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Tour Operators on Travel Trends and ChallengesJune 10, 2011 By: Jena Tesse Fox Travel Agent
|Demand for South Paciifc destinations is on the rise among vacationers; shown here is a kids’ club in progress in Tahiti.|
We touched base with several different tour operators, both specialist and global, to get their thoughts on the industry, its future and how agents can capitalize on the latest trends and overcome new challenges.
Families on the Go
According to Steve Gorga of Travel Impressions, all-inclusive properties are popular with the family travel market. “In terms of experiences, we’re finding that swimming with dolphins is one of our most popular activities, and it’s offered in a number of different destinations,” he says. Within the family market, Gorga adds that his team has seen increased interest in jungle river tubing in Jamaica, visits to El Yunque Rainforest and tours of historical Old San Juan in Puerto Rico, which the company sells in two-for-one packages.
Paul Wiseman of Trafalgar Tours says that families are keen on activities that they can all enjoy together and that have an element of learning attached—“whether it is learning how to make pizza in Rome, riding through the Black Hills in a historical steam engine or seeing the colorful and abundant wildlife in the Costa Rican rainforests.”
Dan Austin, director of Austin-Lehman Adventures, notes that National Parks in the U.S. are getting increased business. “Yellowstone National Park is our No.1 selling trip, and is all but sold out for the year,” he says. “I am guessing at least some of this is driven by the ‘stay closer to home’ mentality that seems to be abundant…Interest in overall adventure travel is clearly up, [and] family travel is leading by leaps and bounds on all fronts.” Frank Marini, Collette Vacations’ VP of sales, agrees, citing more interest in Spain and Portugal and, domestically, in the company’s National Parks tours.
Obviously, if a tour operator focuses on a particular region, they will notice micro-trends in their clientele’s choices. For example, Ian Swain, founder of Swain Tours, which specializes in travel to Australia, New Zealand and South Pacific islands, says that his company is seeing “tremendous interest” in those destinations, especially in the new Luxury Lodges of Australia. Beyond that, he adds, Africa is booking well, as are Cambodia and Vietnam.
Jim Holden, President of African Travel, says that visitors are attracted to Southern and East Africa primarily for wildlife and to Egypt for its history. Brian Stack, CEO of CIE Tours (which focuses on Irish and British tourism), says that the company’s business to Ireland rose 14 percent last year and, so far this year, is up 20 percent.
Global businesses are painting a similar picture. Steve Born, VP of marketing for the Globus family of brands, says that Europe is up across all brands over same time last year, with Britain and Ireland, Italy, France and Switzerland leading the way. “We’re also seeing a more recent improvement in our Greece and Turkey business,” he notes. “Outside of Europe, South America is hot, particularly over the past few months, and North American business has been great, likely as a value alternative to a longer-haul destination.”
Jack Richards of Pleasant Holidays says that his company’s business to Tahiti, Bora Bora and the Caribbean is on the rise. “These are the top honeymoon destinations, and this business is significantly up in 2011.”
He adds, “We launched USA destinations in October 2010, including Las Vegas, Orlando, San Francisco, Los Angeles, San Diego and Phoenix/Scottsdale, and bookings have exceeded expectations for all destinations.” The U.S. is now the fastest-growing destination in the company’s portfolio.
Globus’ Born feels that price sensitivity and “deal conditioning” among travelers is one of the industry’s biggest challenges. “The expectation set by the OTAs is that travelers should only book if there’s a deep discount,” he says. “It’s resulted in a lot of confusion in the marketplace: As suppliers scramble to present a deal, travelers are less likely to understand what’s a true deal and what is just a headline with hidden cost. Not only is it putting pressure on suppliers to compete with lower margins, it’s making it harder for travelers to understand what they’re really paying for.”
Likewise, African Travel’s Holden says that the industry’s biggest challenge is the Internet and the lure of cheap travel. “Low prices are being dumped onto the Internet, especially by the airlines, but the traveler has no way of knowing what he/she gets for this low price,” he says. “In the case of Africa, it can mean the difference between a so-so trip and a mind-blowing trip. To overcome this challenge, we have had to spend more time in the sales process to explain to the traveler exactly what she/he gets for the price. And we have learned there is no substitute for knowledge when it comes to selling Africa.”
