers can now make repeat visits to the U.S. without going through the visa process again. According to the NTA, the United States is the dream destination for many Chinese citizens, and any move to make travel here easier is expected to lead to more visits.
The visa extension is the latest in a series of steps the U.S. Department of Commerce has taken in the last few years to facilitate travel from China into the United States, including shortening the period of time it takes for Chinese citizens to obtain a visa, the NTA said.
According to new data from the U.S. Department of Commerce (DOC), international travel to the United States is projected to grow to 88.3 million visitors by 2019, an increase of 27 percent over 2013.
Visitor volume in 2014 is expected to increase 5.9 percent and reach 73.9 million visitors who stay one or more nights in the United States. This growth would build on the 4.7 percent (revised) increase in arrivals in 2013, which resulted in a record 69.8 million visitors.