We recently gathered industry executives to get the pulse on travel to Europe this year. The event was hosted by The Leading Hotels of the World in their Manhattan headquarters.
In attendance were Ted Teng, president and CEO, The Leading Hotels of the World; Ruurd Hooijer, senior director, travel trade, North America, The Leading Hotels of the World; Navin Sawhney, CEO, Ponant; Daniel Durazo, director of communications, Allianz Global Assistance; Lori Corless, vice president, marketing, Central Holidays; Wibke Brown, director, product development, Delta Vacations; and Willie Montano, vice president, marketing, Insight Vacations.
Representing Europe tourism offices were Michael Gigl, regional manager, Austrian Tourist Office; George Vella, head of sales North America, German National Tourist Office; and Alex Herrmann, director, North America, Switzerland Tourism.
Ruthanne Terrero, VP and editorial director of Travel Agent, magazine moderated the panel. Following is a condensed and edited version of the discussion.
Ruthanne Terrero: How is business faring this year?
Michael Gigl, Austrian Tourist Office: In the first couple of months, we’ve seen a robust growth, continuing with what we’ve seen in the last couple of years. I just looked over the last six years and found that we’ve seen an increase in U.S. arrivals by 40 percent. That is quite a significant number, especially for a destination like Austria, but you know, we’re not a new kid on the block, we’ve been a very established destination for a long time, so to see that robust growth is a positive sign. If things stay similar politically and economically, I think we’ll see a very good year.
Alex Herrmann, Switzerland Tourism: When Austria is doing well and Germany is doing well, Switzerland is also doing well. We’re very happy we’ve had a continued growth over seven or eight years now. Last year was actually our best year since 2000, and our second best year in more than 25 years and that’s as far as we can go back. We can’t compare the statistics before that, so it was a very, very good year.
If we take a closer look at these numbers, we see the strongest growth is in the five-star segment. We also see that travelers from the U.S. are spending more money on average. So it’s not just quantity of growth, it also seems to be a quality of growth of people who are willing to spend money, and also to stay at nice properties and spend it all in Switzerland.
What we’ve seen and heard from our operating partners, the agent community, and our airline partners, things look really, really good.
George Vella, German National Tourist Office: For at least the past 10 years, we never had any negative figures from the United States on overnights. For the whole of 2017, we had a plus of 8.8 percent, but some cities have been registering double-digit increases from the United States. These include Munich, Baden-Baden and Leipzig. Some tour operators are reporting that Europe and Germany are robust this year. They are telling us that FIT business is doing extremely well to Germany. One tour operator brings to us an increase of more than 25 percent for this year, and another one 29 percent.
We’ve been seeing an increase in the number of tour operators offering Germany in their programs, especially over the last two years. That confirms that they are not only selling the bigger cities but also combining them with the smaller ones.
If things hopefully remain as they are, then business for this year looks very good.
Ruthanne Terrero: I’ve been on several river cruises through Germany, and definitely want to go back to those cities and towns and explore. Does river cruising fuel a desire for people to go back to spend more time?
George Vella, German National Tourist Office: Yes, absolutely. During the cruises, by the way, the overnights that we count are only hotel overnights, only hotel beds. So that does not include anything on the rivers. But yes, definitely the river cruises are the opener for the host country. The beauty with the river cruising is that they get them to the heart of the smaller towns so they start basically with the wow factor. But definitely that’s an opener to come back.
Ted Teng, The Leading Hotels of the World: We’ll finish first quarter with about 10 percent growth over last year. So it’s been quite strong; fortunately there’s not a lot of disruptive events. For comparison purposes, there is not a lot of fluctuation in terms of currencies and all of that. So a stable market is always very good for us.
2017 was a spectacular year for us in terms of growth in revenue. But it was a year of high anxiety. That was the environment, I don’t know if we’ve accepted this as the new normal. But we’re going into 2018 very strong.
Navin Sawhney, Ponant: To give you a quick snapshot of who we are, we’re a world leader of luxury expeditions. We’ve got a fleet of 12 small ships, and we pretty much dominate the poles with what we offer in Antarctica as well as the high Arctic. We also do expeditions in tropical and subtropical regions of the world, like New Guinea and the Seychelles. And when we’re not cruising to those spots of the world and it’s peak season, we, of course, cruise in classical destinations. None other comes to mind first, other than Europe.
Our business tends to have a longer booking window. That got severely impaired a few years ago, in 2016, with the incidents there. However, since September or so, we’ve seen an immense upsurge; the booking window is now normalized. In fact, we’ve seen a robust double-digit growth into Europe from America. That’s all of Europe, and that includes the Aegean, the western Mediterranean, up north to the Baltic, all parts of it. We’ve also seen that there is some pre-booking demand for 2019 already. That’s an incredible illustration of how resilient the market is. And how conditional it is.
Ruthanne Terrero: We had hosted a luxury travel advisor roundtable and they were saying that their clients are booking further out, into 2019, some 2020, but then they still have people booking very close in and spending $100,000.
Willie Montano, Luxury Gold and Insight Vacations: My company has been around for 40 years, we’re part of the Travel Corporation, a 100-year-old company that is family owned. It’s great to see Austria, Germany and Switzerland doing very well for 2018. We are seeing a double-digit growth and I agree with Ted there is a lot less anxiety than in 2017. We’re noticing that with the travel trade and also with our guests. That is giving us an opportunity to rethink how we do business, to bring innovation, and to get closer to our guests. We have recently introduced ways of interacting and connecting with guests during the planning process of their vacation. Not to get in close and buy their holiday, but to learn more about them, about what they expect going on holiday with a company like ours, and I think that’s very important.
Now we’re heading to the best year in our company’s history. The best growth is in the luxury end of the sector. This is with the Luxury Gold product that we introduced in 2012. We’re bringing new destinations this year — Japan, Montenegro and Costa Rico — and those destinations are doing very well for us.
Wibke Brown, Delta Vacations: I’m with Delta Vacations’ product development side. We’re also seeing double-digit growth for the first quarter of 2018, and that’s on top of really robust growth last year as well. We’re really excited about our Europe business. Delta Vacations has a lot of travelers going to the Caribbean and Mexico and Hawaii, but we’re really excited that more people are now looking at Europe. Because of that we’ve continued to add new destinations. We have 50 destinations across Europe now and really taking the lead from our airline partners. So being owned by Delta Air Lines, and then having access to their partner networks around the world really gets us access to some of the more off-the-beaten path destinations as well.
Lori Corless, Central Holidays: Central Holidays is doing very well for 2018; we’re seeing a 25 percent growth over 2017. Italy was always Central Holidays’ strongest destination, but we’re also seeing big growth in France, Greece and Spain, the Europe destinations that we go to.
We have a lot of last-minute trends with our FITs and our customized travel. Our group business though is booking through 2019 and we just introduced our programs for Oberammergau for the 2020 season.
We launched our new luxury brand, Journeys, which does customized FIT. We started in Italy and France and it’s doing extremely well. Journeys is headed by Marco Evangelista, and it’s really off-the-beaten-path, different types of personal experiences. It’s more experiential travel; we’re seeing people are just much more interested in that type of travel.