Stack agrees. “People like discounts,” he says, but notes that there is a sharp difference between “cheap” and “value.”
In a great sign for the market’s overall growth, several operators have difficulty just keeping up with demand, and getting enough people in the office to handle all the clients.
|Kylemore Abbey, Connemara, Ireland; the country is prominent among European nations seeing a surge in tourism.|
The past year has seen numerous events that made traveling a challenge—from the ash cloud that shut down airports all over Europe to the civil unrest in Egypt, Northern Africa and the Middle East to earthquakes and tsunamis in Japan and Hawaii.
“It doesn’t take a student of history to see that natural disasters and political unrest occur quite regularly, but that hasn’t squelched people’s desire to travel,” says Eric Welter, senior vice president of Collette Vacations, adding that these events underscore the benefit of using a travel agent to book their vacation. “When things like this happen, there is little recourse, and whom do you call for answers when you have booked your trip online?”
Dan Austin recalls that he had guests leave Morocco the day of the last bombing in the café. “They had an amazing time, but were shaken by the event,” he says, adding that a destination facing “challenges” like these may also face a drop in interest from travelers. “It doesn’t mean it comes off the list… It gets moved further down and/or is replaced until there is more stability.”
Globus’ Steve Born agrees. “We took a real hit to our 2011 business to some of these regions,” he acknowledges. “Travelers are simply putting off their travel until they feel more confident. But in the longer-term, these cases can actually strengthen us. Travelers are smart and resilient—the demand for these amazing places is still there, and when they return, they’ll do it in a way that leaves less to chance.”
On the other hand, Travel Impressions’ Gorga says that his company has not seen “a great deal of change” that it can attribute to the recent events, although he does acknowledge that it encourages travel agents to offer clients insurance. “Although numbers are up slightly for that product, it’s not significant,” he adds. “We do have a company-wide emergency team that is called into action to assist travelers when there is any type of natural disaster or other event that has an impact on travel plans, and we provide updates and information for travel agents on our website.”
After the ash cloud and civil unrest, there has been a renewed interest in travel insurance. “For less than 10 percent of the investment of the vacation, travelers can add complete peace of mind to their booking,” Born says. “Following the volcanic ash incident, we have seen a rise in interest in travel protection overall, whether it’s through us or a third party that the agent uses. This season so far, approximately 60 percent of our travelers have included our Travel Protection.” Scott Wiseman of Abercrombie & Kent USA, on the other hand, noted that insurance was of limited value during the ash cloud as most policies treated it as a weather delay, though policies that cover trip interruption or travel delay did provide coverage up to the their limits.
And in a more unusual side effect from the overseas drama, Pleasant Holidays’ Richards has noticed an increase in domestic “staycations” (including the Hawaiian Islands). “Airline-imposed fuel surcharges to Europe have increased over the last few months, resulting in higher airfares to European destinations,” he says.
Growing and Changing
As information technology continues to advance, Globus’ Born believes that travelers will seek out ways that take the guesswork and hassle out of the planning. “We’re seeing that the fun of planning a vacation has been replaced by an overload of information—vacation choices, supplier deals, destination info, ratings and reviews—and don’t forget social media,” he says. “They need help cutting through all the noise and getting to the actual vacation. They’ll also seek out real humans and real companies rather than online-only solutions.”
A&K’s Scott Wiseman agrees, terming social media a important channel of communication with prospective travelers. “For example, parents asking about the appropriate age to take a child on safari can get answers directly from past travelers,” he says. “In a crisis situation like Egypt, we were able to share regular updates about the situation on the ground and reassure family members about the steps we were taking to insure the safety of our guests.”
Pleasant Holidays will continue to expand into new destinations, Richards says, including more cruises to Hawaii and the Caribbean. The brand will also launch on VAX VacationAccess for home-based travel agents—“which is a very fast-growing segment.”
Paul Wiseman says that Trafalgar is currently undergoing a “top-to-bottom review” of every aspect of their product. They also have new “lifestyle itineraries” focused on culinary experiences as well as photography, and have entered into a partnership with Gutsy Women Travel. The brand will operate its small-group guided vacation programs exclusively for women.
|U.S. destinations are doing rather well. Here, a mother and daughter visit the Maui Ocean Center.|